Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- United Parks & Resorts Inc (PRKS, Financial) reported strong financial results for Q2 2024, with increased attendance and revenue despite unfavorable weather conditions.
- The company achieved a record level for in-park per capita spending, highlighting the success of their investment strategies.
- United Parks & Resorts Inc (PRKS) repurchased approximately 6.3 million shares, nearly 10% of outstanding shares, indicating strong free cash flow and commitment to returning capital to shareholders.
- Booking trends at Discovery Cove and group bookings are running well ahead of 2023, showing positive future prospects.
- The company continues to make significant investments in digital transformation, including CRM capabilities and a mobile app, which have shown positive financial impacts and increased guest engagement.
Negative Points
- Total revenue per capita decreased by 0.4% in Q2 2024, with admission per capita down by 2.9%, indicating some pricing challenges.
- Adjusted EBITDA declined by $6.1 million compared to Q2 2023, partly due to increased expenses.
- The company paused its opportunistic debt repricing due to market volatility, indicating potential financial uncertainties.
- International visitation remains down compared to 2019 levels, showing a slow recovery in this segment.
- The timing of new attraction openings, such as the ride in Orlando, was delayed, impacting potential revenue generation during peak seasons.
Q & A Highlights
Q: Can you provide more color around the pressure on admissions per capita and the pricing decisions?
A: We are focused on driving total revenue and confident we can grow per caps over time with our initiatives. We used some offers in the quarter to drive volume and revenue, which may have impacted per caps. Our strong value proposition, especially with season pass products, remains resilient even when customers are more value-conscious.
Q: How do you plan to achieve record EBITDA in the second half of the year despite unpredictable weather?
A: We are focusing on driving demand through events like Halloween and Christmas, new rides, pricing and per cap initiatives, and cost efficiencies. Contributions from volume, per cap, and cost efficiencies are key to achieving higher EBITDA than in 2022.
Q: Can you provide any cadence through the year for per caps and early July trends?
A: Per caps were up in April but down slightly for Q2. We focus on driving total revenue, and promotions may impact per caps. Preliminary July per caps were up very low single digits.
Q: How do you view the impact of Universal's new park opening next year on your business?
A: We will have new attractions and events to attract visitors. Our differentiated product offering, strong value proposition, and significant local attendance will help us compete. We expect to benefit from the increased market size and continue to grow our business.
Q: Can you elaborate on the changes in international traffic and the multiyear recapture opportunity?
A: International attendance is still down compared to 2019 but was up slightly for the quarter versus 2023. We see a substantial opportunity to recapture international visitors, which used to be about 10% of our attendance.
Q: What are your long-term cost efficiency opportunities?
A: We focus on growing attendance, per caps, and managing costs to achieve EBITDA expansion. We have identified new cost efficiency initiatives and expect to continue finding ways to be more efficient.
Q: How do you plan to market and attract visitors in response to Universal's new park opening?
A: We will have new attractions and events, and our differentiated product offering will help us attract visitors. Our strong value proposition and significant local attendance will also play a key role.
Q: Can you provide more details on the 2025 pass product lineup and any changes in strategy?
A: We will continue to offer a great suite of benefits to our pass holders and look for new ways to engage them. Our strategy of securing people's commitment earlier and throughout the year will remain.
Q: What trends are you seeing between different parks and attendance growth?
A: We are pleased with the Orlando performance year-to-date. We see opportunities at all our parks, including Busch Gardens Tampa, where we need to better showcase the park's offerings.
Q: How do you view the potential for EBITDA growth in 2025 with the opening of Universal's new park?
A: We expect to grow our business in 2024 and 2025. We have participated in the market's EBITDA growth historically and expect to continue doing so. Our value proposition and product differentiation will help us attract visitors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
