James Hardiman: So, I should be adding the 75,000 this year in the 249,000 last year for the fourth quarter to get to something like 324,000 if we were to — versus call it, normal or I guess that would be versus fourth quarter of 2021, technically. But is that how to think about it?
Marc Swanson: Yes, I mean the way I think about it, it was — again, it’s an estimate, but we said over 370,000 for the year. So that’s for the full year. 75,000 of that was in the fourth quarter, and that’s relative to 2022. So I think you have it right, just make sure you adjust the quarter correctly and the year correctly. And keep in mind, it is an estimate, but we try to do the best we can on that, obviously.
James Hardiman: Okay. And then on the margin front, I guess this illustrative EBITDA walk certainly isn’t guidance, but it says — would seem to suggest that something north of 50% margins is on the table. But margins the last two years have moved in the wrong direction. And then we’ve got the hotel business which I assume is likely to be margin dilutive to certainly 40%-plus margin. So, help me to connect the dots there. What do you think is the long-term margin potential for this business? Obviously, you guys went from being a 20-something percent margin business to being a 40-something-percent margin business, but then there’s been some retrenchment. So, help us think through sort of what the — I don’t know, near and medium-term outlook is for margins.
Marc Swanson: Sure. I mean I think what I would point out, you kind of alluded to it, is look, if you look at where we are here at the end of 2023 and where we were back in like 2019, 2018, there’s been tremendous expansion in the margin. And that’s even with this year all the weather impacts that we had. And the way I think about it, I think the way as a company, we think about it is if we had gotten some of that weather-impacted attendance, that flows through at a very high rate, right? So, I don’t think you would have had a whole lot of incremental costs for those incremental people that we lost to weather. And so if you kind of do that math, I think you get margins that obviously would have been better than what we’ve shown here in 2023.
But I don’t have anything to guide you to. What I think about, the way we think about it, the way the Board thinks about it, it’s kind of what I said, grow attendance a little bit a year, grow our pricing on admissions and in-park a little bit a year, have some new initiatives in there that, hopefully, more people are buying the product, that type of thing, to maybe be even a little stronger on the pricing and then just watch our costs. And if we do that, margins should expand. I don’t know how high they could ultimately go, but that’s how we think about the business.
James Hardiman: And that’s even contemplating hotels, which I’m assuming would be, to some degree, margin dilutive, but maybe not enough to really move the needle?
Marc Swanson: Well, the point I wanted to get across on hotels is look, we know for hotels that the margin is a little lower like you said. Now I think the big difference for us is these are hotels that are on our property, adjacent to our parks, connected to our parks, however you want to think about it. And I think there’s benefit from that, that clearly, others in the industry have seen. We’re going to be careful and work with the Board, and we’re talking to different people, as I noted, to make sure we structure however we end up structuring any sort of hotel construction that it makes sense We want to target that 20%-plus cash-on-cash return. We know that’s high or higher than others. But you got to — we’re pulling into that number people visiting the park, people staying longer in the park, capturing more of their share of time and spending.
So, you got to kind of look at it holistically, and there’s multiple ways we can, I think, construct that. We’ll see. But I mean if the return is not there, obviously, we wouldn’t move forward with something that we didn’t feel good about.
Operator: Our next question comes from the line of Thomas Yeh with Morgan Stanley. Please go ahead.
Thomas Yeh: Thanks so much. Yes. Can you help us unpack the missing piece on the group and international visitation? Just help us think through what possibly could stimulate that return? And what you’re kind of seeing in terms of the dynamics that might be keeping it below 2019 levels?
Marc Swanson: Sure Thomas. So, when you — and we had a slide on this, right? So, international, in particular, is down and group is down as well, down quite a bit, less than international. I think the group business — we have some — a dedicated team focused on that, and we’re seeing better bookings in 2024 relative to 2023. And then also seeing more revenue out of those bookings. So, I think our group business, I feel, is probably more near-term potential than the international. And some of the group things we’re doing around even new venues and switching up some venues. We have just, I think, tremendous locations in our parks to host group events, corporate events or whatever, your church group or whatever it may be to come out to our park and have a really good time, and we can do some really special things that others — that are one-of-a-kind with some of our experiences.
