Q3 2025 United Parks & Resorts Inc Earnings Call

Speaker #1: Good day and welcome to the United Parks and Resorts third quarter earnings conference call . All participants will be in listen only mode .

Speaker #1: Should you need assistance , please signal a conference specialist by pressing the star key , followed by zero . After today's presentation , there will be an opportunity to ask questions , to ask a question , you may press star , then one on a touchtone phone .

Speaker #1: To withdraw your question , please press star . Then two . Please note this event is being recorded . I would now like to turn the conference over to Matthew Stroud of Investor Relations .

Speaker #1: Please go ahead .

Speaker #2: Thank you and good morning , everyone . Welcome to United Parks & Resorts Inc. third quarter earnings conference call . Today's call is being webcast and recorded a press release was issued this morning and is available on our Investor Relations website at United Parks & Resorts Inc. .

Speaker #2: Com replay information for this call can be found in the press release and will be available on our website . Following the call .

Speaker #2: Joining me this morning are Mark Swanson , Chief Executive Officer , and Jim Forrester , incoming interim chief financial officer and treasurer . This morning , we will review our third quarter financial results , and then we will open the call for your questions .

Speaker #2: Before we begin , I would like to remind everyone that our comments today will contain forward looking statements within the meaning of the federal securities laws .

Speaker #2: These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward looking statements , including those identified in the risk Factors section of our Report on Form 10-K and quarterly Reports on Form 10-q filed with the Securities and Exchange Commission .

Speaker #2: These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward looking statements , including those identified in the risk Factors section of our Annual over to our Chief Executive Officer , Marc Swanson Mark .

Speaker #2: These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our website .

Speaker #2: We undertake no obligation to update any forward looking statements . In addition , on the call , we may reference non-GAAP financial measures and other financial metrics such as adjusted EBITDA and free cash flow .

Speaker #2: More information regarding our forward looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can be also found in our filings with the SEC .

Speaker #2: Thank you . Matthew . Good morning . everyone , and thank you for joining us . We're obviously not happy with the results we delivered in the quarter .

Speaker #2: Performance during the quarter was . negatively impacted by an unfavorable calendar shift . Poor weather during peak holiday periods . A decline in international visitation , and less than optimal execution .

Speaker #2: The consumer environment in the United States appears to be inconsistent , as has been outlined by a number of other leisure and hospitality businesses .

Speaker #2: Nonetheless , we can and expect to do better . Attendance in the third quarter was negatively impacted by approximately 150,000 visits from unfavorable calendar impacts , particularly the timing of the 4th of July holiday , and was also impacted by poor weather over peak 4th of July and Labor Day weekends .

Speaker #2: We saw a decline in international visitation of approximately . 90,000 guests during the quarter , which was a reversal of earlier trends we saw in the first half of the year .

Speaker #2: Adjusting for these calendar shifts and the international visitation declines , attendance would have been roughly flat for the quarter . On the positive side , we are pleased to report growth in In-park per capita spending , which has grown in 20 of the last 20 two quarters .

Speaker #2: Our Halloween events just concluded last week , and we saw meaningful year over year growth from our separately ticketed Halloscream events , including record attendance in Orlando and San Diego .

Speaker #2: For these events . Looking forward , we are encouraged by the forward looking revenue trends into 2026 for our Discovery Cove property and our group business , both of which are up over 20% compared to the same time last year .

Speaker #2: We are also happy to report that our attendance at SeaWorld Orlando is up year to date . We also pleased that during the third quarter , stockholders granted authority to the Board of Directors to approve and implement additional share repurchases .

Speaker #2: The board previously announced a 500 million share repurchase program , contingent on receiving this approval , and we have already repurchased 635,020 shares for an aggregate total of 32.2 million through November 4th , 2025 , underscoring our strong balance sheet , significant free cash flow generation and our strong belief that our shares are materially undervalued later this month , we will begin our award winning Christmas events at our SeaWorld Busch Gardens and Sesame Place , Langhorne Parks .

Speaker #2: This year , we believe our Christmas events will be our best ever with a popular rides , attractions and exhibits , our guests have come to expect , plus additional new and exciting events , specialty food and beverage offerings , and holiday shopping for everyone .

Speaker #2: I want to thank our ambassadors for their dedication and efforts during our busy summer season , and as well during our Halloween events and upcoming Christmas events .

Speaker #2: As we move into 2026 and beyond , we firmly recognize there are significant opportunity to execute better and drive meaningfully more tenants to our parks , grow total per capita spending , and continue to reduce costs and find efficiencies .

Speaker #2: While this year has been disappointing to date , we have high confidence in our ability to deliver operational and financial improvements that will lead to meaningful increases in EBITDA , free cash flow and shareholder value .

Speaker #2: We are focused , well positioned and confident in the investments we are making . The operational efficiencies we expect to achieve and the value we plan to build for stakeholders .

Speaker #2: We have announced several of its upcoming new rides , attractions and events and upgrades for 2026 . This includes the following . Orlando is pushing the boundaries of family thrills once again with its new attraction , seaQuest legends of the deep .

Speaker #2: Guests will embark on a vibrant submersible adventure through dazzling Under ecosystems where their encounter extraordinary life forms . Breathtaking environments , and inspiring stories of the sea .

Speaker #2: This groundbreaking attraction plunges explorers into an environment of awe and mystery , guided by the SeaWorld Adventure Team . SeaWorld San Diego is creating a reimagined and immersion version of the Shark Encounter , which will debut in the spring of 2026 .

Speaker #2: SeaWorld San Antonio is making waves once again with an all new ride , Barracuda Strike , Texas's first inverted family coaster . The one of a kind attraction invites guests of all ages to dive into the deep and experience the ocean's most agile predator like never before .

Speaker #2: With every twist , drop and tight turn , Barracuda Strike will deliver a rush of excitement that's bold enough for thrill seekers , yet built for the whole family .

Speaker #2: Suspended beneath the track , riders will glide above thrill the parks and connect water ski lake in a high speed pursuit that captures the speed , power and precision of the Barracuda .

Speaker #2: Busch Gardens Tampa Bay is roaring into 2026 with an all new lion and hyena Ridge , an extraordinary new addition to the park's award winning animal care portfolio .

Speaker #2: And a most ambitious new habitat in more than a decade . This reimagined area of the park expands the existing space to more than double its previous size , creating nearly 35,000ft² of dynamic Savannah terrain where two of Africa's most iconic species will thrive .

Speaker #2: Thrive a pride of five young male lions and a pair of playful hyenas . Busch Gardens Williamsburg will be announcing their upcoming attraction later this week .

Speaker #2: Our balance sheet continues to be strong . On September 30th , 2025 , net total leverage ratio is 3.2 times , and we had approximately $872 million of total available included total available liquidity and approximately $221 million of cash on hand , including restricted cash .

Speaker #2: This strong balance sheet gives us flexibility to continue to invest in and grow our business , and Ta opportunistically allocate capital with the goal to maximize long term value for shareholders .

Speaker #2: I'm . I'm disappointed in our management of costs during the quarter . We have made changes to address our execution issues in this area and have implemented new processes and initiatives to address cost opportunities across the enterprise .

Speaker #2: Moving on to an update on select strategic initiatives on the sponsorship front , we have made good progress on several partnerships that we expect to announce in the coming months .

Speaker #2: As a reminder , we have over 21 million annual visitors across our park portfolio and the average length of stay is over six hours .

Speaker #2: We continue to expect approximately $20 million of annual sponsorship revenue in the coming years on our international opportunities . We are an active discussions with multiple potential partners .

Speaker #2: We signed one MoU during the quarter with an international partner and have since entered a development advisory agreement and have begun concept development work .

Speaker #2: We expect to sign at least one additional MoU in the coming months . In regards to the mobile app , we continue to make progress on functionality , adoption , usage and financial impact .

Speaker #2: The app is being used by an increasing number of guests in our parks to improve their performance . The app has now been downloaded more than 16.8 million times , up from 15.6 million at the end of Q2 .

Speaker #2: Total revenue generated on the app continues to grow , and we are now seeing approximately 30 and approximately 37% increase in average transaction value for food and beverage purchases made through the app compared to point of sale orders .

Speaker #2: We are excited about the potential of the app and its ability to improve the impart guest experience drive increases in revenue and decreases in cost on real estate .

Speaker #2: We continue to discuss alternatives with potential partners and have recently received specific proposals that we are actively evaluating as we have discussed , we own over 2000 acres of valuable real estate and desirable locations , including approximately 400 acres of undeveloped land adjacent to our parks , including significant development , developable land in Orlando .

Speaker #2: We do not believe that the public markets have or are appropriately giving credit to these attractive and valuable 100% owned real estate assets .

Speaker #2: I'm excited about the significant investments we are making . The many initiatives we have underway across our business that we expect will improve the guest experience , allow us to generate more revenue and make us a more efficient and more profitable enterprise .

Speaker #2: We are building an even stronger and more resilient business that we are confident over time will deliver improved operational and financial results and meaningful increases in value for all stakeholders .

Speaker #2: With that , Jim will discuss our financial results in more detail . Jim . Thank you , Mark , and good morning . During the third quarter , we generated total revenue of $511.9 million , a decrease of $34.1 million , or 6.2% , when compared to the third quarter of 2020 .

Speaker #2: For the decrease in total , revenue was primarily a result of decreases in attendance and admissions per capita , partially offset by an increase in In-park per capita spending .

Speaker #2: Attendance for the third quarter of 2025 decreased by approximately 240,000 guests , or 3.4% , when compared to the prior year quarter . The decrease in attendance was primarily due to an unfavorable calendar shift , including the timing of the 4th of July holiday and a decrease in an visitation compared to the prior year quarter .

Speaker #2: In the third quarter of 2025 , total revenue per capita decreased 2.9% . Admission per capita decreased 6.3% and In-park per capita spending increased 1.1% .

Speaker #2: Total revenue per capita lowered due to decreases in admissions per capita , partially offset by increases in In-park per capita spending . Operating expenses increased $7.1 million , or 3.4% , when compared to the third quarter of 2020 .

Speaker #2: For selling general and administrative expenses increased $5.3 million , or 9.6% , compared to the third quarter of 2020 . For we reported net income of $89.3 million for the third quarter compared to net income of $119.7 million in the third quarter of 2020 .

Speaker #2: Four . We generated adjusted EBITDA of $216.3 million in the quarter . Looking at our results for the three quarters of 2025 compared to 2024 , total revenue was $1.29 billion , a decrease of $51.9 million , or 3.9% .

Speaker #2: Total attendance was 16.4 million guests , a decrease of approximately 252,000 guests , or 1.5% . Net income for the period was $153.3 million , and adjusted EBITDA was $490 million .

Speaker #2: Now turning to our balance sheet . As Mark mentioned , our September 30th , 2025 net total leverage ratio is 3.2 times , and we had approximately $872 million of total available liquidity .

Speaker #2: We had approximately $221 million of cash on hand , including restricted cash . The strong balance sheet gives us flexibility to continue to invest in and grow our business , and to opportunistically allocate capital with the goal to maximize long term value for shareholders .

Speaker #2: Our deferred revenue balance as of the end of September was $145.5 million , through October 2025 . Our passports , including all past products , was down approximately 4% compared to October 2024 .

Speaker #2: We have launched our 2026 pass program , which includes our best ever pass benefits program . We're excited about our new 2026 pass program , and expect to see improvement in growth in our pass base as we progress into next year .

Speaker #2: We started our Black Friday sale earlier this week . It's one of our biggest selling periods for the year , and we are encouraged with the preliminary results so far .

Speaker #2: Finally , as of September 30th , 2025 , year to date we have invested $167.2 million in CapEx , of which approximately $142.2 million was on core CapEx and approximately $25 million was on expansion or ROI projects for 2025 , we expect to spend approximately 175 to $200 million on CapEx and approximately $50 million of CapEx on growth in ROI projects .

Speaker #2: Now , let me turn the call back over to Mark , who will share some final thoughts . Mark . Thank you . Jim .

Speaker #2: Before we open the call to your questions , I have some closing comments . In the third quarter of 2025 , we came to the aid of 192 animals in need .

Speaker #2: Of our over our history . We have helped over 42,000 animals , including bottlenose dolphins , manatees , sea lions , seals , sea turtles , sharks , birds and more .

Speaker #2: I'm really proud of the team's hard work and their continued dedication to these important rescue efforts . I'm excited about the opportunity set in front of us , both in the near term , where we see clear paths to drive meaningful progress , and over the medium term , where the growth potential is greater .

Speaker #2: We're focused , well positioned and confident in the investments we are making . The operational efficiencies we are realizing and the value we are building for stakeholders .

Speaker #2: Now let's take your questions .

Speaker #1: We'll now begin the question and answer session . To ask a question , you may press star then one on your touch tone phone .

Speaker #1: If you are using a speakerphone , please pick up your handset before pressing the keys . If at any time your question has been addressed and you would like to withdraw your question , please press star then two .

Speaker #1: Please limit yourself to one question and one follow up . At this time we will pause momentarily to assemble our roster . Our first question comes from Steve Wisniewski with Stifel .

Speaker #3: Yeah . Hey , guys . Good morning . So , Mark , if we go back to your last call , which was early August , I think you noted then that attendance , you know , was was up on a day to day basis through through early August .

Speaker #3: So I'm just wondering maybe what happened from early August through the end of the quarter , because that would kind of tell me that , you know , you witnessed somewhere low to mid single digit declines for the rest of the quarter .

Speaker #3: And this was also off of a , you know , an easier comp since the third quarter of 24 , I think you had a weather headwind of somewhere around 300,000 guests or somewhere in that range .

Speaker #3: So , you know , maybe just trying to figure out , you what kind of happened through through August and September .

Speaker #2: Yeah . Hey , Steve , I can help you with that . So look , August , August is where we started to see , you know , I should say we expected to get more of the weather recovery .

Speaker #2: We got some early in the month , early on , and then we did not get as much as we expected over Labor Day .

Speaker #2: And and obviously into into September . You also had , you know , the , the international attendance impact in there as well .

Speaker #2: And that , you know , was there a little bit it was there in July as well . But obviously there in August and in more , more pronounced in September and here into October .

Speaker #2: And I think that's been pretty well reported . You know , that that we view that as more of a macro issue . And , and I'm sure there's things we can be doing better too .

Speaker #2: But more of a macro issue . You also have at , you know , kind the end of the quarter . And this is just a function of how we report our results .

Speaker #2: We report at the end of of of the month , regardless of what day of the week it is . So if you kind of go back and look at the days in the quarter right there , kind of at the end of the month , you have a negative calendar shift that happens .

Speaker #2: And that's just unique to us . Some of that we will get some benefit of that back in in Q4 . But that that was another a pretty , pretty meaningful impact in the quarter .

Speaker #2: Obviously .

Speaker #3: Okay . Gotcha . Thanks for that . And then second question Mark , you noted the in your words , the consumer is inconsistent .

Speaker #3: And just maybe one understand what that means a little bit more . And then maybe if you could kind of touch on as well the impact from you know , or lack of impact from epic through the , the summer and into the fall so far .

Speaker #3: Thanks .

Speaker #2: Sure . So I'll take your your second one first . So on epic . I mean , you heard me say in the prepared remarks that year to date , attendance is up at SeaWorld Orlando .

Speaker #2: I'm not going to really comment much beyond that . Obviously . But the thesis hasn't changed . We we still view the epic opportunity as a very good opportunity .

Speaker #2: We welcome investment into the market . We think it benefits the market in general . And obviously , you know , we can share and in that , in that market improvement , if you will .

Speaker #2: And that's evidenced by more than 50 years of being in Orlando . And continuing to grow and adding our own , our own additional parks and things like that .

Speaker #2: So that has not changed . Obviously , it's going to ebb and flow from quarter to quarter . I'm sure , and they're going to do things and we're going to we're going to do things .

Speaker #2: Others in the market are going to do things . But I think we're going to continue to optimize and and , and learn and , and take advantage of what will be more people coming to the market .

Speaker #2: Obviously , as far as the consumer , you know , I said last quarter , you know what ? I look at a lot of times is the the park spend and our in-park spend was up in this quarter .

Speaker #2: So people are , you know , at least in our park , you the park spend is growing . We recognize that there's a lot of companies talking about the consumer and the health of the consumer .

Speaker #2: So it's hard for us to pinpoint , you know , if it's having a significant impact on us . But we're not , you know , we're not ignoring that .

Speaker #2: Obviously , a lot of people are talking about it . So I'm sure there is some some impact to certain guests across our portfolio .

Speaker #2: It's just really hard for us to tell . And like I said , we see our per cap on In-park basis up in the quarter .

Speaker #2: And I can tell you it was up , up again in October . So that's that's kind of the commentary there around . It's just a little bit mixed .

Speaker #2: We're going to continue to move forward on our end . And like I said , the the , you know , things we got to do to continue to drive our results .

Speaker #2: And we know there could be some challenges with consumers , obviously . But at least from where we sit looking at our in-park per cap , which is the one thing I do look at that is positive in the third quarter and positive in October as well .

Speaker #2: Sorry , just one one quick thing to add to that , I kind of mentioned it , but you know , if you do look at our past base , we know that's been , you know , down and look .

Speaker #2: I'm sure when some of the peak selling seasons for our passes were around , when the tariff noise was , was happening , I said this last quarter , it's hard to know if that had an impact on us .

Speaker #2: I'm sure it didn't help us because I think what we're trying to say . And so , you know , we have opportunities to close that gap .

Speaker #2: And I can talk more about that . I'm sure a little later .

Speaker #1: Our next question comes from Artin Kocharyan with UBS .

Speaker #4: Hi . Thank you for taking my question . I have a couple of quick ones . First , what do you think drove the reversal in international visitation ?

Speaker #4: You were seeing in the first six months of the year ? It seems like you're saying it is not Orlando . What do you think drove that ?

Speaker #4: Then I have a quick follow up .

Speaker #2: Well , I think the asking specifically about international attendance , I mean , we saw it up in the second quarter and then , you know , obviously a decline in the third quarter .

Speaker #2: And I know , I think visit Orlando has put out some projections that it's going to be to the to the market in Orlando for the year .

Speaker #2: And so I think it's more macro factors . Obviously there's always things we can do better . But I think this one is pretty well understood .

Speaker #2: On the macro side that , you know , international visitation to the United States , you know , is slowing . And we see that mentioned , I think some of you guys even mentioned that in some of your reports this morning .

Speaker #2: So .

Speaker #4: Okay . And you don't see that tied to some of the immigration stuff and harder to get visas and whatnot ? Versus macro .

Speaker #2: No , all those things you said I'm sure are factors . That's what I'm saying . I think they're more more macro factors that are necessarily in our control .

Speaker #2: So whether it's visas or immigration costs , whatever it may be , that's what I'm saying . I think all those things are a drag for , for , you know , just the , the international visitation in general .

Speaker #1: Our next question comes from Thomas Yee with Morgan Stanley.

Speaker #5: Thanks so much . Yeah , I just wanted to follow up a little bit more on that . Orlando market comment . Can you maybe just flesh out what you're seeing at the regional level a little bit more , because you did cite SeaWorld Orlando attendance up year to date , and I would imagine most of the international visitation headwind you cite stems from that market .

Speaker #5: Is that fair ? And if so , then were the other markets kind of underperforming , even relative to that ?

Speaker #2: Yeah . Hey , Thomas , I think I think you can , as we've said in the past , assume that the international attendance is , as you noted , more of a an impact to to the Florida market and Orlando .

Speaker #2: So the fact that we're up year to date at SeaWorld Orlando with that headwind , you know , I think you could could view that as a positive .

Speaker #2: You know , we'll we'll see where we shake out . Obviously . But you know , your point is a valid one on a relative basis .

Speaker #2: There are other parts that we need to see do better that are outside of the Orlando market.

Speaker #5: Okay . That's helpful . And then for October , you cited per caps growing . How's attendance pacing . If you can comment on that , particularly given I think you're comping the hurricane Milton issues that you were facing in early October last year .

Speaker #2: Yeah . So on a October attendance , you know , we we had the hurricane recovery in Tampa , which we got a good portion of that .

Speaker #2: And and to some extent here in Orlando as well . There's been a couple headwinds against that , mainly the the weather in Williamsburg , which is one of our more popular Halloween parks .

Speaker #2: As I might remember over Columbus Day , a pretty big nor'easter up the East Coast that really impacted that park . And to some extent , our Sesame Park in Langhorne for a number of days .

Speaker #2: And then we did have a couple rain weekends here in Orlando . So we did get and then we have the continued international decline as well .

Speaker #2: I mean , when you net it all up , attendance was up in October . Not as much as we'd like because the weather recovery was not as strong , in part due to just poor weather in other places and the international decline .

Speaker #2: I will say I think it's important to note I said impact per cap was positive for October . Admissions per cap was also positive as well .

Speaker #2: For the month . No one's asked me yet about this , but the comment I'd make around that is I think we're doing a better job of managing the admissions per caps here .

Speaker #2: You know , in October , and you know , we'll see where that goes going forward . But that's a couple of data points for you .

Speaker #1: Our next question comes from Chris Wawrinka with Deutsche Bank .

Speaker #6: Hey good morning guys . Thanks for taking the questions Mark . Yeah I guess as you guys kind of collect feedback from guests and any surveys you do and your marketing approach .

Speaker #6: I mean , do you get the sense that you need a more strategic pivot , whether it's in in park offerings or marketing approach and thinking about things like social media versus traditional , but really , the gist of the question is , is you're collecting feedback from customers .

Speaker #6: Is there something more different ? They they want to see outside of a price value situation ?

Speaker #2: Well , look , Chris , thanks for the question . I mean , when you when you kind of back up in the quarter and you take out the weather in the calendar shift , you know , those are things that are just just kind of happen .

Speaker #2: So I don't think that has to do with necessarily what we offer in the parks or anything . The international , you know , impact is a new emerging thing .

Speaker #2: And that's more macro related . So look , there's obviously things we can do better in our parks . And you know , we got to execute better on some things .

Speaker #2: But I think as far as the events and the rides and the attractions we offer are compelling and we're going to continue to do that .

Speaker #2: We saw , like I noted , for our Halloscream event in San Diego , in Orlando , record attendance for those events . And , you know , we have a good Christmas event ready to start this weekend in one of our parks and then the rest of the parks later on .

Speaker #2: But one of the , I think , key things I don't know that pivots the right word . I think we we will continue .

Speaker #2: And I So we'll continue to make that capital investment . So there's no change in that strategy that that will attract people if you give them some good reason to come .

Speaker #2: And it's new and exciting and things like that , where I think we could do a better job is is obviously on the execution around that .

Speaker #2: And some of that comes down to marketing , some of that comes down to different ticket offers we have and whatnot . So we've got to we've got to do a better job on some of those areas .

Speaker #2: But you know , the the core of what what we do to our parks , the , the rides and attractions , the , the collection of assets still remains , you know , really strong and will continue to invest in those .

Speaker #6: Okay . Thanks for that , Mark . And then as a follow up , I think you mentioned the MOU being signed internationally in third quarter and one , I think you said you expect to sign soon .

Speaker #6: Can you maybe give us just a little bit of an overview of the overall size of that pipeline and knowing that things may or may not happen , but you know , how big can that get over the next three , five years ?

Speaker #6: And then also on the sponsorship side , you gave us kind of a run rate number . You expect . And I think in the next couple of years , same question .

Speaker #6: Is there a is the pipeline growing there as well ? Thanks .

Speaker #2: So on on international you know I think what's exciting is , you know , people continue to reach out to to us . And so we talked about in our in our release or in my prepared comments , the , the two things that we , you know , we're comfortable mentioning , the two MOU one signed , one one we expect to sign in the coming months .

Speaker #2: So , you know , I think that outreach should should continue . I don't want to guide you to anything . Obviously these things can take a while to develop , but I certainly I think having people see the potential in our product , the park in Abu Dhabi , if you've not seen it , you know , go there or look online .

Speaker #2: It's a really well done park . I mean , it's just really showcases the brand well in my opinion . And I think people see the potential of what our kind of know how and knowledge can bring to wherever they may be located .

Speaker #2: Right ? And it doesn't just have to be SeaWorld . I mean , we have obviously other brands , whether it's Busch Gardens or Aquatica or even Discovery Cove .

Speaker #2: So I expect , outreach will continue . And but I don't have specific to guide you to . We'll , we'll , we'll update you each quarter on the sponsorships .

Speaker #2: You know , similar I mean , people recognize that we have , you know , over 20 million visitors coming through our parks on an annual basis .

Speaker #2: It's somewhat of a captive audience . And , you know , there's a lot of activation in different things . We can do .

Speaker #2: And so those those there's a there's a list that , we're working through . And , you know , we're excited about those opportunities going forward .

Speaker #2: So I expect we'll continue to find more opportunities in that over the coming years .

Speaker #1: Our next question comes from James Hardiman with Citigroup .

Speaker #6: Hi . This is .

Speaker #7: Sean Wagner on for James . I guess you've talked some . What about the the international weakness ? Are you able to break down domestic visitors ?

Speaker #7: Are you seeing any differences there between destination or fly in versus local drive in .

Speaker #2: Yeah I don't know that we'll comment a whole lot on just the nuances . I mean , just , you know , a lot of our parts get visitation from , you know , closer in .

Speaker #2: Right ? So even even here in Florida , where we're sitting today , a lot of our tenants is coming from from the state of Florida .

Speaker #2: And think things move around from quarter to quarter . I think the the most pronounced thing , like we saw , which is why we called it out , was the international attendance changing .

Speaker #7: Okay . On the attendance per cap front , are you able to provide any more color on how that breaks down by park , or are you more aggressive in Orlando versus other markets , given some of the international and competitive headwinds there ?

Speaker #2: Yeah , I don't think we're going to break it down by park , but I think a couple comments , since you kind of asked , I mean , obviously , you know , you have a lot of things that impact your your admissions per cap .

Speaker #2: So you kind of mentioned international decline . That's typically a higher per cap guest . So when that when that you know , for all the reasons that were mentioned earlier why those folks , you know , why when that attendance goes down , that can have an impact on your per cap .

Speaker #2: Obviously the weather and the holiday shift as well . You can't wait around for weather to get better in a compressed summer . I think summer is , in my opinion , getting more compressed so you don't have a whole lot of time .

Speaker #2: You have to react somewhat quickly and then obviously with our pass space down , you're looking to fill fill the gap . If we do , there's different strategies for doing that which , you know , we went after .

Speaker #2: We also , you know , when I talk to our our revenue management team , you know , we have a whole team that manages this process .

Speaker #2: You know , they see more more competitive offers , if you will , more promotions from some of our competitors in in several markets .

Speaker #2: Right . So I think we're not the only ones , you know , you know , or maybe said another way , we're sometimes having to react to some of those offers that other competitors are putting out in .

Speaker #2: More than one of our markets . The good news is , as I said , is we did see improvements in the per cap in October .

Speaker #2: And , you know , I mentioned or I think Jim mentioned in his prepared remarks that , you know , we just launched our 2026 passes and and one of the big kind of acquisition periods is around Black Friday .

Speaker #2: And that's kind of our first kind of , you know , big time of the year where we we start to acquire passes for the following year .

Speaker #2: And so that that sale has just started this week , you know , it's very early , but obviously we're encouraged by the trends , as Jim said , that we see there .

Speaker #2: We know we very important that we close that gap . And early on here we're encouraged . Still a long way to go and still , you know , that that that gap can live with you for a little while because it's , you know , it's a yearly pass .

Speaker #2: So that'll start to cycle through as we go into next year . And the spring and summer of next year . And , and hopefully become more of a , a tailwind for us .

Speaker #2: And we you know , I'm not going to give you specific what we did , but obviously we've we've done a few things differently with some of our past products that we think are going to be compelling to guests .

Speaker #2: And , we continue to have very good benefits as well . And I think most importantly , to give you a really long winded answer , is the key thing you need .

Speaker #2: One of the key things you need for a strong pass program is to have reasons to visit . And I said this already , but we have another exciting lineup of new things coming to our parks next year .

Speaker #2: Whether it's attractions , rides , events , you know , refresh venues , that type of thing that you fundamentally need to have .

Speaker #2: I think in most years to to continue to have passed . Members visit and continue to also , you know , give them reasons to come .

Speaker #2: The second thing would be , you know , continue to give them a compelling value proposition . Our passes are among , I think , one of the best values you can buy for entertainment , for your family .

Speaker #2: And friends and things like that . If you look at the kind of the value you get in a season pass for coming to our park .

Speaker #2: So the investments in the product is there , the value proposition is there . We have to do a better job of driving the awareness around those pass products .

Speaker #2: The the how . We're how we're marketing those products and how we're driving people to buy that product .

Speaker #1: Our next question comes from Lizzy Dove with Goldman Sachs .

Speaker #8: Hi there . Thanks for taking the question . I guess just to go , bigger picture for a second . It feels like as an industry and for you guys like attendance isn't back to 2019 levels .

Speaker #8: And if you guys not back to the peak levels either , that you've kind of laid out in the past , like what do you think is the kind of gating factor to growing attendance longer term ?

Speaker #8: Like , is it something structural , more competition , maybe not even from other parks , but just other kind of in-home out-of-home entertainment ?

Speaker #8: Or how do you kind of think about that forward trajectory ?

Speaker #2: Hey , Lizzie , look , I still have a lot of confidence in in the industry as a whole . It's a it's a good industry and there's a lot of , you know , I kind of mentioned in the last question about the value proposition and things of going to a theme park .

Speaker #2: And I think we we line up very nicely with that . And , you know , we're continuing to make the investments in the product , which I think is really important to do that .

Speaker #2: And we'll continue to do that . You know , in our case , we've not had the best weather over the last several years here .

Speaker #2: We know there's a lot of competition for people's time . More than more than ever . And I think we've got to continue to kind of break through on the awareness and and why , you know , you should have a ticket or a pass to our part .

Speaker #2: We we sometimes talk about like , you know , if you if you moved into town , if you moved into Tampa and you were a new resident , like , it should almost be like your neighbors should be telling you like , hey , you got to get a pass to Busch Gardens .

Speaker #2: It's a great value . Everybody has a pass . So we we we've got a I think market that better give people reasons to buy our product .

Speaker #2: And we will the way to do that is to continue to invest in the parks , continue to give a strong value proposition .

Speaker #2: And people reasons to visit . And so I'm still real confident in , in not only our business , but obviously the industry as a whole .

Speaker #2: .

Speaker #8: Got it . That makes sense . And then just to kind of ask one of the other questions is slightly different way , but you've got these kind of cost saving targets .

Speaker #8: Your margins are still higher generally than the rest of the industry . And look , I know there's nuances with footprint and operating days and all of that , but I guess just because you maybe speak to the confidence of being able to kind of grow margins from here or whether there is some reinvestment needed , whether that's events , marketing , anything like that .

Speaker #8: Thanks .

Speaker #2: Sure . Well , look , you , you know that we hold ourselves to a pretty high standard and and we've , we've executed over the years .

Speaker #2: You know , I think reasonably well with , with , with some of the initiatives now , you know , obviously , I said I was disappointed in the quarter and with the cost savings and efficiencies and and I was and we've got some , you know , some new efforts around kind of how we're how processing some of that , how we're managing that .

Speaker #2: And I think we're going to do a better job of managing that going forward . There's obviously , as you noted , always new costs and new things that emerge .

Speaker #2: And we have to do a better job of managing those things as well . So I think the stuff that is in our cost plan , we're managing , it's some of the new things that emerge that we've got to we've got to address more quickly and , you know , be be more able to mitigate those as much as possible .

Speaker #2: So I don't know , I'm not going to guide you to where margins can go . Margins . You know , we're we're not guiding to that .

Speaker #2: But what I can say is , you know , a core kind of piece of our strategy going forward is continuing to find cost efficiencies and managing our cost .

Speaker #2: If , like you said , the margins are are still strong for the industry and , you know , if you look at the the cost .

Speaker #2: You know , I call them the adjusted EBITDA cost . The difference between revenue and adjusted EBITDA . If you look at that growth , you know , this year , I think under 2% .

Speaker #2: So it's not like we're we're we're out of control or anything . We've we've managed to a fairly low level , but we we know we can do more .

Speaker #2: And we got to execute better on that . And we've you know , we're addressing that as we speak .

Speaker #1: Our next question comes from Patrick Scholz with Truist .

Speaker #9: Hi . Good morning everyone . Thank you . I got on the call a little bit late . So I apologize if any of these have been asked already .

Speaker #9: Any initial expectations or how should we think about CapEx spend for next year ? Thank you .

Speaker #2: Yeah . So I can take that . I mean , you know , I think you would expect us to be in a similar range to where we are this year and that , you know , it might move around slightly , but , you know , that's been our our kind of target somewhere in that range for the most part .

Speaker #2: We haven't , you know , given you anything specific . I think the key thing for you and I know I've said this already , but we're going to continue to make investments in the parks .

Speaker #2: We're not going to suddenly change that mindset . So we'll continue to invest in the parks with capital , with with , you know , new events , with aesthetics , whatever it may be , to keep our parks fresh and reasons to visit .

Speaker #9: Okay . Thank you . And then my next question is just sort of a high level sort of thematic question . Certainly attendance .

Speaker #9: The last quarter was soft , but then you point out some really strong initial metrics for next year with Discovery Cove and Group up 20% .

Speaker #9: You know , when I think about especially Discovery Cove , you know , a really high end type of exclusive type of product , you know , would you say that , you know , you're in your business , you're seeing these bifurcated trends where , you know , say Discovery Cove doing initial bookings , looking really well , but then sort of , you know , last minute more mass market attendance , softer , you know .

Speaker #9: Is that something that you , you also see in your business , this k shape bifurcation . Thank you . And any other those types of trends that you see .

Speaker #9: Thank you .

Speaker #2: Yes , sir . Patrick . So quick I'm glad you called out Discovery Cove . And that park is on pace this year to have record attendance and revenue .

Speaker #2: And as I mentioned in my prepared remarks , the revenue trends for next year are up . You know , the bookings and revenue for next year are up over 20% compared to the same time last year .

Speaker #2: So that's a good sign . It's a really good park and it's our most expensive park right . So that's you know , kind of feeds into the comment about , you know , we look at that park , it's solid bookings .

Speaker #2: We look at our in park per cap growing in the quarter . And again in October . So you know there's you know are there consumers that are that are being impacted as part of our kind of guest mix ?

Speaker #2: I'm sure there are . So I don't want to , you know , say they're not . But we see other things . Like I said , like Discovery Cove and or Park per cap that tell us , you know , there's there's also consumers who are , who are , who are fine .

Speaker #2: Right . So kind of the the mixed bag there as you noted . But you know , I think the takeaway Discovery Cove , which is in Orlando , pacing well this year , you know , to a record attendance and revenue and looking solid for next year as well .

Speaker #1: This concludes our question and answer session . I would like to turn the conference back over to Mark Swanson . For any closing remarks .

Speaker #2: Yeah . Thank you . On behalf of Jim and the rest of the management team here at United Parks and Resorts , I want to thank you for joining us this morning .

Speaker #2: As you heard today , we're confident in our long term strategy , which we believe will drive improved operating and financial results and long term value for stakeholders .

Speaker #2: So we thank you and look forward to speaking with you next quarter .