Pursuit Attractions and Hospitality, Inc. (PRSU) Q3 2025 Earnings Call Transcript

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Overview

The earnings call reveals strong financial performance, with significant revenue and EBITDA growth, driven by strategic acquisitions and organic investments. Positive guidance and expansion plans, including the Costa Rica acquisition, bolster future growth prospects. The Q&A session supports this with confidence in continued demand and strategic investments. The raised guidance and robust financial health, coupled with strategic growth initiatives, suggest a strong positive outlook for the stock price over the next two weeks.

Key Financial Performance

Total Revenue $241 million, up 32% year-over-year. This growth was driven by a strong recovery across Jasper properties after last year's wildfires, incremental growth from new experiences, and continued momentum in guest demand.

Adjusted EBITDA Margin 49%, reflecting the scalable nature of the business, strong demand for attractions and lodging properties, and diligent cost management.

Net Income Attributable to Pursuit $73.9 million, up from $48.6 million in the prior year. This increase includes a $4.2 million pretax gain from business interruption insurance proceeds related to the 2024 Jasper wildfire.

Adjusted EBITDA $117.4 million, up 41.5% year-over-year. This increase was driven by significant revenue growth, strong margin flow-through, operating leverage, and cost discipline.

Attraction Ticket Revenue $100.4 million, up 33% year-over-year. This was driven by a 22% increase in visitors, strong Jasper recovery, new attractions, and a 9% increase in same-store constant currency effective ticket pricing.

Lodging Room Revenue $59.7 million, up 42% year-over-year. Growth was driven by Jasper recovery, new lodging, and improvements in same-store ADR and occupancy.

Same-Store Constant Currency RevPAR 6% growth compared to 2024, reflecting premium pricing and high occupancy in high-demand experiential travel destinations.

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Operating Highlights

New Attractions and Lodging: Pursuit expanded its portfolio to 17 world-class attractions and 29 lodges since 2015. Recent additions include the Tabacon resort in Costa Rica, which features unique thermal river attractions and a luxury 105-room resort.

Tabacon Expansion: Tabacon opened a second Thermal River attraction, Hot Springs Pura Vida, targeting budget-conscious guests. This addition is expected to drive incremental revenue and strengthen its positioning in the luxury market.

Geographic Expansion: Pursuit operates across four countries and is exploring opportunities to expand its presence in Costa Rica with additional high-quality attractions and hospitality assets.

Global Demand Trends: The company is benefiting from global consumer demand for experiential travel, with strong visitation across its destinations, including Banff, Jasper, and Costa Rica.

Revenue Growth: Total revenue for Q3 2025 reached $241 million, a 32% year-over-year increase, driven by strong recovery in Jasper and new attractions.

Adjusted EBITDA: Adjusted EBITDA margin expanded to 49%, with full-year 2025 guidance raised to $116-$122 million, reflecting strong operational performance and cost management.

Lodging and Attractions Performance: Lodging room revenue increased by 42% year-over-year, while attraction ticket revenue grew by 33%, supported by higher visitation and effective pricing strategies.

Refresh, Build, Buy Strategy: Pursuit continues to execute its strategy by investing in organic growth and acquisitions. Over $250 million in refresh and build opportunities have been identified through 2030, including major projects at Forest Park Hotel and Grouse Mountain Lodge.

Acquisition of Tabacon: The acquisition of Tabacon in Costa Rica exemplifies Pursuit's focus on high-quality, irreplaceable assets. The resort is profitable 10 months of the year and aligns with the company's growth strategy.

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Risk or Challenges

Market Conditions: Potential risks from economic uncertainties and geopolitical trends that could impact consumer demand for experiential travel.

Regulatory Hurdles: Investments in new attractions and renovations are subject to approvals, which could delay projects like the Jasper SkyTram and Grouse Mountain Lodge.

Supply Chain Disruptions: Large-scale refresh and build projects may face delays or cost overruns due to supply chain issues.

Strategic Execution Risks: Challenges in achieving targeted returns on investments, such as the 15% IRR hurdle rate for acquisitions and refresh projects.

Operational Risks: Dependence on favorable weather conditions and minimal natural disruptions, as seen in the strong performance due to minimal inclement weather this year.

Financial Risks: Increased capital investments in refresh and build projects could strain financial resources if returns are delayed or below expectations.

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Guidance & Outlook

Full Year 2025 Adjusted EBITDA Guidance: Pursuit has raised its full year 2025 adjusted EBITDA guidance to a range of $116 million to $122 million, reflecting an increase of $6 million at the midpoint compared to prior guidance. This represents substantial growth of $39 million to $45 million relative to 2024.

2026 Growth Projections: Pursuit anticipates continued growth in 2026, supported by favorable secular trends, sustained demand for its destinations, and solid business fundamentals. Key drivers include increasing demand for experience-driven travel, adventure, wellness, and immersive exploration.

Capital Investments for 2025 and Beyond: Pursuit plans to invest $38 million to $43 million in refresh and build opportunities in 2025, with a total pipeline of over $250 million in such investments through 2030. These investments aim to elevate asset quality, enhance guest experiences, and unlock new revenue streams.

Large-Scale Lodging Refresh Projects: Two major lodging refresh projects are underway: the Forest Park Hotel in Jasper National Park and the Grouse Mountain Lodge in Whitefish, Montana. These projects are expected to elevate guest experiences, support higher ADRs, and increase attraction visitation. Completion is planned for 2025 and 2026, respectively.

Future Growth Capital Investments: Pursuit expects growth capital investments over the next two years to increase relative to 2025, driven by large-scale projects such as the Jasper SkyTram attraction, Forest Park Hotel Woodland Wing, and Grouse Mountain Lodge.

Acquisition Strategy: Pursuit continues to target acquisitions of irreplaceable attraction and hospitality businesses in existing and new markets. These acquisitions must meet a 15% IRR hurdle rate and align with the company’s strategy of scaling with purpose.

2026 Capital Plans: Details on 2026 capital plans will be provided in February 2026. Planned investments include large-scale refresh and build projects, which are expected to propel growth beyond 2026.

Tabacon Acquisition and Expansion: The recent acquisition of Tabacon in Costa Rica is expected to drive long-term growth. Pursuit plans to explore refresh and build opportunities across the 570 acres of acquired terrain and additional buy opportunities in Costa Rica.

Market Trends and Demand: Pursuit expects strong demand for its destinations in 2026, supported by favorable foreign exchange rates, unique geopolitical trends, and renewed free admission to Canadian national parks. Early indicators from global tour and travel partners signal strong demand for 2026 itineraries.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Can you talk about the insurance proceeds in the quarter? Were those contemplated when you provided the original EBITDA guide, and how is foreign exchange impacting guidance for the full year?

A:The company received $24 million in total insurance proceeds, with $13 million last year and $11 million in 2025. For Q3, $4.2 million was in business interruption recoveries, treated outside adjusted EBITDA due to its nonrecurring nature. FX was not a major driver for the quarter or the year, with movements reversing by Q2, making it neutral for the year.

Q:Can you unpack the strong ETP growth this year? How much is mix versus outright price increases, and does this create difficult comps for 2026?

A:ETP growth is driven by a combination of price increases, visitor mix, and operational adjustments. Management is confident about 2026 due to trends in experiential travel and investments in attractions like Sky Lagoon and Banff Gondola. Recent investments have improved guest satisfaction and ETP growth.

Q:What was the EBITDA and revenue contribution from the Tabacon acquisition in Q3, and how is the integration progressing?

A:Tabacon contributed $6.3 million in Q3 revenue and is expected to add $3 million in EBITDA for the second half of 2025, with $10 million annualized for 2026. Integration is progressing well, with cross-location learning and plans for growth, including luxury villa prototypes.

Q:Are there more than $200 million of CapEx projects planned, and what is driving the increase?

A:The company has increased its CapEx projection to $250 million over six years, focusing on organic growth within existing businesses. For 2025, $38-$43 million will be invested in projects like Jasper SkyTram, Banff Gondola, and Apgar Village.

Q:What is driving the 9% increase in ticket prices on a same-store basis, and how does this compare to competitors?

A:The increase is attributed to demand management, operational adjustments, and strong performance across locations like the Canadian Rockies and Sky Lagoon. Management focuses on improving experiences rather than competitor pricing.

Q:What is the timeline for the Forest Park Hotel and Grouse Mountain Lodge projects?

A:Forest Park's second phase is underway and expected to complete in 2026. Grouse Mountain's first phase will complete in 2026, with the second phase starting after summer and finishing in 2027. A new event pavilion is also being built at Grouse Mountain.

Q:What is the timeline for the Jasper SkyTram project?

A:The project is in the public commentary phase with Parks Canada. Construction is targeted to begin in 2026, with more details to be provided in February.

Q:What is the capacity for additional transformational investments or acquisitions?

A:Management has the bandwidth and financial flexibility for additional investments. The team is strong, and financial systems are integrated with Tabacon. The company has $275 million in liquidity and a net leverage of 0.7x, allowing for opportunistic growth.

Q:How far booked is the company for 2026, and are there any discernible trends?

A:Early booking pace for 2026 is ahead of prior years, with strong demand from tour and travel partners. The company is optimistic about continued growth in experiential travel and will provide more details in February.

Q:What is the progress on reopening hotel inventory in Jasper affected by wildfires, and will this be net dilutive or accretive?

A:Reconstruction is underway, with new facilities expected to open in late 2027. Improved lodging quality is expected to have a rising tide effect, benefiting the overall market.

Q:How does the company balance pricing power with affordability for guests?

A:The company focuses on improving experiences to justify pricing. Dynamic pricing allows budget-conscious travelers to find affordable options. Strong guest satisfaction and referrals are prioritized over competitor pricing.

Q:Review of Unclear Management Responses

A:Management avoided providing a specific timeline for the Jasper SkyTram project, stating that details would be shared in February. Additionally, they did not directly address how their pricing compares to competitors, focusing instead on their own operational improvements and guest satisfaction.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

PRSU Transcript

Pursuit Attractions and Hospitality, Inc. (PRSU) Q3 2025 Earnings Call Transcript

Positive11-6

Pursuit Attractions and Hospitality, Inc. (PRSU) Q2 2025 Earnings Call Transcript

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The earnings call reveals strong financial performance, with a 15% revenue increase and significant EBITDA growth. Positive factors include optimistic guidance for 2025, a strategic buyback program, and successful acquisitions. The Q&A reinforces confidence in the company's strategy and market positioning, despite some uncertainty regarding specific investments and buyback details. Overall, the positive aspects outweigh the negatives, suggesting a likely stock price increase.

Pursuit Attractions and Hospitality, Inc. (NYSE:PRSU) Q1 2025 Earnings Call Transcript

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The earnings call summary presents a mixed picture. Basic financial performance shows a slight EPS improvement but remains negative, indicating potential instability. Product development and market strategy appear positive with strategic acquisitions and growth guidance reaffirmed. However, financial health concerns and lack of shareholder returns counterbalance this. Q&A insights reveal challenges in acquisition integration and currency impact, with management providing vague responses on some issues. Overall, the sentiment is neutral, as positive growth guidance and market positioning are offset by financial and operational risks.

Pursuit Attractions and Hospitality, Inc. (PRSU) Q1 2025 Earnings Call Transcript

Unknown5-10

The earnings call presents mixed signals: while there's optimism in revenue growth and EBITDA guidance, financial performance shows a net loss and declining adjusted EBITDA due to inflation and seasonal losses. The Q&A reveals strong demand and positive sentiment for attractions, but concerns remain about competitive pressures, regulatory changes, and currency impacts. Lack of shareholder return announcements and management's avoidance of specific currency impact answers further temper enthusiasm. Overall, these factors suggest a neutral sentiment, with potential for modest fluctuations in stock price.

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