Viad Corp

NYSE:VVI

Earnings Call Analysis

Robust Growth and Record Results for Pursuit in 2023

Pursuit had a remarkable year in 2023 with total revenue rising approximately 17% to a record $350 million, driven by a 25% increase in ticket revenue to $143 million and visitation surging roughly 21%, with strength in independent traveler numbers moderating group volume recovery. Room revenue also saw a healthy boost, up about 12% to $86 million, thanks to both higher Average Daily Rates (ADRs) and occupancy. For 2024, they anticipate overall attraction visitation to grow at a low double-digit rate, and same-store visitation to increase at a mid-single-digit rate. The adjusted EBITDA margin improved by around 370 basis points over last year, and a targeted margin of 30% for 2024 reflects a continued focus on labor and expense management, combined with the leverage of their high-margin attractions.

Record-Breaking Momentum Continues into 2023 for Pursuit

Pursuit had an exceptional year in 2023, achieving robust demand across its attractions and hotels, which propelled the company to break previous revenue records. Ticket revenue alone skyrocketed by 25% to reach $143 million, thanks to a 21% hike in visitation rates coupled with pricing initiatives that capitalized on guest experiences. Boosted by the lure of its world-class attractions in Western Canada and Iceland, Pursuit drew in a notably larger international crowd, filling the gap left by slower group travel recoveries. With independent travelers at the core of their recent success, advanced commitment initiatives contributed an additional $11 million in ticket revenue.

Lodging Sector Flourishes with Double-Digit Growth

The company's unique lodging experiences haven't been left behind, witnessing a full-year room revenue jump of 12% to $86 million, driven by climbs in both Average Daily Rate (ADR) and occupancy levels. Pursuit seems to be on the right trajectory, with early bookings for 2024 already outpacing the previous year, promising even stronger ADRs, which bodes well for the upcoming season. This fervor in the lodging sector has contributed substantially to the company’s soaring annual revenue, which climbed by approximately 17%, reaching a new zenith of $350 million.

A Future Built on Strategy, Execution, and People

Looking ahead to 2024, Pursuit's leaders are emphasizing a strategic approach that marries an owner's mindset with pinpoint focus on execution and having the right team in place. There's a determined effort to improve guest satisfaction continuously while pushing the efficiency envelope. Revenue growth expectations are pegged at mid-single digits, driven by strong demand, pricing power, and a surge in visitation from around the world. Furthermore, they’re planning for similar growth rates in RevPAR and ticket prices, with overall attraction visitation predicted to increase at a low double-digit rate year-over-year.

FlyOver Chicago and Margin Expansion: A Glimpse into Pursuit's 2024

With excitement building for the new FlyOver Chicago opening on March 1, 2024, the company is poised to capitalize on its strategic location at Navy Pier. With integrated ticketing systems in place, this addition to Pursuit's array of attractions is projected to funnel a significant footfall, reinforcing the company’s growth strategy. Margin enhancements are also on the horizon, with a target adjusted EBITDA margin set at 30% for 2024, an ambitious leap of 370 basis points above the previous year, driven by higher attraction visitation and vigilant labor and expense management. They are crafting another year of record EBITDA, potentially tripling the figures from 2015, which heralds a testimony to the efficacy of their Refresh, Build, Buy growth approach.

Earnings Call Transcript 2023-Q4

[Operator]

Good afternoon. My name is Lydia, and I will be your conference operator today. At this time, I'd like to welcome everyone to Viad Corp's Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]I'll now hand you over to Carrie Long to begin. Please go ahead.

[Carrie Long, executive]

Good afternoon, and thank you for joining us for Viad's 2023 fourth quarter and full year earnings conference call. We issued our earnings release after the market close today, along with an earnings presentation, which are both available on our website at viad.com. We'll be referencing specific pages from the presentation during the call as we discuss our business performance and outlook.I'd like to point out that our earnings press release and presentation contain important disclosures regarding non-GAAP measures that we'll be referencing during the call, including adjusted EBITDA and income before other items. During the call, you'll be hearing from Steve Moster, our President and CEO and President of GES; Ellen Ingersoll, our Chief Financial Officer; and David Barry, President of Pursuit.Before I turn the call over to Steve, I'd like to remind everyone that certain statements made during the call, which are not historical facts, may constitute forward-looking statements. Information concerning business and other risk factors that could cause actual results to materially differ from those in the forward-looking statements can be found in our annual, quarterly and other current reports filed with the SEC.And with that, I will turn the call over to Steve, who will be starting on Page 4 of the earnings presentation.

[Steven Moster, executive]

Thanks, Carrie, and thanks to all of you for joining our call. I'm very happy to report that our finish to 2023 exceeded our expectations in what was a great year for our businesses. GES substantially outperformed our prior guidance during the quarter and Pursuit delivered solid results in this seasonally slower period. Looking at the year as a whole, Pursuit set new records for both revenue and EBITDA with the continued return of international leisure travel to our destination and our expanded portfolio of experiences.GES delivered strong full year revenue growth with an EBITDA margin that was just 30 basis points shy of our 8% target and has positive momentum continued for GES and the industry overall. We have a great deal of optimism as we enter 2024 in a position of strength with robust demand for our extraordinary experiences at Pursuit and GES and tailwinds from a strong non-annual show schedule and the opening of FlyOver Chicago, we expect to deliver very strong revenue and EBITDA growth again this year.So, let's get into the details, starting with Ellen, who will review our 2023 financial performance and 2024 guidance.

[Ellen Ingersoll, executive]

Thanks, Steve. I'll start on Page 6 with our consolidated fourth quarter results. Revenue increased $43.7 million or 17.6% year-over-year with healthy growth at both Pursuit and GES. Consolidated adjusted EBITDA increased $16.5 million and our fourth quarter net loss before other items improved by $10.9 million. Our GAAP basis net loss attributable to Viad of $15.3 million was $9.6 million higher than the 2022 fourth quarter, primarily reflecting the $19.6 million pretax gain on sale of the ON Services AV business in 2022, partially offset by stronger 2023 operating results at both GES and Pursuit.As shown on Page 7, Pursuit's fourth quarter revenue grew $8.1 million or 23.6% year-over-year and adjusted EBITDA improved by $2.9 million. Pursuit delivered growth across all revenue categories as we continue to see strong demand for our experiences and destinations in the seasonally slow period. Attractions ticket revenues saw the largest year-over-year gain with an increase of 34%, driven by a 23% increase in visitors and higher effective ticket prices. Visitation growth was particularly strong across our Western Canada attractions as well as at our Sky Lagoon attraction in Iceland.As shown on Page 8, GES delivered consolidated revenue growth of $35.6 million or 16.6% and adjusted EBITDA growth of $13.9 million during the fourth quarter. When adjusting to exclude the favorable impact of non-annual shows and the loss of revenue from ON Services, which we sold in December of '22, GES' fourth quarter year-over-year revenue growth was about 20%. Spiro delivered revenue growth of $11.4 million or 15.8%. Excluding the impact of non-annual events from the sale of ON Services, Spiro's revenue growth rate was about 23% versus the 2022's fourth quarter, driven by strong spending from existing and new clients.GES Exhibitions delivered revenue growth of $24.7 million or 17.2%. Excluding the impact of non-annual events and the sale of ON Services, GES Exhibitions' revenue growth rate was about 18% versus the 2022 fourth quarter as show sizes continue to improve. Additionally, GES Exhibitions was selected to produce COP28, a large globally rotating event during the quarter that added nearly $15 million in revenue.Page 9 summarizes our strong full year performance in 2023. Our consolidated adjusted EBITDA increased $30.9 million or 26.6% on a 9.9% increase in revenue, reflecting strong year-over-year growth at both Pursuit and GES on improved demand. Pursuit's full year adjusted EBITDA grew $24.7 million or 36.3% on a $51 million increase in revenue, reflecting the very high margin characteristics and operating leverage of the Pursuit business. GES' full year adjusted EBITDA grew $6.9 million on a $60.4 million increase in revenue. A strong underlying performance more than offset the $74 million revenue impact from the sale of ON Services and the timing of major non-annual shows.Our full year net income attributable to Via decreased $7.2 million, primarily due to the $19.6 million gain on the sale of ON Services in the prior year. Our full year income before other items, which excludes that gain improved by $6.3 million, reflecting stronger EBITDA, partially offset by higher interest expense and tax expense. We ended 2023 with total liquidity of $160.7 million, comprising $52.7 million in cash and approximately $108 million of capacity available on our revolving credit facility. This is down from liquidity of $201.3 million at the end of the third quarter, reflecting operating cash outflows of $9.8 million and capital expenditures of $23.6 million. Our full year cash flow from operations was an inflow of $106.7 million and our capital expenditures totaled $78.3 million, including approximately $39 million of growth CapEx at Pursuit. We made net debt payments of $22.3 million and paid $7.8 million in dividends on our convertible preferred equity.Next, I'll cover our 2024 outlook on Page 10 before turning the call over to David for additional color on Pursuit. We expect full year consolidated adjusted EBITDA to be in the range of $171 million to $191 million, which is up approximately 16% to 30% from 2023, reflecting increases of $12 million to $22 million at both Pursuit and GES. For Pursuit, we expect full year adjusted EBITDA to be in the range of $105 million to $115 million on mid-single-digit revenue growth, with full year adjusted EBITDA margin of about 30%. For Pursuit seasonally slow first quarter, we expect adjusted EBITDA to be in the range of negative $12 million to negative $8 million as compared to negative $10.3 million in the 2023 first quarter.For GES, we expect full year adjusted EBITDA to be in the range of $80 million to $90 million on low double-digit revenue growth with a full year adjusted EBITDA margin of about 8.5%. Non-annual shows are expected to contribute net incremental revenue of about $65 million, primarily during the third quarter. We expect GES' first quarter adjusted EBITDA to be in the range of $15 million to $19 million versus $16.7 million in the 2023 first quarter. With the meaningful full year EBITDA growth we are anticipating, we also expect very strong operating cash flow, particularly in the third quarter with Pursuit's seasonal contribution and GES' 2 largest non-annual shows taking place. This should present us with an opportunity to further reduce our level of debt while still selectively investing in growth at Pursuit to maximize long-term value for shareholders through our Refresh, Build, Buy growth strategy.For the full year, we anticipate an operating cash inflow in the range of $120 million to $140 million and we are planning for full year capital expenditures of $65 million to $70 million, including growth CapEx of about $20 million at Pursuit. I also want to quickly comment on our expectations for tax expense, which absent guidance from us is very challenging to model given our jurisdictional tax position. For the full year, we anticipate an effective tax rate of 27% to 28%. During the first quarter, we expect to record minimal tax expense on an anticipated pretax loss because any tax benefits on pretax losses in the U.S. are subject to a valuation allowance.Now, David and Steve will provide further insight into our business performance and the exciting growth coming our way at Pursuit and GES. David, over to you.

[David Barry, executive]

Thanks, Ellen. Let's dive in at Pursuit starting on Page 12. 2023 was an exceptional year for Pursuit with robust demand for our inspiring unforgettable experiences and we produced record-breaking results. Starting with attractions, Pursuit's world-class attractions finished the year with strong momentum. Our full year ticket revenue grew approximately 25% to $143 million, and this was driven by the powerful delivery of our guest experiences, impressive increases in visitation, which was up about 21% and continued focus on our revenue maximization and pricing initiatives.Our attractions in Western Canada and Iceland experienced significant demand with particularly strong increases in international guests. And we're seeing strength from independent travelers, which helped offset the group volume that has not fully recovered yet. The Pursuit cost helped maximize visitation from independent travelers to our Banff Jasper Collection attractions with advanced non-refundable commitments totaling about $11 million of ticket revenue in 2023. And we're continuing to market this compelling value proposition to our guests for the upcoming 2024 season.I'm also happy with the growth of our newer experiences that have launched in recent years; Sky Lagoon, FlyOver Las Vegas and Golden Skybridge, all delivered significant visitation increases over 2022. Sky Lagoon had a remarkable fourth quarter and benefited from the temporary closures of its most notable competitor in Iceland. Thankfully, our competitors' facilities were unharmed and its people are safe. Our operating team at Sky Lagoon did a terrific job responding to the situation, increasing operating hours and staffing up to meet increased demand. And the work we did to make inventory available to travel partners drove increased awareness and helped to highlight the quality of the Sky Lagoon experience.All right. Switching over to lodging next on Page 13, our one-of-a-kind hotels and lodges, grew full year room revenue approximately 12% to $86 million from increases in both ADR and occupancy. Our same-store RevPAR, which excludes the additional Forest Park Alpine Hotel and Paddle Ridge rooms that we added in 2022, was up 9% year-over-year. I'm very pleased to report that all of our geographies delivered year-over-year growth in room revenue. Western Canada was a strong contributor to our success, primarily driven by increased demand and the performance of the Forest Park Alpine Hotel.As shown on Page 14, our room revenue on the books for 2024 is ahead of this time last year with strong improvements in ADRs for both our Canadian and U.S. lodging properties. This early booking pacing trend is encouraging and I'm optimistic about the season ahead. So, when you look at overall revenue growth, and you'll see that on Page 15, you can see our overall revenue growth trajectory. For the full year, our revenue increased about 17% and set a new record of $350 million and we're thrilled with the strong performance of our attractions and hotels as well as the $11 million of revenue growth we delivered from our integrated food and beverage and retail experiences in 2023.The favorable leisure travel trends and prioritization of discretionary spend on experiences combined with our locations' substantial barriers to entry and perennial guest demand set the backdrop for strong growth ahead. So, let's just talk a little bit about the future and I'd like to share -- or start by sharing my focus for 2024. So first, people. Ensuring we have the right people in the right roles with the tools they need to be successful. And we expect our leaders across Pursuit to have an owner's mindset.Second, strategy. As a leadership team, we're focused on the right things that will ensure success both in '24 and over the longer term. And thirdly, execution, control the controllable. Relentlessly seek opportunities to improve team member and guest satisfaction. Do that while driving rate, utilization, efficiency and eliminating waste wherever we can. We expect revenue to grow mid-single digits from strong guest demand, pricing power and increased visitation from both home and abroad in 2024. With our extraordinary bucket list experiences and dedicated revenue maximization team, we're planning for mid-single-digit same-store growth in RevPAR and effective ticket prices.We anticipate overall attraction visitation will increase at a low double-digit rate year-over-year with same-store visitation up mid-single digits. This outlook does not anticipate any meaningful change in Asian travel trade visitation. In addition to growth across our same-store attractions, we're also looking forward to welcoming guests to our newest FlyOver location at Chicago's Navy Pier. FlyOver Chicago was set to open on March 1. We have an ideal location and a really powerful opportunity to work together with the other Navy Pier attractions as a destination. With one shared ticketing system and a grouping of world-class attractions, Navy Pier is positioned well to drive strong visitation in 2024, and we're glad to be there.All right. So, margin expansion. If you take a look on Page 16, we'll discuss our adjusted EBITDA margin expansion, which is primarily driven by increased visitation at our high-margin attractions. Our attractions are built for volume and revenue from every incremental guest flow through at a high rate to our bottom line. Additionally, with the easing of staffing and supply chain-related pressures, we were able to ratchet it back the extraordinary measures put in place to address pandemic-related challenges. For the full year, our adjusted EBITDA margin improved by about 370 basis points as compared to 2022.In 2024, we expect to drive further margin improvement and achieve our 2024 target adjusted EBITDA margin of 30% through higher attraction visitation, revenue management and a very careful focus on labor and expense management. We're gearing up for another year of record-breaking results with our full year adjusted EBITDA expected to approximately triple our 2015 levels. This reflects the strength of our powerful Refresh, Build, Buy growth strategy. Pursuit is on a remarkable growth journey and our strategy to expand our collection of world-class experiences remains unchanged. Our 2024 results will benefit from our newest build investment, FlyOver Chicago as well as other smaller refresh investments at our well instrumented and strong-performing existing experiences. We're well positioned for continued growth in 2024 and beyond.So, just as I conclude my remarks, I just want to say congratulations across the world to the Pursuit team members for a record 2023, and a big thank you for creating remarkable experiences and lasting memories for our guests and staff. Steve, back to you.

[Steven Moster, executive]

Thanks, David. Now switching over to GES, where we also had a fantastic year of continued revenue growth and margin gains in 2023, driven by underlying growth in Exhibitions and our corporate clients as well as our focus on improving profitability across the business. When I look back at where we were 1 year ago, I'm even more impressed and proud of what we've accomplished at GES. We entered 2023 knowing our revenue would be negatively impacted by about $80 million from the sale of ON Services and the timing of non-annual events.Show sizes had been hovering just over 80% of their pre-pandemic levels for 3 consecutive quarters as smaller exhibiting companies and international inhibitors had not fully returned. However, we were seeing stronger pricing and exhibitions and spending from our Spiro corporate clients, which gave us reason to believe that we could offset part of the revenue headwinds with growth elsewhere. As shown on Page 18, GES was able to fully offset those headwinds and deliver revenue growth of $60.4 million or 7% versus 2022. When adjusting to exclude the impact of ON Services and major non-annual shows, GES' 2023 revenue grew an impressive 19% or $134.6 million year-over-year with strong growth at both Exhibitions and Spiro.Page 19 illustrates some important trends we've seen in key revenue drivers of the GES Exhibitions business. Same-show revenue and same-show size versus pre-pandemic levels, both have steadily improved. Thanks to the great effort of our Exhibitions team to improving pricing, delivered great service and grow our share of spend on the show floor, we have seen full recovery in our same-show revenue metric. However, same-show square footage remains about 10% below pre-pandemic level. We see this as a meaningful opportunity for further revenue and margin growth as event sizes continue to recover.But GES Exhibitions success isn't all driven by same-show performance and major non-annual events. Our well-established leadership position in key trade show market in North America and EMEA puts us in a strong position to win and service new events. A prime example is COP28, the United Nations Climate Change Conference, which we serviced in Dubai during the 2023 fourth quarter. We produced the 2022 edition of this conference in Canada. And with our leading position in the UAE, we are proud to have been selected once again to produce this globally important event. GES played a pivotal role in COP28 by offering a range of essential services and aligning with the event's commitment to sustainability, including sustainable fabric graphics, reusable furniture and pavilion structures, live plants and recyclable carpet. The seamless event management and dedication to sustainable solutions contributed significantly to the success and impact of COP28.Now, let's talk about Spiro on Page 20. I'm very happy with the underlying growth and new client wins that we continue to see at Spiro during 2023. With 6 additional client wins during the fourth quarter, Spiro has reached a total of 55 new client wins since launching as a discrete experiential marketing agency within GES in early 2022. This is a testament to the strength of Spiro's team and capability as well as the importance of experiential marketing as a means for brands to connect with customers in a powerful way. Experiential marketing is a large fragmented market that is forecasted to grow significantly. And as one of the few agencies with end-to-end capabilities and global reach, Spiro is well positioned to continue winning and growing.On Page 21, you can see GES' overall revenue growth trajectory. Since early 2022, GES has experienced improving industry dynamics and steady underlying growth. As I highlighted earlier, when adjusting to remove the impact of ON Services and major non-annual events, GES' consolidated revenue grew by 19% in 2023. For GES Exhibitions, that growth rate was 23%, driven by same-show revenue growth and our ability to win and produce new events like COP28. Notably, U.S. Exhibitions same-show revenue grew about 19% and event sizes increased about 11% compared to the prior year. For Spiro, the adjusted growth rate was about 11%, driven by our success in winning new clients and growing revenue from existing clients.Participation at trade shows and conferences continue to improve each quarter and the demand for trade show services is approaching 2019 levels. Additionally, corporate marketing budgets are exceeding 2019 levels as corporate marketers are finding new ways to engage with their target audiences through experiential marketing. These favorable trends, along with a much stronger non-annual show schedule in 2024, give us confidence in our outlook for another year of strong growth in 2024. As Ellen mentioned earlier, we expect GES to deliver full year revenue growth in the low double-digit range.Next, let's take a look on Page 22 and discuss our adjusted EBITDA margin expansion. I've talked a lot in the past about our efforts to drive margin improvement at GES, and I'm very happy with the results we're seeing. Historically, GES' adjusted EBITDA margin had fluctuated between about 5% to 7% with higher margins in years with strong incremental revenue from major non-annual shows. Achieving a 7.7% adjusted EBITDA margin in 2023, which was a slow year for non-annual shows is a tremendous proof point that our efforts to transform GES' cost structure are paying dividend.Over the past few years, we've eliminated approximately $50 million in SG&A through lean productivity initiatives and we have a robust multiyear road map of lean initiatives to enhance our margin each year going forward. With a strong non-annual show schedule in '24 and our continued focus on efficiency gains, we expect to deliver an adjusted EBITDA margin of about 8.5% this year. Across GES, we're performing at a very high level with growth-oriented and winning culture.In closing, we're very happy to have finished 2023 on a high note and with strong momentum heading into what should be an even better 2024. We're thrilled with our performance and the strength we're seeing across our businesses as well as the bright future we see ahead of us. We remain committed to our strategy to create extraordinary experiences and strong returns for our shareholders. I want to thank our hard-working and dedicated employees as well as our shareholders for their continued support in Viad.And with that, we'll open up the call for questions.

[Steven Moster, executive]

Thank you. [Operator Instructions] Our first question today comes from Bryan Maher of B. Riley.

[Bryan Maher, analyst]

First of all, I just wanted to compliment you on the enhanced slide deck, I mean, very, very helpful, and thanks for compiling that and getting that out. As it comes to questions, maybe we could just start with -- and I just added this to my list, the non-annual shows, the bigger ones for 2024, can you just remind the audience because I don't think you did in your prepared comments exactly what those bigger 2 or 3 shows are and what quarters those are in?

[Steven Moster, executive]

Yes. The larger ones, it's a good question, Bryan, thanks for the question. The larger ones in 2024 happened in the third quarter and it's IMTS, the International Manufacturing Technology Show as well as MINExpo. And then the third largest would be Farnborough Airshow in the U.K.

[Bryan Maher, analyst]

All in the third quarter, correct?

[Steven Moster, executive]

That's correct.

[Bryan Maher, analyst]

Kind of moving on to Iceland real quick, maybe for David. I think in your prepared comments, you talked about how you actually kind of benefited, I guess, from Blue Lagoon shutting down because of the volcanic activity. Can you give us a little more color there? Like how much was the benefit? Maybe how long was Blue Lagoon shut down for? And how close if anything, did this activity get to your property?

[David Barry, executive]

I'll answer the last question first. So, no proximity to us at all. So no risk there. And Blue Lagoon had its first closure on the 9th of November and then was able to reopen a few weeks later and then had to reclose, reopen and reclose several times. So, I think it's been beneficial in the sense that it's exposed Sky Lagoon to a lot of folks that perhaps might not have visited it. Blue Lagoon has a long 25, 30-year history. So, we were just pleased to be able to host guests for the first time and you never want to benefit from someone else's misfortune, but it was just beneficial for us to expose the brand to lots of folks and host guests from all over the world.

[Bryan Maher, analyst]

And maybe sticking with Pursuit for a minute. I think your margins came in, it's about 400 bps better than we were thinking on the EBITDA line. Was there anything in particular that you did activity-wise, maybe other than just better visitation that helped with those margins? And would that end over the expectation for higher visitation in 1Q, potentially lift 1Q EBITDA margins as well?

[David Barry, executive]

Yes. I think that generally, when you look at margin, what drives it, and so 370 basis points for us, terrific improvement as we articulated last year on the call, making that move upwards. So, we were pleased with the progress. It's a combination of many things, but overall visitation to attraction is generally very favorable. That's a profitable segment within our business. And as you hit certain visitation volumes, majority of that drops to the bottom line. So, we're just very encouraged with that. And then just general overall great management efforts by the teams across Pursuit to improve. And I think we've given you a view into the year a little early still in the quarter. We're just coming out of January and into February. So, I'll reserve judgment on that for now.

[Bryan Maher, analyst]

And just last for me. FlyOver Chicago is coming online. I would assume that hopefully, it came in on time, on budget. If it's not, maybe you can update us on that. But can you give us also an update on is anything moving in Toronto? And are there any other projects material in the works, whether you can share them or not just from the standpoint of -- from our side of the coin, looking at future growth potential kind of outside of just what's on the books now?

[David Barry, executive]

So, I'll speak first to a project in Chicago is on time and well within its budget. So, we're very encouraged with that. The product itself is phenomenal. The team has done a great job capturing the spirit of Chicago. Toronto remains mired in some back and forth between the site and the city of Toronto. So, no real news there at this point. And can't really speculate about the future until we get there. So just right now, we're stabilizing the business, getting Chicago open, and then we'll focus on the future after that.

[Operator]

Our next question comes from Kartik Mehta of Northcoast Research.

[Kartik Mehta, analyst]

Steve, just as you speak with your customers, I'm wondering what you're noticing in terms of budgets for 2024 as they prepare for either corporate events or trade shows.

[Steven Moster, executive]

Yes, it's a great question, Kartik. So, we're seeing the -- as you know, within this industry, we see things kind of 6 to 9 months before they happen, meaning right now, people are booking space for events that will happen later this year and really even into 2025. So, we have decent visibility on the exhibition side, and we're seeing the continued trend that we saw through 2023, which is the trade shows are still coming back. They're above kind of on a same-show basis, above the revenue that they had in 2019. The square footage has made significant progress during the course of '23, and we expect that to continue through '24. On the corporate marketing side, we've been really pleased with what we've seen in '23 that budgets are coming in above 2019 levels very solidly and we expect that to continue as well. You don't have as much visibility, but you have kind of 6 months' worth of visibility on the corporate marketer side and we feel really good about the position we have going into '24.

[Kartik Mehta, analyst]

And then just on the Pursuit side, I'm wondering how much do you anticipate the new attractions experiences to benefit in 2024? How much of a contribution are you anticipating?

[David Barry, executive]

I mean, I would answer that is we're looking for continued growth. We had a good period of growth through '23, if you take a look, and we've got a variety of attractions that all of them at a healthy growth rate. We're going to continue to see increased visitations. We expect those numbers to continue to perform and we're in a good position as we move forward.

[Operator]

Our next question comes from Tyler Batory of Oppenheimer.

[Tyler Batory, analyst]

First question for me on the GES side of things, Steve. What are your expectations for same-store revenue in 2024? The past few calls as well, there's a lot of discussion about square footage, show sizes. So, what are your latest thoughts on those topics? And then the third part of this question, price has been a reason in a way you've been able to grow your revenue in GES. Do you think you can hold on to price going forward or perhaps even grow it from here? Just trying to get a good sense of your views on those topics.

[Steven Moster, executive]

Yes. I think, so the drivers of growth for next year, one is, as you mentioned, same-show growth. And I would expect that to be in the mid-single-digit range, partially driven by pricing and partially driven by increase in the square footage of those events, as we've talked about on prior calls. The second is obviously a large one, which is the non-annual events that are taking place and it's roughly $65 million of incremental revenue that will occur in '24 that did not occur in '23. And then the last element of growth is just a continuation of what we've seen in the growth of Spiro. We're really pleased with the new clients that we've picked up during the course of '23, and I feel there's momentum behind us and that will definitely help our overall growth for Spiro in '24. So, those are kind of the 3 buckets and kind of where I see them shaking out for this year.

[Tyler Batory, analyst]

Switching gear to Pursuit, in terms of the revenue guide, what's implied in terms of long-haul visitation? Are you having any conversations with tour groups travel trade coming from Asia?

[David Barry, executive]

We certainly are. And as we talked a little bit about it in the remarks that one of the things we've been able to do, Tyler, is to have demand coming from other parts of the world as certain countries in Asia take longer to recover. So, if you look at the visitation growth and you look at the room night growth, we've been able to basically substitute. And as China returns specifically, we think that's going to be a multiyear return, but we do believe it will return. So, no meaningful change anticipated from Asia group travel, demand remains consistent and they're really rebuilding and they're rebuilding their channels out of the country and into Canada. And so the good news is we have demand from all over the world. And the other thing we try not to concentrate too much in one country. So, you're not stuck. If a country's economy falters, you're not stuck waiting for business from that country. So, we tend to spread out allocations into the forward look and I can tell you that demand in '24, demand in '25 remains quite strong.

[Tyler Batory, analyst]

And then in terms of the margin outlook there, the growth in terms of 2024 is really quite strong. In the past, you've talked about getting back to low-30s on EBITDA margin in Pursuit. Is that still something that you think is doable? Do you have any line of sight in terms of when that might happen?

[David Barry, executive]

Yes. So, if you take a look at Page 16 in the deck, you can see a view to margin. I mean, we're quite confident and on track for our return to 30% margin in '24. And so we're working hard in that direction and we're pleased with the 370 basis point increase in '23, but we're on track and working hard for '24. We feel confident about it.

[Tyler Batory, analyst]

My last question, in terms of cash flow here. On the CapEx side of things, [indiscernible] growth CapEx, I'm assuming that's all related to FlyOver. So, I just wanted to be sure that, that's the right way to be thinking about it. And then free cash flow is going to be moving quite higher year-over-year. I think in the prepared remarks, you called out perhaps leaning more into reducing debt. So, I wanted to be sure that I heard that correct, kind of how you're thinking about leverage and the opportunities to reduce that going forward.

[Ellen Ingersoll, executive]

Yes, you did hear that right. Regarding the growth CapEx, though, about $6 million is FlyOver Chicago and a handful of smaller projects after that. As far as our cash flow, Q3 will obviously be a big cash flow quarter. We will likely pay off our revolver in Q3, probably add to it in Q4, but we will have excess cash flow to pay down some debt and do some selective growth projects at Pursuit.

[Operator]

The next question is from Alex Fuhrman of Craig-Hallum.

[Alex Fuhrman, analyst]

Congratulations on a really strong year. I guess my first question would be on the Pursuit side of things. It seems like you're guiding to very substantial EBITDA growth in 2024, but on fairly modest mid-single-digit revenue growth. So, just kind of rough numbers here, seems like something approximately like a 100% flow-through on incremental revenue to EBITDA relative to what you did in 2023. Is the expectation that most of your revenue growth in 2024 is going to come from rate increases where there's not a lot of associated expenses or just increased flow-through to attractions where there's not a lot of cost. I would love to just kind of hear a little bit more about how earnings is going to be up so much on a relatively small amount of revenue growth.

[David Barry, executive]

So, attraction scale with volume. And our profitability increases meaningfully when visitation is strong. So, our fixed costs remain fixed. Every dollar of incremental revenue flows at a very high margin to the bottom line. We've got consistent rate increases. And as we make experiences better, we're able to provide a better experience and then charge more for it. We're quite focused on just better execution across the board in terms of the things that we can control and manage. The combination of technology improvements, you look for experimenting in Chicago as an example with ticket kiosks and digital ticket purchasing, which we all use for everyday items like groceries and airline tickets and other things. But it's all in areas where we can make the business more efficient and more effective. And there are some improvements that we continue to work on in terms of how we can deliver experience from a cost side and just driving to greater profitability and greater experience. So that's what gets us to 30% and then we just keep working hard.

[Alex Fuhrman, analyst]

And then of the $20 million of growth CapEx that you're deploying this year, I imagine some amount of that is for the Chicago FlyOver opening. Can you give us a sense of what the rest of that is for and when we could start to see any benefit from that spending?

[David Barry, executive]

Yes, I'll let Ellen also jump in on this, Ellen, do you want to go ahead? Or would you like me to take it?

[Ellen Ingersoll, executive]

No. Go ahead, David. I was just going to reiterate of the $20 million, about $6 million is Chicago, and then you can speak to the other smaller projects that you have going on.

[David Barry, executive]

Yes. And Alex, it fits well with something that you've experienced when you visited us and we did the tour around Maligne Lake. And Maligne Lake is a great example of a very successful business, very highly rated from a guest experience standpoint. We consistently sell out in the peak of the day. So, something as simple as ordering an additional boat for the Maligne Lake boat fleet enabled to respond to demand. And so that fabrication is well underway and on track for delivery and time for the summer season.Another really good example is at Sky Lagoon where the ritual experience at Sky Lagoon, which is the sauna and salt scrub and cold plunge, et cetera, is limited today by the size of that facility. By expanding that facility itself within Sky Lagoon, it allows us to eliminate less expensive products, provide a better experience, but also charge a premium price. So, those are just 2 initiatives. And then there's a myriad of other things across the board, all across Pursuit where we're looking at internal things that we can make better and improving guest experience all the way across the company.

[Alex Fuhrman, analyst]

And then if I could ask one on the GES side of the business. I mean, it looks like you -- if we're rounding to the nearest percentage point, you basically hit your 8% EBITDA margin target early and it looks like you're guiding to margins a little bit above that for this year. Without getting into specific guidance for future years, can you just give us a sense at a high level? I mean, assuming you've got a pretty meaningful revenue headwind in 2025, when you lose some of these non-annual shows, do you think it's reasonable to maintain that 8.5% EBITDA margin even in odd-numbered years or at least the 8% level that you've referred to in the past?

[Steven Moster, executive]

It's a great question, Alex. And yes, we are very pleased with what we were able to accomplish in 2023 given that it's a traditionally lower non-annual show rotation for this year. It does benefit us next year. But I think the thing to keep in mind is as revenue comes back, meaning same-show revenue and the square footage comes back, it comes back at a pretty high flow through. Additionally, the team has really been laser-focused on finding lean projects throughout the business. So, we've talked about this over the last kind of 2.5 years or so, and we're really seeing the benefit of that play into the results that we had in '23. And obviously, as we tackle new projects in '24 and '25, those will have a benefit as well. So, it's my expectation that we can maintain that 8% or higher as we go into odd years where there isn't a big show rotation.

[Operator]

And we have a follow-up from Bryan Maher of B. Riley.

[Bryan Maher, analyst]

And kind of following up on Alex's question and really the kind of series of questions before that. This may come across as a loaded question, you don't have to answer if you don't want to, but kind of aspirationally as you think about the next 3 to 4 years and what you're seeing with technology and what you've learned from the business and et cetera, where could margins go both at GES and at Pursuit, maybe more on the Pursuit side because I think, Steve, you kind of answered it on the GES side.

[Steven Moster, executive]

Yes, I'll let David talk about what he sees going forward for Pursuit.

[David Barry, executive]

Yes. Our goal is to -- as soon as we can get to 33%, it's going to take some time. But the jump this year to almost 27% and then coming in on '24 at 30%, we believe 33% is a really sustainable and powerful margin for the business. It allows us to continue to maintain things at a high level and also keep improving experiences and at the same time, be it a great margin business that we can sustain over the long term.

[Operator]

There are no further questions at this time. Steve Moster, I turn the call back over to you.

[Steven Moster, executive]

Thanks, Lydia, and thanks again to our hard-working team members around the globe and our shareholders for their support in Viad. We look forward to giving you another update in -- for the next quarter. Thank you so much.

[Operator]

This concludes today's call. Thank you for joining. You may now disconnect your lines.