Alex Fuhrman: Hi guys, congratulations on a really strong year. And thanks for taking my question. I guess my first question would be on the Pursuit side of things. It seems like you’re guiding to very substantial EBITDA growth in 2024, but on fairly modest mid-single digit revenue growth. So just kind of rough numbers here. Seems like something approximately like 100% flow through on incremental revenue to EBITDA relative to what you did in 2023. Is the expectation that most of your revenue growth in 2024 is going to come from rate increases, where there’s not a lot of associated expenses or just increased flow through to attractions where there’s not a lot of cost. Would love to just kind of hear a little bit more about how earnings is going to be up so much on a relatively small amount of revenue growth?
David Barry: So attractions scale with volume, and our profitability increases meaningfully when visitation is strong. So our fixed costs remain fixed. Every dollar of incremental revenue flows at a very high margin to the bottom line. We’ve got consistent rate increases, and as we make experiences better, we’re able to provide a better experience and then charge more for it. We’re quite focused on just better execution across the board in terms of the things that we can control and manage, the combination of technology improvements. If you look, we’re experimenting in Chicago as an example, with ticket kiosks and digital ticket purchasing, which we all use for everyday items like groceries and airline tickets and other things.
But it’s all in areas where we can make the business more efficient and more effective. And there are some improvements that we continue to work on in terms of how we can deliver experience from a cost side and just driving to greater profitability and greater experience. So that’s what gets us to 30%, and then we just keep working hard.
Alex Fuhrman: Okay, that’s really helpful. Thanks, David. And then of the $20 million of growth CapEx that you’re deploying this year, I imagine some amount of that is for the Chicago FlyOver opening. Can you give us a sense of what the rest of that is for and when we could start to see any benefit from that spending?
David Barry: Yes. I’ll let Ellen, also jump in on this. Ellen, do you want to go ahead or would you like me to take it?
Alex Fuhrman: No, go ahead, David. I was just going to reiterate of the $20 million, about $6 million is Chicago. And then you can speak to the other smaller projects that you have going on.
David Barry: Yes. And Alex, it fits well with something that you’ve experienced when you visited us and we did the tour around, you were at Maligne Lake. And Maligne Lake is a great example of a very successful business, very highly rated from a guest experience standpoint. We consistently sell out in the peak of the day. So something as simple as ordering an additional boat for the Maligne Lake boat fleet, enabled to respond to demand. And so that fabrication is well underway and on track for delivery in time for the summer season. Another really good example is at Sky Lagoon, where the ritual experience at Sky Lagoon which has sauna and the salt scrub and cold plunge, et cetera, is limited today by the size of that facility.
By expanding that facility itself within Sky Lagoon, it allows us to eliminate less expensive products, provide a better experience, but also charge a premium price. So those are just two initiatives. And then there’s a myriad of other things across the board, all across Pursuit, where we’re looking at internal things that we can make better and improving guest experience all the way across the company.
Alex Fuhrman: Great. That’s really helpful. Thank you, David. And then if I could ask one on the GES side of the business. I mean, looks like you for rounding to the nearest percentage point, you basically hit your 8% EBITDA margin target early, and looks like you’re guiding to margins a little bit above that for this year. Without getting into specific guidance for future years, can you just give us a sense at a high level, I mean, assuming you’ve got a pretty meaningful revenue headwind in 2025, when you lose some of these non-annual shows. Do you think it’s reasonable to maintain that 8.5% EBITDA margin, even in odd numbered years, or at least the 8% level that you’ve referred to in the past?
Steve Moster: Yes, it’s a great question, Alex. And we are very pleased with what we were able to accomplish in 2023, given that it’s a traditionally lower non-annual show rotation for this year. It does benefit us next year, but I think the thing to keep in mind is as revenue comes back, meaning same show revenue and the square footage comes back, it comes back at a pretty high flow through. Additionally, the team has really been laser focused on finding lean projects throughout the business. We’ve talked about this over the last, kind of two and a half years or so. And we’re really seeing the benefit of that play into the results that we had in 2023. And obviously, as we tackle new projects in ’24 and ’25, those will have a benefit as well. So it’s my expectation that we can maintain that 8% or higher as we go into odd years where there isn’t a big show rotation.
Alex Fuhrman: Great. That’s really helpful. Thank you, Steve. And thanks, everyone.
Steve Moster: Thanks, Alex.
Operator: And we have a follow up from Bryan Maher of B. Riley. Please go ahead.
