Assia Georgieva

Asha Georgieva of Infinity Research noted that her firm's data showed a slight sequential pricing dip in recent weeks and asked if this was due to seasonality or macro factors. She also inquired about typical booking seasonality, such as a potential uptick in the fall.

Answer

EVP of Finance Linh Banh could not verify the external data but asserted that Viking's internal data shows pricing remains strong, citing an increase in the 2025 River rate advantage since the last call. President and CFO Leah Talactac added that while Wave Season is key, Viking markets and sells throughout the year, sometimes opening seasons early to capture demand, indicating a more continuous sales cycle.

Asha Georgieva from Infinity Research noted that her firm's data indicated a slight sequential pricing decline in recent weeks and asked if this was attributable to seasonality or macroeconomic factors. She also inquired about the typical booking cadence and whether a fall uptick was expected.

Answer

EVP of Finance Linh Banh could not verify the external data but countered that Viking's internal data shows pricing remains strong, citing that River rate growth for 2025 improved from +5% to +7% since the last update. President and CFO Leah Talactac added that while Wave Season is key, their direct marketing efforts continue throughout the year, and they sometimes open seasons early to capture demand, smoothing the booking curve.

Assia Georgieva asked for visibility into pre-booked revenue for Q2 and Q3, questioned if the company should build up medi-spa inventory to hedge against tariff impacts, and sought clarification on future land-based spa closures and the adjusted EBITDA figure excluding severance costs.

Answer

Executive Leonard Fluxman declined to provide forward-looking pre-booking metrics. On inventory, both he and Stephen Lazarus explained that building up stock is impractical due to product expiration dates and limited refrigerated storage on ships. Regarding land-based spas, Leonard Fluxman commented on the strong value proposition of cruising compared to land vacations. Finally, Stephen Lazarus confirmed that adjusted EBITDA would have been $27.7 million without the one-time severance expense.

Assia Georgieva of Infinity Research inquired about Medi-Spa economics, including staffing models and real estate flexibility on new ships. She also asked if strong 'wave season' trends were translating to higher onboard spend and sought clarification on the Q1 financial impact from the leap year.

Answer

CEO Leonard Fluxman explained that Medi-Spa economics are stable and that the company maximizes facility utilization, though more space is always a goal. He confirmed strong booking trends typically lead to better onboard spending. CFO Stephen Lazarus noted the combined Q1 headwind from the leap year and dry docks was $4.3 million but did not provide a specific breakdown.

Assia Georgieva asked if the economics on private islands are similar to onboard services and questioned the potential to increase the prebooking rate from 22%, suggesting a target of 27%.

Answer

CEO Leonard Fluxman confirmed that pricing for services on private islands is generally similar to onboard pricing. Regarding prebooking, he stated that while the company's internal target is to get above 25%, achieving this is dependent on cruise line partners dedicating more marketing resources to promote spa services, which is a key focus for 2025 given that prebooking guests spend more.

Assia Georgieva asked about the impact of cruise line occupancy on growth, how the company adapts its offerings for different demographics on ships like Icon and Utopia, and the opportunity for pre-booking penetration.

Answer

CFO Stephen Lazarus explained that since OneSpaWorld serves a small percentage of guests, occupancy increases above 100% have a marginal impact. Executive Chairman Leonard Fluxman expressed confidence in catering to diverse demographics, citing extensive experience. He also noted that pre-booking, currently at 23% of service revenue, has room to grow as new partners are fully integrated.

Assia Georgieva asked about several topics, including whether occupancy still presented a yield opportunity, the possibility of ordering new ships for 2027-2028 given strong EBITDA, the debt paydown strategy, and the competitive landscape in Galveston, Texas.

Answer

CEO Josh Weinstein confirmed that while there is some occupancy upside, it's not the main driver of future revenue growth. He stated the newbuild order book is set through 2028 and the focus is on using cash flow to pay down debt. CFO David Bernstein added that debt strategy is a balance of targeting high-cost debt, managing maturity towers, and reducing secured debt. Regarding competition in Galveston, Weinstein expressed no concern, noting the vacation market is vast and there is room for growth.

Assia Georgieva from Infinity Research posed a long-term question about newbuilds, asking if the company might accelerate its capacity growth rate from the planned one to two ships per year once it returns to an investment-grade credit rating.

Answer

CEO Josh Weinstein reiterated the company's philosophy of ordering one to two ships per year once new orders resume, which is a lower growth rate than historically. He emphasized that the current low order book through 2025 allows the company to focus on generating free cash flow and paying down debt, which will put them in a much better position to make future newbuild decisions.