OneSpaWorld Holdings Limited (NASDAQ:OSW) Q4 2022 Earnings Call Transcript

Leonard Fluxman: Yeah. So certain banners cater more to that demographic, and we continue to see very strong demand on ships such as Virgin, where we see a younger demographic onboard. A couple of the other banners as well tend to have quite a decent content. We’ll see more of those people cruising in the summer again. And we expand. I mean, we cover a lot of areas in wellness, whether it be meditation, wellness programs on some of the more luxury ships, but those are definitely not your Gen Z people. But yes, wellness continues to be a category that we feel there is ample opportunity for us to load up on more types of services. So that’s an area that we focus on. Acupuncture has been something that has grown the most in 2022 than we’ve seen historically. So there clearly is a demand for wellness, I think coming out of the pandemic, the immunity concerns, supplementation around immunity, immunity shots definitely is in high demand.

Gregory Miller: Excellent. I appreciate that. And then my follow-up, I was curious to get your thoughts about some of your ships that still don’t have a significant medi-spa offering, perhaps some of your luxury ships are inclusive of that. Do you think that the medi-spa is better suited for, say, a contemporary ship versus some of your small luxury ships or do you continue to anticipate expansion of medi-spa offerings to some of the small luxury ships at you service?

Leonard Fluxman: Yeah. It’s a good call out. I mean, as you move up the chain in age, medi-spa is something that becomes much more selective than opportunistic experience. We certainly feel that the breadth of demand is more in the contemporary mass market, and that’s where we excel. Certainly, as you move up the age chain, people are set as to who their provider is and are very selective about it, but we still do nicely. The obvious problem and the constraints around real estate is what limits us onboard some of the luxury ships, whereas we will continue to get new ships this year that are going to have much better facilities than you find on the smaller ships. So we will see the mix of medi-spa move upwards, and we’re excited about that as we continue to look at more opportunity to load in more staff, particularly, nurses, so that can complement some of the services that we provide onboard.

So I think this year, we’re going to actually see a very nice move up in medi-spa facilities onboard ships.

Gregory Miller: Great. Thanks very much, Leonard.

Leonard Fluxman: Yeah. You’re welcome.

Operator: Our next question comes from Laura Champine with Loop Capital. Please go ahead.

Laura Champine: Thanks for taking my question. Wanted to get a sense of what the trend is in ship size and also the trend in average age of your customers?

Leonard Fluxman: So I think if you like to take a look out at the order book, you’ll see that pretty much the biggest ship coming onboard that is being built right now is Royal Caribbean’s Icon. That’s the largest ship that’s ever going to be out there. I think for the most part, cruise ships have settled into a size, where passenger on a lower basis is measured anywhere between, I would say, 4,500 and 5,500. Those are the largest ships out there. I think if you look at the average, it’s probably closer to the 4,500. And I don’t see ships getting much bigger than that. Certainly, the Icon is the newest one that will be of enormous scale. I mean, it’s like it’s bigger than a larger village. It’s an incredible ship that’s coming out.