Viad Corp (NYSE:VVI) Q1 2024 Earnings Call Transcript

Viad Corp (NYSE:VVI) Q1 2024 Earnings Call Transcript May 4, 2024

Viad Corp isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon. My name is Matt and I’ll be your conference operator today. At this time, I would like to welcome everyone to Viad Corp’s First Quarter 2024 Earnings Conference Call. [Operator Instructions] Thank you. Carrie Long, you may begin your conference.

Carrie Long: Good afternoon and thank you for joining us for Viad’s 2024 first quarter earnings conference call. We issued our earnings press release after the market closed today, along with an earnings presentation, which are both available on our website at viad.com. We will be referring to specific pages from the presentation during the call as we discuss their business performance and outlook. And I’d like to point out that our earnings press release and presentation contain important disclosures regarding non-GAAP measures that we’ll be referring to during the call, including adjusted EBITDA and adjusted net loss. During the call, you’ll hear from Steven Moster, our President and CEO and President of GES; Ellen Ingersoll, our Chief Financial Officer; and David Barry, President of Pursuit.

Before turning the call over to Steve, I’d like to remind everyone that 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. And with that, I’ll turn the call over to Steve, who will start on Page 4 of our earnings presentation.

Steven Moster: Thanks, Carrie, and thanks to all of you for joining our call. I am happy to report that our first quarter results were in line with our expectations, and we’re off to a strong start for 2024. GES’ strong first quarter performance drove margin expansion with healthy revenue growth and Pursuit delivered 14% revenue growth during the seasonally slower period and successfully launched its new FlyOver Chicago attraction. We are optimistic about the year ahead and are maintaining our favorable outlook for strong growth as positive trends continue for both businesses. We’re in a position of strength with accelerating business activity on the horizon and expect to deliver approximately 16% to 30% year-over-year growth in our full year consolidated adjusted EBITDA.

At Pursuit, we have an exciting peak summer season ahead and are on track to continue setting new records for both revenue and EBITDA this year. We’re seeing signs of robust demand for our destinations and experiences, including FlyOver Chicago. At GES, we expect to continue delivering impressive profitable growth this year from healthy industry demand, our strong non-annual show schedule and our transformed margin profile. Now let’s get into the details, starting with Ellen, who will review our financial performance and guidance.

Ellen Ingersoll: Thanks, Steve. I’ll start on Page 6 with our consolidated first quarter results. Revenue increased $12.7 million or 4.9% year-over-year with healthy growth at both Pursuit and GES. Consolidated adjusted EBITDA increased $0.9 million, and our first quarter adjusted net loss improved by $0.3 million. Our GAAP basis net loss attributable to Viad was $4.2 million higher than the 2023 first quarter, primarily reflecting increased non-operational items and income tax expense. As a reminder, our 2023 first quarter GAAP net loss included a $2.1 million favorable tax matter. As shown on Page 7, Pursuit’s first quarter revenue grew $4.6 million or 14% year-over-year, and adjusted EBITDA decreased by $0.8 million during the seasonally slow period.

Pursuit’s revenue growth was led by attraction ticket revenue, which increased 25% due to higher effective ticket prices and a 10% increase in visitors. We saw a particularly strong demand for our Sky Lagoon attraction in Iceland and our new FlyOver Chicago attraction that opened in March. Pursuit’s adjusted EBITDA decline primarily reflects increased operating cost to support higher business volume. And as we move into the next 2 quarters of higher activity, revenue growth will more than offset our wider seasonal loss. As shown on Page 8, GES delivered consolidated revenue growth of $8.1 million or 3.6% and adjusted EBITDA growth of $2.2 million during the first quarter. When adjusting to exclude the unfavorable impact of major non-annual shows, GES’ first quarter year-over-year revenue growth was about 6%.

Spiro delivered revenue growth of $0.9 million or 1.5%. Excluding the impact of major non-annual events, Spiro’s revenue growth rate was about 7% versus the 2020 first quarter, driven by strong spending from existing and new clients. GES Exhibitions delivered revenue growth of $6.3 million or 3.7%. Excluding the impact of major non-annual events, GES Exhibitions revenue growth rate was about 5% versus the 2023 first quarter as show sizes continued to improve. We ended the 2024 first quarter with total liquidity of $137.2 million, comprising $48.8 million in cash and $88.4 million of available capacity on our revolving credit facility. Our first quarter cash flow from operations was an outflow of $7.5 million, which was lower than expected due to working capital timing.

Our capital expenditures totaled $20.7 million, including approximately $8 million of growth CapEx at Pursuit. We ended the quarter with $488.4 million of debt, and our net leverage ratio was 2.7x, which is near the low end of our target ratio range of 2.5x to 3.5x. While we are comfortable with our level of debt and strong liquidity position, we’ve been focused on lowering the cost of our debt. On April 26, we successfully repriced our Term Loan B, which had a remaining outstanding balance of $320 million at the end of the quarter. I’m very pleased to say that we reduced our borrowing rate by 75 basis points to SOFR plus 4.25% and remove the additional silver credit spread adjustment. This repricing will reduce our annual interest cost by more than $2.5 million.

Next, I’ll cover our 2024 outlook on Page 9 before turning the call over to David for additional color on Pursuit. We continue to expect very strong growth in full year consolidated adjusted EBITDA and are reaffirming our guidance range of $171 million to $191 million. For Pursuit, we continue to expect full year adjusted EBITDA to be in the range of $105 million to $115 million on mid-single-digit revenue growth with a full year adjusted EBITDA margin of about 30% as compared to 26.4% in 2023. For Pursuit’s second quarter, we expect adjusted EBITDA to be in the range of $20 million to $24 million as compared to $19.5 million in the 2023 second quarter. For GES, we continue to expect full year adjusted EBITDA to be in the range of $80 million to $90 million as compared to $68.2 million in 2023, with a full year adjusted EBITDA margin of about 8.5% as compared to 7.7% in 2023.

We expect CES to deliver low double-digit revenue growth, including about $65 million of net incremental revenue from major non-annual shows. We expect GES’ second quarter adjusted EBITDA to be in the range of $34.5 million to $38.5 million versus $26.8 million in the 2023 second quarter. We expect new wins and continued underlying growth to more than offset the impact of major non-annual shows which are expected to negatively impact revenue by about $10 million during the second quarter. With the meaningful full year EBITDA growth we are anticipating, we also expect very strong operating cash flow, particularly in the third quarter with Pursuit’s seasonal contribution and GES’ two largest non-annual shows taking place. For the full year, we continue to anticipate an operating cash inflow in the range of $120 million to $140 million, and we are planning for full year capital expenditures of $65 million to $70 million, including growth CapEx of about $20 million at Pursuit.

We are committed to being good stewards of shareholder capital and will balance value-enhancing growth investments with maintaining a strong balance sheet and ample liquidity. I also want to quickly comment on our expectations for tax expense, which absent guidance from us is very challenging to model given our jurisdictional tax positions. For the full year, we anticipate an effective tax rate of 27% to 28%. And during the second quarter, we expect an effective tax rate of 15% to 16%. Now David and Steve will provide further insight into our business performance and the exciting growth coming our way at Pursuit and GES. David, over to you.

David Barry: Thanks, Ellen. All right. Let’s dive into Pursuit. We’ve had an encouraging start to what should be another year of record-setting revenue and EBITDA and continued margin expansion. I’ll start by discussing our attractions performance on Page 11. Pursuit’s year-round bucket list attraction started 2024 with strong momentum. Our ticket revenue grew approximately 25% to $18 million, and this was driven by the powerful delivery of our guest experiences, an impressive increase in visitation, which was up about 10%, and continued focus on our revenue maximization and pricing initiatives. Our same-store ticket revenue grew by 18% year-over-year, with substantially higher effective ticket prices. Sky Lagoon was a big contributor to our success with robust demand for the geothermal attraction experience in Iceland.

We continue to benefit from the increase in volcanic activity that has affected certain parts of the country, bringing more visitors into the center of Reykjavik. Iceland has been experiencing higher visitation and our team has done a terrific job growing the business and increasing awareness at Sky Lagoon. Additionally, on March 1st, we successfully opened our new world-class attraction, FlyOver Chicago. It is a phenomenal experience with an exhilarating flight ride that captures the story and spirit of Chicago. We have an ideal location at Navy Pier, which sees about 9 million visitors each year. In our first month of operation, we have strong visitation, received really favorable reviews, and delivered positive adjusted EBITDA. We’re well positioned for a solid first year for our newest build growth investment.

So next, on Page 12 for hospitality. Our one-of-a-kind lodges delivered solid room revenue performance of about $8 million during the seasonally slower period. We experienced some softness early in the year from unfavorable weather and ski conditions within our destinations. But as conditions normalize later in the quarter, results rebounded quickly with about 7% year-over-year room revenue growth in March, and our team did an incredible job maximizing revenue, and hustled to offset the weaker early season. The Forest Park Alpine Hotel that we opened in 2022 continues to be a solid build to growth investment in addition to our portfolio. This elevated forest-inspired property in the heart of the mountain town of Jasper realized strong year-over-year room revenue and RevPAR increases during the quarter.

Additionally, the new Founder’s Cabins that we added to Pyramid Lake Lodge last summer contributed incremental room revenue and available rooms during the quarter. These new accommodations are a great example of a recent successful refresh growth investment that enhance the guest experience and expanded capacity within our existing well-performing business. We continue to expect growth in full year room revenue in RevPAR as our seasonal properties ramp open in the coming months. Our hospitality businesses are in iconic destinations with strong perennial demand. And as this demand builds into the season, it creates compression in the market. Iconic destinations with strong perennial demand, a finite bed base and high occupancy, when you combine it together with pricing power, it’s a great recipe for success.

As shown on Page 13, our room revenue on the books for 2024 is ahead of this time last year with strong improvements in ADRs for both our Canadian and U.S. lodging properties. This early booking pacing trend is encouraging, and I’m optimistic about the peak season ahead. Lodging pacing is a leading indicator of destination demand and the strength we’re seeing in advanced booking supports our favorable outlook for both our lodging and our attractions. We continue to expect favorable leisure travel trends and the prioritization of discretionary spend on experiences. And we provide the iconic, unforgettable and inspiring bucket list experiences that global travelers are looking for. So overall revenue growth, you can see on Page 14, our overall revenue growth trajectory.

For the first 3 months of the year, our revenue increased about 14% and set a new record for the first quarter. We continue to expect full year revenue to grow mid-single digits from strong guest demand, pricing power and increased visitation from both home and abroad. We’re gearing up for a busy peak summer season, and we’re in great shape from a seasonal staffing perspective. Next let’s look at Page 15 and discuss our adjusted EBITDA margin expansion. For the full year, we expect to drive further margin improvement and achieve our target adjusted EBITDA margin of about 30% through higher attraction visitation with strong throughput, revenue management, and careful focus on labor and expense management. We’re ready to deliver another year of record-breaking results with our full year adjusted EBITDA expected to be in the range of $105 million to $115 million, and this is about triple the amount of EBITDA we produced in 2015 and reflects the strength of our powerful refresh build by growth strategy.

Our results will benefit from our newest build investment, FlyOver Chicago, as well as other smaller refresh investments at our well instrumented and high-performing existing experiences. These refresh investments include expanding the wellness ritual at Sky Lagoon in Iceland, launching a new tour experience at the Columbia Icefield Adventure in Jasper, expanding our guest capacity with a new boat at Maligne Lake and opening a new food and beverage experience at the West Glacier Village in Montana. So now let’s talk about our exciting future beyond 2024 with continued profitable growth. Looking ahead, we expect continued multiyear margin expansion with a goal of reaching an adjusted EBITDA margin of 33%. We remain very focused on boosting our profitability and believe that 33% is the optimal level for our business, while still having appropriate resources to continue to deliver great staff and guest experiences, maintain our assets, maximize our pricing power and successfully deliver additional growth investments.

Our remarkable journey to meaningfully scale Pursuit is ongoing, and our successful refresh build by strategy remains unchanged. We have a strong pipeline of organic and inorganic investment opportunities to help accelerate our growth in 2025 and beyond. And everything we do is in support of our vision for what Pursuit is becoming. Our vision is to be the world’s leading provider of iconic bucket list attractions and vertically integrated hospitality experiences. So just as I conclude my remarks, most importantly, I just want to say a big thank you to our Pursuit team members who have been working hard to get us ready for a kickoff to the season and to create extraordinary experiences and lasting memories for our guests and staff in ‘24.

Steve, back to you.

Steven Moster: Thanks, David. Now let’s switch over to GES, starting with GES Exhibition trends on Page 17. Same-show revenue and same-show event sizes are key revenue drivers for the GES Exhibition business. I’m very happy to see that both metrics continue to improve year-over-year versus pre-pandemic levels. As I’ve discussed on past calls, our same-show revenue metric has returned to pre-pandemic levels as our exhibition team has done an incredible job delivering great service and growing revenue per square foot of event space through smart pricing and compelling service offerings. However, the size of event as measured by same-show square footage remains about 10% below pre-pandemic levels. We see this as a meaningful opportunity for further revenue and margin growth as event sizes continue to recover, which we believe will continue through 2025.

And given GES’ flexible cost structure, each incremental same show dollar flows to EBITDA at a high rate. We’re encouraged by the favorable trends we’re seeing and strong demand within the event industry. Our well-established leadership position in key trade show markets, long-standing client relationships and multiyear contracts with high renewal rates put us in a strong position to retain and grow events. Entering this year, GES Exhibitions’ revenue was already over 90% sold and under contract. We are well positioned for a solid year of performance from exhibitions. Now let’s talk about Spiro on Page 18. Spiro is built for strong revenue growth of high single to low double digits from new and existing clients in the large fragmented growing experiential marketing market.

As one of the few experiential marketing agencies with end-to-end capabilities and global reach, we are well positioned for growth. Our winning growth strategy is focused on retaining, growing and expanding our clients. Starting with retain, it is important that we maintain our marquee client base and use it as a foundation for future growth. Spiro already has strong positions with leading companies in targeted industries. We represent over 1,500 corporate clients and the best of the best. Moving to grow. We are focused on accelerating our existing client revenue with new products and services beyond the trade show floor to pursue untapped revenue opportunities. Next, expand. We’re utilizing our competitive differentiators, including unmatched global capabilities to penetrate new markets and acquire new clients.

I’m very pleased to share that we have now reached a total of 60 new client wins since launching Spiro as a discrete experiential marketing agency within GES in early 2022. This is a testament to the strength of the Spiro team and capabilities as well as the importance of experiential marketing as a means for brands to connect with customers in a powerful way. On Page 19, you can see GES’ overall revenue growth trajectory. GES is experiencing improved industry dynamics and steady underlying growth. When adjusting to remove the impact of major non-annual events, GES’ consolidated revenue grew by 6% in the first quarter. For GES Exhibitions, that growth rate was about 5%, driven by same-show revenue growth. Notably, U.S. exhibition same-show revenue grew about 6% and event sizes grew about 2% compared to the prior year first quarter.

For Spiro, the adjusted growth rate was about 7%, driven by our success winning new clients and growing revenue from existing clients. Corporate marketing budgets are exceeding 2019 levels as corporate marketers are finding new ways to engage with their target audiences through experiential marketing. Additionally, participation at trade shows and conferences continues to improve, and the demand for trade show services is approaching 2019 levels. These favorable trends, along with a strong major non-annual show schedule, give us confidence in our outlook for the full year. As Ellen mentioned earlier, we continue to expect GES to deliver full year revenue growth in the low double-digit range. The GES team is laser-focused on executing our client experiences in front of us.

The second and third quarters of this year will be particularly strong for GES. The second quarter will benefit from a high volume of new business wins, and the third quarter will see incremental revenue of about $85 million to $90 million from major non-annual shows. The most significant new event for the second quarter is the McDonald’s 2024 Worldwide Convention, which is one of the largest client projects Spiro will deliver this year. And it’s a terrific example of the power of the GES collective where Spiro provides the sizzle and GES Exhibitions provides the infrastructure. During April, team members across Spiro and GES Exhibitions came together to transform the Fira de Barcelona into a temporary center for McDonald’s megabrand.

Led by Spiro’s strategy, creative and production talent, and supported by GES’ logistical capabilities, we partnered with McDonald’s to create a high-impact community experience for 14,000 internal and supply chain stakeholders from across the globe. Now let’s take a look at Page 20 and discuss our adjusted EBITDA margin expansion. I’m very happy with the results that we’re seeing from our efforts to drive margin improvement at GES. We achieved an 8% adjusted EBITDA margin for the first quarter, which is up 70 basis points year-over-year. Our transformed cost structure is paying dividends. With our strong major non-annual shows scheduled this year and our ongoing focus on efficiency gains, we expect to deliver an adjusted EBITDA margin of about 8.5% for the full year.

Now let’s talk about our exciting future beyond 2024 with continued profitable growth. GES is focused on maintaining revenue levels in 2025 despite the unfavorable impact of major non-annual shows. GES Exhibitions is already selling and winning events in 2025 and beyond. And Spiro continues to add to its client roster and work with existing clients to support them across a wider spectrum of experiential marketing activities. Additionally, we have a robust multiyear road map of lean initiatives to enhance our margin each year. We expect to hold at or above our 8% adjusted EBITDA margin target beyond 2024 with and without the benefit of our major non-annual shows. The fundamental changes we made to reduce GES Exhibitions’ cost structure and build Spiro growth capabilities have transformed GES’ margin profile.

Now in closing, we’re thrilled with our performance and the strength we are seeing across our businesses as well as the bright future we see ahead of us. We remain committed to our strategy to create extraordinary experiences and strong returns for our shareholders. I want to thank our hardworking and dedicated employees and our shareholders for your continued support in Viad. And with that, we’ll open up the call for questions.

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Q&A Session

Operator: [Operator Instructions] The first question is from the line of Bryan Maher with B. Riley Securities. Your line is now open.

Bryan Maher: Great. Thank you, and good afternoon. My questions mainly are on the Pursuit side. Maybe starting with Iceland. Is there – maybe you can update us as to what the current situation is with the volcanic activity in Blue Lagoon. Is Blue Lagoon still shut down? Maybe just a little bit more color there would be helpful.

David Barry: Sure, Bryan. So a couple of things. One is visitation to Iceland overall is up. It was up in February, it was up in March. And so both airlift and visitation into the country is strong. There are periodic closures at that part of – in that part of the country where the Blue Lagoon is located. They may be closed for several days and then reopening. Overall, what it’s done is on the days when there has been volcanic activity, it drives visitation into the center of Reykjavik because people have perhaps planned to go in one direction and because of road closures, are heading in a different direction back into the center. So definitely, it’s been beneficial for Sky Lagoon in terms of visitation. Overall, though Iceland’s on its way to have a really, really strong summer. It’s increased airlift from across Western Europe and North America. So no red lights there at all. All green lights.

Bryan Maher: And maybe moving on to Chicago FlyOver, can you draw any correlation or lessons learned from opening Las Vegas and how that possibly helped with the opening of FlyOver Chicago? Or are they just such different markets that the dynamics between the two don’t correlate?

David Barry: Yes. I mean I think we’re seeing very strong response in Chicago, really strong visitation out of the gate in our first month, definitely tracking well and positive EBITDA in the first month. So we’re happy with that. I think our presence at Navy Pier the fact that we’re working together with the other attractions there. It’s a much less competitive market than in Las Vegas. And I think it’s a very compelling story. So while we see continued improvement in Las Vegas, we see an incredibly strong start in Chicago, and that’s going quite well.

Bryan Maher: And then just last for me. On Pursuit RevPAR for this upcoming year, putting the first quarter aside for a minute, I think when we look at lodging names that we cover, it’s generally kind of low to mid-single digit RevPAR expectations in the U.S. I know that with what you’ve done in Canada, you expect kind of some stronger activity there. But do you have any general thoughts on RevPAR numbers as you look at bookings for this upcoming season?

David Barry: Yes. Good question, Bryan. I think first, I would look more globally at how we’re pacing for the summer. So there’s a few factors that really drive our performance and our sense of confidence for the coming year. Number one, consumer confidence overall is higher year-over-year. Secondly, we’re on trend in terms of experiences over things, and that’s a very positive momentum behind us. We have a strong U.S. dollar, which corresponds to a weak Canadian dollar, which drives tourism into Canada. We have an increase in airlift into each of our destination gateways. Canadian lodging, you’ll see that on Slide 13, pacing up 24%, ADR at 14% in the U.S., up 3%, ADR up 9%. We’re deliberately managing inventory in the U.S., which is really a positive.

Our iconic locations also benefit from compression. So unlike city hotels or hotels on the side of the highway and select service and a variety of other comparables, the compare set is quite different. So for us, we see this – all of this momentum driving a strong season. Things early indicators like our Pursuit Pass, which is up double digits. Compression end markets drives yield, which correspondingly will drive RevPAR. And we’re being quite selective, especially in our U.S. properties where we’ve learned that it’s not beneficial to sell everything in March and April. In fact, we are holding on to inventory and as we get closer to-date, releasing that at much higher yields. So, we feel quite confident and we are benefiting also from bundling attraction product with our lodging products.

So, we have a real strong feeling of momentum heading into the season.

Bryan Maher: And then just last for me on the GES side. I mean it’s only been not two months since you just reported fourth quarter numbers. But it doesn’t appear on the surface and we hadn’t been able to drill down since you have released the information about an hour ago. But it doesn’t seem like there is a whole lot of difference in the new GES kind of outlook versus where we were six weeks, seven weeks ago. Is that the proper way to think about it?

Steven Moster: Yes, absolutely, Bryan. I mean I think the trend has been consistent for several quarters now as on the exhibition side, the revenue on a same-show basis and the square footage on a same-show basis continue to improve year-over-year, and that’s a trend that we think will continue throughout the year. And on the Spiro side of the business, we continue to have a very compelling offering and being able to win new clients and bring them onboard. So, yes, we continue to kind of deliver on the same path that we have been on for the last couple of quarters.

Bryan Maher: Great. Thank you. That’s all for me.

Steven Moster: Thanks Bryan.

Operator: Thank you for your question. Next question is from the line of Tyler Batory with Oppenheimer. Your line is now open.

Unidentified Analyst: Hi. Good afternoon. This is Jonathan on for Tyler. Thanks for taking my questions. First one for me on GES, a two-part question. Steve, we have talked about this in the past, but can you just give us an update on the bridge to recovering the same-show square footage back to 2019 levels? Is that still a 2025 story, or how are you thinking about that? And then secondly, can you speak on the sustainability of pricing power? And should we expect that 8% gap between the same-show revenue and the same-show square footage to stay consistent as square footage presumably recovers next year?

Steven Moster: Yes. So, I would refer back to kind of Page 17 within our investor presentation. I think it’s important to look at the growth year-over-year. You want to compare a quarter year-over-year because sometimes the mix of shows and the type of shows within the quarter will vary from quarter-to-quarter. So, I think what we saw in the first quarter was a continuation of really strong growth, both in the revenue on a show basis, but also in the square footage going up, getting very close to the flat with 2019 in terms of revenue and still being down about 10%. I think this trend will continue going through – probably through ‘25 until we have a full recovery. And then it will grow beyond 25%. So, this is kind of in line with kind of our expectations for the business, and it has been for the last couple of quarters.

So, we feel very good about that. Additionally, you asked about the pricing power within the business. We have done a very good job over the last 1.5 years or so of garnering significant price increases that helped drive the business forward. I see our ability to continue doing that going forward kind of in the mid-single digit range, and you will continue to see a gap between the revenue on a same-show basis versus the square footage on a same-show basis. So, we are going to continue to drive everything we can to drive revenue on these individual shows. And pricing is one major component of it.

Unidentified Analyst: Okay. Excellent. Thank you for all the color on that. And then switching gears to the Pursuit side of things, you gave some pacing statistics in terms of bookings. And I am just interested if you can give a little more detail kind of what you are seeing more real time in bookings, etcetera. When we start to look at the peak summer season, is there any sense of weakness or slowing starting to emerge in the consumer traveler that you guys are seeing?

David Barry: None. Yes, it’s pacing strongly behavior in terms of spending, guest spend per visit, advanced demand for things like restaurant bookings and specific sites seeing tours. I would say that all of the channels are experiencing strong demand. We are not seeing any weakening at all in terms of spend and actually are being judicious in terms of selling out on a variety of things because we are – we know the demand is coming, and we are just really managing inventory effectively and being attentive to maximizing price and managing availability.

Unidentified Analyst: Okay. Great. Appreciate the color. And then maybe last one for me. Helpful commentary on FlyOver Chicago, was that bill completed? Any early color on markets that might make sense for further expansion of FlyOver and maybe an update on Toronto, if there is any or if you can provide on?

David Barry: I will start with Toronto. So, ongoing progress with Canada lands in the City of Toronto, and we will have an update on that, I think in the coming months, but that continues. Really no speculation as to further locations, we are working on improving the performance in Las Vegas and really managing the very successful launch of Chicago. And we are focused also on looking into the future, we have got a great pipeline of both organic and inorganic opportunities within. And so very focused on our iconic locations, very focused on things that no integration risk, no new market risk, things where we can invest within our specific business and improve. And so we have a long list of great refresh projects. We have a long list of other opportunities in each geography, and that would be our focus going forward.

Unidentified Analyst: Okay. Perfect. Thank you for all the color. That’s all for me.

David Barry: Thank you.

Operator: Thank you for your question. The next question is from the line of Alex Fuhrman with Craig-Hallum. Your line is now open. Alex, please check if you are on mute.

Alex Fuhrman: Hi guys. Sorry about that. Thank you very much for taking my question here. I wanted to ask, if I could, about what you are seeing on the Pursuit side in terms of group travel. It seems like over the past year or so, pretty much everything has been working really well for you guys. Probably the one thing that has not materialized as we would all hope has been travel from China to North America has been really disappointing and remains well below pre-COVID level. So, I am wondering what you are expecting for this year in terms of the group travel business? And are you seeing other countries kind of stepping in here and replacing the volume that’s presumably not being made back from Chinese group tours?