Lizzie Dove

Lizzie Dove questioned the anticipated impact of Epic Universe on United Parks & Resorts' Orlando trends (attendance, per caps, costs) in 2026. She also asked about the company's sponsorship performance in 2025, specifically if it met mid-single-digit EBITDA expectations, and the visibility into the $15 million+ pipeline for 2026 and the $30 million+ long-term opportunity.

Answer

CEO Marc Swanson views Epic Universe as beneficial for the Orlando market, bringing more visitors, and highlighted United Parks' differentiated offerings, animal experiences, and value proposition. Regarding sponsorships, Mr. Swanson expressed excitement for the 2026 pipeline ($15 million+ and growing) and the long-term $30 million+ opportunity. Interim CFO and Treasurer Jim Forrester added that while relationships take time to develop, concrete plans are emerging.

Lizzie Dove asked about the anticipated impact of Epic Universe on United Parks & Resorts' Orlando trends for 2026, covering attendance, per caps, and costs. She also inquired whether mid-single-digit EBITDA from sponsorships was realized in 2025 and sought visibility into the $15 million+ pipeline for 2026 and the long-term $30 million+ opportunity.

Answer

CEO Marc Swanson believes Epic Universe will attract more visitors to Orlando, creating growth opportunities for United Parks & Resorts. He highlighted the differentiated experiences at SeaWorld Orlando, including new attractions and animal components, along with the value proposition of their parks. Regarding sponsorships, Mr. Swanson expressed excitement for the 2026 pipeline ($15 million+ and growing) and the long-term potential ($30 million+). Interim CFO Jim Forrester added that while relationships take time, the company has concrete plans for future sponsorship growth.

Lizzie Dove asked about the attendance trends at non-Orlando parks, particularly the Busch Gardens locations, and what factors were gating their performance. She also asked for clarity on expectations for the second half of the year, noting the company was no longer referencing a record EBITDA target.

Answer

CEO Marc Swanson acknowledged an opportunity to improve performance at parks like Busch Gardens Tampa, citing weather impacts and the need for better marketing awareness as contributing factors. For the second half outlook, Swanson detailed a path to strong results based on slightly positive Q3-to-date attendance, popular upcoming events, favorable weather comparisons to last year's hurricanes, and a new $15 million cost-reduction plan. He stressed the need to improve per capita metrics.

Lizzie Dove inquired about the vacation ownership business, specifically how stronger VPG will offset mid-single-digit tour declines, the initiatives driving this, and the potential for new buyer growth and mix shift impacts. She also asked about identifying 'low-hanging fruit' versus longer-term turnaround efforts, particularly on the cost side.

Answer

Matthew Avril, CEO, explained initiatives like investment in new hire training and improving tour flow quality. He emphasized expanding tour flow opportunities by leveraging existing infrastructure, increasing owner engagement, and maximizing package tours. Regarding costs, he noted rigorous review, ongoing reductions, and prioritizing activities to align the cost structure with future business needs.

Lizzie Dove inquired about the vacation ownership business, specifically the initiatives driving stronger VPG despite a mid-single-digit decline in tours. She also asked about the potential for increasing new buyers and any mix shift impacts, as well as identifying low-hanging fruit versus longer-term turnaround opportunities, particularly on the cost side.

Answer

Matt Avril, Chief Executive Officer, explained that investments in training for new hires and improving tour flow quality from packages were implemented in late 2025 to boost VPG. He emphasized expanding tour flow opportunities by leveraging high-occupancy resorts and existing infrastructure, aiming for an overall environment of growth. On costs, Matt Avril noted rigorous efforts over several months to reduce the cost structure, with further reductions expected before the quarter's end, prioritizing activities to align with business needs.

Lizzie Dove asked for more details on Choice Hotels' expectation for U.S. rooms growth to return to positive territory in 2026, including specific brand drivers. She also questioned how much of the potential tailwinds, such as the World Cup and tax stimulus, are factored into the domestic RevPAR outlook.

Answer

Patrick Pacious (CEO) attributed the confidence in positive U.S. net rooms growth to increased mid-scale and economy franchise agreements (up 5%), a 12% increase in the conversion pipeline in Q4, and improved guest scores. He identified Quality, Clarion, Clarion Pointe, Rodeway, Ascend, and the redesigned Country Inn & Suites by Radisson prototype as key conversion drivers. Regarding RevPAR tailwinds, Patrick Pacious (CEO) stated that while factors like tax relief and a weaker U.S. dollar are constructive, they are harder to measure and not fully baked into the guidance, but he remains optimistic given the transitory nature of 2025's weaknesses. Scott Oaksmith (CFO) clarified that Q1 RevPAR would still be negative due to hurricane comps, with an expected inflection point in Q2.

Lizzie Dove inquired about the outlook for U.S. rooms growth for the rest of 2026 and longer term, considering competition in the premium economy segment and momentum in midscale and above.

Answer

CEO Geoff Ballotti expressed encouragement regarding the U.S. pipeline, highlighting solid conversion rooms and significant opportunity in economy openings, which grew 90% in 2025 (10,000 rooms vs. 5,000 in 2024). He also noted over 2% net room growth in domestic midscale brands and increasing conversions, indicating a positive outlook for U.S. growth.

Lizzie Dove asked about U.S. rooms growth for the remainder of 2026 and longer term, considering the rise of conversion-friendly brands, potential overlap with competitors, and momentum in midscale and above segments.

Answer

CEO Geoff Ballotti expressed encouragement for the U.S. pipeline, citing solid conversion rooms and significant opportunity in economy openings, which saw 90% growth in 2025 compared to 2024, contributing to a 4% U.S. gross add to the economy system with over 94% retention. He also noted over 2% net room growth in domestic midscale brands and a continuously growing pipeline.

Lizzie Dove asked about the balance of the mix shift between new deals requiring key money (coming in at a 40% fee-par premium) and the growing presence of China in the mix, and whether this combination is accretive or dilutive to RevPAR over time.

Answer

CFO Michele Allen confirmed that key money deals are absolutely accretive to RevPAR over time, bringing in high-quality products in higher demand markets. She clarified that while faster growth in international regions with lower royalty rates might appear dilutive to the overall royalty rate or global fee-par, it remains highly accretive to revenue and EBITDA. CEO Geoff Ballotti added that Wyndham is not deploying key money in China, yet is achieving double-digit net room growth and fee-par accretive rooms there, with 52 new deals in Q3 and a 3% pipeline increase, many being stunning new construction additions competing with larger peers.

Lizzie Dove inquired about the balance of mix shift between new deals requiring key money (at a 40% fee-par premium) and the growing presence of China in the portfolio, and whether this mix is accretive or dilutive to RevPAR over time.

Answer

CFO Michele Allen confirmed that key money deals are accretive to RevPAR over time, bringing in high-quality products in higher demand markets. She explained that faster growth in international regions with lower royalty rates could appear dilutive to the overall royalty rate or fee-par but remains accretive to revenue and EBITDA. CEO Geoff Ballotti clarified that key money is not typically deployed in China, where Wyndham is achieving strong double-digit net room growth and pipeline growth (up 3%) without it, driven by new construction.

Lizzie Dove of Goldman Sachs inquired about the current key money environment, asking if it has become more competitive or if a greater amount of capital per deal is now required.

Answer

CFO Michele Allen described the key money environment as 'pretty consistent.' She emphasized that this capital is successfully being used to secure higher fee-per-room deals, which are 36% more accretive than the existing system. Allen stated it's a valuable tool for winning deals in the midscale and above space, but the competitive landscape has not fundamentally changed.

Lizzie Dove questioned the expected deceleration in Volume Per Guest (VPG) trends for 2026, specifically asking for more color on the impact of the deliberate mix shift. She also asked for an update on new owner close rates and demand tracking versus existing owners in Q4 2025.

Answer

Erik Hoag, CFO, explained that the modest year-over-year decrease in VPG for 2026 (midpoint down 1-2%) is 100% attributable to the deliberate mix shift towards new owner transactions, aiming to move from low thirties to mid-thirties as a percentage of total transactions. Michael Brown, President and CEO, added that new owner performance in Q4 2025 was consistent throughout the year, with strong owner performance driving overall results. He expressed satisfaction with the acceleration in tour growth and the team's ability to manage it.

Lizzie Dove asked for more color on the VPG guidance for 2026, which factors in a deceleration, and the impact of the deliberate mix shift. She also inquired about new owner close rates and demand trends in Q4 2025.

Answer

CFO Erik Hoag explained that the modest year-over-year decrease in VPG (1-2%) in the 2026 guidance is entirely attributable to a deliberate mix shift towards increasing new owner transactions from the low 30s to mid-30s. President and CEO Michael Brown added that new owner performance in 2025, including Q4, was very consistent, and strong owner performance drove overall results.

Lizzie Dove from Goldman Sachs asked why the gross VOI sales guidance was not increased despite a higher VPG outlook, and inquired about the underlying assumptions for tour growth. She also sought an update on delinquency trends and the long-term potential for the loan loss provision to fall below 20%.

Answer

CEO Michael Brown stated the VPG guidance raise increases their confidence in the existing VOI sales range, particularly the upper end, and noted tour growth is accelerating. CFO Erik Hoag confirmed that delinquency trends have moderated since Q1 and outlined that disciplined underwriting and improved product engagement could drive the loan loss provision below 20% over time.

Lizzie Dove inquired about the high-level outlook for Las Vegas in 2026, considering various factors such as capital investments, upcoming conferences, and the ongoing leisure customer trends. She also asked about the long-term strategy for managing operating expenses and maintaining margins, given Caesars' strong performance relative to peers.

Answer

CEO Tom Reeg projected sequential improvement for Las Vegas in Q1 2026, with Q2 looking even better due to group business. He noted that the second half of the year would depend on leisure recovery, also mentioning the renovation of the Augustus Tower at Caesars Palace (nearly 1,000 rooms offline during summer) as a factor. On OpEx, Reeg stated that management is a daily focus, with labor contract increases becoming more manageable. He expects margins to improve as demand firms and occupancy smooths out, noting that Q4's mid-40s margins were achieved during a challenging period.

Lizzie Dove inquired about the overall outlook for Las Vegas in the current year, considering various factors such as capital investments, conference schedules, and the impact of leisure customer trends. She also asked about the company's long-term strategy for managing operating expenses and maintaining margins.

Answer

CEO Tom Reeg projected sequential improvement for Las Vegas, with the second quarter looking stronger due to group business, but noted that the second half depends on leisure recovery. He also mentioned the Augustus Tower renovation at Caesars Palace as a temporary room take-out. On OpEx, Tom Reeg (CEO) stated that management is a daily focus, with labor contract increases becoming more manageable, and anticipated margin improvement as demand stabilizes and occupancy smooths out.

Lizzie Dove inquired about the longer-term outlook for Las Vegas in 2026, considering capital investments, conference schedules, and macroeconomic consumer trends.

Answer

Tom Reeg, CEO, identified the recovery of leisure demand as the primary question for 2026, acknowledging ongoing year-over-year softness despite sequential improvement. He highlighted positive factors for Caesars, such as the State Farm Conference and an overall improved mix.

Lizzie Dove asked for a high-level outlook on Las Vegas for 2026, considering capital investments, conference calendar changes, and the macroeconomic environment's impact on leisure demand recovery.

Answer

CEO Tom Reeg identified the consumer's leisure demand recovery as the key question for 2026, noting specific conferences like State Farm in Q2 and the current leisure demand still being softer year-over-year.

Lizzie Dove from Goldman Sachs inquired about the potential for further incremental investments in Las Vegas properties beyond those already announced. She also asked about the sustainability of the high online sportsbook (OSB) hold rate achieved in the quarter.

Answer

President & COO Anthony Carano detailed upcoming projects, including room remodels at Caesars Palace, a new TAO day club, and the Vanderpump Hotel at Cromwell, stating that the rest of the portfolio is in 'pretty dang good shape.' Regarding OSB hold, President of Caesars Sports & Online Gaming Eric Hession acknowledged that favorable sports outcomes boosted the Q2 hold rate but maintained a long-term target of 10%, citing structural improvements like higher parlay mix.

Lizzie Dove asked about the long-term potential for margin expansion in Wynn Las Vegas, given the significant increase since 2019 and recent normalization trends. She also sought clarification on the estimated financial impact of the Encore renovation, particularly the 80,000 room nights out of service, and typical IRR for such projects.

Answer

President & CEO Craig Billings stated that Wynn Resorts does not manage to margin but rather focuses on maximizing revenue and judiciously managing OpEx. He clarified that the estimated $50 million EBITDA impact for the Encore renovation was high, explaining that renovations are staged during low-demand periods and the 12-month process will split the impact across 2026 and 2027, as added by President, Wynn Resorts Brian Gullbrants.

Lizzie Dove inquired about the long-term margin expansion potential for Wynn Las Vegas, acknowledging recent normalization, and sought details on the Encore renovation's estimated EBITDA impact and typical IRR for such projects.

Answer

President & CEO Craig Billings stated that Wynn manages to top-line revenue and judicious OpEx rather than a specific margin target, emphasizing strong performance. He noted the 80,000 room nights headwind from the Encore renovation would be mitigated by staggering work during low-demand periods and picking up some impact in rate, with the project split across 2026 and 2027, as confirmed by President, Wynn Resorts Brian Gullbrants.

Lizzie Dove of Goldman Sachs requested a deeper check on the Las Vegas consumer, asking about spending patterns and any differences between domestic and international visitors. She also inquired about the strategic preparations for the Wynn Al Marjan Island launch.

Answer

CEO Craig Billings noted that as a high-end barometer, Wynn has seen continued strong casino volumes and stable fine dining checks, indicating resilient spending from its target clientele. Regarding Wynn Al Marjan Island, he explained that extensive, non-public work on infrastructure is underway, with a key focus on educating the market about the project's quality and opportunity ahead of its launch.

Lizzie Dove asked about the non-RevPAR fee side of Hilton's business, inquiring how it's evolving, its outlook over time, and specifically the performance of the credit card program.

Answer

Kevin Jacobs, EVP and CFO, reiterated that non-RevPAR driven fees are expected to continue growing above their algorithm, fueled by the credit card program, timeshare, and purchasing business, along with new initiatives to commercialize their customer base. Chris Nassetta, President and CEO, highlighted the strong and popular credit card program with Amex, which drives significant customer engagement and favorable economics for Hilton. He expressed high confidence that the credit card program will continue to grow above algorithm for many years.

Lizzie Dove, Vice President and Senior Equity Research Analyst at Goldman Sachs, inquired about the non-RevPAR fee side of Hilton's business, specifically its evolution and outlook over time, with a focus on the credit card program, recalling previous Investor Day targets.

Answer

Kevin Jacobs, EVP and CFO of Hilton Worldwide, stated that non-RevPAR-driven fees (including credit card, timeshare, purchasing business) are expected to continue growing above the algorithm, consistent with past Investor Day projections. Chris Nassetta, President and CEO, added that Hilton has a 'fantastic credit card program' with Amex, which is among the best and most popular in the industry, driving customer engagement and strong economics. He expressed confidence that the program would continue to grow above algorithm for a long time, without anticipating any major announcements regarding contractual changes.

Lizzie Dove sought an update on key money trends, including key money per room, the competitive environment, and any recent shifts in this area.

Answer

Kevin Jacobs, EVP and CFO, stated that the competitive environment for key money has intensified over the last few years, but there hasn't been a dramatic shift in recent months. Key money is primarily deployed for full-service, luxury, and large convention center hotels. He noted that 90%+ of deals under construction involve no key money. The historical run rate of $150M-$200M per year for key money remains a good estimate. Chris Nassetta, President and CEO, added that Hilton's development teams emphasize the superior performance of Hilton brands to owners, arguing against accepting more key money for lower market share.

Lizzie Dove requested a pulse check on the U.S. consumer, seeking more details on booking windows, and trends across leisure, business transient, and group segments, especially given the expectation for stronger U.S. and Canada RevPAR.

Answer

CFO Leeny Oberg described a 'steady as she goes' environment, with leisure continuing to outperform (up 4% globally in Q4), group remaining steady (pace up 6% for next year), and business transient down (partially due to government shutdown). She noted similar booking windows, the continuation of the K-distribution disparity (top-end resilient, lower-end challenged), and the positive impact of extraordinary events like the World Cup on travel experiences.

Lizzie Dove requested a pulse check on the consumer, particularly in the U.S., seeking more details on booking windows, trends in leisure, business transient, and group segments, and observations regarding the K-shaped recovery.

Answer

CFO Leeny Oberg reported that leisure continues to outperform (Q4 global leisure up 4%, group up 2%, business transient down due to government shutdown). Group pace is up 6% for the coming year. Booking windows remain similar, with leisure slightly longer and business transient shorter. She noted the World Cup is expected to contribute 40 basis points to U.S. and Canada RevPAR. The K-shaped recovery, with lower-end consumers facing tougher times and government business down, is expected to continue, though perhaps with a narrower disparity.

Lizzie Dove asked about Marriott's appetite for small tuck-in M&A or strategic partnerships, similar to the CitizenM investment, and if there are specific areas within the portfolio Marriott aims to further develop or fill out.

Answer

President and CEO Tony Capuano reiterated that Marriott does not feel a burning need to chase M&A for scale, but would consider opportunities to fill geographic gaps or brand architecture gaps more effectively than organic growth, applying the same financial rigor as seen with CitizenM. CFO Leeny Oberg did not add to this specific question.

Lizzie Dove asked about Marriott's appetite for small tuck-in M&A or partnerships, similar to citizenM, and if so, which areas of the portfolio Marriott would prioritize for expansion.

Answer

Tony Capuano (President and CEO) reiterated that Marriott does not feel a pressing need to pursue M&A for scale, given its industry-leading position. He stated that M&A opportunities would be considered if they address specific geographic growth needs where organic pace is insufficient, or if they fill a brand architecture gap more effectively than an organic launch, always applying rigorous financial scrutiny.

Lizzie Dove of Goldman Sachs asked about development trends in Greater China, noting that they seem to have defied the region's mixed RevPAR environment.

Answer

CFO Leeny Oberg confirmed 'fantastic' room signings in China, with 70% of first-half signings in the select-service segment, which offers lower risk and solid returns for owners. She stated that rooms growth in the region is in the high single digits. President & CEO Anthony Capuano added that year-over-year room signings in China for 2025 are up almost 20%.

Lizzie Dove asked for more details on the net yield cadence for the year, particularly for Q2, considering factors like dry dock timing, deployment shifts, and the ramp-up of the Royal Beach Club.

Answer

CFO Naftali Holtz explained that the yield cadence is influenced by dry dock timing (more in Q2, involving larger and higher-yielding ships), the ramp-up of the Royal Beach Club, deployment mixes, and the timing of new ship deliveries, all affecting year-over-year comparisons.

Lizzie Dove asked for more details on the Net Yield cadence for the year, particularly for Q2, given the factors of dry dock timing and deployment shifts.

Answer

Naftali Holtz, CFO, explained that the yield cadence is driven by several factors: dry dock timing (more in Q2, with larger and higher-yielding ships, including Silversea, undergoing modernization), the ramp-up of the Royal Beach Club Paradise Island, and the timing of new ship deliveries and deployment mix changes. He noted that first-half cost growth is expected to be higher than the second half.

Lizzie Dove followed up on the success of side bets in Singapore, requesting an update on their rollout in Macau, any structural or customer base differences, and the long-term implications for structural hold.

Answer

Grant Chum, CEO and President of Sands China, confirmed continuous rollout of additional wager options on baccarat layouts in Macau, observing an increasing trend in participation, though not yet at Singapore's levels. He stated the company will continue to innovate in this area.

Lizzie Dove asked about the expected timing and cadence for the Londoner Macao to reach its goal of $1 billion in annualized EBITDA. Her follow-up question concerned the competitive response to LVS's increased promotional activity in the market.

Answer

Grant Chum, President & CEO of Sands China, stated that the Londoner is only in the 'very early innings' of its ramp-up, having just fully launched in May, and is already running close to an $800 million annualized EBITDA. He expressed confidence in reaching the $1 billion goal but did not provide a specific timeline. On the competitive environment, he noted that the market remains intense and expects it to stay that way, but LVS is now 'in the mix' with its reinvestment levels and seeing encouraging results, especially at the high end.

Lizzie Dove inquired about the drivers of Carnival's same-ship yield growth despite fewer new ship launches than peers, specifically asking about brand improvements and the performance of previously lagging brands. She also asked for an update on Celebration Key's contribution, including participation rates, spend rates, and uplift, following its opening.

Answer

President and CEO Josh Weinstein attributed same-ship yield growth to improved commercial execution across brands, including revenue management tools, performance marketing, and clearer brand messaging. He highlighted the 'ridiculous price-to-experience ratio gap' compared to land-based alternatives. Regarding Celebration Key, he confirmed it's performing as anticipated in terms of ticket premium, onboard shore operations output, and fuel consumption, with over one million guests visiting.

Lizzie Dove asked how Carnival evaluates the decision between building new ships and expanding retrofitting programs, like AIDA Evolutions, to other brands, and the relative returns of these investments. She also inquired about Carnival's strategy to maintain its competitive edge in the Galveston market, given increased competitor activity and the potential for diversifying offerings in the Western Caribbean or Mexico.

Answer

CEO Josh Weinstein confirmed active consideration of similar mid-life ship refurbishment programs for other brands, especially since many have no new builds on order. He stated that maximizing existing assets and investing for returns is a key focus, with dry dock costs yielding strong returns, evaluated similarly to new builds. Regarding Galveston, Mr. Weinstein emphasized its long-standing importance and loyal guest base. He acknowledged increased competition but stated Carnival will continue to enhance guest experience, ship offerings, and destination diversification. He highlighted Carnival's diversified portfolio, with significant business in the Caribbean, Europe, and Alaska, as a major benefit.

Lizzie Dove from Goldman Sachs asked how Carnival evaluates building new ships versus expanding retrofitting programs like AIDA Evolutions to other brands, and how the company plans to maintain its competitive edge in Galveston amidst increased competitor activity.

Answer

CEO Josh Weinstein stated that Carnival is actively planning similar midlife refurbishment programs for other brands, evaluating them like new builds based on incremental spend and returns, with AIDA providing a successful template. Regarding Galveston, he emphasized the market's long-term importance, loyal guest base, and continuous efforts to enhance guest experience and diversify offerings, noting the strength of Carnival's diversified portfolio.

Lizzie Dove from Goldman Sachs asked how Carnival evaluates the decision between building new ships and expanding retrofitting programs, like AIDA Evolutions, to other brands, considering their relative returns. She also inquired about Carnival's strategy to maintain its competitive edge in Galveston, given increased competitor activity and expansion of Eastern Caribbean islands, and how this impacts its go-to-market approach.

Answer

CEO Josh Weinstein confirmed that Carnival is actively planning similar mid-life ship refurbishment programs for other brands, evaluating them like new builds based on incremental spend and expected returns, noting AIDA's success as a template. For Galveston, he emphasized its long-standing importance and loyal guest base, stating Carnival will continue to "up its game" through guest experience, ship deployment, and diversifying offerings. He highlighted Carnival's diversified portfolio and long-term commitment to the Caribbean.

Lizzie Dove asked for a refresh on the types of inorganic growth opportunities Viking might consider, given its strong balance sheet, and whether this financial strength precludes other forms of capital returns. She also inquired about customer demand, specifically the mix of repeat visitation/cross-sell between river and ocean versus new-to-brand/new-to-cruise customers.

Answer

Leah Talactac, President and CFO, outlined inorganic growth principles: scalable, non-distracting, margin-accretive, and complementary to the brand ethos, mentioning past 'Viking Tours' (land-based products) as a potential future area. Tor Hagen, Chairman and CEO, added that exploring the Chinese outbound market is a significant long-term growth engine. Leah stated that 53% of 2024 guests were repeat travelers, with many having multiple active bookings. She noted that new-to-brand customers often come from larger cruise operators, drawn to Viking's destination-focused, child-free, experiential cruising. Tor emphasized the appeal of a quiet, serene atmosphere for older travelers.

Lizzie Dove asked for an update on potential inorganic growth opportunities and whether Viking's strong balance sheet and cash position might preclude capital returns. She also inquired about customer demand, specifically repeat visitation, cross-selling between river and ocean, and new-to-brand/new-to-cruise trends.

Answer

Leah Talactac, President and CFO, outlined principles for acquisitions: scalable, non-distracting, margin accretive, and complementary to the brand, mentioning past 'Viking Tours' as a potential future land-based product. Tor Hagen, Chairman and CEO, highlighted the long-term growth potential of the Chinese outbound market. Leah noted a 53% repeat guest rate in 2024, with many guests having multiple active bookings and high take rates for booking next journeys onboard. For new-to-brand, guests often come from larger cruise operators, drawn to Viking's destination-focused, child-free, serene experience.

Lizzie Dove inquired about the long-term potential for structurally higher RPD in the Americas, the timeline for investment payoffs, and the company's willingness to potentially sacrifice market share for RPD. She also asked for an assessment of the competitive environment's aggressiveness quarter-to-date.

Answer

CEO Brian Choi affirmed the belief in structurally higher RPD due to cost inflation and the company's focus on return on invested capital thresholds, not market share. He pointed to stabilization in the two-year pricing stack as an encouraging sign but refrained from providing specific RPD guidance for next year. He characterized the competitive market as consistent with previous years, neither more nor less aggressive, reinforcing Avis's strategy to differentiate through customer experience and earn pricing power.

Lizzie Dove, a VP and Equity Research Analyst at Goldman Sachs, inquired about the potential for structurally higher RPD, the expected timeline for customer experience investments to yield results, and the balance between competitive dynamics, industry defleeting, and willingness to sacrifice market share for RPD. She also asked about the competitive environment's aggressiveness quarter-to-date.

Answer

CEO Brian Choi reiterated that Avis Budget Group expects RPD to increase due to cost inflation and is pushing for higher pricing to meet return on invested capital thresholds, without managing to market share. He noted stabilization in the two-year pricing stack. Regarding the competitive environment, he characterized it as consistently competitive, neither more nor less aggressive than previous years, reinforcing the company's focus on customer experience to earn pricing power.

Lizzie Dove of Goldman Sachs inquired about recent weekly trends in Revenue Per Day (RPD) and what was factored into the second-half guidance. She also asked for an assessment of the current competitive landscape.

Answer

CEO Brian Choi noted some recent 'green shoots' in RPD as industry supply tightened due to recalls, but he cautioned it was too early to declare a structural shift. On competition, Choi stated that while the market is always competitive, Avis's strategy with 'Avis First' is to elevate the industry and grow the overall profit pool by offering a differentiated, premium product rather than competing solely on price.

Lizzie Dove from Goldman Sachs inquired about recent weekly trends in Revenue per Day (RPD) and what is factored into the second-half guidance, and also asked for an assessment of the current competitive environment.

Answer

CEO Brian Choi noted some 'green shoots' in RPD recently, likely due to industry-wide supply tightening from recalls, but was cautious about calling it a structural trend. He reiterated that Avis responds to, rather than sets, market prices. Regarding competition, Choi acknowledged it is always intense but positioned the Avis First initiative as a strategic move to differentiate on value and experience, aiming to grow the entire industry's profit pool rather than just competing on price for a commodity product.

Lizzie Dove of Goldman Sachs asked for clarification on the 2026 CapEx plan of $400 million and how the company balances ride investments, which drive attendance, with leverage considerations. She also noted the greater EBITDA pressure at legacy Six Flags parks and asked about the timeline for reinvestment initiatives to show results.

Answer

CEO Richard Zimmerman explained that the 2026 CapEx of $400 million is prudent as they can still benefit from the 2025 capital program into next year. He emphasized that reviving underpenetrated parks requires consistent, multi-year investment in the total guest experience, including amenities and food & beverage, not just major rides. CFO Brian Witherow clarified the 2025 CapEx remains $475-$500 million.

Lizzie Dove from Goldman Sachs Asset Management inquired about the setup for 2026, considering the strong Q4 2025 exit rate, the potential ROI from Great Stirrup Cay, and the net yield impact of shifting more capacity to 'Fun and Sun' itineraries. She also asked about the key opportunities for achieving the remaining $100 million in cost savings.

Answer

CEO Harry Sommer clarified that deployment decisions are made to optimize overall profitability and brand health, not just yield. CFO Mark Kempa stated that the strong Q4 exit rate provides a good setup for 2026 and the company remains focused on its optimal booked position. Regarding costs, Kempa reaffirmed the commitment to sub-inflationary growth through broad-based efficiencies, with Sommer strongly emphasizing that these savings do not compromise the guest experience.

Lizzie Dove asked how operating a smaller fleet impacts the long-term normalized EBITDA outlook and questioned the expected timeline for achieving the $1,500 RPU target.

Answer

CFO Scott Haralson asserted that the smaller fleet does not alter the long-term target of over $1 billion in EBITDA by 2027, as this goal is not solely volume-dependent. CEO Gil West added that significant improvements in asset utilization can offset a smaller fleet. CCO Sandeep Dube described achieving the RPU target as a journey involving both utilization gains and foundational RPD enhancements, which are also subject to the macro environment.