Lizzie Dove

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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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.