Viad Corp

Good evening. Thank you for attending today's Viad Court fourth quarter 2021 earnings call. My name is Selena and I will be your moderator. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Carrie Longwood Viad. Please go ahead. Good afternoon, and thank you for joining us for VOD's 2021 Fourth Quarter and Full Year Earnings Conference Call. During the call, you'll hear from Steve Moster, our President and CEO and President of GES, David Barry, our President of Pursuit, and Ellen Ingersoll, our Chief Financial Officer. Certain statements made during the call, which are not historical facts, may constitute forward-looking statements. Information concerning business and other risk factors that could cause actual results to materially differ from those in the forward-looking statements can be found in our annual, quarterly, and other current reports filed with the SEC. During the call, we'll be referring to certain non-GAAP measures, including income or loss before other items and adjusted EBITDA. Important disclosures regarding these measures, including reconciliations to net income or loss attributable to Viad, can be found in Table 2 of our earnings press release, which is available on our website at viad.com. With that, I'd like to turn the call over to Steve.

Thank you, Carrie, and good afternoon, everyone. Thanks for joining us. During the call, we'll discuss our business performance during the 2021 fourth quarter and full year, provide some insight into the recovery of our industries, and review our financial position. David will provide business updates for Pursuit shortly, and after that, I'll share some business updates for GES. Ellen will cover our financial results toward the end of the call. Before I turn the call over to David, I'd like to thank our entire team for their remarkable job meeting the needs of our clients and guests with excellent service and operational execution this year. I'm proud of what we've accomplished in this very dynamic operating environment with COVID restrictions, global supply chain issues, and labor shortages. In addition to delivering extraordinary experiences for our customers as business activity accelerated, we transformed our cost structure at GES, opened three new world-class pursuit attractions, and enhanced our financial flexibility with a new credit facility that has enabled us to continue investing in exciting growth opportunities. I'm pleased with our performance and the actions we've taken to position our company for incredible success into the future as our businesses and industries continue to recover with pent-up demand for iconic and unforgettable leisure experiences and in-person live events. And now I'd like to turn the call over to David to discuss what's happening across Pursuit. David?

Thanks, Steve. Thank you all for joining us. Pursuit's recovery continues in full swing. We're pleased with how the business rebounded in 2021 and are optimistic about what lies ahead for 2022. Before getting into the details, I'd just like to start with gratitude and recognition from my Pursuit colleagues, from our frontline team members serving guests to our managers and senior leaders who've worked so incredibly hard through difficult conditions. We've been living in a very fluid operating environment for 22 months and have succeeded in delivering strong guest experiences at Pursuit's iconic locations. Pursuits adjusted EBITDA increased 52.4 million, improving from a loss of 9.7 million in 2020 to a positive 42.7 million in 2021. This rebound is evidence that the world is healing, that the tourism industry is in recovery, and that guest demand for high-quality experiential travel and hospitality experiences remains strong. For the seasonally slow fourth quarter, Pursuits delivered revenue of 23.4 million, compared to just $9.2 million in Q4 2020. And we exceeded pre-pandemic 2019 fourth quarter revenue by nearly 8%, as our two new year-round attractions, Sky Lagoon and Reykjavik, and Flyover Las Vegas, and our new night-rise experience at the Banff Gondola, helped offset challenges driven by the pandemic, including the Omicron variant, which spiked in December and adversely impacted holiday season operations. Despite ongoing COVID-related challenges, our teams persevered. We remained open for business throughout the quarter while delivering healthy results. In Jasper, as part of our continued refresh build by growth strategy, we initiated a multi-year roadmap to invest in a variety of upgrades across the lodging portfolio and the benefit to the guest experience was immediately clear. All seven hotels saw meaningful year-over-year increases in guest feedback scores. In Banff, As testament to the quality of our experiences and the dedication of our team members, we saw record net promoter scores at several attractions, including the Glacier Adventure, Glacier Skywalk, and Brewster Sightseeing Tours. Several of our lodging properties in Montana saw record guest feedback scores, with the historic Glacier Park Lodge, Delphin Chalet, and West Glacier RV Park and Cabin Village all delivering new highs. Finally, in Iceland, we were pleased with the success of our holiday gift ticket program at Sky Lagoon. We sold over 29,000 holiday gift ticket packages, which equates to roughly 80% of the total Icelandic population receiving a Sky Lagoon gift product for Christmas. In terms of financial results, starting with attractions, you're all aware that international border closures remained in place well into the 2021 peak summer season, which impacted overall visitation. And despite these short-term impacts to visitation, we're very encouraged by the growth of our revenue per customer metrics. For the year, effective ticket price or attraction ticket revenue per guest increased 11% from 2019 levels on a same-store basis, including only the attractions we had in the entirety of both years. Attractions performance in the fourth quarter also benefited from the launch of Night Ride, a new attraction within an attraction at the top of the Banff Gondola. We created this in partnership with the Indigenous Stony Nakota Nation. Night Rise is a multimedia light, art, and sensory experience that connects the guests to the story of the land, stars, and night. Night Rise is a great example of continuous improvement, specifically taking a great experience like the Banff Gondola and creatively making it even better. Launching in early December, the exciting addition of Night Rise drove a 4% increase in Q4 effective ticket price at the Gondola from 2019. while also increasing ancillary revenue yields for food and beverage and retail by 13% and 44% respectively. In Vancouver, Flyover Canada's strong third quarter results continued into Q4 as pent-up demand for the wonders of the flyover experience drove strong ticket sales and ancillary revenue per guest. And as mentioned, Flyover Las Vegas saw its first full quarter of operations, delighting Las Vegas visitors with the sensation of flying over the American Southwest and earning a rating of 4.5 out of 5 stars on both Google and TripAdvisor. Over to lodging, the hotel property saw significant year-over-year increases. For the quarter, same-store room revenue increased 49%, and rev par grew by 35%. Relative to the fourth quarter of 2019, occupied rooms increased 4%. For the full 21 fiscal year, year-over-year hotel occupancy increased by 5%, rooms revenue by 109%, and rev power by 42% on a same-store currency-adjusted basis. As many of you know, Pursuit's attractions and lodging businesses segments are complemented by the vertical integration of food and beverage and retail offerings. What many of you may not know is that there are now 44 food and beverage businesses and 45 retail stores across Pursuit. And as we've grown, they've become meaningful contributors to revenue in even double. We're constantly working to improve our menus, merchandising, and the overall guest experience, and are pleased with the financial growth we're seeing in these categories. In food and beverage, we delivered revenue of approximately $29 million in 2021, for a year-over-year increase of 180%. We believe that high-quality F&D is an important part of the hospitality experience, whether it's that perfect cup of coffee before your morning hike or the opportunity to sit down for dinner together as a family. And we're pleased to report that 2021 same-store F&D yields at our hotels, measured by revenue per occupied room, increased 32% from 2019. Guest satisfaction scores are continuing to improve in food and beverage, and the best part is we get to see guest comments and ratings daily. Today, in Montana, Alaska, and the Van Jasper Collection, we have eight restaurants in the top five rankings on TripAdvisor in their region. And finally, we're very excited about the growth in our retail business. For 2021, we delivered retail revenue of approximately $25 million, which more than doubled from the prior year. And as compared to 2019, retail yields increased 62% at our attractions and 70% at our lodging properties on a same-store basis. So now let's turn our attention to the year ahead. It is clear to us based on early season booking trends and advanced reservations, people are ready to travel and will not be dissuaded from doing so. We're confident that borders will remain open and that Pursuit will be able to welcome guests to Western Canada, Alaska, Montana, Las Vegas, and to Iceland throughout 2022. While we're still early in the booking cycle, lodging reservations for 2022 in Banff and Jasper are pacing ahead of the same reporting period in the prior year by 89% and 43% respectively. And for the critical third quarter, our Banff hotels are ahead of pace when compared to 2019. Across the 10 hotel portfolio, average daily rate is trending up 7.5% from 2021. In Pursuit's Glacier Park collection, 2022 lodging room nights on the books are pacing 32% ahead of the same time last year and 60% ahead of 2019 on a same-store basis. Relative to the prior year, ADR growth is approximately 10%. We're also seeing healthy pacing in Alaska, with 2022 room nights up 14% compared to the same period last year and up 6% compared to the pre-pandemic 2019 levels with ADR growth of 4%. In Iceland, inbound visitation to the country continues to grow relative to 2021 levels, and we anticipate a stronger tourism season this summer. We're already hard at work preparing for a notable year-over-year increase in guest volumes at both Flyover Iceland and Sky Lagoon. And as we remain steadfast in our view that the future for our company and our industry is bright, we have and will continue to invest in refresh-build-buy opportunities around the world. Our plan for 2022 includes several important investments to improve the guest experience at our location. Some examples, just to name a few, include a new mountain coaster at the Golden Sky Bridge in Golden, BC, a stunning new flyover film featuring the inspiring topography of the Canadian Rockies that we'll show in all locations, and two new restaurant concepts in the Banff Jasper Collection. Last quarter, we told you that construction had begun on the Forest Park Hotel, a new 88-room hotel in downtown Jasper, in the heart of Jasper National Park, and today I'm pleased to report that construction is on schedule and we are on track for an early summer opening. We continue to see high volumes of acquisition opportunities in multiple geographies, and our development team is hard at work assessing these opportunities for the next great pursuit experience. In closing, I'll reiterate that we're proud of our 2021 results and are especially thankful for our 3,000 seasonal and year-round team members that bring their best every day to deliver on our mission of connecting guests and staff to iconic places through unforgettable, inspiring experiences. We remain focused on the continuation of our growth trajectory, to increasing the breadth and quality of our offerings, to working hard to become an employer of choice in the hospitality industry, and to achieving new heights in guest satisfaction. We're confident that we're poised to accelerate out of the pandemic And we look forward to welcoming guests from near and far as the world more fully reopens to travel. Steve, back to you.