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

But that’s something that’s an outlier, and it’s unique. And just as Royal Caribbean launched the largest certainly as they — the wonder of the seas and similar classes of ships, this one is certainly going to set a new size, so to speak, in terms of ship build. But for the most part, if you look at the order book, I think it’s pretty steady arena.

Laura Champine: Got it. And then the second question was on your average customer age and how that may be trending?

Leonard Fluxman: Yeah. That varies across the different banners. I would say, the sweet spot somewhere between 45% and 55%. Obviously, that changes during the summer where you have a lot of kids go onboard so that could go lower. But generally speaking, it’s anywhere between sort of early 40s and early 50s tends to be a general population. And then as you move to some of the luxury brands and some of the other brands, then the age group does move well above 65%.

Laura Champine: Got it. Thank you.

Leonard Fluxman: Of course.

Operator: Our next question comes from Sharon Zackfia with William Blair. Please go ahead.

Sharon Zackfia: Hi. Good morning. I wanted to touch on pre-booking. If you could give us an update on kind of where that is as a percent of maybe services, transactions or revenues? And any insight into how the Norwegian launch has gone on pre-booking?

Leonard Fluxman: Hey, Sharon. So Norwegian, we just commenced the pre-booking in Q1, and we will roll out the entire fleet this quarter. We had taken bookings in Q4 for services in Q1. So we had started on one of the ships, the Encore, and we will continue to roll vigorously now through the first quarter. So we’re on pre-booking at about 80%. Once we have Norwegian fully loaded, we’ll get closer to 90%, which is incredible.

Sharon Zackfia: Okay. Thank you for that. And then just a quick question on payroll, it looks like the salary and payroll kind of jumped over 35% sequentially in the fourth quarter. Was there — is something there with bonus accruals or anything that we should think about in that number in the fourth quarter?

Leonard Fluxman: Yes. That is exactly what you should think about. So as we headed into the fourth quarter, with the incremental performance that was achieved, there are performance bonuses that were accrued for in the quarter. So you’re thinking of the reason there is spot on.

Sharon Zackfia: Okay. Well, congratulations on getting the bonus. We’ll chat later.

Leonard Fluxman: Thank you.

Operator: Our next question comes from Assia Georgieva with Infinity Research. Please go ahead.

Assia Georgieva: I know, this is my turn. Congratulations on a very nicely done job in Q4. Keep it up. And again, I’m looking forward to a great fiscal ’23. I had a couple of questions. First of all, it seems that you’ll be adding about 500 more staff by the end of this quarter. So I would expect that there will be incremental expenses that we’ll see in this quarter only, and that may not be repeated through the balance of the year. Is that fair?

Leonard Fluxman: Yes. So look, I mean, as you know, our onboard model is primarily variable. So adding staff in and of itself really has a very, very small fixed cost component, particularly, on the much bigger ships where they — it’s all commission-based, primarily, obviously, you’ve got lodging and food costs that you have, but it’s more than offset by the revenue that they will generate. And yes, it is a big number that we’re going to load up for. But quite frankly, all of that’s going to complement and add to the revenue-generating capabilities as load factors continue to increase through spring. But it will obviously taper off as we get into the back quarters, correct.