Brandt Montour

Brandt Montour asked if Flutter Entertainment has altered its philosophy for guiding sport outcomes or structural hold within its 2026 US revenue guidance, given the low-teens growth expectations and conservatism around handle.

Answer

CFO Rob Coldrake confirmed no change in guidance philosophy, emphasizing a sensible, measured approach for 2026 US guidance, which includes 12% revenue and 14% EBITDA growth. He noted that prediction market revenue is not included, and expects high-teens iGaming growth alongside double-digit sportsbook revenue growth.

Brandt Montour asked about the U.S. revenue guidance for 2026, specifically if the company has altered its philosophy for guiding on sport outcomes or structural hold within that guidance.

Answer

CFO Rob Coldrake stated that the company has not changed its philosophy, maintaining a sensible, measured approach to 2026 guidance, which includes 12% revenue growth and 14% EBITDA growth in the U.S. The guidance does not include prediction market revenue, assumes high-teens iGaming growth, and double-digit sportsbook revenue growth, with expected sequential improvement throughout the year.

Brandt Montour from Barclays sought to understand management's confidence level on core KPIs, given that recent guidance changes were from non-core items. He also asked what the renegotiated Boyd deal implies for the value of other market access agreements.

Answer

CFO Rob Coldrake expressed that they feel "really good" about the underlying momentum but are taking a prudent approach to guidance. Regarding market access, he noted the Boyd deal was favorable but other renegotiation opportunities are longer-term, mostly post-2030, and that other cost levers are available to them.

Brandt Montour circled back on the Derby, seeking more color on the company's confidence, pacing this year versus last, whether there's more cushion in ticket sales, and embedded pricing/revenue growth.

Answer

CEO Bill Carstanjen affirmed strong visibility into the Derby, noting the company is back on track after last year's tariff disruption. He highlighted positive KPIs across ticket sales, sponsorship, and licensing, and sees tailwinds like tax bill benefits for 2026, unlike prior headwinds.

Brandt Montour requested additional details on Derby pacing, comparing this year's confidence to last year, and specific KPIs such as cushion for ticket sales or embedded pricing/revenue growth.

Answer

William C. Carstanjen, CEO of Churchill Downs Incorporated, explained that last year's sales process was disrupted by tariffs, whereas this year is back on track with strong KPIs, including ticket sales, sponsorship, and licensing. He noted that the company has good visibility into Derby performance and is currently experiencing tailwinds, particularly from tax bill benefits, unlike the headwinds faced last year.

Brandt Montour inquired about the ramp-up of The Rose property, expectations for margin improvement into next year, and any concerns regarding the potential impact of the government shutdown discussions in D.C.

Answer

CEO Bill Carstanjen expressed satisfaction with The Rose's progression and anticipated improving margins as win per unit increases, despite ongoing marketing investments. He stated that the vast size of the market (6.5 million people) meant no discernible impact from government shutdown discussions on their growth trajectory.

Brandt Montour of Barclays requested details on the planned renovation for the area between the First Turn and the Sky Terrace, asking about its scope, timeline, and potential disruption to the 2026 Derby.

Answer

CEO William Carstanjen described the area as a 'clear and obvious' opportunity for capital improvement. He stated that the team is currently refining plans and cost estimates, with a full announcement expected on the next earnings call. He explicitly confirmed the project will not disrupt the 2026 Derby and promised it would be an 'exciting project' for investors.

Brandt Montour asked for help understanding the puts and takes of the Kentucky Derby's expected 'comparable' performance, weighing positives like the new pavilion against the tough comp of the 150th anniversary, and questioned if the guidance reflected conservatism.

Answer

CEO William C. Carstanjen explained his commentary was an effort to be candid about the real macroeconomic uncertainties that have emerged. While he does not believe these issues will have a long-term impact on the Derby, he acknowledged they have seen a change in demand for lower-end tickets in recent weeks. He stressed that overall demand is so strong that it will not materially affect performance or be visible in the crowd size, and he remains very positive about the event's trajectory into 2026.

Brandt Montour asked about the digital segment's 2026 revenue growth target, specifically what's driving the 20% ex-gross up growth (iGaming vs. OSB handle decline, hold benefit), and the conservatism of this target. He also inquired about the retail promotional environment and new supply pressure in 2025, and expectations for these factors in 2026.

Answer

CEO Jay Snowden and President and Chief Technology Officer, PENN Interactive, Aaron LaBerge, explained that iGaming growth is the primary driver, with strong retention in higher-worth segments and NGR growth on OSB despite handle declines due to lower promotional reinvestment. iCasino is currently growing faster than 20%. Jay Snowden noted less impact from promotional environment and new supply in retail for 2026, expecting these factors to become a tailwind in the second half as they lap prior year openings.

Brandt Montour asked about the drivers behind the digital segment's 2026 target of 20% revenue growth (excluding tax gross-up), specifically inquiring about the relative contributions of iGaming and online sports betting (OSB) given anticipated handle declines, and the impact of hold rates. He also asked about the retail segment's promotional environment and new supply pressures in 2025 and expectations for 2026.

Answer

CEO Jay Snowden and President and Chief Technology Officer of PENN Interactive, Aaron LaBerge, explained that iGaming growth, currently exceeding 20%, is the primary driver. OSB is expected to see Net Gaming Revenue (NGR) growth despite lower handle, achieved by focusing on higher-worth customer segments and reducing promotional reinvestment for unprofitable, low-worth customers. Retention for mid-to-high worth segments remains strong post-rebrand. For retail, Jay Snowden noted that the impact from promotional activity and new supply in markets like Louisiana and Council Bluffs, Iowa, is fading. He anticipates these pressures will be fully lapped by mid-Q2 2026, creating a tailwind for the second half of the year.

Brandt Montour of Barclays asked why Penn's sports division didn't see the same upside from the high-hold June quarter as its peers and questioned the drivers behind the updated, lower interactive guidance for the year.

Answer

CEO Jay Snowden clarified that Penn's hold rate was strong at 9.8%, but the company is focused on growing GGR and NGR share rather than just handle. He explained the revised interactive guidance incorporates new costs for the Missouri launch, tax increases in four states, and more conservative market share assumptions, while still allowing for marketing spend to support the launch of new features like Fan Center.

Brandt Montour asked about the Digital segment's outlook, questioning how the balance between a slightly below-plan OSB market share and strong iGaming performance affects the full-year guidance. He also inquired about iGaming's path to profitability and the promotional spending used to drive its growth.

Answer

CEO Jay Snowden stated that the full-year guidance assumptions remain intact, as stronger-than-expected iCasino performance can offset any slight weakness in OSB share. Snowden, along with CTO Aaron LaBerge and Head of Operations Todd George, noted that the stand-alone Hollywood iCasino app is driving 70% incremental revenue with minimal cannibalization and benefits from a stronger margin profile than OSB. They highlighted that cross-sell from both retail and OSB is ramping up effectively.

Brandt Montour from Barclays asked about the cadence of lapping competitive supply pressures in the brick-and-mortar business and requested a comparison of the potential Alberta launch to the successful Ontario launch for theScore Bet.

Answer

CEO Jay Snowden and Head of Operations Todd George explained that competitive pressures should lessen as 2025 progresses, with PENN becoming the source of new supply from Q4 onwards. Regarding Canada, Snowden stated that expectations for Alberta are similar to Ontario due to the strength of theScore brand. He noted the 'no inducement' policy in Canada benefits their product-focused strategy. George confirmed theScore's user base in Alberta is as strong as in Ontario.

Brandt Montour from Barclays questioned the Q4 interactive guidance, asking why the Q3 EBITDA beat didn't flow through to the full-year outlook and if it was solely due to unfavorable hold. He also asked about the initial success and product roadmap for the ESPN and ESPN BET account linking feature.

Answer

CEO Jay Snowden confirmed the Q4 interactive guidance reiteration was entirely due to unfavorable, industry-wide hold to start the quarter. CTO Aaron LaBerge added that tens of thousands of users have already linked accounts, showing higher engagement, and that this feature enables deeper personalization across the ESPN ecosystem.

Brandt Montour asked about year-to-date RevPAR trends, sequential occupancy build, specific demand segments driving improvement, and how these 'green shoots' are factored into the Q2-Q4 average implied RevPAR growth guidance.

Answer

CEO Geoff Ballotti highlighted significant improvement in January U.S. RevPAR, down 4% normalized, driven by demand. He noted positive trends in Texas, Florida, and California, along with continued strength in Midwest states. Occupancy in economy and midscale segments showed better recovery compared to upper upscale and luxury. Interim CFO Kurt Albert clarified that specific 'green shoots' are not individually built into guidance but could contribute to achieving the higher end of the outlook as they materialize.

Brandt Montour asked about year-to-date RevPAR trends, sequential occupancy build, specific demand segments driving growth, and how these 'green shoots' are factored into the Q2-Q4 RevPAR guidance.

Answer

CEO Geoff Ballotti highlighted significant year-to-date improvement in January U.S. RevPAR, driven by demand, with positive trends in Texas, Florida, California, and Midwest states. He noted improving booking windows and occupancy recovery in economy and midscale segments. Interim CFO Kurt Albert clarified that while green shoots are encouraging, they are not fully built into the current guidance but could lead to the higher end of the outlook.

Brandt Montour inquired about the impact of business and infrastructure-related travel demand, specifically how government spending curtailment has affected project pipelines and if data centers have provided an offset.

Answer

CEO Geoff Ballotti affirmed that the $1.2 trillion infrastructure bill remains a multi-year tailwind, despite a slowdown in Q4 last year's 150 basis points growth and potential reallocation of federal funds. He highlighted private investment in reshoring and manufacturing, particularly data centers, as a positive offset, with Wyndham hotels in those markets outperforming and gaining significant market share.

Brandt Montour inquired about the impact of business and infrastructure-related travel demand, specifically how the new administration's curtailment of government spending has affected project pipelines, and if data centers have provided a positive offset.

Answer

CEO Geoff Ballotti reiterated that the $1.2 trillion infrastructure spending is viewed as a multi-year tailwind, though some projects are paused or shifting due to federal reallocation. He noted that infrastructure room nights contracted are pacing well ahead of last year. Ballotti expressed confidence in private investment, particularly in data centers, where Wyndham hotels in those markets are outperforming and gaining significant RevPAR market share, citing examples like Amazon Web Services and Meta data centers.

Brandt Montour from Barclays asked about the evolution of net unit growth expectations for the year, specifically regarding the mix between new construction openings and conversions.

Answer

CEO Geoffrey Ballotti highlighted record first-half openings and a growing, higher fee-per-room pipeline. CFO Michele Allen added that while overall expectations have been consistent, the quality and visibility of growth have improved. She noted the full-year guidance range was raised to 4.0%-4.6% to reflect the removal of the Super 8 China master license portfolio and continued strength in development activity.

Brandt Montour of Barclays asked about the development backdrop, noting that Q1 net unit growth was slightly below the full-year range and inquired about the dynamics of the conversion business, including costs and potential countercyclical effects.

Answer

CEO Geoffrey Ballotti expressed confidence in the full-year net room growth target, explaining that openings ramp throughout the year. He confirmed the ability to flex up conversions, which were 90% of openings during COVID and are now around 70%. He also noted strong new construction momentum, with openings up 500 basis points. Regarding costs, he mentioned the team is managing supply chains by shifting sourcing, negotiating with suppliers, and focusing on domestic FF&E for key brands like Echo Suites to mitigate tariff impacts.

Brandt Montour inquired about the key drivers for the accelerated net unit growth guidance in 2025, asking for a breakdown between new construction, conversions, and retention improvements, and whether the trend is similar for U.S. and international markets.

Answer

CFO Michele Allen explained that the guidance reflects an acceleration from 2024 performance. The high end of the range assumes a 30 basis point improvement in retention and a 70 basis point improvement in gross openings. Allen highlighted that new construction, particularly from the Echo Suites brand, will be a larger contributor in 2025, with both U.S. and international segments expected to show improved production.

Brandt Montour asked for a comparison of the current hurricane season's impact to the major 2017 storms and questioned whether the upcoming U.S. election might negatively affect travel demand for Wyndham's portfolio.

Answer

CFO Michele Allen explained that while the current hurricane impact is providing a 40 basis point lift to Q4 RevPAR, it is less significant than the 200-300 basis point impact seen over multiple quarters in 2017. She also stated that unlike business-travel-heavy peers, Wyndham does not expect a material negative impact from the election, as its core 'hard hats and work boots' traveler is less affected.

Brandt Montour inquired if there was any bottom-line benefit from the sales optimization announcement in Q4 2025 and asked about the process and options for owners of the older resorts being removed from the system, including any associated cost components.

Answer

President and CEO Michael Brown clarified that there was no Q4 benefit from the optimization, with benefits starting in Q1 2026, and the Q4 impact was balance sheet related. He explained that owners of the exiting resorts are offered two options: receiving proceeds from the eventual sale of properties or moving their ownership to Club Wyndham or another product. He noted an intensive outreach program to owners, with many choosing to stay in ownership, and emphasized that the initiative helps reduce HOA burden and special assessments.

Brandt Montour asked if there was any bottom-line benefit from the sales optimization announcement in Q4 2025. He also inquired about the process for older resorts once Travel + Leisure Co. moves on, specifically if there's outreach to long-time owners not in the points program to convert them or if they are 'left behind.'

Answer

Michael Brown, President and CEO, clarified that there was no Q4 2025 bottom-line benefit from the sales optimization, with the impact being balance sheet related and benefits starting in Q1 2026. Regarding older resorts, Mr. Brown explained that the company works with HOAs and owners to provide two options: receiving proceeds from the eventual sale of properties or moving their ownership back into the Travel + Leisure Co. system. He noted an intensive outreach program is underway, with many owners opting to stay and convert their ownership.

Brandt Montour of Barclays probed whether the lower new owner sales mix in Q2 was a deliberate tactical shift to focus on higher-quality tours. He also questioned how the company could increase its new owner mix sequentially in the back half without creating pressure on its high VPGs.

Answer

CEO Michael Brown clarified that the Q2 new owner mix was a natural outcome of strong performance with existing owners, not a tactical shift, and that the 35% target is a long-term goal, not a quarterly mandate. He explained the focus is on accelerating absolute tour flow growth in the second half while maintaining the current strong VPG levels, a balance he believes the team is managing effectively.

Brandt Montour of Barclays noted that rising delinquencies and softer new owner close rates are potential early signs of a slowdown and asked how quickly management could pivot its strategy. He also questioned the seasonality challenges of the Sports Illustrated college town model.

Answer

President and CEO Michael Brown asserted that the management team can react very quickly but does not rely on heavy discounting, emphasizing the business's resilience and experience in navigating economic cycles. Regarding the Sports Illustrated model, he compared college towns to ski destinations, which have successfully built year-round demand. CFO Michael Hug added that universities are also actively working to attract off-season events.

Brandt Montour sought more detail on forward bookings being 'a tad behind' last year and asked for a breakdown of the drivers for the higher loan loss provision.

Answer

President and CEO Michael Brown clarified his comment was specific to owner bookings, while total occupancy remains consistent with the prior year. He emphasized efforts to drive owner arrivals via new digital tools. Executive Michael Hug explained that the increase in the loan loss provision was primarily driven by the uptick in portfolio-wide delinquencies seen in the first half of 2024, rather than a change in new owner credit quality or financing mix.

Brandt Montour sought to clarify the reason for the Q3 gross VOI sales miss relative to guidance, asking if weakness in Las Vegas accounted for the entire gap beyond the hurricane impact. He also asked for an outlook on consumer travel sentiment in 2025.

Answer

CEO Michael Brown confirmed that weakness in Las Vegas new owner tours was the primary driver of the VOI sales miss, supplemented by other small, non-recurring regional shortfalls. For 2025, he expressed confidence in the business model's resilience, citing a solid core business, subsiding interest rate headwinds, and the future growth potential from Accor and Sports Illustrated, which positions the company well regardless of the macroeconomic environment.

Brandt Montour asked about the regional segment's flow-through in the fourth quarter, noting a slight deterioration, and sought clarification on when this metric is expected to improve and the anticipated impact of marketing program adjustments. He also requested a deeper dive into specific pain points affecting Las Vegas, such as international inbound traffic, California interstate visitors, and discount airline seat availability.

Answer

CEO Tom Reeg attributed the Q4 regional flow-through to weather events in the last two weeks of the year, which impacted visitation and promotional recoupment, and expects continued improvement in Q1 and throughout the year. Regarding Las Vegas, Tom Reeg (CEO) stated there hasn't been a meaningful shift in international or California drive-in traffic between Q4 and Q1, but noted the impact of Canadian business and immigration crackdowns on Southern California visitors in the prior year.

Brandt Montour asked about the regional segment's flow-through in Q4, noting a quarter-over-quarter decline, and sought clarification on when this metric is expected to improve, particularly with promotional programs being called back as a tailwind for growth. He also requested a deeper dive into specific pain points affecting Las Vegas, such as international inbound traffic, California interstate traffic, and discount airline seats, and how these trends are evolving into Q1.

Answer

CEO Tom Reeg attributed the Q4 regional flow-through to weather events and promotional costs, expecting continued improvement in Q1 and throughout the year, especially after the last two weeks of Q4. For Las Vegas, Reeg indicated no meaningful shift in the mentioned pain points between Q4 and Q1, with Q1 benefiting from more group business. He noted that Canadian business, while a small percentage of total visitation, represented an outsized portion of room night loss in 2025, and softer Southern California drive-in traffic coincided with immigration crackdowns, expressing optimism for a gradual recovery in 2026 and beyond.

Brandt Montour asked about Las Vegas leisure demand recovery, specific metrics for sequential improvement into Q4, and the expected flow-through from regional promotional programs in both supply-impacted and non-supply-impacted markets.

Answer

CEO Tom Reeg detailed the sequential improvement in Las Vegas leisure demand, noting better occupancy and rate compression driven by group activity in Q4. He also clarified that regional marketing efforts are about increasing efficiency and taking up slack, not a promotional war, expecting improved flow-through in subsequent quarters.

Brandt Montour inquired about the regional segment's hold-adjusted growth and the flow-through from new marketing programs, asking if the observed efficiency is sustainable.

Answer

Tom Reeg, CEO, clarified that the regional marketing strategy is focused on optimizing the Caesars Rewards program and property quality, not initiating a 'promo war.' He expects continued improvement in efficiency and flow-through from these marketing efforts as the programs are refined over time.

Brandt Montour from Barclays asked for details on Caesars' recent promotional marketing efforts, including what makes them different and if they are tied to the Las Vegas slowdown. He also inquired about the potential causes of the soft summer leisure demand in Las Vegas.

Answer

President & COO Anthony Carano and CEO Tom Reeg described a data-driven approach to marketing, using their 52-property portfolio to test and learn which promotions drive profitable revenue. Reeg noted this started as a response to new regional competition but also helps fill Las Vegas rooms during softer leisure periods. Regarding the Vegas slowdown, Reeg characterized it as a return to normal seasonality, noting softer demand from international visitors, particularly Canadians, but saw no major structural issues with the consumer.

Brandt Montour asked for a quantification of the net financial impact from weather and the leap year on the regional segment, and also inquired about the drivers of the strong margin performance in Las Vegas.

Answer

CEO Tom Reeg estimated the combined negative impact from weather and the leap day was in excess of $10 million for the regional segment, with an additional $6 million impact in Las Vegas from the leap day. President and COO Anthony Carano and CEO Tom Reeg attributed the Las Vegas margin strength to broad operational discipline in labor and F&B, vendor negotiations, and the maturation of recent F&B outlets, which typically operate at higher margins after their first year.

Brandt Montour asked for a bigger picture view on the drivers for full-year 2025 EBITDA growth in Las Vegas and for details on the KPIs driving the strong top-line growth in the iGaming segment.

Answer

CEO Tom Reeg and President and COO Anthony Carano explained that Las Vegas growth will be driven by increased room yield from group business and returns from new F&B and hotel renovation projects. President of Caesars Sports and Online Gaming Eric Hession detailed that iGaming growth comes from new customer acquisition for its standalone apps, with key metrics including customer acquisition cost, daily actives, volume, and improving hold.

Brandt Montour questioned the performance of the Online Sports Betting (OSB) segment in October, asking how it compared to the previous November and whether improved structural hold was mitigating adverse sports outcomes. He also asked if the year-over-year increase in iGaming hold was due to structural changes or normal volatility.

Answer

CEO Tom Reeg acknowledged that October sports betting outcomes were poor, with one weekend being the worst combination of outcomes seen since the business started, and noted that higher parlay mix works against them in such scenarios. He clarified the iGaming hold improvement is structural, driven by a higher mix of slot play versus table games following the launch of the Caesars Palace online app, a trend that is expected to continue.

Brandt Montour asked about the performance of prediction markets in late December post-launch and why the rollout wasn't more 'splashy.' He also inquired about DraftKings' advertising plan, considering its national advertising footprint for OSB and the need to target prediction markets in specific states.

Answer

Jason Robins (Co-Founder and CEO, DraftKings) explained that the initial December launch was 'bare bones' and they aimed to ensure a competitive product and capture more economics with the upcoming Railbird integration before aggressive marketing. He views the national marketing footprint as a significant advantage, as most customers don't differentiate between products. DraftKings plans to leverage national spend to drive both OSB and predictions simultaneously, with a detailed strategy to be unveiled at Investor Day.

Brandt Montour asked about the initial performance of DraftKings' prediction markets post-December launch and the advertising strategy, particularly how national advertising would be leveraged given the different legal landscapes for OSB and prediction markets.

Answer

Co-Founder and CEO Jason Robins explained the initial bare-bones launch and the focus on product improvement and capturing economics with Railbird. He highlighted the advantage of DraftKings' national marketing footprint, which can drive both OSB and prediction products simultaneously, with more details to be unveiled at Investor Day.

Brandt Montour asked about the gap between the $300 million luck impact and the full-year EBITDA guide down, seeking a breakdown of factors such as higher promotional spend, early spend with ESPN/NBC partnerships, and early prediction market spend.

Answer

Jason Robins, Co-founder and CEO of DraftKings, clarified that most of the gap is due to sport outcomes. Other contributing factors include some Q4 prediction market spend (both marketing and product/technology investment for launch) and potential early spend with new partnerships. He reiterated that prediction market spend will be analytically driven and conservative.

Brandt Montour questioned the gap between the $300 million full-year luck impact and the larger reduction in the full-year EBITDA guide, asking for a breakdown of contributing factors such as higher promotions, early spend on ESPN/NBC partnerships, and initial prediction market investments.

Answer

Jason Robins, Co-founder and CEO of DraftKings, clarified that most of the gap is due to outcomes. He noted that some Q4 2025 guidance includes an assumption for prediction spend, which will be analytically driven, and investment in product and technology for the prediction market launch. He mentioned that while the exact launch date is uncertain, budget is allocated for development and launch in Q4.

Brandt Montour of Barclays requested a breakdown of the reaffirmed 2025 EBITDA guidance, asking for quantification of the impacts from tax changes, the Missouri launch, and any positive offsets beyond favorable sports outcomes.

Answer

CFO Alan Ellingson quantified the anticipated EBITDA impact from the Missouri launch at $35 to $45 million for the current year. He noted that while favorable sports outcomes were the main driver in Q2, strong core business performance also provided optimism. However, the company chose to maintain its guidance, feeling it was prudent given that the majority of revenue and EBITDA for the year is still to come in the second half.

Brandt Montour of Barclays requested a detailed breakdown of the reaffirmed 2025 adjusted EBITDA guidance, asking for quantification of the negative impacts from tax changes and the Missouri launch, as well as any positive offsets beyond favorable sports outcomes.

Answer

CFO Alan Ellingson quantified the anticipated EBITDA impact from the Missouri launch at $35 to $45 million for the fiscal year. He noted that while strong core business performance provided an offset, the company chose to maintain its guidance given that the majority of revenue and EBITDA for the year is generated in the second half.

Brandt Montour asked for the implied structural hold in the second-half 2025 guidance, particularly for the NFL season, and the expected parlay mix lift. He also sought clarification on the Q2 adjusted EBITDA guidance, which was well above consensus.

Answer

CEO Jason Robins projected that structural hold should be slightly north of 11% in the second half, driven by high-parlay-mix sports like NFL and NBA. Regarding Q2 guidance, Robins explained that the company provided the specific figure to help align expectations, as the Street's model had a different allocation of earnings across quarters, with only a minor impact from April's unfavorable sports outcomes.

Brandt Montour of Barclays asked for elaboration on the comment that the long-term ceiling for hold may be higher than previously thought. He also inquired about any concerns regarding the promotional environment for iGaming.

Answer

CEO Jason Robins explained that the view of a higher hold ceiling is based on the accelerating rate of improvement in parlay mix, which is not slowing down. He expressed no concern about the iGaming promotional environment, noting that intensity declined year-over-year in 2024 and is expected to continue declining in 2025.

Brandt Montour of Barclays asked for more detail on the drivers of the 11% structural hold target for 2025 and questioned what would be required to achieve higher hold rates closer to competitors.

Answer

CEO Jason Robins stated that the hold improvement is almost entirely driven by product mix shifts toward parlays, not changes in leg count. He explained that reaching a 12-13% hold rate is also primarily a function of driving this parlay mix, which he described as a significant upside lever for the business, fueled by their product and merchandising strategy.

Brandt Montour requested an overview of Wynn Las Vegas's convention calendar for the year by quarter, including year-over-year comparisons and any standout group trends. He also asked about the drivers behind strong VIP volumes in Macau, specifically if direct lending practices had changed or if there were new supply and demand factors.

Answer

President, Wynn Resorts Brian Gullbrants noted Q1's convention calendar was stronger year-over-year, while Q2 faced challenges due to holidays, with the team actively filling summer gaps. President & CEO Craig Billings confirmed no changes to their credit approach for VIPs, attributing strong volumes to specific investments in VIP hosting teams and player development, as a small number of players can significantly impact turnover.

Brandt Montour asked whether the RevPAR growth seen in Las Vegas for Q4 was primarily from mix and rate compression from group business, or if it indicated a recovery in leisure occupancy. He also inquired about the timing for building excitement and buzz for Wynn Al Marjan Island with global players and any insights gained from the London acquisition.

Answer

CEO Craig Billings and COO Brian Gullbrants attributed Q4 RevPAR growth to overall health and group compression, noting a strong October start. Craig Billings explained that one-to-one marketing for Wynn Al Marjan Island is ongoing with key players, while mass marketing will commence closer to opening. He highlighted significant database overlap and valuable learnings from the Mayfair (London) operation regarding game preferences and competitive dynamics.

Brandt Montour requested clarification on the delayed $375 million CapEx project timing and its 2025 P&L impact. He also asked how Macau's daily operating expenses were kept flat year-over-year despite new amenity openings.

Answer

CFO Julie Cameron-Doe explained the CapEx delay was footnoted because the new timing is uncertain, but the project is not canceled. CEO Craig Billings added that re-sourcing and re-spec'ing items is a lengthy process. Regarding Macau OpEx, Cameron-Doe noted the new food hall opened after Q1, and Billings added that the goal is for incremental gaming revenue from the increased foot traffic to more than offset the new operating costs.

Brandt Montour from Barclays asked for details on the timing and potential disruption from the upcoming Encore tower renovation in Las Vegas. He also sought commentary on the evolution of pricing power across the broader Las Vegas market.

Answer

Executives Craig Billings and Brian Gullbrants detailed that the renovation will start late summer, last about 12 months, and be managed to minimize guest disruption by taking floors out of service in blocks and pausing during peak demand. They do not plan to quantify any disruption. Regarding market pricing, Billings declined to comment on the market as a whole but stated Wynn's own pricing power felt 'incredibly good' in Q4 and continues to feel good.

Brandt Montour asked for the reasoning behind the downward revision of Macau CapEx guidance and inquired about the company's perspective on the New York gaming license process, particularly in light of potential iGaming legislation.

Answer

CFO Julie Cameron-Doe explained the lower Macau CapEx guidance is purely a matter of timing due to government approval processes, not a change in commitment. CEO Craig Billings confirmed the company shares concerns about iGaming, citing the serious risk of cannibalizing land-based revenue and jobs, which could halve margins, and the potential for long-term regulatory blowback. He stated it is a critical consideration for a multi-billion dollar investment.

Brandt Montour asked about the first quarter 2026 RevPAR guidance, which is around the midpoint of the full-year range (2%), following a strong 4% global RevPAR growth in Q4 2025. He inquired if Hyatt is observing the real-time firming in business transient demand that some peers have noted, and if there are other factors impacting Q1 comparisons.

Answer

Joan Bottarini, CFO, explained that the Q1 guidance reflects a continuation of trends, with strong package RevPAR (leisure transient) and January performing at the high end of the range. She noted that business transient (BT) has improved slightly but remained flat in January, with pace looking positive for February and March, exceeding the top end of the full-year RevPAR range. Mark Hoplamazian, President and CEO, added that the Q1 comparison is impacted by lapping the inauguration in Washington D.C. last year. He emphasized that leisure, especially all-inclusive resorts, remains very strong, with pace up around 10%.

Brandt Montour asked about Hyatt's Q1 2026 RevPAR guidance of approximately 2% after a strong 4% global RevPAR growth in Q4 2025. He also inquired if Hyatt is observing a 'real-time firming' in business transient demand, similar to what larger peers have reported.

Answer

CFO Joan Bottarini stated that Q1 2026 guidance reflects a continuation of trends, with strong package RevPAR (leisure transient) and January coming in at the top end of their range. She noted that business transient (BT) improved slightly, remaining flattish in January, with shorter booking windows. President and CEO Mark Hoplamazian added that they are lapping the inauguration in Q1 2025, which impacted U.S. BT comparisons. He indicated positive BT pace for February and March, exceeding the top end of their full-year RevPAR range, suggesting firming in the near term.

Brandt Montour asked for Hyatt's early thoughts on the 2026 RevPAR outlook for the U.S. and globally, and the company's confidence in re-acceleration given trends in business transient, group, leisure, and events like the World Cup.

Answer

Mark Hoplamazian, President and CEO, Hyatt, cited tailwinds for 2026, including the World Cup, America 250 celebrations, and infrastructure build, driving economic activity. Joan Bottarini, CFO, Hyatt, expressed confidence in incrementally positive U.S. RevPAR, driven by strong group pace and improved rates. Both noted continued strong leisure demand and momentum in international markets, expecting overall global incremental positivity in 2026.

Brandt Montour asked for early thoughts on how 2026 RevPAR might shape up in the U.S. and globally, considering business transient, group, leisure, and events like the World Cup.

Answer

Mark Hoplamazian, President and CEO of Hyatt, pointed to tailwinds for 2026, including the World Cup, America 250 celebrations, and ongoing infrastructure and hyperscaler construction. Joan Bottarini, CFO of Hyatt, expressed confidence in incrementally positive U.S. RevPAR, driven by strong group pace and easier comparisons. Both noted continued strong international momentum and persistent leisure demand globally.

Brandt Montour asked for an update on development signing momentum in China and questioned if Hyatt was experiencing any pushback from local developers against signing with an American brand due to geopolitical tensions.

Answer

President and CEO Mark Hoplamazian reported that while overall signing activity in China was slow in Q1 as expected, the pipeline for the UrCove by Hyatt brand remains very strong. He stated that Hyatt has not experienced any negative sentiment from developers or consumers against its American brand, noting that their strategy of partnering with large, state-owned enterprises helps provide stability.

Brandt Montour asked for Hyatt's outlook on incentive management fees (IMF) for 2025, noting a peer's more downbeat view due to uncertainty in China.

Answer

CFO Joan Bottarini conveyed that Hyatt expects healthy RevPAR and fee growth across all markets in 2025. She noted that strong incentive fee growth is anticipated from Asia Pacific (excluding Greater China). She also clarified that core fee growth remains in the high single digits, as less than a third of the total guided fee growth comes from recent acquisitions.

Brandt Montour, Managing Director at Barclays, asked about Hilton's group business, seeking a pace number for 2026 and questioning if a significant demand shock would be necessary to prevent group business from accelerating this year compared to last year.

Answer

Chris Nassetta, President and CEO of Hilton Worldwide, stated that Hilton feels 'great' about group business coming into 2026, with a mid-single-digit system-wide group position up for the year. He believes group will be the outperformer this year, leading leisure and business transient, all of which are expected to see healthy growth due to macro tailwinds, barring unforeseen events. Nassetta confirmed that a demand shock would indeed be needed to prevent group business from accelerating.

Brandt Montour inquired about the 2026 group business pace and whether a significant demand shock would be necessary to prevent group business from accelerating this year compared to last year.

Answer

Chris Nassetta, President and CEO of Hilton Worldwide, confirmed that a demand shock would indeed be needed to prevent acceleration. He stated that Hilton feels very good about its mid-single-digit system-wide group position for the year, relative to expectations. Nassetta anticipates group business will be the outperformer in 2026, followed by leisure, and then business transient, with healthy growth expected across all segments.

Brandt Montour asked about corporate travel trends heading into the fourth quarter, seeking insights into which types of companies are traveling and what factors might be delaying increased corporate travel.

Answer

Chris Nassetta, President and CEO, noted that major corporate customers are generally constructive about increasing travel next year and expect to pay more. He attributed current hesitation to 'noise in the system' (geopolitical, economic uncertainty). He believes that as broader macroeconomic trends take hold and confidence returns, travel patterns will normalize. SMBs are typically more resilient but also somewhat rattled.

Brandt Montour of Barclays asked about the growth trajectory of the Spark by Hilton brand, questioning if the initial wave of openings represented "low-hanging fruit."

Answer

President and CEO Christopher Nassetta strongly refuted this idea, stating that Spark is performing exceptionally well and has become Hilton's highest market share brand on a comparable basis. He set a goal of over 400 open Spark hotels by the end of 2026, driven by strong owner performance and international expansion. He also stressed that Hilton's conversion growth is multifaceted, relying on multiple brands, not just Spark.

Brandt Montour requested a more detailed breakdown of the Q2 RevPAR guidance of 'roughly flat,' asking for expectations on domestic versus international performance and the relative strength of different transient segments.

Answer

CFO and President, Global Development, Kevin Jacobs stated that the Q2 outlook is muted primarily by the Easter holiday shift. He expects domestic RevPAR to be in line with the overall 'roughly flat' guidance. Segment performance will follow recent trends, with Group leading, followed by Business Transient, and softer conditions in Leisure. International regions are expected to perform better than domestic, consistent with prior commentary.

Brandt Montour asked for a bridge to the full-year EPS guidance, which appears lower than the Investor Day algorithm would suggest, even when accounting for the exclusion of future buybacks from the forecast.

Answer

Kevin Jacobs, CFO and President, Global Development, explained that the main driver is higher interest expense from releveraging the balance sheet to fund the buyback program at rates higher than previous borrowing. Christopher Nassetta, President and CEO, added that this is a temporary effect during the releveraging period and will stabilize once leverage levels are consistent year-over-year.

Brandt Montour asked about the early traction of the Small Luxury Hotels of the World (SLH) partnership, including customer engagement and any specific marketing initiatives.

Answer

President and CEO Christopher Nassetta described the initial data as 'super good,' despite it being very early. He noted that customers are engaging with the properties on Hilton's platforms and utilizing points for redemptions, which is the desired behavior. He emphasized that the partnership significantly enhances Hilton's luxury and leisure offerings in unique, sought-after destinations, providing more opportunities for loyalty members to 'earn and burn' points.

Brandt Montour asked about the full-year 2025 disruption compared to original estimates and sought details on the new Durango phase, including its opening strategy, amenity rollout, gaming versus non-gaming spend breakout, and expected return thresholds.

Answer

Stephen Cootey, EVP, CFO, and Treasurer, stated that full-year 2025 disruption came in better than expected, citing Q4's $5.1 million actual versus a $9.5 million estimate. Lorenzo Fertitta, Vice Chairman, expects similar low-to-mid teens returns (growing to 20% historically) for the new Durango phase. He anticipates a 'one big bang' opening for 90-95% of amenities, with possibly one food and beverage amenity trailing by a few months. The expansion adds 400 slots to a base of 2,200, with entertainment amenities expected to significantly boost foot and gaming traffic.

Brandt Montour asked about the full-year 2025 disruption compared to the original $25 million estimate, and details on the new Durango phase, including its opening strategy, gaming versus non-gaming spend breakout, and expected return thresholds.

Answer

Stephen Cootey, EVP, CFO, and Treasurer, stated that full-year 2025 disruption came in 'better than we thought,' noting Q4 was $5.1 million versus an expected $9.5 million. Lorenzo Fertitta, Vice Chairman, expects similar returns (low to mid-teens, growing to 20%) for the new Durango phase. He anticipates a 'one big bang' opening for most amenities (90-95%), with some food & beverage possibly trailing. The expansion adds 400 slots to a base of 2,200, and entertainment amenities are expected to significantly increase foot traffic and gaming on both tables and slots.

Brandt Montour inquired about the performance of Red Rock Resorts' hotel business, specifically its resilience against any Strip weakness and its ability to attract VIP customers from the Strip. He also sought clarification on the potential disruption impact from the Durango Casino Resort Phase 3 expansion on the north side.

Answer

Scott Kreeger (President, Red Rock Resorts Inc) stated that hotel performance was resilient despite a choppy market, with occupancy up and RevPAR likely positive if Green Valley Ranch rooms were included. He noted that Red Rock's ADR outperformed the Strip by about 25%. Stephen Cootey (EVP, CFO, and Treasurer, Red Rock Resorts Inc) confirmed that the north side expansion at Durango is expected to cause significant disruption, with details still being finalized.

Brandt Montour inquired about Red Rock Resorts' hotel performance, specifically its resilience against broader Las Vegas Strip weakness and its ability to maintain VIP share. He also sought clarification on the potential disruption from Durango's Phase 3 expansion.

Answer

Scott Kreeger, President, highlighted strong hotel performance despite Green Valley Ranch rooms being offline, noting increased occupancy and outperformance in ADR compared to the Strip. Stephen Cootey, EVP, CFO, and Treasurer, confirmed that details on Durango Phase 3 disruption are still being worked out but anticipate significant impact on the north side.

Brandt Montour from Barclays questioned the reason for the slight increase in the CapEx budget for the Green Valley Ranch renovation and asked for more detail on post-election consumer behavior.

Answer

Executive Stephen Cootey clarified that the GVR renovation budget increased because a refresh of the meeting space was added to the project's scope. Executive Scott Kreeger reiterated that post-election strength was observed in the VIP, core, and regional/national segments, while the mix of carded and uncarded play remained consistent.

Brandt Montour inquired about potential tailwinds for the upcoming year, such as the mitigation of cannibalization at Red Rock and the typical second-year growth of a new property like Durango. He also asked about the historical business impact of elections.

Answer

Executive Scott Kreeger identified significant household growth near the Red Rock, Durango, and Sunset Station properties as key tailwinds. Regarding elections, Kreeger acknowledged a historical impact during election and Olympic years but noted that the business was showing encouraging strength heading into Q4, a sentiment echoed by Executive Lorenzo Fertitta.

Brandt Montour asked if the adjustment to the royalty rate for credit card fees changes how investors should think about potential upside from ongoing credit card deal negotiations.

Answer

CFO Leeny Oberg reiterated that the royalty adjustment is entirely separate from the credit card deals. She emphasized that Marriott already has the largest credit card program in the industry, generating over $700 million in fees, and that new credit card deals involve a rollout and stabilization period, so the two items should be considered independently.

Brandt Montour asked for clarification on whether the royalty rate adjustment changes how analysts should think about potential upside from ongoing credit card negotiations.

Answer

CFO Leeny Oberg reiterated that the royalty rate change and the credit card negotiations are 'totally separate.' The royalty rate adjustment is a function of a changed agreement, Bonvoy's strength and scale, and operational efficiency. She reminded that Marriott already has the industry's largest credit card program, generating over $700 million in fees, and new credit card deals involve a rollout process that takes time to stabilize.

Brandt Montour sought clarification on business transient trends, asking if performance had recently worsened, the specific impact of government-related declines, and whether any stabilization or 'green shoots' were observed when excluding government business.

Answer

President and CEO Tony Capuano stated that global business transient was flat in the quarter, a sequential improvement from Q2, and up 1% year-over-year excluding government, which was down 15%. He noted encouraging strength from larger companies but hesitancy from SMEs navigating economic volatility. CFO Leeny Oberg added that relative weakness in smaller and medium-sized businesses had a greater impact on select service brands.

Brandt Montour sought clarification on business transient trends, particularly the recent worsening, asking how much was government-related and if ex-government trends have stabilized or show green shoots.

Answer

Tony Capuano (President and CEO) stated global business transient was flat in Q3, an improvement from Q2's 2% decline. Excluding government, global BT RevPAR was up 1% year-over-year, while government transient was down 15%. He noted strength in larger companies but hesitancy from SMEs. Leeny Oberg (CFO and EVP of Development) added that weakness in smaller/medium-sized businesses disproportionately impacts select service brands.

Brandt Montour of Barclays asked for a breakdown of business transient trends, specifically requesting details on non-government demand and the outlook for the second half of the year.

Answer

CFO Leeny Oberg clarified that while overall business transient RevPAR was down 2%, it was down only 1% when excluding the government segment, which saw a 17% decline. President & CEO Anthony Capuano noted that while most corporate travel restrictions are gone, macro uncertainty has contributed to some softness, particularly in the select-service segment where government demand is concentrated.

Brandt Montour of Barclays asked if conversations around hotel conversions were increasing, consistent with historical counter-cyclical trends. He also requested specific development statistics for China, including its share of the pipeline and rooms under construction.

Answer

CEO Tony Capuano expressed a bullish view that conversions will be a 'steady state' component of growth, not just cyclical, citing factors like conversion-friendly brands and dedicated resources. CFO Leeny Oberg provided China stats, noting it represents 10% of existing rooms and 18% of the pipeline, with signings showing a 'big increase' driven by select-service interest.

Brandt Montour from Barclays asked to reconcile the strong fourth-quarter leisure performance with the more conservative 'flat to slightly up' guidance for 2025. He also inquired about the factors that could unlock the availability of capital for new hotel construction.

Answer

CEO Tony Capuano described the Q4 leisure results as encouraging but noted the guidance reflects an expectation of normalization, given short booking windows. On capital availability, he cited regulatory uncertainty like Basel III as a headwind for lenders, but noted Marriott is capturing a leading share of the new construction starts that are occurring, suggesting a flight to quality.

Brandt Montour from Barclays asked about the progress of special corporate negotiated rate discussions for 2025 and whether interest rate uncertainty is affecting hotel developers' capital planning.

Answer

President and CEO Tony Capuano stated that the company is targeting a mid-single-digit increase for 2025 special corporate rates and feels good about that target. He acknowledged that while developers are watching interest rates, the availability of debt and elevated construction costs are currently bigger impediments to new construction starts than interest rates themselves.

Brandt Montour sought clarification on the nature of Las Vegas stabilization, specifically how Q4 KPIs (RevPAR down, casino revenue up) translate into monthly trends, and whether growth can be achieved with continued RevPAR declines. He also asked about the structural changes contributing to the elevated table hold percentage in Las Vegas.

Answer

CFO Jonathan Halkyard explained that Q4 ADR declines moderated from October to December, with November impacted by special events like F1. He noted casino's ability to drive revenue growth and that RevPOR was slightly up in Q4. CEO Bill Hornbuckle attributed the higher table hold to significant high-end activity and MGM's strong market share in that segment, acknowledging volatility but not confirming it as a 'new normal.'

Brandt Montour asked for more detail on the stabilization seen in Las Vegas, particularly from a KPI perspective given RevPAR declines but strong casino revenue, and whether growth can return under such conditions. He also questioned the structural changes leading to higher table holds (24%+) compared to pre-COVID levels and if this is the new normal.

Answer

Jonathan Halkyard (CFO) explained that ADR declines moderated throughout Q4 and into Q1, with casino revenue growth driven by events and effective marketing, noting that RevPOR (revenue per occupied room) was slightly up. Bill Hornbuckle (CEO) attributed the higher table holds to significant high-end activity and MGM's strong market share in that segment, but cautioned against calling it the 'new normal' due to inherent volatility.

Brandt Montour of Barclays asked for a broader perspective on Las Vegas Strip visitation, particularly concerning the free independent traveler (FIT) segment, and requested an update on the progress toward the $150 million cost savings target for the year.

Answer

CEO & President Bill Hornbuckle noted that after a nine-week booking decline, trends have increased in three of the last four weeks, giving him confidence for the fall. COO Corey Sanders added that group business cycle-outs impacted the summer. CFO Jonathan Halkyard stated that about $80 million of the $150 million cost savings target was realized in the first half, driven by digital check-in and AI chatbots.

Brandt Montour asked for details on Las Vegas's strong April performance, inquiring which key performance indicators (KPIs) were driving the results and how the company is offsetting softer international inbound travel.

Answer

Jonathan Halkyard, CFO, highlighted record hotel occupancy and rates, strong group performance, and the success of the Marriott partnership, which books over 20,000 room nights weekly. CEO William Hornbuckle added that while booking windows are later, demand remains strong. He also noted that declines in leisure travel from markets like Canada are being successfully offset by the Marriott program and a strong casino customer base.

Brandt Montour requested more detail on the strong January performance in Las Vegas, particularly regarding room rates, and asked about the underlying drivers of this momentum.

Answer

Executive Jonathan Halkyard confirmed January set records for occupancy, ADR, slot handle, and restaurant revenue, with mid-single-digit ADR growth expected in future months (ex-February). Executive William Hornbuckle attributed the strength to the Marriott partnership, which is exceeding expectations, and record-breaking convention bookings, indicating strong corporate demand.

Brandt Montour from Barclays asked for a breakdown of Las Vegas demand trends by month during Q3 and into October, excluding high-end baccarat. He also inquired about the 2025 outlook for group and convention business and any notable calendar shifts.

Answer

CEO William Hornbuckle and executive Corey Sanders noted that July was weak due to external factors, but August and September improved sequentially. Executive Jonathan Halkyard reported strong October occupancy of 97%. For 2025, Halkyard anticipates cash rate growth but highlighted a significant headwind in February from the Super Bowl comp ($60-70M impact) and a major room renovation at the MGM Grand.

Brandt Montour asked about the rationality of industry participants' reactions to the Caribbean supply situation and whether the current strong Wave season indicates potential for improvement.

Answer

Chairman and CEO Jason Liberty observed that the industry is much more rational now with greater price integrity compared to a decade ago. He noted that promotions are similar to previous years and the cruise sector is somewhat insulated due to its price gap to land-based vacations.

Brandt Montour asked about how other industry participants have reacted to the Caribbean supply situation, whether the market feels more or less rational than in the past, and if there's potential for improvement given strong Wave season volumes.

Answer

Jason Liberty, Chairman and CEO, stated that the industry is 'so much more rational' with 'price integrity' compared to a decade ago, noting that current promotional activities are similar to pre-pandemic levels (2017-2019). He emphasized that the cruise industry is somewhat insulated due to its price gap compared to land-based vacations, and that travel partners are generating high-quality demand.

Brandt Montour of Barclays asked about the operational expectations for the new Royal Beach Club, including feedback from travel agents and pre-booking trends. He also sought to understand if the strength in close-in demand was coming at the expense of longer-term bookings or if it was purely incremental demand.

Answer

Michael Bayley, President and CEO of Royal Caribbean International, reported that sales for the Royal Beach Club are very strong since opening, with high interest and dynamic pricing starting from $139. He shared an anecdote of selling an 'Ultimate Family Cabana' for $10,000 for a single day. President & CEO Jason Liberty added that the operational ramp-up will be slow and thoughtful to ensure a flawless guest experience, prioritizing trust over maximizing initial revenue. On booking windows, Liberty stated that while younger consumers do book closer in, 2026 bookings remain in line with prior years at higher rates, indicating healthy long-term demand. Michael Bayley added that the increase in short cruise capacity to Perfect Day also contributes to the shorter booking window trend.

Brandt Montour asked if loyalty program data indicated any customer trade-down behavior between ships or brands. He also questioned how much the company would be willing to flex load factors to protect pricing in a slower booking environment.

Answer

CEO Jason Liberty gave a direct 'No' to the trade-down question, stating that customer behavior remains normal. On the second point, he emphasized that the focus is on optimizing total revenue while maintaining price integrity. He added that the company is actively working to increase load factors on ships to add value for guests, and the current booked position is strategically managed to avoid being 'too booked' early on.

Brandt Montour of BofA Securities questioned the 2025 net yield guidance, seeking to reconcile the 3.5% midpoint with 2024's strong performance. He also inquired about the new Celebrity River Cruises' market positioning and pricing strategy relative to luxury competitors.

Answer

CEO Jason Liberty explained the yield guidance reflects tough comparisons after double-digit growth in the prior two years. Regarding River Cruises, he noted it's a fragmented market where Celebrity can win share by leveraging its large customer database and brand trust. He clarified the river product will be more inclusive than its ocean counterpart, justifying higher per diems for an elevated, Edge-class standard experience.

Brandt Montour inquired about current pricing trends versus 2019 levels, the potential impact of lower inflation on future yield growth, and the capital investment and return expectations for the new Perfect Day Mexico destination.

Answer

CEO Jason Liberty stated that full-year pricing is up approximately 26% versus 2019, driven by strong demand and an enhanced value proposition, not inflation. Regarding Perfect Day Mexico, he noted the port and land acquisition cost was $292 million, with a focus on achieving significant returns similar to CocoCay. CFO Naftali Holtz added that the acquisition is expected to close in the first half of 2025.

Brandt Montour inquired about the booking momentum and whether Carnival's revenue management strategy involved taking volume at the expense of slightly less pricing growth. He also asked about Carnival's specific exposure to the Caribbean market, particularly short (3-4 day) itineraries, given the significant capacity lift in Q1 2026.

Answer

President and CEO Josh Weinstein confirmed that revenue managers optimize for maximum revenue, managing the booking curve effectively. Regarding the Caribbean, he highlighted Carnival's long-standing presence in short Caribbean cruises and emphasized their diversified portfolio, noting that 20% of their Q1 Caribbean capacity comes from European brands with flight crew programs.

Brandt Montour from Barclays inquired about consumer behavior, specifically if Carnival is observing fatigue or trading down among lower-end consumers, and how the booking strategy for 2026 might evolve given past volatility.

Answer

CEO Josh Weinstein noted strong business performance across all brands (contemporary, premium, luxury) and highlighted robust booking periods, with Carnival Cruise Line booking 8% more in Q3 2025 than Q3 2024. He indicated that learnings from past volatility are informing the 2026 strategy, aiming for optimization.

Brandt Montour from Barclays asked if Carnival is observing any consumer fatigue or behavioral shifts, such as trading down on shore excursions, among its core consumer base, particularly lower-end segments, given trends seen in other travel verticals. He also inquired about the 2026 booking strategy, asking if being "half booked" is optimal and if learnings from 2025's booking volatility might lead to changes.

Answer

CEO Josh Weinstein stated that Carnival is not seeing consumer fatigue, highlighting strong Q3 2025 bookings (e.g., Carnival Cruise Line booked 8% more year-over-year). He noted that restrained capacity growth for 2026 and beyond sets up well for increased demand. Regarding 2026 booking strategy, he acknowledged that 2025's volatility provides insights for optimizing future approaches, aiming to reduce similar volatility.

Brandt Montour asked about consumer behavior, noting that while lower-end consumers show fatigue in other travel sectors, Carnival does not seem to be experiencing this. He inquired if there are any behavioral shifts within Carnival's loyalty set, such as guests trading down on shore excursions or other spending patterns. He also followed up on the 2026 booking commentary, asking if being half-booked is optimal and if the booking strategy will change given past choppiness.

Answer

CEO Josh Weinstein affirmed the strength of Carnival's business and brands across all segments (contemporary, premium, luxury), citing a strong Q3 booking period with Carnival Cruise Line booking 8% more in Q3 2025 than Q3 2024. He noted that restrained supply for 2026 (no new ships) positions them well. Regarding booking strategy, Mr. Weinstein acknowledged past volatility (e.g., election cycle) and the current reduction in volatility, stating that lessons learned from navigating past challenges provide confidence in their approach for 2026.

Brandt Montour asked for an assessment of the lower-income consumer's health and whether it feels different today, and also sought clarification on the implied yield guidance cadence, which suggests Q4 growth will be stronger than Q3.

Answer

CEO Josh Weinstein stated that the company has not observed any differentiation in booking patterns between lower-income and higher-income consumers, attributing this to the cruise's strong value proposition. Regarding the guidance cadence, he explained that while the percentage growth differs, the absolute year-over-year dollar increase for Q3 and Q4 is comparable at around 8% each, due to Q3's seasonally higher base. He also noted the ramp-up of Celebration Key contributes positively to Q4.

Brandt Montour inquired about the health of the lower-income consumer, asking if their behavior feels different compared to previous years. He also asked about the implied guidance cadence for Q3 versus Q4, noting the sequential lift, and whether it's primarily due to the ramp-up of Celebration Key.

Answer

CEO Josh Weinstein stated that the company has not seen any differentiation in booking patterns between lower-income consumers and premium or luxury guests, attributing this to the strong value proposition of cruising. Regarding guidance, he clarified that while Celebration Key is helpful, the dollar increase year-over-year is comparable for both Q3 and Q4, at approximately 8% each, despite the different percentage growth rates due to seasonal base effects.

Brandt Montour from Barclays asked about any relative differences in consumer behavior between European and American markets, and how the company perceives the industry's pricing discipline in a potential consumer slowdown.

Answer

CEO Josh Weinstein noted that European brands continue to outperform, reinforcing the strength of the company's portfolio approach. Regarding pricing, he stated that Carnival is in an 'enviable position' due to its record booked status, strong visibility, and minimal capacity growth, which supports its ability to maintain price discipline.

Brandt Montour asked if pricing on the current 2025 booking curve appears any less robust compared to the same point last year for 2024, given the tougher comparisons. He also asked for clarification on the net financial impact of the Red Sea situation in 2025 versus 2024.

Answer

CEO Josh Weinstein confirmed that the 2025 book is in a stronger position than last year, with both higher occupancy and higher prices across all quarters. Regarding the Red Sea, he explained that 2025 will not see a simple 'bounce back' of the ~$100M impact from 2024. This is because the company proactively redeployed ships away from the region for 2025, which involved selling less attractive itineraries, making a direct year-over-year comparison difficult.

Brandt Montour asked about the SEA Change targets, noting that current performance suggests the company could potentially exceed them. He also questioned how the softer demand environment seen in land-based leisure might affect cruise consumer behavior and pricing sensitivity.

Answer

CEO Josh Weinstein acknowledged they are outperforming expectations and are about 75% of the way to their key SEA Change targets after just one year, with the goal to "hit them early" and "get further than that." Regarding the broader leisure market, he emphasized that cruise remains a "remarkable value" and suggested land-based softening might be because cruise is doing better. He credited improved marketing and a 17% year-over-year increase in new-to-cruise guests for their strong performance.

Brandt Montour asked for a breakdown of the incremental revenue from new pricing discounts, specifically whether it's more from dynamic pricing on window tickets at certain resorts or the month-ahead 30% discounted ticket program, and sought benchmarking on previous dynamic pricing efforts for off-peak periods and data insights on price elasticity.

Answer

Rob Katz, CEO of Vail Resorts, declined to provide specific breakdowns but stated that all initiatives—Epic Friends, dynamic pricing, the 30% off promotion, and marketing efforts—collectively contribute to the guidance and are expected to drive additional revenue. He explained that previous off-peak efforts included lower pricing for lodging, ski school, and rentals, but the current approach is a significant shift with a direct focus on lift tickets. Mr. Katz noted that Vail has conducted numerous unannounced price tests, gleaning insights into elasticity from extensive data capture and personalization, and highlighted that declining lift ticket sales over the past two years indicated a need for this multi-pronged effort.

Brandt Montour asked for clarification on the 'normal weather' assumption in the guidance, specifically whether last year's weather was considered normal or better than normal. He also inquired about the risk of cannibalizing early commitment (pass sales) by making lift tickets more attractive through smarter marketing and pricing strategies.

Answer

CFO Angela Korch described last year's weather as a 'pretty normal ramp' for terrain opening across most regions, without unusual disruptions, though not an 'above average snowpack or snowfall year.' CEO Rob Katz acknowledged the risk of cannibalization but stated it's something they pay close attention to. He explained that the price gap between advance passes and lift tickets has widened dramatically, providing 'plenty of room to be more aggressive and creative on lift ticket pricing without necessarily sacrificing pass business.'

Brandt Montour asked for clarification on the 'normal weather' assumption in the guidance, specifically whether last year's weather was considered normal or better than normal. He also inquired about the potential risk of cannibalizing early commitment (pass sales) by making lift tickets more attractive through smarter marketing and pricing, even if lift ticket marketing occurs after the pass selling season.

Answer

CFO Angela Korch described last year's weather as a 'pretty normal ramp' across most regions, allowing terrain to open on a typical schedule without unusual disruptions, though it wasn't an 'above average snowpack or snowfall year.' CEO Rob Katz acknowledged the risk of cannibalization but stated it's something they pay close attention to. He believes that the significantly widened gap between window/advance lift ticket prices and pass prices, particularly after the pass price reduction four years ago, provides ample room to be more aggressive and creative with lift ticket pricing without sacrificing pass business.

Brandt Montour asked for clarification on the 'normal weather' assumption in the fiscal 2026 guidance, specifically whether the prior year (fiscal 2025) was considered normal or better than normal, given previous years were worse. He also asked if there's a risk that improving the attractiveness of lift tickets through smarter marketing and pricing could cannibalize early commitment pass sales for the following year.

Answer

CFO Angela Korch described fiscal 2025 as having a 'pretty normal ramp' for terrain opening across most regions, without unusual disruptions, though not necessarily an 'above average snowpack or snowfall year.' CEO Rob Katz acknowledged the risk of cannibalization from enhanced lift ticket offerings but stated that the dramatic widening of the price gap between walk-up/advance lift tickets and passes (especially after the pass price reduction four years ago) provides ample room to be aggressive and creative with lift ticket pricing without sacrificing pass business.

Brandt Montour from Barclays sought clarification on the "normal weather implied in guidance," asking whether the previous year's weather conditions were considered normal or better than normal, especially in contrast to the disruptions of earlier years. He also followed up on the potential risk of cannibalizing early commitment (pass sales) by making lift tickets more attractive, acknowledging that while lift ticket marketing is delayed, there could still be an overlap in target audiences for the following year.

Answer

CFO Angela Korch described last year's weather as a "pretty normal ramp" across most regions, allowing for typical terrain openings without unusual disruptions, though not an "above average snowpack or snowfall year." CEO Rob Katz acknowledged that cannibalization of pass business by more attractive lift tickets is a risk they pay close attention to. However, he argued that the dramatic widening of the price gap between walk-up/advanced lift tickets and season passes (especially after the pass price reset four years ago) provides ample room to be more aggressive and creative with lift ticket pricing without sacrificing pass business.

Brandt Montour from Barclays asked for details on the past season's visitation shortfall, specifically which geographies or source markets underperformed. He also inquired about the philosophy on pass innovation and tiering versus the risk of complexity.

Answer

CEO & Chair Rob Katz identified the biggest shortfall came from uncommitted lift ticket visitors, which requires a different marketing approach. Regarding pass innovation, Katz acknowledged the complexity but affirmed the company is constantly looking for new ways to drive advance commitment, with a focus on the 'less committed skier' rather than a complete overhaul.

Brandt Montour questioned the stated 7% average pass price increase, suggesting the Epic Day Pass price rose much more significantly. He asked about a potential tactical shift and concerns about demand elasticity, particularly for the full Epic Pass, which now exceeds $1,000.

Answer

CEO Kirsten Lynch clarified that the price increase is a consistent 7% across the board and offered to follow up offline to ensure correct comparison points were used. Regarding the full Epic Pass price, she stated the company feels the 7% increase strikes the right balance between price and value, reflecting investments in the guest experience while preserving the opportunity for continued unit growth.

Brandt Montour from Barclays asked if there is a risk that lagging destination and international bookings for Whistler Blackcomb could become unrecoverable if they don't rebound soon. He also inquired about long-term operating model adjustments for East Coast resorts to account for potential climate shifts.

Answer

CEO Kirsten Lynch expressed optimism for Whistler, noting that the strong early season snow should positively influence booking decisions and that booking trends are already improving. For the East Coast, she stated that the company is constantly evaluating its operating model to adapt to variability and emphasized the strategic importance of the region for accessing major markets and providing geographic diversity to the overall resort network.

Brandt Montour from Barclays asked if the "COVID normalization" trend includes a return to more concentrated peak-period travel. He also inquired about the widening price gap between Epic Pass and its main competitor and the risk of being positioned as a lower-tier product.

Answer

CEO Kirsten Lynch stated they have not seen a significant shift back to peak-period travel; visitation remains strong in off-peak periods, a dynamic driven by the pass program. On competitive positioning, Lynch expressed confidence in Epic Pass's value perception and strategic goal of maximizing advance commitment. She noted that while Epic Pass prices have risen 25% since the 2021 reset, they carefully monitor price elasticity to ensure the pass remains an attractive alternative to lift tickets, which is crucial for revenue stability.

Brant Montour asked if Norwegian Cruise Line Holdings moving capacity out of Europe in 2026 would be a tailwind for Viking, or if their customer base is too different to matter. He also sought clarification on Viking's strategy of 'pressing its advantage' against new river competitors, specifically regarding product overlap and differentiation.

Answer

Tor Hagen, Chairman and CEO, stated that Norwegian's mass-market big ships do not impact Viking, as Viking focuses on its unique product and loyal guests. He reiterated Viking's significant advantages in docking sites and unique river ship design, which allows for more guests (190 vs. 160-170 for competitors) and greater efficiency, emphasizing a philosophy of designing for cost and efficiency over 'bells and whistles.' Leah Talactac, President and CFO, added Viking's extensive itineraries across 21 rivers.

Brandt Montour inquired about the dynamic pricing strategy used to maintain booking cadence during recent macro volatility. He also asked about the operational readiness of the company's ships in Russia should the geopolitical situation change.

Answer

President and CFO Leah Talactac reiterated that the strategy is to engage consumers directly, not adjust price, noting the success of this approach with strong April and May bookings. Chairman and CEO Torstein Hagen addressed the Russia question, confirming the ships are kept 'ship shape' and ready to go. He believes the primary variable is traveler sentiment but that the itineraries would be a positive EBITDA contributor once operational.

Brandt Montour asked about the dynamic pricing strategy Viking employed to maintain booking momentum amidst recent macro volatility. He also inquired about the operational readiness of the company's ships in Russia should that market reopen.

Answer

President and CFO Leah Talactac explained the strategy involved using direct marketing to finalize 2025 bookings and then pivot to 2026, which elicited a strong response in April and May. Chairman and CEO Torstein Hagen stated that the six ships in Russia have been kept 'ship shape' and are ready to operate, with the timing dependent on traveler demand, but noted they would provide a positive EBITDA contribution.

Brandt Montour questioned if factors like anti-American sentiment could affect bookings and if a well-capitalized competitor like Royal Caribbean could challenge Viking's product advantage with innovation, forcing a design pivot.

Answer

Chairman and CEO Torstein Hagen expressed confidence that Viking's educated and curious guests are resilient to such factors. On competition, he argued that the physical constraints of river ships limit radical innovation. He highlighted Viking's own patented designs (e.g., square bow, asymmetric balconies) that maximize space and guest count, and asserted that the superior quality of staff and itineraries, not just ship hardware, are the key sustainable advantages.

Brandt Montour inquired about the impact of the family mix shift on 2026 yields, given Q4 pressure and increased occupancy confidence. He also asked for clarification on the 20% booking increase, its relation to optimal ranges, and the drivers behind this acceleration amidst a shift to shorter Caribbean cruises.

Answer

Mark Kempa (EVP and CFO) and Harry Sommer (President and CEO) explained that while the family segment drives higher load factors, it can modestly dilute blended pricing, though core customer pricing remains strong, supporting low to mid-single-digit yield growth. Harry Sommer clarified the 20% booking increase was for Q3 and continued into October, broad-based across all brands, reflecting a stronger consumer and NCL-specific tailwinds from capacity and shorter cruises.

Brandt Montour asked about the impact of the mix shift towards families on next year's yields, considering the reiterated 2026 targets and increased occupancy confidence. He also inquired about the strong 20% booking acceleration in Q3 and October, and how it aligns with being within the optimal booking range, especially with a shift to shorter, Caribbean itineraries.

Answer

Mark Kempa (EVP and CFO) explained that the strategy targets low to mid-single-digit yield growth, with higher load factors from families leading to slightly lower blended pricing but strong core customer pricing. Harry Sommer (President and CEO) confirmed the 20% booking increase for Q3 and October across all three brands, driven by robust consumer demand, acknowledging capacity shifts and shorter cruises as contributing factors.

Brandt Montour from Barclays asked about the tactical or promotional tools used to drive the booking reacceleration from April to July. He also inquired about the competitive positioning of the enhanced Great Stirrup Cay island, particularly in relation to competitors.

Answer

CEO Harry Sommer attributed the booking rebound primarily to an improved macroeconomic environment and a strategic shift toward top-of-funnel brand marketing, rather than any unusual promotional activity. Regarding Great Stirrup Cay, Sommer stated the goal is to create the 'greatest private island in The Caribbean' with a diverse set of amenities tailored to NCLH's specific customer demographic, declining to comment directly on competitors.

Brandt Montour asked for the underlying reason for American consumer hesitation to travel to Europe this summer, questioning if it was a supply and demand issue. He also followed up on whether this hesitancy was extending to 2026 European bookings, particularly for luxury brands which tend to book further in advance.

Answer

CFO Mark Kempa suggested the hesitation was related to rounding out the last few points of load factor on longer-haul trips, likely tied to general macroeconomic uncertainty among North American customers, and clarified it was not a supply issue. CEO Harry Sommer stated they are not seeing any challenges with Europe 2026 bookings, noting that outside of a brief soft patch in early April, booking patterns for 2026 have returned to normal and the booked position is doing well.

Brandt Montour from Barclays asked for the rationale behind the guided occupancy decline for the second through fourth quarters of 2025 and sought more detail on the strong demand from U.S. customers for European sailings, including any recent geopolitical or election-related impacts.

Answer

President and CEO Harry Sommer explained the minor occupancy dip is due to a deployment mix shift, including a 20% increase in longer itineraries in Asia, Africa, and the Pacific, and the use of a larger ship for longer Alaska sailings, which affects the family mix. He clarified that strong European demand is a result of a superior product offering, not weak prior-year comparisons, and noted that booking patterns have remained normal following the election.

Brandt Montour requested a deeper analysis of 2025 booking strength across different brands and geographies, and asked how the company's definition of an 'optimal' booking curve has evolved with the recent trend of strong close-in demand.

Answer

CEO Harry Sommer stated that booking strength for 2025 is broad-based and progressing as expected across all segments, with a focus on maximizing yield over booked position. He explained that while the booking curve was pushed out post-COVID to de-risk, recent robust close-in demand has allowed them to recalibrate, though the optimal curve remains dynamic and varies by itinerary.

Brandt Montour asked about potential disruption from the Orleans Hotel renovation project in the coming year. He also inquired about the promotional environment across the Midwest and South markets, specifically any quarter-over-quarter changes or competitive consistency.

Answer

CFO Josh Hirsberg indicated it's too early to quantify disruption for the Orleans project, expecting it to be limited initially, and noted successful management of disruption at Suncoast. President and CEO Keith Smith confirmed no significant disruption is anticipated for 2026 modeling. Keith Smith also stated that while competitors in the Midwest and South have increased marketing, Boyd Gaming remains disciplined, maintaining margins and growing revenue and EBITDA efficiently.

Brandt Montour from Barclays asked for clarification on the Orleans Hotel project scheduled for next year, specifically inquiring about potential disruption impacts given its easy comps and market factors. He also asked about the promotional environment in the Midwest and South markets, seeking to understand if there were quarter-over-quarter changes or consistent competitor behavior.

Answer

Josh Hirsberg, CFO, indicated it's too early to quantify disruption for the Orleans project, but initial phases in the second half of next year would likely have limited impact. He noted the management team's success in managing disruption at Suncoast. Keith Smith, President and CEO, advised against anticipating significant disruption for 2026 modeling. Regarding the Midwest and South promotional environment, Keith Smith acknowledged increased aggression from competitors but stated Boyd Gaming has remained disciplined, maintaining consistent margins and growing revenue and EBITDA through efficient marketing.

Brandt Montour inquired if the unrated customers driving growth have a higher spend profile and asked about Boyd's market share performance in the Las Vegas locals market during Q2.

Answer

EVP and CFO Josh Hirsberg clarified that they cannot determine the spend profile of unrated customers, only that the volume of play has increased. CEO Keith Smith stated that based on data through May, Boyd's market share was stable or up slightly. Hirsberg added that competitive pressures are easing as expected, with the segment also benefiting from the unrated play.

Brandt Montour inquired about any encouraging post-election consumer trends in the Midwest and South and asked for a comparison of the Par-A-Dice project's potential to the successful Treasure Chest redevelopment.

Answer

President and CEO Keith Smith noted that while Q4 was stronger, it's difficult to attribute it to any single factor like election sentiment. He strongly cautioned against comparing Par-A-Dice to Treasure Chest, highlighting that market dynamics, competition from VGTs, and population are completely different, and Treasure Chest's success was exceptional.

Brandt Montour asked if the current monthly GGR for Treasure Chest is a sustainable run-rate or if there's further room for growth, and inquired about any unmentioned impacts from hurricanes during the quarter.

Answer

President and CEO Keith Smith indicated that the current performance of Treasure Chest, which has been consistently 70-80% higher than pre-renovation levels, is likely a good number to use going forward and he does not anticipate it growing much higher. He acknowledged that an earlier hurricane did impact some Louisiana properties but noted it was one of several minor impacts during the quarter that were not individually called out.

Brandt Montour asked about the competitive landscape in the Las Vegas locals market, particularly concerning the Orleans, and questioned if the historical correlation between the Strip and the locals market has changed.

Answer

Executive Keith Smith noted that excluding the Orleans, the company's locals properties are outperforming the market. He stated that the competitive pressures on the Orleans are not new and that the performance gap narrowed in Q1. He also argued that historical correlations to the Strip are less relevant today due to the significant diversification of the Southern Nevada economy over the last 10-15 years, making the locals market less dependent on tourism employment.

Brandt Montour of Barclays requested a system-wide look at July attendance that excluded hurricane-affected markets to better understand underlying trends. He also asked about the potential opportunity costs of pulling forward season pass sales and advertising, questioning why this strategy isn't used every year.

Answer

CFO Brian Witherow contended that the July weather comps were not overly favorable, as this year's adverse weather impacted larger parks than last year's hurricanes did. CEO Richard Zimmerman stated that the early launch of pass sales has minimal downside, as it encourages a valuable trade-up from single-day tickets to higher-value season passes, which strengthens both the current and following year's performance.

Brandt Montour requested a deeper dive into season pass sales, asking for a breakdown of momentum on a volume or unit basis between the legacy Cedar Fair and Six Flags systems. He also asked if the positive commentary implied any change to the full-year top-line plan.

Answer

CFO Brian Witherow explained that while they are driving for higher volumes on both sides, the opportunity is greater at the legacy Six Flags parks, where attendance and the pass base are further from pre-pandemic levels. This allows for more aggressive pricing on the legacy Cedar Fair side. CEO Richard Zimmerman confirmed that the company still believes there is meaningful top-line growth to achieve and is pursuing it, combined with significant cost reductions, to drive margin expansion.

Brandt Montour of Barclays questioned why the full-year contract sales guidance was maintained despite improving monthly trends and sought to reconcile the higher loan loss provision guidance with reports of declining delinquencies.

Answer

CEO John Geller stated that due to being down year-to-date and ongoing macro uncertainty, they are holding the contract sales guidance. CFO Jason Marino explained the higher loan loss provision reflects Q2's 13% rate, influenced by seasonality and minor defaults in Asia. Geller added that while delinquencies are improving, they have not yet returned to historical lows.

Brandt Montour of Robert W. Baird & Co. asked about the new first-time buyer financing strategy and its potential impact on loan loss provisions. He also inquired about the drivers for the raised full-year EBITDA guidance, questioning if it was due to sales performance or cost efficiencies.

Answer

CEO John Geller clarified that the financing promotion does not alter underwriting standards, so no impact on loan loss provisions is expected. He noted the new $50M-$100M efficiency plan is for 2025-2026. CFO Jason Marino added that the guidance increase was driven by better-than-expected Q3 results in other parts of the business, not a change in the contract sales outlook.

Brandt Montour from Barclays asked for an update on new owner sales trends, particularly concerning the former Diamond portfolio, and sought details on the market dynamics and forward indicators for Las Vegas, given recent softness.

Answer

CEO Mark Wang stated that new owner cohorts have stabilized after some degradation in 2024, and the new buyer pipeline is growing, supported by strong package sales. He noted the new buyer mix is also affected by significant outperformance on the owner upgrade side. Regarding Las Vegas, Wang acknowledged that lower visitation has led to promotional pressure on room rates but explained that HGV can strategically reallocate room nights to drive sales, and VPGs in the market remain strong.

Brandt Montour from Barclays inquired about the performance and evolution of new owner sales throughout the year, particularly within the legacy Diamond portfolio, and asked for insights into the demand softness in the Las Vegas market.

Answer

CEO Mark Wang responded that new owner cohorts have stabilized and momentum is building, evidenced by a 10% increase in the new buyer pipeline and 200,000 packages sold in the quarter. He noted the new buyer transaction mix is lower partly due to significant outperformance on the owner side. Regarding Las Vegas, Wang acknowledged lower market-wide visitation created promotional pressure but stated HGV can strategically reallocate room nights to drive sales and that VPGs in Vegas remain strong.

Brandt Montour asked why Hilton Grand Vacations is not seeing the leisure travel choppiness reported by other companies and questioned the sustainability of high VPGs given the seasonal shift towards more new-owner sales.

Answer

CEO Mark Wang explained that HGV has a significant advantage in demand visibility due to its large, prepaid owner base and marketing package pipeline, which have much longer booking windows than typical leisure travel. He clarified the new buyer mix is around 25-30% and that strong VPGs were driven by outperformance in the owner channel, with VPG growth also seen in new buyers. He expects this strong performance to continue.

Brandt Montour of Barclays asked for a summary of timeshare KPIs, clarification on tour flow dynamics between owner and new buyer segments, and a performance breakdown across the legacy HGV, Diamond, and Bluegreen businesses. He also inquired about the drivers of improving new buyer close rates.

Answer

CEO Mark Wang clarified that owner tour flow was stable while new buyer tours were impacted by hurricanes, with the Bluegreen business disproportionately affected. He attributed improving new buyer close rates to better organizational alignment, increased staffing, and the rollout of new noncash incentives and financing options to better match customer needs.

Brandt Montour requested more detail on the strengthening Chinese consumer in Macau, specifically regarding spend-per-visit trends across base mass and premium mass. His follow-up question sought to clarify if the Londoner property was the primary recipient of increased reinvestment and if other properties were next.

Answer

Grant Chum, President & CEO of Sands China, explained that while overall visitation is strong, the GGR acceleration is still primarily driven by premium segments, though base mass also grew significantly. He clarified that the higher reinvestment levels were applied across the entire portfolio, not just the Londoner. However, he noted that smaller properties may require further recalibration of reinvestment levels to match their specific product offerings and attract patronage.

Brandt Montour of Barclays asked about the strategy for activating the Londoner's new casino floor with a partial room inventory and inquired about the potential Thailand opportunity, specifically how it compares to the Singapore market.

Answer

Chairman and CEO Robert Goldstein stated that while a buzz will be created with 1,000 rooms, gaming activity directly correlates with room count, and performance will build as all 2,400+ rooms become available. Regarding Thailand, President and COO Patrick Dumont described it as a separate and distinct opportunity from Singapore that could strengthen their overall ecosystem. Robert Goldstein added that Asia's vast population can easily support both markets without cannibalization.

Brandt Montour questioned if the high $900 ADR in Singapore was due to room supply compression or indicative of new product quality. He also asked about the renovation of the Macao Arena and its expected impact in 2025.

Answer

President and COO Patrick Dumont and Chairman and CEO Robert Goldstein confirmed the ADR reflects both some compression and, more significantly, the exceptional quality of the renovated rooms and strong market demand. Sands China CEO Grant Chum added that the upgraded Venetian Arena will relaunch in late 2024 and will be actively programmed alongside the Londoner Arena to drive traffic and spend.

Brandt Montour asked for commentary on booking momentum for the May Golden Week and for an explanation of the performance decline at the Venetian Macao during the quarter.

Answer

President and COO Patrick Dumont declined to comment on the current quarter's trends. Regarding the Venetian, CEO and President of Sands China Grant Chum explained that the property experienced a sharp decline in non-rolling revenues, particularly in the premium mass segment. He also noted that a lower hold percentage contributed to the weaker results, and that while visitation was strong, the spend per visitor was lower.

Brandt Montour from Barclays asked for clarification on the $50 million net reimbursable deficit add-back in the EBITDA walk and questioned the disparity between strong EBITDA growth and slower operating cash flow growth since 2019, focusing on the role of key money.

Answer

CFO Scott Oaksmith explained the deficit is related to the timing of spending from the marketing and reservation system fund, which operates at a breakeven over the long term. He noted a planned spend-down of a prior surplus is occurring. Regarding OCF, Oaksmith acknowledged an increase in key money use since 2019, driven by brand launches (Cambria, Everhome) and the competitive development environment. He stated the free cash flow conversion ratio has been steady and is expected to be in the mid-60s for 2025.

Brandt Montour requested a breakdown of the Q3 ancillary revenue unlock between legacy Choice and Radisson contributions and asked for an explanation for the RevPAR underperformance in the mid-scale segments compared to STR data.

Answer

An executive, likely CFO Scott Oaksmith, estimated the ancillary revenue was roughly 75% from legacy Choice and 25% from Radisson, driven by contract realignments and cross-selling services. CEO Patrick Pacious explained the RevPAR variance versus STR was primarily a regional mix issue, as Choice's portfolio has a higher concentration in regions that underperformed the national average.

Brandt Montour inquired about the weather impact during April and the underlying weather assumptions in the company's full-year guidance. He also asked for the company's perspective on how Epic Universe's ticketing and marketing strategies might impact their business.

Answer

CEO Marc Swanson noted a slight negative weather impact in April but stated the full-year forecast assumes more normalized weather, which would be an improvement over 2023's significant hurricane disruptions. Regarding Epic Universe, he emphasized that United Parks is focused on its own differentiated products and value proposition to capture the incremental traffic brought to the Orlando market.

Asked for the reasoning behind the flat top-line guidance for International Interactive, questioning if it's due to U.K. growth being offset by a decline in Asia. Also inquired about the company's philosophy on leverage levels in relation to share buybacks.

Answer

The flat International Interactive guidance is largely due to lapping a significant decline in Asia from 2023, which offsets expected growth in the U.K. The company is comfortable with its current leverage, viewing it as transitory due to the Chicago development. They will remain opportunistic with buybacks when the stock is undervalued, considering the small impact on overall leverage.

Brandt Montour from Barclays asked if the company could quantify the potential per diem upside from reducing its reliance on opaque distribution channels. He also inquired about the company's medium- to long-term strategy for the China market.

Answer

CEO Josh Weinstein stated that as booking momentum builds, they are already pulling back on opaque channels, which helps improve per diems, but declined to quantify the future impact. Regarding China, he explained that while they will evaluate the market if it fully reopens, they are not relying on it and are focused on strengthening their position in existing core markets.

Brandt Montour asked why 2023 might not be a 'normal' year given that bookings and pricing are ahead of historical levels. He also inquired about the potential to lift net pricing by reducing promotional activity versus raising headline prices.

Answer

CEO Josh Weinstein affirmed the positive outlook, stating the company is well-positioned for a 'fantastic' 2023. CFO David Bernstein added that strong 2022 onboard revenue per diems also set up 2023 for a record year. Regarding pricing strategy, Weinstein acknowledged that managing promotions and opaque channels are key levers and that there is an opportunity to optimize their use to maximize revenue.