Pursuit Attractions & Hospitality, Inc. Q3 FY2024 earnings call

• Pursuit and GES had strong third quarter performance; Pursuit's adjusted EBITDA was near the high end of guidance, GES' adjusted EBITDA was above guidance with revenue growth and margin improvement.
• Completed a $15.9 million tuck-in acquisition for Pursuit's Glacier Park Collection.
• On track to complete the sale of GES by the end of the year, which will make Pursuit a pure play business.
• Jasper's reopening progress: seven out of eight hotels reopened, Maligne Lake Cruise attraction didn't reopen this year, Pyramid Lake Lodge to reopen before holiday season, attractions and hospitality at Columbia Icefield reopened in August with good visitor numbers.
• Pursuit's year-to-date revenue grew 4% overall and 14% excluding Jasper fire impact; attractions ticket revenue grew 12% with 5% increase in visitors and improved ticket prices; hospitality room revenue excluding Jasper lodging grew about 8% year-over-year.
• Refresh, Build, Buy strategy: active acquisition pipeline, closed a 15.9 million acquisition for Glacier Park Collection, working on acquiring Jasper SkyTram, identified $200 million of organic Refresh and Build opportunities.

Pursuit: Third quarter revenue was 182.3 million, adjusted EBITDA was 86.3 million, and an adjusted EBITDA margin of 47.4%. Revenue and adjusted EBITDA were down from the prior year due to wildfire activity at Jasper National Park, but non-Jasper experiences saw 13% revenue growth. On a same store basis, attractions ticket revenue grew 16% and room revenue grew 9%. GES: Consolidated revenue was 273.4 million, adjusted EBITDA was 20.2 million, and an adjusted EBITDA margin of 7.4%. Consolidated revenue and adjusted EBITDA were up from the prior year, with Spiro revenue increasing 40% and GES exhibitions revenue growing 60% due to major non-annual shows.

• At GES, revised full year adjusted EBITDA guidance to 90 million to 95 million, up from previous 85 million to 95 million.
• Narrowed Pursuit's adjusted EBITDA range to $87 million to $92 million.
• Consolidated full year EBITDA guidance range is now 163 million to 172 million, up from 2023's 147 million.
• 2025 Pursuit adjusted EBITDA expected to be greater than 100 million after absorbing standalone public company costs.
• Proceeds from GES sale will be used to retire debt and fund Pursuit's growth initiatives.

• Wildfire activity at Jasper National Park caused temporary closures and revenue declines.
• Uncertainty regarding insurance proceeds and their impact on financials.
• Timing and amounts of business interruption recoveries are uncertain.
• Potential impact of transaction-related costs on financials.

Q: Talk a little bit more about FlyOver Chicago, FlyOver Las Vegas, where we are in the ramp of those two assets? Is Chicago at this point a positive contributor to EBITDA? And then a little bit more big picture when you look farther out. I mean, do you still see FlyOver, the platform, overall as a growth engine for you and do you think that makes sense in this new the new Pursuit entity?

A: Hi Tyler. A couple of things. So yes, Chicago is on a positive track and doing well. As we look into the future, as I mentioned in previous calls, we're working on stabilizing all of those businesses and getting them to optimum performance. They take a long time to build. They take a long time to come out of the ground. We're very proud of the experiences that we have. They have tremendous guest satisfaction ratings. We're going to work to optimize them, but we do not plan on deploying capital into creating future FlyOver locations right now. We've got lots to focus on, on the iconic location side of the business.

Q: As it relates to Jasper and the lack of those 400 rooms, is it safe to assume that you should be running pretty close to full occupancy for the next couple of quarters as construction crews and cleaning up and displaced residents own the place to stay? I mean, how should we think about that relative to prior years?

A: You're going to have some seasonality, Bryan. And as an example, for instance, construction workers potentially going home on weekends and other things back to where they live and then coming back during the week. So it will be a little lumpy, but I think what's important to note is, as you think to next summer, given that you have that removal of rooms, you're going to have very significant compression for summer 2025 in the Jasper market.

Q: It seems like every quarter this year, we've kind of heard about the Sky Lagoon being really strong demand and different measures you're taking to capture that demand. And no matter what you do, it seems like there's just more and more demand there. I was wondering if you could maybe give us a little bit of a sense for those of us that haven't been out there. Can you describe to us kind of what is the opportunity to expand on that property? Is there enough space in the area to potentially build a boutique hotel to leverage all of the demand and the strong location?

A: Sure. I'd be happy to walk you through some stuff. So a couple of things to remember, right, just to recenter on what we've actually done. So at Sky Lagoon, we realized as things continued and momentum was building, that the higher end experience, which is called fuel, which is the whole turf house experience, between the steam shower and the salts and the salt scrub and the sauna and all of the different aspects of cold plunge and so on, it had a throughput issue and it was incredibly popular. But we were turning guests away from a higher end product because we had throughput issues. So the first problem we solved was to make the whole experience in the turf house incredibly beautiful, larger and just magnificent. So now instead of one sauna that seats 50 beautiful people staring at the ocean, there's two. And there's a combination of just improvements to that facility. What that allows you to do is to sell more of our higher end product, which is the ritual, and to really encourage guests and it drives length of visitation, it drives guest satisfaction levels and so on. Remember that it's an Opco and Propco partnership, right, where we work with our Icelandic partners who are the landowners there. So there are opportunities for development and it would be something we might consider, we may not consider as time goes on, and so no commitment today as to what we might be envisioning there, other than there continues to be opportunity to expand the product, continue to have opportunity to work on the various brand aspects of it. But we're really, really pleased with how the design and operational efforts have brought it to fruition.