SeaWorld Entertainment Inc

NYSE:PRKS

Earnings Call Transcript 2021-Q4

[Operator]

Good morning, and welcome to the SeaWorld’s Q4 2021 Earnings Conference Call [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Matthew Stroud of Investor Relations. Please go ahead.

[Matthew Stroud, Investor Relations]

Thank you, and good morning, everyone. Welcome to SeaWorld's Fourth Quarter and Fiscal 2021 Earnings Conference Call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations Web site at www.seaworldinvestors.com. Replay information for this call can be found in the press release and will be available on our Web site following the call. Joining me this morning are Marc Swanson, Chief Executive Officer; and Elizabeth Gulacsy, Chief Financial Officer and Treasurer. This morning, we will review our fourth quarter and fiscal 2021 financial results, and then we will open up the call to your questions. Before we begin, I'd like to remind everyone that our comments today will contain forward-looking statements within the meaning of the federal securities laws. These statements are subject to a number of risks and uncertainties that could cause actual results to be materially different from those forward-looking statements, including those identified in the Risk Factors section of our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. These risk factors may be updated from time to time and will be included in our filings with the SEC that are available on our Web site. We undertake no obligation to update any forward-looking statements. In addition, on the call, we may reference non-GAAP financial measures and other financial metrics, such as adjusted EBITDA and free cash flow. More information regarding our forward-looking statements and reconciliations of non-GAAP measures to the most comparable GAAP measure is included in our earnings release available on our website and can also be found in our filings with the SEC. Now I would like to turn the call over to our Chief Executive Officer, Marc Swanson. Marc?

[Marc Swanson, Chief Executive Officer]

Thank you, Matthew. Good morning, everyone, and thank you for joining us. We are pleased to report another quarter of record financial results and record financial results for the fiscal year. In the fourth quarter and fiscal 2021, we delivered record revenue, record net income and record adjusted EBITDA. We are especially pleased to deliver these record results while continuing to operate in an environment with significant and unprecedented headwinds related to COVID-19. These results are a testament to the tireless work of our incredible team, the demonstrated resiliency of our business model and the continued successful implementation of our proven business plan and strategies. Our fourth quarter and fiscal year financial performance would have been even better if not for limited international guest attendance and reduced group-related attendance related to the impact of COVID-19. While we have made good progress on our plans, as we look to the future, we continue to be highly confident that we can deliver even more operational and financial improvements that we expect will lead to meaningful increases in shareholder value. In particular, we believe our forward ride, attraction and park enhancement investment plans are the most robust they have ever been and currently reflects the cadence focus areas and strategies we have been working towards. We are extremely excited about the new rides we have opened and plan to open this year and the new additions, upgrades and improvements we've made to our parks. We encourage you all to visit our parks with your family and friends very soon and often this year. We continue to improve our commercial functionality with investments in talent and capabilities in revenue management and marketing and have opportunity to continue to improve in these areas. We also continue to identify, track and execute on additional cost reduction and efficiency opportunities that we expect to continue to help offset inflationary pressures and lead to structurally improved profitability. With respect to our digital capabilities, including our mobile app and CRM implementations, we are encouraged by the early results and are in the very early innings of realizing the full potential of these initiatives. I would also say that we believe we are behind our competitors in some of these areas, which gives us even greater confidence in the potential we have yet to realize. And we continue to make progress on our inorganic growth initiatives related to hotels, new parks and international expansion and expect to have more to share later in the year. We are also pleased to have ended 2021 in a particularly strong financial position as a result of the proactive and decisive decisions made over the last couple of years as well as our record financial performance in 2021. Our available liquidity, including cash on our balance sheet and capacity on our revolving credit facility, was over $800 million and our total leverage was less than 2.50x. Our strong financial position provides us significant flexibility to invest in our business, fund high-growth ROI initiatives, consider strategic opportunities and/or return capital to our shareholders. In 2021, we are proud to have received numerous industry honors and recognitions, including SeaWorld Orlando voted as number one for Nation's Best Amusement Park by USA Today readers. Aquatica Orlando voted as number one for the Nation's Best Outdoor Water Park by USA Today readers and Busch Gardens Williamsburg named World's Most Beautiful Theme Park for the 31st year in a row by the National Amusement Park Historical Association. In addition, two of our other water parks, Water Country USA and Adventure Island Tampa, were voted in the top 10 of the Nation's Best Outdoor Water Parks by USA Today readers. The Mako rollercoaster at SeaWorld Orlando was ranked as the number one for Best Rollercoaster and the Celtic Fire Dance Show at Busch Gardens Williamsburg was voted as number one for Best Amusement Park Entertainment each by USA Today readers. We also launched new iOS and Android mobile apps for all our parks in 2021 and completed what we believe to be the most significant transformation of our in-park venues as many were redesigned, refreshed or added across our parks in 2021. We are very excited for 2022 as we believe we have the most exciting lineup of new rides, attractions, events and upgrades we have ever had in our history with something new and meaningful in every one of our parks, including, according to USA Today, four of the nine most anticipated rollercoasters of 2022 opening across our parks this year. We recently opened the Ice Breaker rollercoaster at SeaWorld Orlando, a quadruple launch coaster featuring four airtime filled launches, both backwards and forwards, culminating in a reverse launch, up a 93-foot vertical spike, leading to the steepest beyond vertical drop in Florida. The Iron Gwazi rollercoaster at Busch Gardens Tampa Bay, what we believe could be the best roller coaster, in the world and has certainly got quite a bit of hype already, opens for past members on February 13 and will open to the general public on March 11. This will be the tallest hybrid coaster in North America and the world's fastest and steepest hybrid coaster with the world's tallest drop. Riders will climb more than 200 feet before plunging into a beyond vertical drop, reaching speeds of 76 miles per hour and experiencing a dozen airtime moments. In addition, the Emperor rollercoaster at SeaWorld San Diego will open to pass members on March 2nd and to the general public on March 12. This will be the tallest, fastest, longest and first floorless dive coaster on the West Coast. After climbing more than 150 feet, riders will dangle at a 90-degree angle before plunging into a 143-foot vertical drop that will accelerate riders to more than 60 miles per hour. And the Pantheon roller coaster at Busch Gardens Williamsburg will open to pass members on March 4 and to the general public on March 25. Pantheon will be the world's fastest multi-launch coaster, will accelerate riders to a speed of 73 miles per hour and will include a 180-foot drop at 95 degrees, four launches, two inversions and 15 airtime moments. All four of these coasters are among the nine most anticipated coasters of 2022 according to USA Today. Also at SeaWorld San Antonio, the Tidal Surge Screaming Swing, the world's tallest and fastest screaming swing, will open Saturday to select season pass holders and on March 5th to all guests. Later this spring, we will open the Big Bird's Tour Bus at Sesame Place Philadelphia, the Reef Plunge water slide at Aquatica Orlando, the Rapids Racer and Wahoo Remix water slides at Adventure Island Tampa, the Aquazoid Amped water slide at Water Country USA and the Riptide Race water slide at Aquatica San Antonio. Overall, we are very excited about this new lineup at our parks. In addition to these attractions, we're also very excited that our newest park, Sesame Place San Diego, will open March 26. This will be the first Sesame Place theme park on the West Coast and only the second in the United States. This will be the first new theme park we have opened since 2013. On the technology front, we are pleased to have completed the rollout of our mobile app across our parks. These mobile apps feature interactive maps, ride wait times and e-commerce capabilities that allow for in-park purchases and are now being used by guests in our parks to improve their visit. We plan to continue to add features to the app and enable in-app purchases across more in-park venues over the next several quarters, which we expect to contribute to enhanced guest satisfaction, incremental revenue opportunities and cost efficiencies. Turning to our pass base. At the end of January 2022, our pass base was up approximately 27% compared to January of 2021 and is approximately 19% higher than January of 2020, which was the previous January record. This is especially encouraging as the peak pass selling seasons of spring and summer are still ahead of us. We are also seeing a higher mix of premium passes in our pass base compared to prior year as our pass holders continue to recognize the value and benefits of our higher-tiered products. Finally, like many other companies, the current labor market continues to present staffing and wage challenges, which we are working to manage through, including expanding our use of international workers at our parks, something we didn't take advantage of as much as our competitors may have in the past. We continue to work on cost reduction and efficiency opportunities, including continuing to eliminate unnecessary and redundant costs, optimizing our staffing and spend levels and investing in and leveraging technology. Our teams continue to make extraordinary efforts to operate our parks despite the challenging environment we face this year and better position this company for revenue growth and increased profitability. As we have demonstrated in the fourth quarter and throughout 2021, we believe the strategies we have developed and refined over the past few years, along with the actions we have taken since the beginning of the COVID-19 pandemic, will continue to lead to significantly improved financial results for the company. With that, I would like to turn the call over to Elizabeth to discuss our financial results in more detail. Elizabeth?

[Elizabeth Gulacsy, Chief Financial Officer and Treasurer]

Thank you, Marc, and good morning, everyone. Similar to last quarter, due to the disruption we experienced when we temporarily closed all of our parks on March 16, 2020, I'll provide commentary today around the financial results compared to 2019. We believe this comparison provides a more meaningful insights on our performance and operating trajectory. For those interested, we provide a comparison versus both 2019 and 2020 in our earnings release and will do so as well in our Form 10-K. During the fourth quarter, we generated record total revenue of $370.8 million, an increase of $72.8 million or 24.4% when compared to the fourth quarter of 2019. The increase in revenue is due to an increase in total revenue per capita of 18.1% and an increase in attendance of 5.4% when compared to the fourth quarter of 2019. Attendance would have been even better if not for limited international guest attendance due in part to travel restrictions and reduced group-related attendance. Excluding international guests and group-related attendance, attendance in the fourth quarter increased by approximately 20% when compared to the fourth quarter of 2019. Our pricing and product strategies, along with the strong consumer demand environment, continued to drive higher realized pricing and strong guest spending, resulting in total revenue per capita in the quarter of $74.87 compared to $63.42 in the fourth quarter of 2019. This increase was driven by improvements in both admissions per capita and in-park per capita spending. This is the highest total revenue per capita we have ever reported in the fourth quarter. Admissions per capita increased by 15.2% to $43.65 and in-park per capita spending increased by 22.3% to $31.22 in the fourth quarter of 2021 compared to the fourth quarter of 2019. The increase in admissions per capita primarily relates to the realization of higher prices for admission products resulting from our strategic pricing efforts, partially offset by the net impact of the admissions product mix when compared to the fourth quarter of 2019. In-park per capita spending improved due to a combination of factors, including an improved product mix, higher realized prices and fees and the impact of new or enhanced and expanded in-park offerings compared to 2019. We also benefited from a strong consumer demand environment, which contributed to higher guest spending levels during the quarter. We generated record net income of $71.5 million compared to a net loss of $24.2 million in the fourth quarter of 2019. And we generated record adjusted EBITDA of $152.8 million, an increase of $68.8 million or 82% when compared to the fourth quarter of 2019. The increases in net income and adjusted EBITDA for the fourth quarter 2021 were primarily impacted by an increase in total revenue when compared to the fourth quarter of 2019. Looking at our results for the full year, which were still impacted by the COVID-19 pandemic, total attendance was approximately 20.2 million guests, a decrease of 10.7% versus 2019. Excluding international guest visitation and group-related attendance, attendance in 2021 increased by approximately 2% when compared to 2019. Total revenue was a record $1.5 billion, an increase of $105.5 million or 7.5% on when compared to 2019. Fiscal 2021 total revenue per capita was $74.43 compared to $61.80 in 2019, a 20.4% increase driven by an increase in admissions per capita and in-park per capita spending. Admissions per capita increased 18.9% to $42.17 compared to $35.48 in 2019. The improvement in admissions per capita is primarily due to the realization of higher prices in our admission products resulting from our strategic pricing efforts, along with the net impact of the admissions product mix when compared to 2019. In-park per capita spending improved by 22.6% to $32.26 from $26.32 in 2019. The increase was primarily due to a combination of factors, including an improved product mix, higher realized prices and fees and the impact of new enhanced or expanded in-park offerings when compared to '19. Operating expenses decreased by $27.2 million or 4.2% when compared to 2019 primarily due to a net reduction in labor-related costs and other operating costs, resulting from structural cost savings initiatives and the impact of modified and/or limited operations due to COVID-19. These factors were partially offset by certain nonrecurring contractual liabilities and real costs impacted by the temporary COVID-19 park closures, operating costs associated with incremental operating days and events added in 2021 and an increase in noncash equity compensation expense. Selling, general and administrative expenses decreased by $76.8 million or 29.4% when compared to 2019 primarily due to a targeted reduction in marketing-related costs, a decrease in legal costs largely related to a legal settlement charge in 2019, a decline in third-party consulting costs and the impact of cost savings and efficiency initiatives. These factors were partially offset by an increase in noncash equity compensation expense. Net income for the year was a record $256.5 million, an increase of $167 million. Adjusted EBITDA was a record $662 million, an increase of $205.1 million when compared to 2019, which held the previous record in both net income and adjusted EBITDA. Now turning to our balance sheet. Our current deferred revenue balance as of the end of the fourth quarter was $154.8 million, an increase of approximately 48.2% when compared to December of 2019 due in part to our strong pass sales. As we have discussed throughout this year, we continue to be encouraged with the trends we have seen in our pass base. At the end of January 2022, our pass base was up approximately 27% compared to January 2021. We are also still seeing a higher mix of premium passes in our pass base as our pass holders continue to recognize the value and benefits of our higher-tiered products. Additionally, we continue to see the impact of our pricing strategies with stronger realized prices on our pass sales. We continue to opportunistically repurchase shares during the quarter, buying approximately 2.2 million shares of common stock at a total cost of $133 million. As of December 31, 2021, our total available liquidity was approximately $808 million, including $443.7 million of cash and cash equivalents on our balance sheet and $364.5 million available on our revolving credit facility, which was undrawn. Cash flow from operations was a record $86.6 million for the fourth quarter of 2021 and a record $503 million for fiscal 2021. Free cash flow was a record $31.3 million for the fourth quarter of 2021 and a record $374.2 million for fiscal 2021. We've spent $55.3 million on CapEx in the fourth quarter 2021, of which approximately $25.4 million was on core CapEx and approximately $29.9 million was on expansion ROI projects. For 2022, we plan on spending approximately $150 million in core capital expenditures and another $30 million to $50 million on growth of our ROI capital expenditures. Now let me turn the call back over to Marc, who will share some final thoughts. Marc?

[Marc Swanson, Chief Executive Officer]

Thank you, Elizabeth. Before we open the call to your questions, I have some closing comments. In the fourth quarter, we helped rescue almost 370 animals and we are approaching nearly 39,900 animal rescues over the company's history. We are one of the world's leading animal rescue organizations and we are proud of our efforts to protect and save wildlife. Lately, our rescue teams have been busy -- have been even busier helping to save manatees throughout Florida due to the recent cold weather as well as the overall denigration of their habitat, which is reducing their primary food source. In fact, we have seen such an increase in the number of manatees in need of help that our Florida team proactively added temporary pools to allow us to rescue and rehabilitate even more manatees. I'm really proud of the team's hard work and their continued dedication to these important rescue efforts. I want to thank them and all our ambassadors for all they do to operate our parks in this current environment. We are excited about 2022. We have an exciting lineup of new rides, attractions and events that we believe is one of our best offerings ever. We recognize that we have made good progress over the past year, but we continue to believe there are significant additional opportunities to improve our execution, take advantage of clear growth opportunities and continue to drive meaningful growth in both revenue and adjusted EBITDA. We continue to have high confidence in our long-term strategy in our ability to deliver significantly improved operating and financial results that we believe will lead to meaningfully increase value for stakeholders. Now let's take your questions.

[Operator]

[Operator Instructions] Our first question comes from Steve Wieczynski with Stifel.

[Steve Wieczynski, Stifel]

So Marc, obviously, you guys don't give annual guidance. But I guess as you look to this year, and you're obviously coming off of an all-time high EBITDA year in '21, how should we think about the opportunity to grow EBITDA from current levels? And I guess maybe a better way of asking that is what are some of the gives and takes we need to be thinking about for this year that could impact that EBITDA growth? And then kind of the last part of that question is did you guys witness any type of impact in January around the variance that we need to be thinking about as well.

[Marc Swanson, Chief Executive Officer]

I'll start with the last part of your question. Look, on the variant, there's a lot of factors that impact our attendance and some of them are easier than others to tease out. But certainly, we know the variant was on people's minds. We see it in our surveys. We saw the travel disruptions across the country. We saw people -- workers calling in sick and things like that. So I'm sure it had an impact. What I can't give you is an exact number of what that is, but I'm sure it had an impact. I think the good news for the country is we seem to be on a better path now here in February, just based on the news that we see out there regarding the variant. I think your second question about kind of what -- where do we see the business going, how do we think about the opportunities we have to grow EBITDA. I think one of the things that I immediately go towards is if you look at our attendance this year versus 2019, we're still down over 2.4 million people. So what I would quickly -- I'm not going to do the math for you, but you can imagine if we can get back, just get back to 2019 attendance levels, pick up another 2.4 million people, you flow that through our P&L, you can do the math on that. I think that's pretty meaningful, obviously, pretty significant. Beyond that, we're going to continue to execute on our per caps. I think we have a lot of momentum and -- but still plenty of opportunity as well. We have new venues in our parks. We've expanded menus and offerings in our parks. We refurbished things in our parks. We have a great lineup of new rides and attractions. You heard me talk a lot about that. We believe it's our best lineup, These coasters and some of these other rides are just going to be fantastic. And then on the go forward, the longer-term plan is, again, what we believe is the most robust plan we've had. So there's a lot of positive things, I think, ahead of us there. And then as far as the cost, we continue to focus, as we have for a number of years, on achieving cost savings, on identifying efficiencies and trying to offset as much of the inflationary pressures as we can. And so we're going to continue with those strategies, and we believe that's a good recipe. And I think probably with that information, you can probably do some of the math. I think what I would also remind you is -- and you heard me talk about it, our pass base here in January is the highest pass base we've ever had for January. So a lot of things, I think, that we're excited about for 2022.

[Steve Wieczynski, Stifel]

And then second question, and I've got to ask this question, I think, I'm not sure what you're going to say. But you indicated in your prepared remarks about using excess capital to consider, which I think you referred to as strategic opportunities. And I'm just wondering what that comment meant in the grand scheme of things. And what are some of those strategic opportunities you guys would look at? And obviously, there was a public offer for Cedar Fair. And maybe you could comment on what attracted you to those assets?

[Marc Swanson, Chief Executive Officer]

I'm not going to comment a whole lot on Cedar Fair, but what I can tell you is, obviously, we like the industry. We have a lot of respect for Cedar Fair, their assets and their management team, a lot of respect for them. And we obviously believe the combination made sense for us. So it didn't -- they rejected the offer. It didn't work out, obviously. But I like sitting here -- maybe the first part of your question, sitting here today, we talked about in my prepared remarks, we like the strong financial position we find ourselves in. And I think we have some flexibility in -- whether it's investing in the business, which we're clearly doing with our rides and attractions, our refurbishments, other things like that, technology with our mobile app. There's other ROI-type things that we could pursue. We're opening a new park, obviously, in San Diego and new Sesame Place. Certainly could return -- there's capital return to shareholders. And then lastly, there's the M&A opportunity as well. So I'm not going to speculate on what we may or may not do. I think what you can rest assured is we would look to be opportunistic and study those type of uses of cash with our board and advisers. And again, I'm not going to speculate. But beyond that, we're right now really focused on getting ready for spring break. We've got our rides opening, and we're excited about the year.

[Operator]

Our next question comes from Stephen Grambling with Goldman Sachs.

[Stephen Grambling, Goldman Sachs]

Just wanted to ask on Sesame Place, the opening in March. Any thoughts you could give us in terms of what the contribution might look like to attendance, revenue and what the margin profile of this park might look like relative to the company average?

[Marc Swanson, Chief Executive Officer]

So as I said in my prepared remarks, we're very excited. That park will be opening here at the end of March. We're very excited. And I think you can assume that one of the things that gets us excited is we believe it has a better margin profile than the park that was there previously. And the Sesame product is a great IP, we'll be able to open this park more on a year-round basis because it will have some dry attractions. It will have some water attractions as well. So I'm pretty optimistic that there's a better margin profile, a better attendance profile, better EBITDA profile from that location. I'm not going to guide you to a specific number, but I think probably gave you enough information there to help you.

[Stephen Grambling, Goldman Sachs]

Maybe going back to your comments on strategic investments, how do you generally think through synergies or just broader consolidation upside? And what makes an asset more or less attractive?

[Marc Swanson, Chief Executive Officer]

I'm not going to comment a whole lot. I mean I think you heard me say, we like the industry. Certainly with Cedar, we had a lot of respect for their assets and their management team. So again, I think every -- I'm not going to speculate every kind of thing we would evaluate. It's going to have different puts and takes. But I think what I would assure you is we like the position we're in. We like where we ended the year, the flexibility we have to deploy cash in a variety of ways. Like I said, whether it's in -- back into our own business, which we've been doing, obviously, whether it's other ROI initiatives, whether it's returning to shareholders or whether it's some sort of M&A transaction.

[Operator]

Our next question comes from Mike Swartz with Truist Securities.

[Mike Swartz, Truist Securities]

Just wanted to dig into the per caps for a bit. And obviously, you saw some strong growth there over the past year, and there's obviously some exogenous things going on to drive that but as well as some of the internal things you've done to optimize yields. So maybe is there a way you can give us a sense of how much -- or how you think about the growth there over the past 12 months? How much of that was things within your control? And then how should we think about just generally speaking, per caps in '22? Meaning, do you think you could keep them at these levels, do you think you can grow them, is there any kind of puts and takes we should be thinking about?

[Marc Swanson, Chief Executive Officer]

What I'll go back to is a couple of things. I mean, one, you kind of acknowledged it, and we acknowledge it clearly that we're operating in a good economic environment. So that's obviously benefited us. But setting that aside, I think of a number of things that -- I've been at this company a long time, and I see us doing better than we have before but with still areas to improve on. And certainly, one around our revenue management team and optimizing our pricing and how we look at products, how we price them, how we promote them, that type of thing. I think that work has got us -- has done well but still a lot more opportunity there, especially around understanding, testing and optimizing what promotions are really driving people, what are the key levers that we can pull that we know will have a direct impact, that type of thing. On the marketing side, again, I think a lot of opportunity there. Some things, we've done better, but I think things we can continue to do better, to generate demand, to stimulate people to come visit. We will have the -- we've benefited some here in 2021. And I think certainly very early innings of our mobile app and CRM implementation. So realizing the full potential of those over the next several years, I think, is, again, a good backdrop to growing our per caps. And then you layer on top of that, we did this growth this year without any international attendance -- or I shouldn't say without any, but very little international attendance. That will eventually, we believe, be a tailwind at some point for us, and those folks generally tend to spend more on an in-park basis. And then you layer on the things we're doing in the park, the new venues, the new menus, the new offerings, the expanded events, reasons for people to come visit, and then the lineup of rides and attractions. There's just a lot of things that I think we're doing in our parks to get people excited about, the investments we're making in the product. Those things, I think, give us pricing power as well. So you put all that together and I think, certainly, we still have runway there with our per caps.

[Mike Swartz, Truist Securities]

And then just second question, shifting over to the labor environment. I know you guys tend to have a larger year-round full-time labor base. And it sounds like you're going to take advantage of maybe the J-1 Visa program. How should we just frame or think about labor or wage inflation in '22 relative to what we saw in '21?

[Marc Swanson, Chief Executive Officer]

So what I can tell you is we have a tremendous focus on cost. And certainly, labor is one of our larger costs. And we're going to continue to try to find other efficiencies, other opportunities to offset as much of that inflation as we can. That's our goal, obviously. So we're doing things like you mentioned, taking advantage of the international worker program. That was a program that we had largely only utilized really in one of our parks in the past. And this year, we're expanding it across our markets. So we're excited about that. We like that, that provides a stable level of workers that can come in and experience a great time in our parks. Beyond that, we're focused on some of the reasons that make it attractive to work in our parks. And I think maybe in the past, we've not played that up as much. I think working in the theme park can be a lot of fun. It can be -- you're generally outside. You're around people who are generally having fun. You can learn a lot. You can get some good leadership skills, get some good management skills, wherever you go in life that you can use. And so we got to do a better job of kind of showcasing that and some other things. It's not always wage that drives people to your company or retains them. And I think there are some things we can do that are nonwage related to hopefully drive people to come to us, Wage is certainly a factor, but there are certainly other things that we're working on as well.

[Operator]

Our next question comes from Ben Chaiken with Credit Suisse.

[Ben Chaiken, Credit Suisse]

I guess kind of similar to the previous questions. You've talked a lot about offsetting cost inflation. Is there any way to quantify how much of the recent inflation you either have already or expect to offset maybe relative to what was in your expectation when you set the original [6 90] goal? I'm just trying to get some brackets of either what the headwind is or how much do you expect to offset? Just any color there.

[Marc Swanson, Chief Executive Officer]

I think the [6 90] you're referring to was an illustration. That wasn't meant to be guidance or anything, but that was an illustration, obviously. And I think one of the things we are focused on is -- I've kind of already said it but finding offsets to inflationary pressures. And we know that inflation, especially in labor and some supply chain and things like that, has been higher than normal, obviously. And so we're trying to find other ways, other efficiencies to try to offset as much of that as possible. And we have -- as I mentioned, we have things that we -- it's just a continuous culture here to identify and execute on things. And so as we discover opportunities, we vet them and research them and understand them. And then if it makes sense for us, we try to execute on them. So that's our goal is to try to offset as much of the inflationary pressures as we can.

[Ben Chaiken, Credit Suisse]

And I guess just maybe thinking out over the next 12 months or so, given there have been a lot of changes in the variables of your original -- sorry, not goal, but correct, [6 90] illustration -- and I'm kind of referring to inflation, which we've talked a lot about in the call, but then also positive things like per caps and attendance. Like is there -- how do you feel about at some point of the next year updating that illustration?

[Marc Swanson, Chief Executive Officer]

I'm not going to comment specifically on when we may or may not update something. But I think as I noted, I think when Steve asked a question, I think you can do some math. And I think -- we won't do it for you, but I think you can assume we're not even back to 2019 attendance levels. We're still, like I said, over 2 million people shy of that in 2021. A big portion of that is obviously international attendance. And so you can flow that through at whatever you think is appropriate but pretty high flow-through generally when new people come and visit your parks. I've talked quite a bit already about per caps and why we believe we have opportunity there, some tailwinds there. We've got a great lineup of new attractions. So certainly, our goal is to not just get back to 2019 attendance levels, it's to exceed that. And I think with our lineup, not only for this year but in the future years, it's a great lineup. It's a great -- we're investing in these parks. We're adding new rides and attractions. We're refurbishing things. So there's, I think, a lot of reasons to believe that we can continue to grow. As I mentioned, the pass space, again, is at one of its highest -- is at the highest it's been in January. So a lot of optimism around our ability to continue to grow.

[Operator]

Our next question comes from James Hardiman with Citigroup.

[Sean Wagner, Citigroup]

So the attendance of 5% against -- this is Sean Wagner for James Hardiman. Attendance up 5% ahead of 2019 in the quarter, is that a good baseline for us to think about 2022? Or should we be thinking somewhere closer to the -- in-between that and the 20% number that you talked about, excluding group and international? I guess what's the opportunity for you if you can get back those 2 cohorts back to kind of the pre-pandemic levels?

[Marc Swanson, Chief Executive Officer]

I mean I don't know that I can guide you to anything specific. But look, I mean, I think we laid out the potential tailwinds. Obviously, one being international and two being group attendance. When those return, I'm not sure when that will happen, obviously. When we look out over the back half of the year, we see some things that are a little bit more optimistic than -- like right now, international is still a headwind, obviously. But hopefully, those improve in the back half of the year. Beyond that, look, I mean, generally, we're investing in the business. And generally, when you do that and have a high pass base, generally, those are good things for the business. And I think we're giving people reasons to come out and visit with our lineup of attractions, our events, our new things in our parks. So I don't have a specific number to guide you to or anything, but I think we're optimistic that a lot of things we're doing that we can grow attendance over time here.

[Sean Wagner, Citigroup]

And I guess just a follow-up kind of on that international market, particularly for the kind of maybe broader Orlando tourism industry versus maybe historical levels. I guess how do you view the, maybe in 2022, domestic visitors having more international options and maybe the return of some international visitors to the United States? I guess kind of how do those balance out in your mind? And I don't know if you can remind us of like the historical breakdown of those different groups.

[Marc Swanson, Chief Executive Officer]

So just as a reminder, we are in the Orlando market, but international attendance is only about -- across our company, about 10% of our attendance. So that's a consolidated number across the company, 10% of our attendance is international. So we have -- 90% of the people that come to our parks roughly are not international. So that's an opportunity. And I think that is clearly where having new things in the parks is to our advantage and having a high pass base is to our advantage. And as the international comes back, I don't know exactly when it will come back, we don't have a ton of forward data, but the little bit we have would suggest it starts to get better in the second half of the year. But we'll see what happens. But I think that will be something we hopefully pick up over time.

[Operator]

[Operator Instructions] Our next question comes from Paul Golding with Macquarie.

[Paul Golding, Macquarie]

I wanted to ask about sort of your thoughts, your outlook on the capital plan in general. You're doing four new coasters and continuing to invest in attractions and also talking about potential return to keep returning value to shareholders. So just trying to understand if these levels of CapEx that you've guided to for 2022, if that's sort of a run rate that you see or if there's an opportunity to find more leverage in the investments you've made in terms of new attractions?

[Marc Swanson, Chief Executive Officer]

So what I would say is, certainly, we're very excited about the forward plan we have for our rides, our attractions, just general park investment. So I think you heard us say $150 million in core CapEx and then $30 million to $50 million of noncore. So I think that's a good base for 2022. And again, not to guide you beyond that but probably a reasonable starting point for the go forward. So we look to drive -- when we build an attraction, we're looking to build something that we believe will be compelling to our guests. And maybe at the same time, we can add something new to the park or, in some cases, take an area that maybe was a little bit older and refresh it with something new. So there's multiple ways we look at it. So beyond kind of the attraction mix and makeup and things like that, then you've heard us talk about how we work with our Board on uses of cash. So beyond kind of investing in the business, there would be other considerations as well, as you've heard me talk about. The one thing I haven't mentioned yet is like hotels and things like that. So I think there's other considerations that we work with the Board on. And we try to find what we believe is the highest and best use of the cash and try to spend that as efficiently as possible.

[Paul Golding, Macquarie]

And then just a quick follow-up on the mix of attendance. We talked about -- you already talked about international. Any color you could give on how you view the group component? Is that just given what I expect is likely a dilutive impact on per caps? Is that just a piece that maybe you're thinking of substituting with more single-day nongroup or substituting with a different category? How should we think about the emphasis on certain slices of mix going forward?

[Marc Swanson, Chief Executive Officer]

So the group business is not maybe quite as big as international but not too far behind. And I think a lot of that is going to be dependent on, not surprisingly, as people get back to -- whether it's field trips or church outings or convention business. As those things start to come back, I think we feel more optimistic about our ability to sharing that. And that's really the group business. In the meantime, we're not going to sit around and just wait. So for international and group, we have to find opportunities to fill that with other things. And I think what I would point you to is you heard us in our prepared remarks, our attendance would have been up 20% -- in the 20% range in Q4 without controlling for international and group. We were up in the quarter without really having a significant contribution from either one of those areas. So we are filling it with other things, whether it's local or people who drive into our parks. Having that higher pass base, as I mentioned, I think, certainly is one thing that's an advantage to us as well.

[Operator]

This concludes the question-and-answer session. I would like to turn the conference back over to Marc Swanson for any closing remarks.

[Marc Swanson, Chief Executive Officer]

Thank you, Anthony. On behalf of Elizabeth and the rest of the management team at SeaWorld Entertainment, we want to thank you for joining us this morning. As you've heard today, we are confident in our long-term strategy, which we believe will drive improved operating and financial results and long-term value for stakeholders. Thank you, and we look forward to speaking with you next quarter.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.