Viad Corp (NYSE:VVI) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 05:00 pm ET

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Viad Corp (NYSE:VVI) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Thank you for standing by, and welcome to the Viad Corp., Third Quarter Earnings Conference Call. (Operator Instructions) This call is being recorded. If you have any objections, you may disconnect at this time.

May I introduce your speaker for today, Carrie Long, Finance and Investor Relations Executive Director. Please go ahead.

Executive
Carrie Long

Good afternoon, and thank you for joining us for Viad's 2018 Third Quarter Earnings Conference Call. During the call, you'll hear from Steve Moster, our President and CEO; and Ellen Ingersoll, our Chief Financial Officer. (Forward Looking Cautionary Statements)

With that, I'll turn the call over to Steve.

Executive
Steve Moster

Thanks, everyone for joining us on today's call. Our third quarter income per share before other items was $1.72 per share, which was up 29.3% from the 2017 quarter, but below our prior guidance range, due to the impact of forest fires that caused growth within our Pursuit business to be lower than previously anticipated. Throughout much of August, conditions in Banff and Jasper National Parks were challenged with smoke drifts from the forest fires in Western Canada that caused poor visibility and air quality.

Glacier National Park was similarly affected, where the Howe Ridge fire forced the temporary evacuation of parts of the park, including our 27-room Motel Lake McDonald and the closure of portions of the Going to the Sun Road. I'm proud of how well our Pursuit team responded to these challenging conditions. Their ability to deliver a year-on-year organic revenue growth of 7.3% is a testament to the strength of our team, our revenue management initiatives and our Refresh, Build, Buy strategy.

During the quarter, we saw continued improvement in many of our key performance indicators for Pursuit including same-store revenue per passenger and RevPAR. One exception was attractions' passenger volume, which declined 2.1% year-over-year due to poor visibility and air quality that hampered volumes at our Banff and Jasper-based attraction. However, our overall attraction revenue increased 6.3% on an organic basis as we were able to capture higher revenue per passenger from a combination of food and beverage sales, retail sales and higher effective ticket prices. On a same-store basis, our attractions revenue per passenger was up 7.1% versus 2017 quarter.

At our hospitality assets, same-store RevPAR increased 2.5% despite lower occupancy levels caused by the fires. Through a combination of higher RevPAR, the reopening of our upgraded Mount Royal Hotel and the higher ancillary revenue from food and beverage and retail sales across our hospitality properties, Pursuit drove an overall increase in hospitality revenue of 10% on an organic basis.

I'm happy to report that initial guest feedback on the upgraded Mount Royal Hotel experience has been extremely positive, and we've realized significantly higher RevPAR, which were up 34% as compared to pre-renovation RevPAR in the third quarter of 2016. As evidenced by our performance this quarter, our Refresh, Build, Buy strategy continued to pay dividends, and our revenue management initiatives are enabling us to adjust pricing based on current market conditions to maximize revenue.