SeaWorld Entertainment, Inc. (NYSE:SEAS) Q4 2022 Earnings Call Transcript

And obviously, I think some of the spend you would see associated with those would tie to that. I would say, in general, we probably opened our rides a little earlier last year. So there may be a little bit of timing differences of some of those costs just from when we opened those this year. But Jim, why don’t you give maybe an example or 2 of some of the new things we’ve done with the CapEx?

James Forrester: Sure. Phil, good to meet you. I’ve been brushing up on this call, I noticed what you had asked in the third quarter of the year. And so at that time, you would said something about 130 to 140 stable core and about $40 million or so in ROI. And we have increased since that guidance and since we put that out and a lot of that addition has been looking at those attractions, not only that we’re putting in place for 2023, but the advanced purchase and design for 2024 attractions and beyond. So that increased a little bit since we last spoke. We are doing some additional infrastructure needs around the properties, actually fairly major investment, they include base infrastructure, if you will, for the physical plant plus enhancements for the guest experience and things like aesthetics, specifically this year, you’re going to see a lot of focus on shade and restrooms.

That core, not to be outspoken by the ROI benefit of going up to that $120 million range is a lot of food and beverage facility focus. So we’re going to be taking a look in double-digit opportunities across the properties to provide new facilities or expand the current facilities, integrate mobile-ordering to legacy facilities and to increase the opportunity to make our business more efficient in those technology advancements.

Operator: And the next question comes from Eric Wold with B. Riley Securities.

Eric Wold: So two questions. I guess one, if you look back at the illustrative kind of financial targets you laid out back on the 2020 call — 2020 versus today, the estimated costs went up by about $160 million to $159 million. Can you give us a sense of how much of that is variable costs associated with kind of higher per cap spending and how much is kind of a structural increase in operating costs kind of net of the cost savings you’ve implemented?

Marc Swanson: Yes. Eric, I can again, try to help you out here. I mean, again, keep in mind that the illustration, it’s just that it’s an illustration. And if you look at the footnotes, I believe we noted right the flow-through on this, right? So you can probably get some sense of what the flow-through is on the per cap and attendance growth. I mean, maybe said more simply is we should be able to add attendance to our parks and especially if we’re just adding it to a day where we’re already open, and we’re bringing in another 1,000 people or something, that should not have a meaningful increase in costs for us. Where you would get more structural cost increase would be if we have to open days, we weren’t open before or built new areas of the park that we didn’t have before, that type of thing. But in general, if we’re kind of adding to existing days, that flow-through is going to be pretty high.

Eric Wold: Got it. And then kind of going back to an attendance question that was asked or kind of looking at this year. I guess, how do you think about the record season pass is what you’ve done to push that? How do you think about season pass versus daily focus in ’23? Just with an expectation, and obviously, season pass usage would ramp up and you’ve got obviously some increases in pricing with season pass as I assume similar ones with daily. Can you keep the admissions per cap moving higher in ’23 and with that push and pull?