Viad Corp (NYSE:VVI) Q2 2023 Earnings Conference Call August 3, 2023 5:00 PM ET
Company Participants
Carrie Long – Investor Relations
Steve Moster – President & Chief Executive Officer & President-GES
Ellen Ingersoll – Chief financial Officer
David Barry – President of Pursuit
Conference Call Participants
Tyler Batory – Oppenheimer
Kartik Mehta – Northcoast Research
Bryan Maher – B. Riley Securities
Alex Fuhrman – Craig-Hallum Capital Group
Operator
Good afternoon. My name is Aisha, and I will be your conference operator today. At this time I would like to welcome everyone to Viad Corp.’s Second Quarter 2023 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 2023 Second 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 referencing specific pages from the presentation during the call as we discuss our business performance and outlook. I also want 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 income before other items.
During the call, you’ll hear from Steve 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’d like to turn the call over to Steve who will start on Page 4 of our earnings presentation.
Steve Moster
Thanks, Carrie. Good afternoon, and thank you for joining us to review our strong second quarter results and improved outlook for the remainder of 2023. I’m extremely pleased with our performance so far this year. And as you’ll be hearing about in more detail throughout the call, I’m happy to report that both GES and Pursuit continue to demonstrate strong momentum this year with high demand for leisure travel and live event activity near 2019 levels.
GES delivered another very solid quarter with revenue and adjusted EBITDA above our prior guidance range. I continue to be impressed with the team’s focus on margin enhancement and the speed and the strength of GES’ recovery from the pandemic. Based on GES’ performance and our outlook for the second half, we’re raising our full year guidance to reflect the opportunities ahead of us.
Pursuit delivered strong year-over-year growth in line with our adjusted EBITDA expectations for the quarter. With the borders open and no travel restrictions in place, leisure travelers are actively seeking one-of-a-kind experiences and selecting Pursuit’s iconic and unforgettable experiences. Pursuit’s lodging booking pace for the second half of 2023 across all geographies is stronger than the 2019 and 2022 pacing at the same point in the year. On the attraction side of the business, we’re seeing strong visitation to our geographies and higher conversion to passengers at our attraction.
And now I’d like to turn the call over to Ellen to discuss our second quarter financial performance in more detail. Ellen?
Ellen Ingersoll
Thanks, Steve. As shown on Page 6, we delivered consolidated revenue of $320.3 million. This is up $1.1 million year-over-year, driven primarily by higher international tourism into Western Canada and Iceland and continued strengthening demand for exhibitions and events, which more than offset an anticipated $16 million revenue reduction due to shifts in timing of events at GES and the sale of ON Services.
Net income attributable to Viad was $11 million for the quarter and our income before other items was $11.8 million, as compared to $22.2 million in the 2022 second quarter, primarily reflecting lower adjusted EBITDA at GES, higher interest expense and higher taxes, partially offset by higher adjusted EBITDA at Pursuit.
Our consolidated adjusted EBITDA was $42.9 million, which was within our prior guidance range and $4.6 million lower than the 2022 second quarter. GES adjusted EBITDA exceeded the high end of our prior guidance range by about $3 million, driven primarily by stronger-than-expected revenue and Pursuit was within our guidance range.
As shown on Page 7, Pursuit’s second quarter revenue grew 14% to $88.5 million and Pursuit’s adjusted EBITDA increased to $19.5 million, which is an improvement of $3.9 million year-over-year. As David will expand upon shortly, the year-over-year growth at Pursuit was driven by stronger international leisure travel and our refresh build by efforts. At GES, revenue decreased 4% to $231.8 million and GES’ adjusted EBITDA of $26.8 million declined by $8.3 million.
The $9.8 million year-over-year reduction in revenue was driven by a few factors. First, was the sale of ON Services, which contributed about $16 million in revenue in the 2022 quarter. We also experienced a shift in timing of events driven by Omicron disruptions in early 2022, with approximately $10 million in revenue from Q1 shows that rescheduled into Q2 2022, moving back to their normal schedules in Q1 2023.
Partially offsetting those two factors was positive share rotation revenue of about $10 million and strong year-over-year same-store growth. The change in adjusted EBITDA versus the second quarter of 2022, primarily reflects lower revenue as well as increased SG&A expenses relative to the unusually low level GES was operating, with during the 2022 second quarter while a lot of that activity was in the early stages of pandemic recovery.
Next, I’ll quickly cover some balance sheet and cash flow items before David and Steve dive more deeply into the business highlights. Our cash flow from operations during the quarter, was an inflow of approximately $28.7 million. Our capital expenditures totaled about $21 million and included growth CapEx for the FlyOver Chicago build project, and some refresh projects at Pyramid Lake Lodge.
We ended the second quarter with total liquidity of $148.2 million, comprising $53.2 million in cash and approximately $95 million of capacity available on our revolving credit facility. Our debt totaled approximately $477.9 million, including $393 million on our Term Loan B financing lease obligations of approximately $64 million, and other debt of approximately $21 million. Additional balance sheet and cash flow details can be found in the appendix of our earnings presentation.
And now, I’ll turn the call over to David to discuss Pursuit.
David Barry
Thanks, Ellen. I’m happy to report that Pursuit delivered another quarter of record revenues, record second quarter adjusted EBITDA and improved margins overall. It’s exciting to see the world move past COVID restrictions. Strong consumer demand for high-quality hospitality experiences, is fueling a significant increase in visitation. This increased visitation and our focus on performance, is driving margin expansion at Pursuit. We have strong momentum and tailwinds on our side, as we enter the critical third quarter.
More on that to come, but first let’s jump into our second quarter financial performance starting on Page 9. Overall, Q2 revenue grew 14% from 2022 and adjusted EBITDA margin improved by 200 basis points. This growth was driven by stronger international visitation and our investments to scale and elevate Pursuit’s iconic collection of attractions and hospitality experiences, through our Refresh Build Buy strategy. And remember, Refresh Build Buy is our core growth strategy to drive shareholder value and Page 9, does a nice job of illustrating how it’s working.
Nearly 30%, of Pursuit’s second quarter revenue, came from new experiences that we’ve acquired or opened from 2019 forward many of which operate year-round. We continue to see strong momentum from each of these new Buy and Build experiences driving year-over-year revenue growth of 27%.
We also drove strong same-store revenue growth from experiences that we’re operating within Pursuit prior to 2019. Year-over-year same-store experiences were up 9% in revenue. This impressive growth was driven both, by the overall strengthening of international tourism that we’re seeing in our geographies, and by a refresh and revenue maximization effort, which is clearly evident in the impressive 19% same-store revenue growth we’ve driven relative to Q2 of 2019.
The various refresh investments we’ve made make our experiences better driving guest satisfaction and creating pricing power and ancillary revenue growth, a winning formula for capitalizing on strength in consumer spending and unprecedented demand many of our experiences.
Okay. So, next I’ll hit some highlights of our attractions performance on Page 10. Overall attraction ticket revenue of $36.5 million grew 25% year-over-year, on a 23% increase in visitors and growth in effective ticket price. Visitors, to the new experiences we’ve opened or acquired from 2019 grew 29% from 2022, with strong growth across the board.
FlyOver Las Vegas, posted the largest gain in number of visitors and a strong year-over-year growth rate of 41%. We’re happy to see the growth trajectory of this attraction, as we continue to drive awareness and broaden our sales channels in the Vegas market.
Our strongest percentage growth in visitation at 62% came from the new Golden SkyBridge in British Columbia, where our addition of an exciting mountain coaster and other enhancements to the guest experience are drawing increased visits and outstanding guest reviews.
In Iceland, Sky Lagoon continues to put up great numbers with year-over-year visitation growth of 22%. FlyOver Iceland, saw a healthy growth of 12%. International travel to Iceland is improving and our world-class attractions there are capitalizing on that trend, evidenced by growing capture rates of international guests flying into Keflavik International Airport.
Glacier Raft Company is also off to a strong start for its 2023 season, with Q2 ticket revenue up 30% year-over-year. The Glacier Raft Company was an ideal tuck-in acquisition last year, leveraging our existing set of lodging food and beverage and retail offerings just outside the west entrance to Glacier National Park.
Now moving on to our same-store attractions, where we also saw strong growth. Year-over-year same-store attractions visitors grew 21% and all but two of our attractions were above 2019 visitation levels for the quarter. The Banff Gondola, Banff’s top-rated attraction continues to impress with strong growth versus 2022 and 2019 and I’m pleased to report, that we are on track to deliver record full year visitation.
Another standout performer, from a same-store growth perspective is our Maligne Lake Cruise, which is also up strongly from both 2022 and 2019. Last quarter on our call I mentioned that FlyOver Canada and Vancouver, posted first quarter visitation numbers that were nearly on par with pre-pandemic levels of Q1 2019, and I’m very happy to report that Q2 numbers accelerated and exceeded 2019 as our strategy to refresh film content and to show FlyOver films from our other locations is paying dividends.
At our Columbia Icefield attractions, the Glacier Adventure and the Glacier Skywalk early season visitation is significantly ahead of last year, but still below 2019 levels. And I’ve discussed on prior calls, how these two attractions typically see a lot of long-haul international visitation from travel trade, including APAC groups.
And with the later reopening of many Asian markets for international travel, these group tour operators missed the booking window for 2023 itineraries. And as we look forward to 2024 bookings should be much stronger from this segment.
Knowing this constraint was our reality for 2023, the Pursuit team mobilized to maximize visitation from other sources with a strong emphasis on capturing more independent travelers.
One of our key strategies to drive stronger independent traveler visits this year was to increase the amount of presold attraction tickets through our Pursuit Pass. The Pursuit Pass was launched this year to help lock in advanced commitment and drive stronger visitation across our Banff Jasper attractions by including multiple Pursuit attractions in one compelling pass product.
And I’m very pleased to report that, we have now sold over 75,000 Pursuit passes equating to nearly eight million of attraction ticket revenue so far this year. For the second half of 2023, attraction ticketing revenue in Banff and Jasper is pacing significantly ahead of 2022, with renewed ease of border crossings into Canada and we remain confident that we’ll reach our target of achieving full year same-store attraction visits of at least 95% of 2019 levels.
Now, let’s switch over to our lodging performance, which we’ll reference on page 11 of the earnings presentation. Q2 rooms revenue of $22.1 million grew 8% from 2022 driven by an increase in available rooms with the new Alpine wing of the Forest Park Hotel that opened in Jasper in mid 2022 and a 3% increase in RevPAR.
Overall occupancy remained strong at 68% for the quarter which is in line with both 2022 and 2019. In Canada, we continue to see stronger year-over-year occupancy as international visitation to Western Canada improved. And along with increased demand for rooms, we’ve moved ADRs higher and are seeing RevPAR increases at 10 of the 11 hotels equating to a strong 11% year-over-year increase.
Last month, we completed the refresh of the Founders cabins at Pyramid Lake Lodge. Pyramid Lake Lodge is Pursuit’s premium lodging experience in Jasper and this exciting project delivered 12 brand-new guestrooms with high-end finishes overlooking the stunning Pyramid Lake and is open to stellar guest reviews.
In the US most of our properties opened for the season during May and June and are off to a solid start. Q2 did bring us slightly lower occupancy levels year-over-year which impacted overall Pursuit RevPAR and especially our same-store RevPAR metric for the quarter which was relatively flat year-over-year. This early season time frame is impacted by opening dates weather and we just remain very optimistic about the peak summer season.
So let’s move on to our lodging booking pace shown on page 12. 2023 bookings for Q3 and Q4 are at or above 2022 levels in each of our operating geographies across Western Canada Montana and Alaska. Rooms revenue on the books for Glacier is pacing 3% ahead of 2022’s record levels and is up an incredible 33% from 2019.
Alaska is 5% ahead of this time last year and up 9% from 2019. And last, but certainly not least in Banff and Jasper where international visitation is accelerating rooms revenue on the books is up 29% year-over-year, with our same-store properties up 5% from 2019.
Next, I want to quickly cover our ancillary revenue streams before providing more color on our outlook. Food and beverage and retail offerings are key differentiators and an important part of the guest experience. And we once again saw solid year-over-year revenue growth as we capitalized on the integration of F&B and retail experiences with our attractions and lodging lines of business.
Relative to the same period in 2022 food and beverage revenue increased 12% and retail revenue increased 5%. Earlier this month, we opened the refreshed and rebranded Aalto restaurant at the Pyramid Lake Lodge in Jasper and in just a few short weeks Aalto has skyrocketed to number two of 72 restaurants in Jasper on TripAdvisor; second only to our Terra restaurant at the Crimson Jasper which we refreshed and re-launched last summer.
So, now let’s look ahead at the exciting growth coming our way. We’re very encouraged by our own booking pace and are thrilled with the momentum we have heading into the peak summer season. With strong demand for our geographies and experiences we fully expect to set new records for revenue and adjusted EBITDA during the third quarter and for the full 2023 year.
A key success factor for us is having the right level of talent in place across the organization and we continue to win the war for talent to Pursuit. I’m super pleased to say that our efforts to build a strong team and drive record levels of team member engagement have put us in great shape for 2023 with strong staffing levels across all of Pursuit’s geographies to meet the surge in demand that we’re seeing as we accelerate into the peak summer months.
Pursuit’s business is built such that profitability grows materially with incremental increases in attractions visitation. And as I noted earlier we realized a 200 basis point year-over-year improvement in adjusted EBITDA margin during Q2.
And with revenue continuing to accelerate in Q3 we expect to see margins improve by approximately 400 basis points versus Q3 2022.
Revenue management teams are hard at work executing on strategies for regaining pre-pandemic, attraction visitation volumes at those locations that are more dependent on long-haul international visitation and I’m quite happy with the progress we’re making against those initiatives. Our targets for 2023 are well within reach and we are on track to drive continued growth in 2024 to achieve our targeted 30-plus EBITDA margin.
In closing, we’re very pleased with our results and execution thus far in 2023 and excited about what lies ahead. And just quickly, I’d like to thank our operating and support teams around the world for helping to deliver a great second quarter and for all of the energy and effort in preparing for the busy times ahead.
Steve, back to you.
Steve Moster
Thanks, David. Now let me switch gears and provide more insight into the GES business which includes both GES Exhibitions and our experiential marketing agency Spiro. GES continues to experience strong demand from corporate marketers for trade shows, conferences and live events with improving industry fundamentals.
As shown on Page 14, GES delivered $231.8 million in revenue and $26.8 million in EBITDA with an 11.6% EBITDA margin during the quarter. This performance exceeded our second quarter EBITDA guidance range of $20 million to $24 million through stronger-than-anticipated revenue growth from the rebound of live events as well as a series of margin-enhancing lean activities. I’m extremely happy with our performance this quarter.
As Ellen highlighted earlier, the year-over-year comparisons are challenging for the GES this quarter because the second quarter of 2022 was such an anomaly. As Omicron concerns subsided the live event industry experienced a very quick rebound during the second quarter of 2022, including some shows that had postponed from Q1 into Q2. Business activity accelerated much faster than we had expected and significantly outpaced the restaffing of our workforce coming out of the pandemic.
On the Exhibitions side of GES, we reached full staffing levels by the fourth quarter of 2022 and have been successful offsetting some of the higher year-over-year SG&A with lean actions to increase efficiency. At Spiro, we continued to selectively add talent and resources to support business development growth from new and existing clients. Even with these increases, we were able to deliver a strong adjusted EBITDA margin in excess of 11% at both Exhibitions and Spiro during the quarter. Overall I’m very pleased with GES’ performance and I’m excited about the outlook for the business and the industry.
Now I’d like to discuss the second quarter at GES Exhibitions, which is the global leader in the trade show services to event organizers in North America, Europe and United Arab Emirates. During the second quarter, GES Exhibitions delivered $154.5 million in revenue, $17.9 million in adjusted EBITDA and an 11.6% adjusted EBITDA margin as seen on Page 15. As compared to the 2022 second quarter, Exhibitions revenue was relatively unchanged overall, as improving demand offset the impact of shifting event schedules, the sale of ON Services and negative show rotation.
I want to highlight that US Exhibitions same-show revenue grew 19% year-over-year which was stronger than expected and average 98.5% of 2019 levels. UFI the Global Association of the Exhibition Industry recently released its 31st edition of the Exhibition Barometer which measures the health and trends of the industry. The report’s findings concluded that the majority of international exhibitions have fully returned to or surpassed their 2019 revenue levels. The strength and the speed of the industry recovery is a clear indication of the power of in-person face-to-face events as a marketing channel.
I’m happy to see that our same-show exhibition revenue has now recovered to 2019 levels across the globe. But I think it’s more important to focus on the future growth potential for GES, as the size of exhibitions fully recovers. The net square footage of an exhibition strongly correlates to GES Exhibitions revenue, the larger the exhibition, the higher level and quantity of services required by corporate marketers and the event organizer and therefore the higher revenue for GES.
As shown on Page 16, in the second quarter of 2023 our US Exhibitions have only recovered to about 86% of the net square footage of their 2019 occurrences on a same-show basis. This smaller footprint was driven primarily by fewer corporations exhibiting at events. On prior calls, I’ve noted that we’re seeing fewer international exhibiting companies and fewer small entrepreneurial companies who have been slower to return. As these exhibiting companies return to trade shows and conferences, GES Exhibitions has the potential to see volume growth of about 14% to reach their 2019 event size. This is a huge opportunity to drive incremental revenue and profit in 2024 and beyond.
Now turning to Page 17, I’d like to discuss the second quarter performance at Spiro, which serves as the experiential marketing agency of record for a great roster of Fortune 1000 corporate clients. During the second quarter, Spiro delivered $80.4 million in revenue, $8.9 million in adjusted EBITDA and 11.1% adjusted EBITDA margin.
Revenue during the second quarter of 2023 was lower year-over-year, primarily due to the sale of ON Services, shifts in timing of client spend and some non-recurring business, partially offset by positive show rotation and new client wins.
Overall, Spiro continues to see strong spending from its corporate clients with full year marketing budgets at/or above 2019 levels. During the quarter, Spiro supported many major aerospace clients at the Paris Air Show. It was great to see this non-annual event come roaring back after being canceled in 2021.
I’m also pleased to report that Spiro’s winning trend continues as the team continues to grow the client roster with marquee clients. Last quarter I highlighted a large client event win the 2024 McDonald’s Worldwide Convention in Barcelona Spain. The Spiro team is currently working side by side with the McDonald’s team and other partners to play in this amazing event.
During the second quarter, Spiro added 10 new experiential marketing clients bringing the total of new clients won this year to 17. We expect these new clients to contribute about $15 million in revenue during 2023.
As I’ve done in the past, I’d like to highlight one of the client wins to give you a better sense of the type of experiences that Spiro competes for and wins. This past weekend, Spiro delivered two separate business-to-consumer experiences at the Formula E race in London. In addition to producing the events, VIP hospitality area for the second year in a row for this year’s event, Spiro also designed curated and executed an immersive consumer experience for SABIC in Formula E’s fan village. The SABIC VR Experience zone was a unique space highlighting SABIC’s technology and ongoing efforts to drive sustainability. These projects reinforce Spiro’s efforts to build inroads to the business-to-consumer sports marketing vertical.
And now, I’d like to turn the call over to Ellen to review our financial outlook.
Ellen Ingersoll
Thanks, Steve. Before covering our third quarter guidance, I want to provide some updates on our full year outlook, which is shown on page 19. We now expect consolidated adjusted EBITDA to be in the range of $126 million to $143 million, which is up from our prior guidance of $124 million to $141 million and from $116.1 million in 2022.
As Steve mentioned earlier, the increase in our guidance range is based on a significantly stronger-than-expected growth at GES that we experienced during the second quarter. We are not adjusting full year guidance for Pursuit at this time. However, the strong pacing we’re seeing leaves more room for upside performance and downside risk relative to our full year guidance for Pursuit.
Along with the improvement to our adjusted EBITDA guidance we are also raising our expectations for full year cash flow from operations. We now expect an inflow of $75 million to $85 million as compared to prior guidance of $70 million to $80 million and we continue to plan for $70 million to $75 million in capital expenditures for the full year.
Now, turning to our third quarter guidance, which is outlined on page 20. We expect consolidated adjusted EBITDA to be in the range of $77.5 million to $89.5 million as compared to $82 million in the 2022 third quarter. This range reflects significant year-over-year growth at Pursuit and negative share rotation at GES.
For Pursuit, we expect third quarter adjusted EBITDA to be in the range of $87 million to $95 million as compared to $75.1 million in the 2022 third quarter. This growth reflects healthy margin flow-through on stronger year-over-year revenue. We expect revenue to be in the range of $175 million to $190 million as compared to $163.8 million in the 2022 third quarter as demand for Pursuit’s experiences continues to strengthen.
For GES, we expect third quarter adjusted EBITDA to be in the range of negative $6 million to negative $2 million versus $10.7 million in the 2022 third quarter due to lower revenue. We expect revenue to be in the range of $165 million to $180 million as compared to $218.9 million in 2022.
The anticipated year-over-year revenue decline is due to negative show rotation of approximately $50 million and the sale of on services, which contributed about $14 million of the revenue in the 2022 third quarter, partially offset by underlying growth.
Regarding third quarter cash flows, we expect operating cash flow of $55 million to $60 million and capital expenditures of $25 million to $30 million including growth CapEx of about $15 million.
Before turning the call back to Steve for some concluding remarks, I want to emphasize that our favorable outlook for 2023 shows no signs of slowing consumer demand in either of our businesses. Given the strength, we are experiencing in leisure travel to Pursuit’s markets and GES’ live event activity, we are comfortable with our planned level of capital spending.
That said, we stand ready to adjust both capital and operating expenses should the need arise. We remain committed to maintaining a solid liquidity position by maximizing our cash flows from operations while selectively investing in high-return opportunities to continue scaling Pursuit through our Refresh, Build, Buy growth strategy.
And back to you Steve.
Steve Moster
Thanks Ellen. In closing, we’re thrilled with our performance and the strength we’re seeing in our businesses so far this year and excited about what lies ahead. GES continues to see positive momentum in the live events sector and Pursuit is seeing ongoing acceleration of international visitation and growth across its experiences. We expect this positive momentum to continue.
And as we look further ahead to 2024, Pursuit is well-positioned for ongoing top-line growth and margin expansion from the recovery of long-haul international travel trade visitation the continued ramping of our new experiences and the opening of FlyOver Chicago.
GES should also have a much stronger year in 2024 with positive show rotation of approximately $70 million in revenue and an anticipated full recovery of show sizes and corporate marketing budgets. We expect that 2024 will be the year that GES reaches its adjusted EBITDA margin target of greater than 8%.
Our actions to scale Pursuit, transform GES Exhibitions cost structure and strengthened Spiro’s capabilities are positioning us for strong growth in revenue and profitability. We remain committed to our strategy to create extraordinary experiences and strong returns for our shareholders.
I want to thank our hard working and dedicated employees and our shareholders for your continued support in Viad. And with that we’ll open up the call for questions.
Question-and-Answer Session
Operator
[Operator Instructions] Your first question comes from the line of Tyler Batory from Oppenheimer. Your line is open.
Tyler Batory
Thank you. Good morning, everyone. So I want to start the GES side of things. And Steve the guidance there you’re assuming Exhibitions same-store revenue approaching 2019 levels. Just talk about that a little bit more maybe you’re close to 90% last quarter. Just what’s changed there? And what’s your confidence level that we’re not going to be moving backwards as we move through the rest of this year.
Steve Moster
Tyler thanks for the question. Sorry we had some technical challenges on our side. But I’m going to restate the question and give you an answer. So the question was confidence level with the same-show growth at GES and how that’s trending for not only the first half of the year but in the back half.
And as I mentioned during my comments in the script in the second quarter of this year we saw GES same-show growth versus 2019 at about 98.5% of where it was in 2019. So this is several quarters now where we’ve continued to see that revenue growth get back to 2019 levels. A lot of that Tyler has been primarily driven by an increase in pricing as well as an increase in the square footage.
I would call your attention though to slide 16 of the presentation where we highlight both of those metrics. And I think what’s important to point out is that although revenue has recovered close to the 2019 levels on a same-show basis currently the net square footage which as you know correlates very well to our revenue opportunity is still at about 86% meaning the shows are about 86% of the size that they were in 2019.
So we believe that this is a great indicator of the potential growth within GES over the — the coming year or two as — as the size of the shows grows and obviously our revenue grows along with that. So hopefully that gives you a good example of where I think the opportunity is. And again we’ve raised our full year guidance around GES because of the confidence we see in the performance of trade shows, conferences and live events. Operator, probably go to the next call.
Operator
Your next call comes from the line of Kartik Mehta from Northcoast Research. Your line is open.
Kartik Mehta
Good afternoon, Steve. I know you talked about so far no indications of economic slowdown or companies pulling back. I think in the past if I remember correctly whenever there was some kind of economic issue maybe companies would use their exhibits over and over again instead of buying new ones. Are you seeing any signs or early times of where companies might be a little afraid of what’s happening in the economy and pulling back?
Steve Moster
I’ll answer it in two ways Kartik. The first is with the pandemic really shutting down this industry in 2020 and 2021 or the majority of 2021 you actually see a renewed activity in new builds for corporate clients. So their branding has changed their messaging has changed and there’s been a lot of changes on — on their side of their marketing channel. And so we do see an elevated level of new builds coming through the system.
As I mentioned though on prior calls and as I just mentioned around the square footage, a lot of what we’re seeing are some exhibitors, specifically, international exhibitors and some of the smaller booth sizes which I equate to kind of entrepreneurs they haven’t fully returned to the trade show floor. That’s why the size of the events are kind of about 86% of where they were in 2019.
So, I’d answer it two ways that the large corporate clients continue to spend and refresh their image. And that means new construction of booths and booth programs, but some of the smaller and international clients haven’t fully returned to the trade show. So we’re seeing some of the benefit now. And as the events continue to grow in size we’ll continue to see that benefit.
Operator
Your next question comes from the line of Bryan Maher from B. Riley Securities. Your line is open.
Bryan Maher
Thank you and good afternoon everyone. Couple of questions for me maybe more on the Pursuit side. Other than FlyOver Chicago and I know Toronto has been a little delayed given kind of the weirdness in the market we can’t really tell for going into a recession or not. What is the appetite of the firm to acquire or develop incremental attractions at this point?
Steve Moster
Yes. I’ll talk a little bit about from a capital perspective how we’re looking at it. And then maybe David can jump in and talk about the overall market in general and opportunities that are out there. So from a capital allocation perspective, I mean, we remain committed to our strategy, which is scaling Pursuit. So we’re looking for the right opportunities. But given the high level of interest rate, they have to be the right opportunities with the right returns. And so we are selectively looking at new opportunities as they come. David I don’t know if you want to comment on how the health of the pipeline and things that you’re seeing.
David Barry
Yes. And first I would maybe address the recession question. We continue to see no signs of any slowing and frankly see signs of the opposite. So consumer spend remains buoyant and confidence people are buying that extra bottle of wine. They’re taking the extra experience and that’s reflected through the organization and the company as we — our revenues per visitor and effective ticket price and a variety of other things continue to grow and show good signs of health and no sign of recession.
Our focus is on iconic locations, bucket-list experiences that have perennial demand with high barriers to entry. And so we continue to see multiple opportunities, and I think Steve really articulated it well, which is we’re looking for the right opportunity that is obviously going to be powerful, going to be impactful in the business, and something that we can acquire at an appropriate price.
So we won’t comment on any specifics other than, I would say that the climate is robust and there are multiple opportunities, and we remain focused on really digging through and picking the absolute best ones.
Bryan Maher
And as it relates to FlyOver Chicago, I think, I had made a note that does that open next March? Is that still on track for next year in this March of the month?
David Barry
Yes. March is the month. And I would say, just one of the things we’ve been able to do, Bryan, this summer is observe what’s happening at Navy Pier. So, Navy Pier has had a tremendously positive second quarter and then obviously a very, very strong July. And so we think the way that the Navy Pier works in Chicago, the fact that there’s joint ticketing between the attractions, there’s one ticketing system, and hosting significantly high numbers of visitors that the opportunity to work together as a destination is a powerful one, and it’s something that we’re excited about getting open. So we’re on track on plan within capital and ready to open in March of 2024.
Operator
Your next question comes from the line of Alex Fuhrman from Craig-Hallum Capital Group.
Alex Fuhrman
Hey, guys. Thanks very much for taking my question. David I was interested to hear your commentary. It sounds like the Banff Gondola is on track for a record year of visitation this year. It seems like from looking at a lot of the reviews online that the demand for that attraction remains incredibly strong, but it seems like parking is a little bit of the bottleneck there. Can you talk a little bit about what you’re doing to get more people through that attraction? And as you think about next year and the following year, are there opportunities to continue to get visitation up beyond the record levels you’re seeing this year?
David Barry
Yes, that’s a great question. Thanks, Alex. So, a couple of things. One is in any national park town you obviously have parking constraints, because you have the size of the community and I’ll pick Banff an example, where you’ve got a number of residents that are there an amount of parking.
And so there’s a couple of initiatives that happen across town completely. And that’s one, free shuttles where guests can park their car in a central location and then shuttle up to the Banff Gondola free of charge. And we run a series of those services as well as the town advance and the regional transportation authority.
So that’s helped alleviate any of the concerns for parking that you have in that particular location. And you are quite correct. We are on track for a record season in terms of visitation at the Banff Gondola, and we’re excited about that.
Into the future, peak times are peak times, and you reach a certain capacity where you’ve achieved your effective carrying capacity, but there remains who can visit when seeking what experience different times of the day. So if you’re a parent with young kids, and they’re up early in the morning, that’s a great time to visit early in the morning. And obviously at peak times in the afternoon, between say 1:00 and 4:00 p.m. that’s when you’re most constrained.
So we continue to have availability what we call white space earlier in the day and then depending on the season. And so there’s room within our operating season because again we operate on a 12-month basis to grow both volume of passengers and capacity. And generally it will expand into the various hours of the day. And so with the right mix of programming and dynamic pricing we see continued opportunity for growth there.
Alex Fuhrman
Okay. That’s really helpful. Thank you, David. And then, can you talk a little bit about what you’re seeing so far in terms of the pipeline for international group travel next year? I think there was an article just in this morning’s Wall Street Journal about how very few Americans are traveling overseas to China right now and mentioned the difficulty of just simply flights between North America and China.
Do you have any sense of what that might look like next year? And then, it sounds like you’re seeing a lot of increased demand from international tour groups outside of China maybe countries like India and Korea. Is there an opportunity to perhaps make up for the Chinese traveler if flights just don’t come back next year?
David Barry
Yes. Again another good question. So we have a combination of what we call source markets. And so we work in basically 80 countries around the world, where tour and travel partners are coming to Western Canada to experience what Western Canada has to offer. Each of them contracts multiple years out. So we have commitments from tour and travel partners for 2024 and 2025 at this point as people are contracting multi years ahead.
Definitely I would say that demand is quite robust for 2024 and 2025. And then what remains to be seen is can people obtain say, from China exit Visas and will the amount of flights, the number of flights return to say 2019 levels. Today they’re not there. And part of the reason is that the Chinese government opened up the markets quite late in the journey. And so it was very hard for tour and travel partners to secure airlift. So we see that growing into 2024. And yes, there’s quite an interesting balance between not being over-allocated to one country.
And so we try to maintain what we call a competitive position between countries that you can never give everyone all of the space that they want. And so you’re balancing demand from various countries in order to hit your highest potential. So our visitation from Western Europe, obviously, strong demand; Australia, New Zealand returning with significant demand; Korea as a market is strong. India is a developing market but the size of the affluent class in India that can travel internationally and be focused on that is quite large. And so we see that as a growing market into the future.
So these things historically tend to balance out. And if one country lags behind for a few years, there’s opportunity to replace that with visitors from other locations. As we get closer into the beginning of the 2024 season, we’ll have a better sense as to who’s going to fulfill what level of commitment that they’re making today, because obviously when it comes down to deposit time and going firm on the booking that will be a sign. But all signs point to quite positive demand for both 2024 and 2025.
Operator
[Operator Instructions] Our next question comes from Tyler Batory from Oppenheimer. Your line is open.
Tyler Batory
Great. Thanks for taking my follow-up questions here. So I wanted to ask about Spiro and the margin there a little bit more. I mean I know you’re making some investments. Steve, I think you mentioned some investments in talent there. Just — is that kind of a one-year thing? I mean what is your outlook in terms of maybe pulling back on some of those, or is that just something you think you need in order to really ramp up the growth trajectory in that business?
Steve Moster
Yes. Thanks, Tyler. And we started this journey a little bit ago and we’ve indicated that the goal is to build a world-class experiential agency. We are well on our way. We have added resources to the team in order to build out new capabilities to serve our existing clients as well as to attract new clients. We’ve had a few quarters of where we have made those investments. We feel like we’re coming towards the end.
I won’t say that we are completely finished but the level or the pace at which we’re adding will come down, because we’re really getting to that point where we feel like we have the appropriate capabilities in-house. So you should see that those level of investments come down in subsequent quarters. So feeling great about where we stand for the year and feeling great about the team members that we’ve brought on over the last couple of quarters.
Operator
There are no further questions at this time. Steve Moster, I turn the call back over to you.
Steve Moster
Okay. Well, thanks everybody for joining us. I apologize for some of the technical challenges that we have here through the call. But as always, we look forward to talking to you for the next quarter results. Thanks so much.
Operator
This concludes today’s conference call. You may now disconnect.
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