Viking Holdings Ltd

Q1 2024 Earnings Conference Call

5/29/2024

spk02: Good morning, my name is Brittany and I will be your conference operator today. At this time, I would like to welcome everyone to Vikings first quarter 2024 earnings conference call. As a reminder, this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you wish to remove yourself from the queue, press star 2. Thank you. I would now like to turn the program to your host for today's conference, Vice President of Investor Relations, Carola Mangiolini.
spk12: Good morning, everyone, and welcome to Vikings First Quarter 2024 Earnings Conference Call. I am joined by Tor Hagen, Chairman and Chief Executive Officer, and Leah Talaktak, Chief Financial Officer. Also available during the Q&A session is Lynn Bond. Executive Vice President of Finance. Before we get started, please note our cautionary statement regarding forward-looking information. During the call, management may discuss information that is forward-looking and involves known and unknown risks, uncertainties, and other factors, which may cause the actual results to be different than those expressed or implied. please evaluate the forward-looking information in the context of these factors, which are detailed in today's press release as well as in our filings with the SEC. The forward-looking statements are as of today, and we assume no obligation to update or supplement these statements. We may also refer to certain non-IFRS financial metrics, which are reconciled and described in our press release posted on our investor relations website at ir.viking.com. Tor and Leah will provide a strategic overview of the company, a recap of our first quarter results, and an update of the current booking environment and order book. We will then open the call for your questions. To supplement today's call, We have also prepared an earnings presentation that will also be available on our investor relations website following this call. With that, I'm pleased to turn the call over to Tor. Tor?
spk07: Thank you, Carola. Good morning, everyone, and thank you for joining us today for our first earnings calls as a public company. To start today's call, I'd like to provide an overview of our business. and reiterate the key points of differentiation that we highlighted during our recent IPO Roadshow. Vikings started in 1997 with four river vessels and a vision that travel should be more about the destination and also more about the local culture. We saw an opportunity to create a high-end travel experience for guests who seek more than just a vacation. And that we should also appeal to mature individuals who want to learn more about history, art, and the culture of the places they visit. Over the past 27 years, Viking has grown into one of the world's leading travel companies, expanding our fleet from those four river vessels to 92 state-of-the-art ships, which we view as floating hotels. And we've built our travel platform from river cruises to ocean voyages to expeditions to the end of the world, and also in the US on the Mississippi River. During this time, we have successfully grown the business in large part because we are so different than others in the travel industry. I will now take some time to highlight a few of these differences. First, we maintain a clear focus on our core demographic, which are curious, affluent, English-speaking travelers over 55. They have the time money, and desire to explore the world. In the US, this demographic has the largest spending power of any demographic, holding over 70% of the wealth. And they're also the fastest growing segment of the population, expected to increase from 98 million people in 2020 to 110 million people in 2030. To put things in perspective, we carried about 650,000 guests in 2023. As you see, the opportunity is great. Second, we operate under one brand, Viking, which stands for excellence among our guests and across the industry. Rather than creating a conglomerate of different brands, all our products are a consistent extension of the one Viking brand. Being one brand also gives us flexibility and the ability to leverage scale. Third, we're destination focused. We feel strongly that the destination remains the destination, not the ship. And to that end, we have strategically built small ships, which we have proven to operate efficiently and profitably. Moreover, our research and direct customer feedback continues to indicate that our core demographic prefers smaller ship sites. Our ships offer quite understated elegance. They're uncluttered and comfortable. We call it modern luxury for the thinking person. You will find this same aesthetic across all our ships, creating a familiar comfort wherever you travel with Viking. And lastly, I will add that we are contrarians. We have used periods of economic downturn to secure favorable turns for our future ships, allowing us to achieve competitive prices and attractive financing. And all this brings us to where we are today, a newly listed public company trading on the New York Stock Exchange. I'm proud of our entire Biden family for achieving this major corporate and financial milestone and grateful for the continued hard work and dedication of our guests. On May 3rd, we completed our $1.8 billion IPO. It was priced at $24 per share. we raised approximately $246 million of net proceeds for Viking. In the slide here, you can see our post-IPO ownership structure and the economic and voting powers of TPG, CPPA investments, the Hagen family, and all of our other investors. Some say that when you go public, you become a different company. I venture to say we are different in this regard as well. My promise to our guests, employees, and to our shareholders is that we will continue to do four things. First, we will continue to obsess over our guests by offering an excellent travel experience at good value. Second, we will continue to treat all Viking employees as part of our family and keep the family ethos that has been fundamental to our company culture since the beginning. Third, we will continue to be contrarian, emphasizing the importance of a long-term view and shareholder value creation. And lastly, we will continue to do what is right when it comes to the environment with our already fuel-efficient river and ocean ships and with our project to create a true zero-emission solution. I will now turn the call to Leah to discuss the financials.
spk04: Thank you, Tor. Good morning, everyone. I'll begin with an overview of Viking's results for the first quarter. Unless otherwise noted, my commentary on 2024 comparisons are to the same period in 2023. We are very pleased to have delivered a strong first quarter. On a consolidated basis, total revenue grew 14.2% year over year to 718 million, mainly due to an increase in the size of Viking's fleet and higher occupancy. During the first quarter of 2024, capacity PCDs increased by 14.5%, and occupancy was 94%, an improvement of 120 basis points compared to the same period in 2023. As a reminder, we allow up to two guests per cabin, and at times, our guests may even want a single cabin. Therefore, we will never exceed 100% occupancy. Adjusted gross margin in the quarter increased 19.1% year over year to $495 million. Net yield in the first quarter was 508, which is the highest net yield we've seen in a first quarter period. Net yield grew by 2.8% compared to the first quarter of 2023. Keep in mind that in 2023, we experienced strong growth in net yield compared to 2019. Our net yield for the full year of 2023 grew by 16.7% compared to the full year of 2019. Net loss was $494 million for the quarter, which includes a loss of $330.5 million related to the net impact of the private placement derivative loss and interest expense related to the Series C preference shares. The Series C preference shares converted into ordinary shares immediately prior to the consummation of the company's initial public offering, which was after the first quarter of 2024. Also, and as a reminder, we typically incur a net loss in the first quarter due to the seasonality of our business. Having said this, adjusted EBITDA for the first quarter improved more than 46 million compared to last year, mainly due to higher capacity passenger cruise days and higher net yields. Adjusted EBITDA was a loss of $4 million compared to a loss of $51 million for the same period in the prior year. Adjusted EBITDA for the 12 months ended March 31, 2024 was $1.14 billion, which exceeds full year 2023 adjusted EBITDA of $1.09 billion. Adjusted EBITDA margin for the last 12 months was 36.1%. Moving to our two reportable segments, river and ocean, for Viking River, occupancy declined slightly from 93.5% in the first quarter of last year to 92.1% this quarter, primarily due to lower occupancy for our Egypt itineraries compared to the first quarter in 2023. That said, adjusted gross margin grew 33.6% to 108 million this quarter, and as a result, Net yields grew to 609 compared to 593 in the same period last year. Our first quarter river net yields are usually the highest as we have more Egypt and Vietnam sailings compared to Europe's sailings. Most of the European river sailing started in late March. For Viking Ocean, occupancy improved 60 basis points to 94.5%. Adjusted gross margin grew 18.3% to $316 million this quarter, and net yield grew to $439 compared to $425 in the first quarter of 2023. Now moving to the balance sheet, as of March 31, 2024, we had total cash and cash equivalents of $1.7 billion and net debt of $3.9 billion. To this end, our net leverage improved to 3.4 times at the end of Q1 2024 compared to 3.8 times on December 31, 2023. And we are very pleased to have received the ratings upgrade by S&P in May, where Viking Cruises Limited's corporate rating was upgraded to a double B minus from a B plus. This achievement underscores our dedication to financial prudence. As of March 31, deferred revenue was $4.1 billion. Also on this page, you can see our current bond maturity outlook. We have one bond maturity due in May 2025, and all other maturities are in 2027 and beyond. The scheduled principal payments for the remainder of 2024 as of March 31, 2024 is $196 million, and for the full year 2025 is $489 million. The scheduled principal payments for 2025 INCLUDES THE SIX AND A QUARTER SENIOR NOTES DUE IN MAY 2025. FROM A COMMITTED CAPITAL EXPENDITURE PERSPECTIVE, FOR FULL YEAR 2024, THE TOTAL COMMITTED SHIP CAPEX IS EXPECTED TO BE ABOUT 800 MILLION, NET OF FINANCING 420 MILLION. AND FOR THE FULL YEAR 2025, THE TOTAL COMMITTED SHIP CAPEX IS EXPECTED TO BE ABOUT 650 MILLION, NET OF FINANCING $30 million. With that, I'll turn it back to Tor to review our business outlook, including our booking curves.
spk07: Thanks, Leah. As I mentioned earlier, we believe in the importance of taking a long-term view of our business and creating share of the value. We do not feel we should manage a business for short-term earnings, and as such, we will not be providing guidance in the same manner as many other public companies. In communicating with our bondholders over the years, We have provided our booking curves on a quarterly basis, and we intend to continue this practice when communicating with our equity holders. Looking at this slide here, we are well positioned for 2024 with 91% of our capacity PCDs booked for our core products of $4.6 billion of advanced bookings. This is 15% higher than the 2023 season at the same point in time. 2025 is interesting as well. We are 39% booked of $2.5 billion of advanced bookings. This is 27% higher than the 2024 season at the same point of time in 2023. And on the next slide, you will see our ocean curves. The green line shows the bookings for 2024, and the blue line shows the bookings for 2025. As of May 19, we have sold 91% and 47% of our capacity PCDs for the 2024 and 2025 seasons, respectively. We feel good about these trends as advanced bookings were 16% and 30% higher in comparison to the 2023 and 2024 seasons, respectively, at the same point in time. And we're booking at attractive rates. Turning to the next slide, we show the same presentation for our river business. On May 19th, we had sold 92% and 30% of our capacity PCDs for 2024 and 2025 seasons, respectively. These advanced bookings were 13% and 19% higher in comparison to the 2023 and 2024 seasons at the same point in time. And rates here are quite attractive as well. Now, Leah, will you walk through our order book?
spk04: Sure. Thank you, Tor. Moving to our order book, I will discuss the capacity we expect to come online over the next several years through our new building contracts. For our river business, we have 18 river vessels in our order book to be delivered by 2026. Eleven of these vessels would operate in Europe, six in Egypt, and one in Vietnam and Cambodia. We have also signed options for eight additional river vessels, four of which have an exercise date of October 30, 2024, for delivery in 2027, and four which have an exercise date of October 30, 2025, for delivery in 2028. And for oceans, we have six ships in our order book to be delivered by 2028. In addition, in May 2024, we exercised options for ocean ships 17 and 18, which are both scheduled for delivery in 2029. We will enter into contracts with the shipyard, which will be subject to certain financing and other conditions. Further, we have the option for two additional ocean ships for delivery in 2030, with an option exercise date of May 30, 2025. In both scenarios, we will be prudent and fact-based in deciding on whether we convert options to firm orders. all with the intention of maintaining our market-leading position in rivers and oceans. In summary, we are very pleased with our results for the quarter. We feel Viking is well-positioned to continue to grow in the future through the combination of strong advanced booking trends and capacity expansion through new builds. That concludes our prepared remarks. I will now turn it back to the operator to take questions.
spk02: At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue by pressing star two. In the interest of time, we do ask that you please limit yourself to one question. And once again, that is star and one if you would like to ask a question. We'll take our first question from Matthew Boss with JP Morgan. Your line is open.
spk01: Great, thanks, and congrats on a really nice quarter. Thank you. So, Tor, could you elaborate on current demand trends and just your perspective as we think about the nearly 40% booked position for 2025? I think you said that's about 27% higher than the same time a year ago. And then, Leah, just with the business book 91% for this year, just how best to think about the yield cadence for the remainder of the year and multi-year, I think you've kind of laid out. low single digits relative to mid-single digit yields historically. Just how best to think about potential conservatism within that metric.
spk07: Should I take a high-level stab at that first? And then maybe I can get some help from Lynn. We are in different continents today, so we may have a little coordination issues. But I'd say that our current bookings, proceed pretty much as we would have planned, I say. We have no surprises to speak of. Things are going very fine. That's at a very high level. I think Lynn can add substance to that statement.
spk03: Yeah, thanks, Tor. So, hi, Steve. This is Lynn. I think for 2025, you know, we are 39% sold, and we are seven months out from even the season start. So, it's a good position to be in. I think, you know, we are, as Tor said, you know, where we should be on the curve for what we would prefer. For 2024, we are 91% sold. The remaining inventory really is the fourth quarter. And as, you know, many of us are aware, the fourth quarter is generally a low season. So we do expect yields to go down slightly as we sell out the rest of the year.
spk02: Thank you. We'll take our next question from Steve Wyskowski with Stiefel. Your line is open.
spk08: Hey, guys. Good morning, and congratulations on becoming a public company. So I guess my first question is around your forward booked position, which continues to be pretty strong. But if we think about the pricing on your forward bookings, it looks to us like it's kind of running in that you know, let's call it mid to high single-digit range, which is probably, you know, I'd say a little stronger than what, you know, we were thinking and what's kind of out there embedded, you know, in consensus today. So maybe just wondering how you guys think about yield growth over the long term, and maybe any help you can give us as to, you know, maybe what your long-term yield outlook essentially looks like. Thanks.
spk03: Hi, this is Lynn. If I could take this one quickly, and Leah and Tor, please chime in here. Historically, we have been able to go grow yields in the mid to high single digits. I think as we look to the future years, we will always price the demand, you know, currently based on our curves. You could see that, you know, our prices are higher compared to the prior season at the same time, you know, a good amount. I think our goal is always to try to keep prices, you know, fair and mid to high single digits have been something we've been able to achieve historically. And as we look forward, you know, as I said, we would price the demand.
spk08: And can I ask one more, if I could? So, I just want to ask about the decision to not give guidance. And it seems to us that kind of giving guidance for you guys would probably be, you know, a lot easier. you know, given your advanced booking curve and the fact you don't really generate onboard revenue. So the yield variability is a lot less, you know, versus your cruise pier. So just want to try to understand, you know, that decision.
spk07: Well, you know, we have had the bonds outstanding for a few years and we sort of stuck to the theme that we should not give guidance then. And I think What we now do by the, I think these booking curves are probably more information than you are likely to get from any of the other cruise line operators. We also give segment information. So I think we try to be quite transparent. And I think when we see, when you look at the booking curves, I think there will always be some uncertainty up and down. And I don't think we should necessarily speak to that uncertainty. I think that's something that, I think analysts and investors can also assess based on the information they're given. So I think that, you know, we like to talk about what we have done rather than what we hope to do, and I think we'll try to stick to that.
spk04: Yeah, and I just want to add to that that, you know, part of the reason is we are long-term in terms of how we view the business and also in the shareholder value creation. And one of the things that makes us successful is that we are flexible and we are nimble. And we feel that once you start getting guidance, then you start to lose some of that DNA that makes us Viking. And then also I wanted to add that booking curbs are facts. So that's not speculative. That's what we've achieved. And so facts we can stand by rather than forward projections and guidance.
spk08: Okay. Understood. Thanks, guys. Appreciate it.
spk02: Thank you. We'll take our next question from Robin Farley with UBS. Your line is open.
spk06: Great. Thank you. I do want to echo the sentiment, I think, that given how much further Viking books advance today, I do think investors probably were thinking that would – enable Viking to give guidance with higher conviction and higher visibility than maybe some other companies that don't have as much visibility. So it is a little bit surprising not to share your visibility in that way. So maybe you could, if you could help us in thinking about the data point that you are sharing, the advanced booking per passenger cruise day, when you talk about 2025, that being up 12%, maybe if you could help investors just to understand whether, does that booking curve, because you're familiar with how your booking curve changes over the course of the year approaching sailing, investors are not as familiar with that since other companies don't share that. Is that 12% increase representative of where you expect yield to come in? And if not, if you could talk to us about how we should view that 12%, what our expectations should be given that data point that you're sharing. Thanks.
spk03: Hi, Robin. This is Lynn. I think from our perspective as we sell, as we indicated, we do try to price demand. For oceans, oceans does operate year-round, and so the selling there generally starts earlier, which we can see for 2025 for oceans where 47% sold. The pricing there is about 13% higher year-over-year. And then for rivers, rivers mainly starts this season, especially in Europe where the bulk of our capacity is in March and April. And for rivers, you can see here operating capacity, we've sold 30% up to 2025. And so the general cadence is our high season and our higher cabin generally sells first. And so we do see as we open up the season that pricing is generally higher. And then as we sell into the season, whether that be low season or the lower categories, pricing will trend downwards. I think for 24, you can see that here, where for 24, we're 91% sold, and the pricing there may come down a little bit as we sell the rest of 2024, which is really the fourth quarter. But you can see that trend as, you know, we continue to sell.
spk06: In theory, just thinking about prior curves, if every year you sell the higher season and higher price cabins first, and every year then later on you're selling the more average price cabins, wouldn't that be a consistent percent change year over year? And if not, I just want to make sure that there's not an expectation that your price is going to be up 12% if you would suggest that it's not going to be. I think that would be helpful to be clear on that. But just thinking about that year over year, it seems like that would be the – that would be the case that the base would also have moved down last year so that maybe the percent change would be representative. And if it's not, it would just be helpful to understand that that's not the expectation that investors should have. Thank you.
spk03: Generally speaking, you know, we sell based on demand. And we will also have mix and deployment differences year over year as we add new And depending on which itinerary sell first as well. So I understand the question. I think it's hard for us to say that the selling patterns will be consistent year over year at the end of the day. But, you know, we are quite pleased with where we are positioned for 2025 today. Prices are up. for 25, prices are up for 24. And, you know, I think, you know, we've seen as well, historically, we've been able to increase prices in the mid to high single digits.
spk06: Thank you.
spk02: Thank you. We'll take our next question from Andrew DeDora with Think of America. Your line is open.
spk09: Hi. Good morning, everyone. Thanks for the questions. Tor, Lea, are there any guideposts you can give us in terms of how you're thinking about net leverage or liquidity targets as you build cash here over the next few years?
spk07: Yeah, maybe I should take that one. We have had a few roadshows lately, and the question has come up there too. And there we reported what the net leverage was at the end of last year. 3.7, if I'm not mistaken. Now we're down to 3.4. And that is certainly a leverage level where we are comfortable, quite frankly. So that's that. Of course, you can see we are generating a fair amount of cash. So it could go further down if nothing more happens. And that would be fine, too. I think we don't have any sort of – you see what our capital investment program is, so you can model that out. for the time being, at least, we don't have any plans of paying dividend. I believe that, you know, my family is a large shareholder in this, and I think we can't see much better investment opportunity than we have in this company. So I think there are no dividend or buybacks planned of any type. So I think we will have a good base for expanding the business that we have. But it should be profitable expansion, not expansion for expansion side. And I think we have a benefit of a great order book, which we have got at good prices. So I think, and then we combine that with a balance sheet, which is probably among the best in the industry. And I think we are in a good position.
spk09: Great. Thank you for that. And if I could maybe ask one more just on the growth opportunities. I kind of understand the opportunities on the ocean side. I guess just in terms of river growth, you know, over time you've obviously branched out of Europe into the Nile to Vietnam. Tor, where do you see incremental opportunities to deploy the 18 river vessels that you currently have on order? And thank you.
spk07: Well, the longships are planned deployed on the rivers in Europe. That's the nature of their design. And I think there is definitely a demand there for that from our existing markets. Of course, we also, as you know, we have an embryonic effort in China where we have currently deployed four river ships on European rivers to the Chinese source market. And they have good ratings. We're not full yet. This is an area where we see potential. But, you know, we should be very careful that we don't overstate it. But I think there is more potential for building river ships too.
spk09: Thank you.
spk02: Thank you. We'll take our next question from Dan Pulitzer with Wells Fargo. Your line is open.
spk05: Hey, good morning, everyone, and congrats on the recent IPO. I wanted to ask the question about bookings in a little bit more granular manner. Maybe if you could talk about the difference between river and ocean and how those subsegments track along the booking curve. Because I believe that for ocean, you guys are tracking up kind of in that mid-teens for 2025, whereas rivers you're tracking up kind of mid-single digits. So as we think about kind of filling in those curves over the next several quarters, How should we think about maybe the difference in pricing power that you have there?
spk03: Sure. Hi, this is Lynn. So I think the biggest difference between oceans and rivers is ocean operates year-round. And so as we open this season, it generally will open a little earlier than rivers, which is where you see off-spring capacity. We've sold 47% of 25 for oceans already. And for rivers, which, you know, The bulk of our capacity is in Europe. The European river season mainly starts in March, April. And so there is a seasonality difference first and foremost. The second thing is, as you can see for rivers, we're 30% sold for 2025 at pricing of almost $1,000 per day. So for rivers, we generally do see very high season higher cabin categories, and also itineraries that yield a higher yield, they generally will sell first. We do not expect our yields to stay at almost $1,000 per day. And so, you know, understanding if you just do math, you know, 425 for rivers, we're 6% ahead. But if you kind of step back, looking at the pricing itself, it's rather high. And I think as we continue to sell the river season and the rest of the season, we will see that come down.
spk05: Got it. That's helpful. And then just in terms of the balance sheet, I think that you guys, obviously, you're generating a lot of cash. And you already addressed that to some extent. But I mean, high level, next year, you're going to be, I think, net of ship financing. Your CapEx is only $30 million. You are building cash. Is there an impetus or goal to get to investment grade? And as far as the capital allocation, dividends and share repo don't seem a priority. So why And it seems like the growth CapEx is accounted for. So what is it that you, you know, how do you think about deploying that cash?
spk07: Yeah, I don't want to make any forecast, but you can say we never had any ambition to be investment grade. I think we are primarily in the business of creating value for our shareholders. I think our bondholders have had a good ride with us too, don't get me wrong. But we have said that a double B rating is not a bad rating to have. I think it's, we have to optimize the capital structure. So I don't see any, none of us, we don't currently have any stated ambition of becoming investment grade on the bond side. I think we have opportunities, investment opportunities that we'll make use of. And that'll be it. I think the financing we get being a double B, So mine now is good enough.
spk05: Got it. Thanks so much for all the detail.
spk02: Thank you. We'll take our next question from Meredith Jensen with HSBC. Your line is open.
spk11: Hi, good morning. I was wondering if you could speak a little bit about the excursion business and how many people are taking advantage of that and sort of the economics that go into it as you build out some of those other trips that your loyal guests can take advantage of. That would be great. Thank you.
spk03: Hi, Marius. I think, you know, when we speak about our excursion business, it's twofold. So we have pre and post cruise extensions, which are Packages that you can add to your cruise before or after your cruise. It's a couple of nights at a hotel with some tourists that may be involved. And we have a variety of packages that you can purchase. Up to almost 40% of our guests do opt for that. And then also, of course, what you have for others, which is optional excursions. I think it's very important for us to note that biking is an all-inclusive product. That is our business model. We believe in providing our guests with a package that they know well ahead of time what, you know, the costs are, what's included. But of course, guests can also augment their van tour or cruise with things such as pre-post and then optional excursions. And so from an optional excursion perspective, we have seen that grow over the years, which, you know, all these things have added to what you see as our net yields. You know, last year, we had net yields of almost $500 per day, which is quite strong from our perspective.
spk11: Great. One additional question. I know you all are very deliberate about languages and how sort of the comfort level of the guests in terms of being on ship. I was wondering, just looking at, for example, the number of listings in certain languages that you advertise for on LinkedIn, how other sort of areas or base of communities and languages that you might think would be an opportunity long-term outside of China, which we know is another long-term area that you're interested?
spk04: I think at this stage, Meredith, you know, English-speaking language is, you know, our main focus. And as Tor mentioned, the Mandarin-speaking is in its embryonic stage. Beyond that, could there be other opportunities in other languages? There could be, but that would be further out. I think for the moment, we are going to focus on those two languages.
spk11: Awesome. Thanks so much, Leah.
spk02: Yeah, yeah. Thank you. We'll take our next question from Stephen Grambling with Morgan Stanley. Your line is open.
spk10: Hey, thanks. As you fit into Ocean over the next few years, can you talk to how the itineraries are potentially going to change both in thinking through, you know, new locations and or duration?
spk07: I think we, the way we are, we pretty much cover the world, I would say. So I think it will be more of the same. Of course, in the short term, you can see some issues related to what happened in the Red Sea, and we are dealing with that properly, I think. But I think apart from that, I don't think we'll see much change. It will be more of the same. Of course, you can see for the For the Chinese market, it's a question of what product can we offer them. And we have one joint mentorship where we have a 10% interest. That could be deployed slightly differently. That could be an expansion opportunity to different markets, I would say.
spk04: Yeah, and I also wanted to add, you know, so when we think about our ocean capacity coming online, we will continue to deploy in the regions that we are, you know, small ship experts at rather than being largely Caribbean focused. But I also wanted to point out that we do operate year-round in certain regions. region. So, for example, in search of Northern Lights, you wouldn't expect, you would not expect that we, you know, people would want to go there in the off-season, but they do. Then they look for the Northern Lights, and then also in the Med, where they're in the quiet season, which our guests also appreciate. So, given just the type of demographic and the People that are drawn to our products, they know that, you know, in times where you wouldn't necessarily think people would travel to certain regions, that's when they know it's best to go. So based on just that difference, we feel that there's ample opportunity for our oncoming fleet.
spk10: And perhaps to follow up on River, and for those less familiar, what are some of the competitive barriers to entry for this market, and how might the operating leverage of river differ versus cruise? In other words, do you generally expect more or less flexibility in the cost structure versus ocean?
spk07: I think, go ahead.
spk04: Well, from a river perspective, I think, you know, what sets us apart here is just our scale. The fact that we have identical vessels and that there are many of them. So, from a competitive advantage perspective, I think it would be difficult for people to enter into that space, and given that we are over 50% of the market share also. So we have great brand awareness from a river perspective. Also the fact that we have the docking locations, that we either have long-term leases or control. We have about 97 of them. And then also our forward booking curbs. So our forward booking curbs give us flexibility into what itineraries and locations are selling well. So we're able to plan for the future much earlier than others. and secure those stocking locations. Great. Thanks so much.
spk10: Yep.
spk02: Thank you. We have restarted a lot of time for questions. I would now like to turn the call back over to Thor Hagen, Vikings chairman and CEO, for closing remarks.
spk07: Well, I want to thank everyone for joining. in this what I call our virgin earnings call for our new shareholders. I thank you for your support and interest in biking. I wish you a great day.
Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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