Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Viad Corp reported a strong start to 2024 with first quarter results aligning with expectations, driven by robust performances in both GES and Pursuit segments.
- Revenue growth was reported across the board, with a 4.9% increase year-over-year, highlighting healthy growth in key business areas.
- Pursuit segment exhibited a 14% revenue growth during the seasonally slower period, led by attraction ticket revenue which increased by 25%.
- Viad Corp successfully launched the new Flyover Chicago attraction, receiving positive feedback and contributing to revenue growth.
- The company maintained a strong liquidity position with total liquidity of $137.2 million, providing financial stability and flexibility.
Negative Points
- Adjusted EBITDA for Pursuit decreased by $5.8 million during the seasonally slow period, reflecting increased operating costs to support higher business volumes.
- The company reported a GAAP basis net loss attributable to Viad of $4.2 million, which was higher than the first quarter of 2023, primarily due to increased non-operational items and income tax expense.
- First quarter cash flow from operations showed an outflow of $7.5 million, which was lower than expected due to working capital timing.
- Despite overall revenue growth, certain segments like Spire and QTS exhibitions showed modest growth rates, indicating potential challenges in scaling these segments rapidly.
- The company faces ongoing challenges with labor and wage pressures, particularly in gearing up for the high season in the Pursuit segment, although conditions have improved compared to previous years.
Q & A Highlights
Q: Can you update us on the current situation with the volcanic activity in Iceland and its impact on the Blue Lagoon and Sky Lagoon attractions?
A: David Barry, President - Pursuit, Viad Corp: The volcanic activity has intermittently closed the Blue Lagoon but has increased visitation to the center of Reykjavik, benefiting the Sky Lagoon. Overall, Iceland is poised for a strong summer with increased airlift from Western Europe and North America.
Q: How has the experience with opening Flyover Las Vegas helped with the launch of Flyover Chicago? Are there any lessons learned that could be applied?
A: David Barry, President - Pursuit, Viad Corp: The strong start in Chicago, with positive EBITDA in the first month, benefited from the less competitive market and synergies with other attractions at Navy Pier. The experience in Las Vegas provided valuable insights, contributing to the successful launch in Chicago.
Q: What are your expectations for RevPAR for the upcoming year, considering the trends in the lodging industry?
A: David Barry, President - Pursuit, Viad Corp: Pursuit expects strong RevPAR growth driven by consumer confidence, a trend towards experiential spending, a weak Canadian dollar boosting tourism, and increased airlift into destination gateways. Strategic management of inventory and pricing also supports optimistic projections for the season.
Q: Has there been any change in the outlook for GES since the last quarter?
A: Steven Moster, President and CEO, Viad Corp: The outlook for GES remains consistent with previous quarters, with continued improvement in same-show revenue and square footage, and strong demand for exhibition services.
Q: Can you provide an update on the recovery of same-show square footage for GES and the sustainability of pricing power?
A: Steven Moster, President and CEO, Viad Corp: The recovery is progressing and expected to continue through 2025. Viad Corp has successfully implemented significant price increases and expects to maintain mid-single digit pricing growth, which will continue to drive revenue above square footage growth.
Q: What trends are you observing in group travel on the Pursuit side, particularly with the slow return of Chinese tourists?
A: David Barry, President - Pursuit, Viad Corp: While Chinese tourism is recovering slowly, other Asian markets like Japan and Korea are compensating with increased travel. Pursuit is reallocating inventory to other partners and expects strong demand from Asian countries, which is driving positive booking trends for the upcoming seasons.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
