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Cedar Fair, L.P. (FUN) Q4 2022 Earnings Call Transcript

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Cedar Fair, L.P. (NYSE:FUN) Q4 2022 Earnings Conference Call February 16, 2023 10:00 AM ET

Company Participants

Michael Russell - Corporate Director of Investor Relations

Richard Zimmerman - President & Chief Executive Officer

Brian Witherow - Executive Vice President & Chief Financial Officer

Conference Call Participants

Chris Woronka - Deutsche Bank

Steve Wieczynski - Stifel

James Hardiman - Citi

Ben Chaiken - Credit Suisse

Mike Schwartz - Truist Securities

Eric Wold - B. Riley Securities

Paul Golding - Macquarie Capital

Barton Crockett - Rosenblatt Securities

Operator

Good morning. My sanction is Rob, and I will beryllium your convention usability today. At this time, I would for illustration to invited everyone to nan Cedar Fair Entertainment Company Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] Thank you.

I will now move nan telephone complete to Cedar Fair.

Michael Russell

Thank you, Rob, and bully greeting to everyone. My sanction is Michael Russell, Corporate Director of Investor Relations for Cedar Fair. Welcome to today's net telephone to reappraisal our 2022 Fourth Quarter and Full Year Results ended December 31. Earlier this morning, we distributed via ligament work our net property release, a transcript of which is disposable nether nan News tab of our investor's website astatine ir.cedarfair.com.

On nan telephone pinch maine this greeting are Richard Zimmerman, Cedar Fair, President and CEO; and Brian Witherow, our Executive Vice President and CFO.

Before we begin, I request to punctual you that comments made during this telephone will see forward-looking statements wrong nan meaning of nan national securities laws. These statements whitethorn impact risks and uncertainties that could origin existent results to disagree from those described successful specified statements. For a much elaborate chat of these risks, you whitethorn mention to nan company's filings pinch nan SEC. In compliance pinch nan SEC's Regulation FD, this webcast is being made disposable to nan media and wide nationalist arsenic good arsenic analysts and investors. Because nan webcast is unfastened to each constituents and anterior notification has been wide and unselectively disseminated, each contented connected this telephone will beryllium considered afloat disclosed.

With that, I'd for illustration to present our CEO, Richard Zimmerman. Richard?

Richard Zimmerman

Thanks, Michael. Good morning, and acknowledgment to everybody for joining us. Earlier this morning, we announced grounds capacity for fiscal 2022, which reflects nan important advancement we are making connected our strategical initiatives and nan unthinkable activity of our squad to proceed to present exceptional experiences for our guests.

These grounds operating results allowed america to return astir $220 cardinal of superior to unitholders done nan reinstatement of our quarterly rate distributions and nan implementation of a caller portion buyback program. These results besides show that nan beardown capacity trends that we provided updates connected during our quarterly and interim reports passim nan 2022 play came to fruition successful nan 2nd half of nan year.

The consequence was nan 2nd highest attendance twelvemonth successful nan company's history, adjacent humanities highs for in-park per capita spending and grounds out-of-park revenues, driven successful ample portion by nan outstanding capacity of our edifice properties. We produced grounds revenues and adjusted EBITDA for nan twelvemonth contempt continued headwinds, including labour availability, nan effect of ostentation and a group business transmission that was still recovering.

We besides delivered 30%-plus margins, a marked betterment complete past twelvemonth pinch achievable upside arsenic we activity backmost to pre-pandemic request levels. Much of nan in installments goes to our parkland GMs and their team's disciplined costs guidance practices, including efficiently managing seasonal labour to align pinch demand, while besides actively managing down different adaptable operating costs to offset wide inflationary pressure. The improvements they are making will guarantee nan semipermanent vitality of our parks and nan maturation of our business for years to come.

Before I inquire Brian to reappraisal our financial results successful much detail, I want to return conscionable a mates of minutes to locomotion done immoderate cardinal elements of our strategy and business that led to our occurrence successful 2022 and nan beardown momentum we person heading into 2023. First, reinvesting successful our properties is basal to driving semipermanent growth.

At nan bosom of attracting millions of guests to our parks and edifice properties each year, has been nan company's committedness to consistently reinvest successful nan business to amended nan impermanent experience.

While M&A activity has surely played a awesome domiciled successful our humanities growth, nan constricted number of opportunities to get strategical high-quality properties, emphasizes nan cardinal value of investing successful our ain assets to nutrient dependable integrated growth.

Second, prioritizing apical statement maturation was nan correct betterment strategy. Our beardown gross maturation successful 2022 was a nonstop consequence of our expertise to pull much guests to our parks, supply guests pinch much breathtaking and engaging options to thrust in-park spending and support guests coming backmost clip and again.

Given nan uncertainty of nan macro situation astatine nan commencement of nan year, we judge powerfully that focusing connected nan impermanent acquisition and apical statement gross maturation would beryllium nan astir effective measurement to create nan operating leverage basal to propel our business complete nan agelong word and done immoderate economical challenges were ahead. I judge our beardown 2022 results show this was nan correct strategy.

Third, our business is underpinned by reliable, recurring and increasing gross streams. More than 2 thirds of our yearly attendance comes done ticketing channels pinch prepurchase commitments that are good successful beforehand of nan impermanent visit, including play passes, group bookings and tickets associated pinch overnight stays astatine our edifice properties.

These long-lead recurring gross streams besides nutrient predictable levels of rate travel that let america to fine-tune our superior allocation priorities and make informed decisions astir our early direction. We position nan accordant maturation of recurring revenues to beryllium a valuable cornerstone of our business exemplary and judge it remains nan astir unrecognized and underappreciated spot of our company.

Fourth, we are a 2nd half company, generating 2 thirds of our attendance and revenues and 80% of our adjusted EBITDA complete nan 3rd and 4th quarters. As pinch astir seasonally weighted businesses, we bask highest request successful very constrictive windows of nan calendar, successful our lawsuit from July done October erstwhile we afloat leverage our costs building and maximize flow-through connected incremental revenues.

Finally, our equilibrium expanse is beardown and getting stronger. To date, we person reduced full nett leverage backmost to pre-pandemic levels, while progressing pinch intent towards our nett indebtedness target of $2 billion. Our accelerated betterment and beardown results person positioned america good to move quickly towards achieving our goals while pursuing opportunities to adhd elasticity and capacity to our superior building for nan longer term.

I'll region present truthful that Brian tin reappraisal our results successful much item earlier I supply immoderate much colour connected our outlook going forward. Brian?

Brian Witherow

Thanks, Richard, and bully morning. I'll commencement disconnected pinch a reappraisal of our 4th fourth capacity compared to past twelvemonth earlier providing a much elaborate recap of our afloat twelvemonth results compared to 2019, our past afloat play of operations.

During nan 4th quarter, our [indiscernible] had 376 full operating days aliases 8 less days compared pinch nan 4th fourth of 2021. The alteration was related to scheme changes to parkland operating calendars successful 2022 arsenic good arsenic weather-related closures astatine respective parks during nan period. For nan quarter, we generated grounds nett revenues of $366 million, up $15 cardinal aliases 4% compared to nan 4th fourth of 2021.

On a per operating time basis, our 4th fourth gross capacity was moreover stronger, up much than 6% year-over-year. Our improved capacity was driven by a 3% summation successful in-park per capita spending an 18% summation successful out-of-park revenues and a 2% summation successful nan mean regular attendance during nan period. To comparison our capacity to prepandemic levels, mean regular attendance was up 1% compared to nan 4th fourth of 2019.

The summation successful out-of-park revenues was chiefly driven by higher ADRs crossed astir of our edifice portfolio, reflecting our expertise to value into beardown user demand. Results besides benefited from inclusion of nan recently renovated Castaway Bay Indoor Water Park and nan Sawmill Creek Resort, 2 Cedar Point properties that were closed for renovations during nan 4th fourth of 2021.

Meanwhile, in-park per capita spending successful nan 4th totaled a grounds $63.33, fueled by higher levels of impermanent spending connected F&B and merchandise on pinch higher summons pricing peculiarly during our high-demand Halloween events successful October. For nan quarter, nan betterment successful impermanent spending was wrong nan nutrient and beverage channel, up 10% complete nan anterior year, reflecting nan occurrence of nan meaningful superior investments we person made successful that area for nan 2022 season.

Moving to nan costs front; operating costs and expenses successful nan 4th fourth totaled $286 million, up $5 cardinal compared to nan 4th fourth of 2021. The summation was nan consequence of a $4 cardinal summation of costs of equipment sold and a $15 cardinal summation successful SG&A expense, offset successful ample portion by a $14 cardinal alteration successful operating costs. The summation successful costs of equipment sold reflects higher income successful nan 4th arsenic good arsenic nan effect of rising merchandise costs.

Despite these costs pressures, costs of equipment sold arsenic a percent of food, merch and games gross only accrued 140 ground points from nan 4th fourth of 2021. The summation successful 4th fourth SG&A disbursal reflects higher full-time wages and related use and inducement scheme costs, ongoing investments successful exertion upgrades, higher walk connected parkland advertizing successful nan play and accrued transaction and in installments paper fees. The second was driven by this year's conversion of each our parks to cashless, which helped trim labour costs by eliminating nan request for rate handling positions astatine nan properties.

During nan period, we reduced our operating costs by 7% compared to nan 4th fourth of 2021 by tightly managing operating and attraction supplies arsenic good arsenic moderating spending connected intermezo and amusement fees. These savings were somewhat offset by planned increases successful headcount astatine prime parks, higher attraction wages and nan incremental onshore lease and spot taxation costs associated pinch nan waste leaseback of nan onshore astatine California's Great America.

Excluding nan effect of nan waste leaseback transaction, operating costs successful nan 4th would person been down 9% compared to nan first -- to nan 4th fourth of 2021 aliases 7% connected a per operating time basis, a cardinal capacity metric we are intimately monitoring arsenic we proceed to amended negociate costs and amended operating margins going forward.

Adjusted EBITDA, which guidance believes is simply a meaningful measurement of nan company's parkland level operating results accrued $15 cardinal year-over-year to a grounds $88 cardinal successful nan 4th quarter. Meanwhile, our 4th fourth separator improved to 24%, up from 20.9% for nan 4th fourth successful 2021 and up from 21.2% for nan 4th fourth of 2019. Operating separator betterment during nan play reflects nan leverage that comes pinch a return to much humanities attendance levels arsenic good arsenic nan effect of our successful efforts during nan 4th to mean costs growth.

Shifting our attraction to afloat twelvemonth 2022 results compared pinch 2019. Operating days successful 2022 totaled 2,302 compared pinch 2,224 operating days successful 2019. The 78 incremental days were nan consequence of 85 further operating days astatine our 2 [indiscernible] h2o parks acquired successful July of 2019, offset by a nett 7 less days owed to normal year-over-year operating almanac differences astatine nan parks.

For nan afloat year, nett revenues were a grounds $1.82 billion, up 23% aliases $342 cardinal compared to 2019. Our gross maturation was driven by a 28% summation successful in-park per capita spending, a 26% summation successful out-of-park revenues to a grounds $230 million. Meanwhile, attendance totaled 26.9 cardinal visits successful 2022, down 4% compared to 2019.

As we've antecedently noted, nan anticipated slower betterment of our group transmission which was down astir 1.4 cardinal visits compared to prepandemic levels, accounted for nan entirety of nan attendance gap. Helping to somewhat offset nan shortfall successful group attendance was nan capacity of our play walk channel.

With a grounds 3.2 cardinal play passes sold for nan 2022 season, play walk attendance was up 10% complete 2019 levels and comprised 59% of our full 2022 attendance mix. By comparison, play walk visitation represented 52% of nan attendance operation backmost successful 2019.

Moving connected to nan costs front; for nan afloat year, operating costs and expenses this past twelvemonth totaled $1.29 billion, up $298 cardinal compared to 2019, including increases successful costs of equipment sold, operating costs and SG&A expense. The increases successful operating costs and SG&A were chiefly owed to nan effect of wide costs ostentation complete nan 3-year play peculiarly astir labour costs arsenic good arsenic nan afloat twelvemonth inclusion of nan Schlitterbahn parks, which weren't acquired until mid-year 2019.

Looking a small much profoundly astatine labour costs; though nan labour markets successful 2022 stay challenging, we are very pleased pinch nan advancement made astir improving staffing levels and controlling costs. With amended statement of show into operating calendars and little uncertainty astir operating protocols, we were capable to much proactively scheme for our staffing needs. This helped our recruiting efforts and allowed america to return to a much accepted gradual seasonal salary complaint model, only paying up for harder to capable positions and associates successful supervisory roles.

The changes we made to our seasonal salary building helped flatten nan maturation curve astir seasonal labour rates, which is peculiarly important fixed that seasonal labour represents our azygous largest operating cost. For nan year, our mean seasonal labour complaint was down 1% from 2021 pinch trends continuing to amended successful nan 2nd half of nan twelvemonth erstwhile rates were down 2% year-over-year.

Based connected nan occurrence of our strategies this past year, we are optimistic that we tin again support our mean seasonal costs complaint to wrong 1% to 2% of 2022 levels though we will proceed to negociate rates arsenic needed successful bid to guarantee we person capable staffing levels passim nan season.

Adjusted EBITDA for 2022 was a grounds $552 million, an summation of 9% aliases $47 cardinal compared to $505 cardinal for 2019. Meanwhile, our afloat twelvemonth separator this past twelvemonth improved to 30.4% compared to 24.3% successful 2021, reflecting nan use of a recovering attendance guidelines and nan beardown capacity of in-park per capita spending and out-of-park revenues.

Due to nan remaining spread to humanities tenancy levels and wide inflationary costs pressure, margins still way pre-pandemic levels, thing we judge tin beryllium addressed arsenic we look to amended optimize parkland operating structures and arsenic our parks return to humanities attendance levels complete time.

Now turning to nan equilibrium sheet; arsenic Richard noted earlier, we are pleased to opportunity we person built a robust equilibrium sheet, which we intend to fortify moreover further arsenic we present connected our strategical initiatives and activity to optimize our superior structure. We ended nan twelvemonth pinch $101 cardinal successful rate connected hand, nary outstanding borrowings nether our revolving in installments installation and full nett leverage of 4x adjusted EBITDA, backmost successful statement pinch pre-pandemic levels.

During nan year, we utilized $264 cardinal to afloat repay nan company's word loan, we utilized $33 cardinal to salary rate distributions to unitholders and we utilized $185 cardinal to repurchase units nether our caller portion repurchase program. By nan extremity of January, we had repurchased astir 5 cardinal units astatine a full costs of astir $208 million.

As Richard noted, nan reintroduction of our quarterly rate distributions and nan implementation of a portion repurchase scheme were important milestones successful our betterment this past year. Going forward, we will proceed to attraction connected unitholder returns arsenic 1 of nan pillars of our superior allocation strategy. This will see successful nan 3rd 4th determining what level of summation successful nan distribution is due arsenic we get amended visibility into our 2023 performance.

We besides intend to proceed to beryllium progressive successful our portion repurchases, anticipating completing our existing buyback programme early successful nan 2nd quarter, astatine which clip we will measure nan appropriateness of implementing a follow-up program.

Looking astatine agelong lead business indicators for a moment, nan early trends successful income of play walk products, group bookings and reservations astatine our edifice properties are coagulated and successful statement pinch expectations. Our full deferred gross equilibrium astatine nan extremity of nan twelvemonth was $173 million, representing a alteration of $25 cardinal erstwhile compared to deferred revenues astatine nan extremity of 2021. It's important to statement that included successful nan 2021 year-end equilibrium was astir $30 cardinal of COVID-related merchandise extensions astatine Knott's Berry Farm successful Canada's Wonderland into nan 2022 season.

Excluding these extensions, deferred revenues would person been up astir $5 cardinal aliases 3% year-over-year, including results from early income of 2023 play passes and related all-season products. Through this past weekend, income of caller 2023 play passes were up 5% aliases astir $8 million, driven by a 9% summation successful nan mean walk price, which is successful statement pinch plan. Somewhat offsetting nan higher pricing is simply a 4% shortfall successful play walk units sold compared pinch nan aforesaid clip past year.

The year-over-year portion alteration reflects a slow commencement to nan income programme owed to mediocre autumn upwind arsenic good arsenic a return to normal purchasing patterns coming retired of nan pandemic, pinch much than half of our play walk income rhythm remaining, including nan outpouring model that accounts for much than 40% of full sales, we stay focused connected maintaining pricing, driving accrued portion income and matching aliases exceeding nan grounds income capacity of our 2022 play walk program.

Regarding CapEx. This past year, we spent $183 cardinal connected CapEx, including investments successful caller rides and attractions, upgraded and expanded F&B accommodation and renovations to respective of our edifice properties. By comparison, we task investing astir $185 cardinal to $200 cardinal successful superior projects successful 2023.

Lastly, for modeling purposes, for afloat twelvemonth 2023, we are projecting rate liking payments of $130 cardinal to $140 cardinal and rate taxes of $50 cardinal to $60 million.

Finally, I want to supply an update connected really we will beryllium reporting operating results successful nan coming year. Given nan spot of our 2022 capacity and nan shape of our recovery, we judge location is nary longer a request to connection nan number of interim update reports we provided past year. As such, we will beryllium returning to our normal cadence of providing results connected a quarterly ground moving forward.

While we will proceed to supply updates connected our capacity done July pinch 2nd 4th net and our capacity done October pinch our 3rd 4th earnings, we will nary longer supply interim updates comparative to Memorial Day, nan 4th of July aliases Labor Day.

With that, I'd for illustration to move nan telephone backmost complete to Richard.

Richard Zimmerman

Thanks, Brian. We are highly pleased pinch our capacity this past twelvemonth and arsenic excited astir nan opportunities we spot to build connected that momentum successful 2023. One important area that has much room to turn is our play walk channel. Its recurring spot reflects 2 things astir our customer base.

One, nan beingness of our astir loyal guests proceed to turn propelled successful portion by nan benefits offered done our play walk programs, including our Pass Perks loyalty programme arsenic good arsenic nan continuous improvements we person made to nan wide impermanent experience. And two, much of our astir loyal guests are purchasing our highest-priced ticket, successful galore cases, buying up to get nan perks and benefits of play walk ownership. .

Improvements to our nutrient and beverage programme proceed to resonate good pinch our guests, helping to thrust in-park per capita spending higher. While pricing is portion of that equation, astir of our F&B per headdress -- for capita maturation tin beryllium traced to investments made complete aggregate years to elevate nan value of our culinary offerings, including nan opening past twelvemonth of caller high-throughput upscale eating accommodation astatine Knott's Berry Farm, Cedar Point, Kings Dominion and Canada's Wonderland.

Consumer consequence connected our impermanent restitution ratings person been overwhelmingly affirmative for our higher quality, much divers culinary choices, faster turnaround times and comfortable ambiance power eating facilities. We will proceed to upgrade and grow upon our paper offerings and nutrient accommodation arsenic we look to thrust incremental maturation successful impermanent spending.

We person seen a akin impermanent consequence to our premium experiences, an evolving programme that we deliberation is successful its early innings and that we judge has sizeable imaginable to thrust incremental impermanent spending moreover higher. In summation to continuing to marketplace premium offerings specified arsenic Fast Lane, Water Park Cabanas and exclusive VIP areas to our regular guests, we are actively testing a caller prestige walk astatine prime parks successful 2023, a merchandise aimed astatine our play walk guests who are looking for premium experiences passim nan season.

As we return banal of our progress, we judge location is room for betterment and much activity to beryllium done successful respective areas of our business, including wrong our costs structure. Initiatives are good underway for nan existent twelvemonth to again negociate seasonal labour rates, support seasonal labour hours accordant pinch request and guarantee nan effectiveness of different adaptable operating costs.

These are important initiatives arsenic we activity to reconstruct attendance backmost to our erstwhile highs and dynamically value into demand, peculiarly astatine our smaller parks that deficiency nan aforesaid level of operating leverage arsenic our larger parks. A return to prepandemic attendance levels, on pinch our expertise to optimize operations and support costs increases wrong our targeted gross maturation complaint will beryllium captious to achieving our separator goals.

Along nan aforesaid lines, we are actively moving to further amended our parks integer infrastructure, connecting guests pinch applications that velocity up e-commerce transactions, trim nan request for labour and amended our move pricing and analytical capabilities.

We are besides moving connected an improved mobile app for nan 2024 play to supply our guests pinch improved visibility of in-park intermezo and eating options and enhanced transaction power done their smartphones erstwhile purchasing equipment and services. Much for illustration nan cost-saving benefits we person realized done cashless operations, measures to amended exertion that besides amended nan impermanent acquisition will make parkland operations much efficient, trim our operating costs complete nan agelong word and thief summation separator capacity and travel through.

Going into 2023, we will proceed to prioritize gross growth, which will beryllium driven by request from marketable superior and continued finance successful nutrient and beverage highlighted by large caller anchor restaurants astatine our 2 largest parks, Cedar Point and Knott's Berry Farm, betterment of nan group channel, which will beryllium led by younker and schoolhouse bookings successful nan outpouring and firm business passim nan equilibrium of nan twelvemonth and expanded parkland operating calendars complete nan first half of nan year.

While operating calendars whitethorn request to beryllium adjusted for macro factors specified arsenic weather, for nan afloat year, we task adding arsenic galore arsenic 70 days to 80 operating days this twelvemonth compared to 2022.

We are focusing nan lion's stock of our investable superior connected nan areas of nan business that produced nan highest return. We do truthful pinch nan afloat appreciation that much than 80% of our adjusted EBITDA is produced by our 5 largest parks that besides person nan highest operating leverage. With that successful mind, for nan 2023 season, we are making investments of standard astatine each of these parks, investments that toggle shape full sections of nan parks, wherever increases successful request and impermanent spending should beryllium imminent and stay sticky.

We are besides readying to put successful caller marketable attractions astatine 2 of our mid-tier parts, namely Worlds of Fun successful California's Great America successful 2023. History shows that adding awesome caller rides and attractions astatine our smaller marketplace parks has an contiguous effect pinch increases successful attendance, impermanent spending and play walk sales.

Our finance strategy for nan foreseeable early should look overmuch nan same, keeping nan high-capacity engines of our larger parks moving astatine highest capacity while rotating investments successful awesome marketable tractions among our smaller marketplace parks for contiguous effect and incremental semipermanent maturation and improved profitability. We are fortunate to person a business exemplary that has demonstrated resiliency and spot successful varying economical and marketplace conditions.

I americium encouraged pinch really efficaciously our strategical initiatives drove capacity passim nan pandemic and much importantly, done nan betterment this past year. While we proceed to workout a grade of be aware fixed nan existent uncertainty of nan macroeconomic environment, we judge we are good positioned to present different twelvemonth of grounds results successful 2023, and we stay laser-focused connected delivering coagulated returns for our investors.

Rob, that's nan extremity of our prepared remarks. Please unfastened up nan telephone for questions.

Question-and-Answer Session

Operator

[Operator Instructions] Your first mobility comes from nan statement of Chris Woronka from Deutsche Bank.

Chris Woronka

Congratulations connected a very bully quarter. I wanted to drill down a small spot if we could connected margins. And I cognize you had a batch of commentary location already. But is location a measurement to deliberation astir -- erstwhile we look backmost to 2019, and there's an effect from Schlitterbahn erstwhile we comp that to today, is location conscionable a measurement to deliberation astir your longer-term target? And what's nan cadence to get there? Is location a step-up function? And really reliant connected it is attendance versus immoderate of nan operational changes that you're making?

Richard Zimmerman

Chris, I admit you being pinch us. Let maine conscionable opportunity nan commencement by saying, erstwhile again, 2022 was a singular year. And I've sewage to convey everybody successful nan organization, each nan teams retired there. They did a tremendous occupation managing done nan pandemic. So hats disconnected to them. In position of margins, separator is really thing we salary a batch of attraction to. As we said, a return to humanities request levels, it really will thief thrust pushing further and getting margins backmost to those pre-pandemic levels.

But successful addition, we proceed to value into request peculiarly successful nan 4th quarter. It's -- nan large attendance period of October really showed what we could do successful position of demand, pricing and driving high-margin gross -- incremental revenue. We spent nan pandemic, Chris, implementing and building technologies that really allowed america to optimize nan recovery.

Our business intelligence usability is really doing a awesome occupation connected 2 fronts: first, gross guidance and really pricing dynamically into request but besides moving pinch our operators successful nan section connected workforce management, getting a batch much disciplined connected that side. We built a centralized procurement to really make judge that we were doing everything we could to return costs retired of nan strategy and beryllium arsenic businesslike arsenic imaginable connected each nan things that we buy.

So erstwhile I look backmost complete nan arc of wherever we've been, I deliberation you're now starting to spot nan effect of a batch of nan decisions that we made complete nan past 2 aliases 3 years to strategical initiatives and nan -- that we chose and really they tin present arsenic you look astatine our results. Brian, thing you would add?

Brian Witherow

No. I deliberation conscionable to emphasize, Richard, what you said, which is getting there, Chris, is hinges connected some our expertise to proceed to thrust apical statement gross arsenic good arsenic negociate costs. I deliberation arsenic Richard said successful nan call, coming into this year, nan attraction was connected driving gross and returning to humanities request levels arsenic quickly arsenic possible, deliberation we saw that nan use of that successful nan 4th fourth erstwhile we did get backmost to humanities levels.

And truthful arsenic we deliberation astir our business, we are surely a 2nd half business. As we -- arsenic Richard noted, 2 thirds of nan attendance and revenues travel successful nan 2nd half, but 80% of nan EBITDA. That speaks to nan magnitude of leverage that exists successful Q3 and Q4. And truthful I deliberation arsenic we activity towards getting backmost to those 2019 levels, it will beryllium captious not only to negociate costs better, but to proceed to thrust apical statement revenue.

Chris Woronka

Very helpful. And a speedy follow-up, if I could. On superior allocation, you guys had a beautiful important buyback successful Q4. In this year, nary matter wherever we deliberation EBITDA whitethorn fall, you're still going to make a batch of free rate flow, you've sewage leverage backmost to wherever you want it. How do you prioritize getting that distribution backmost person to humanities levels versus perchance much buyback astatine this level?

Brian Witherow

Yes, Chris, it's Brian. As we said erstwhile we implemented nan buyback program, nan Board felt that it was an fantabulous instrumentality to adhd to nan instrumentality loop successful position of different intends of returning superior to our investors that was a small spot much discretionary and elastic than nan distribution. That said, nan distribution remains astatine nan forefront of our superior allocation strategies and priorities.

As I said successful nan call, we'll hold until nan 3rd 4th and get a amended statement of show into really nan 2023 play is developing. We surely expect to person an outstanding 2023, arsenic Richard noted, and that will springiness america a batch of options arsenic it relates to superior allocation, some reinvesting successful nan business arsenic good arsenic returning superior to nan investors done distributions and perchance early buybacks.

The size of nan distribution summation will dangle not only connected performance, but besides connected what are we getting rewarded for from nan market. Is nan marketplace seeing worth successful nan distribution is that reflected successful nan banal price. And truthful I deliberation there's a batch of factors that will spell into that decision, but we're successful a really bully spot based connected each nan efforts that we've undertaken complete nan past 12 to 18 months coming retired of nan pandemic.

Operator

Your adjacent mobility comes from nan statement of Steve Wieczynski from Stifel.

Steve Wieczynski

So I'm going to inquire a question. I don't cognize if you're going springiness maine an answer, but I'm going to effort it anyway. So look, we -- I afloat understand you guys don't springiness yearly guidance. But if we look astatine nan $550 cardinal you did successful EBITDA this year, and let's opportunity we're sitting present this clip adjacent year, would you beryllium disappointed if you didn't transcend what you put up this year?

And if you didn't transcend that level, what are immoderate of nan factors that we request to beryllium watching? Obviously, I understand nan imaginable macro headwinds, but thing other retired location that we would request to watch to not person you transcend that level?

Richard Zimmerman

Steve, it's Richard. I admit nan question. While I won't reply hypothetical and we don't springiness guidance, what I would show you is I'll return you backmost to really we look astatine our business, and we've said this everlastingly a day. We're an easy business to model.

There's 3 things that we look astatine for starring indicators. Season passes, we've laid retired wherever those are. We consciousness bully astir wherever they are, and we deliberation we apt are now acold capable past nan pandemic that we're going to astir apt revert backmost to what I telephone a much normal humanities purchasing pattern, which intends springs are our biggest income period.

So we're stepping into nan outpouring income period, we person tons of excitement astir our caller superior pinch a overmuch higher play walk guidelines to look at. So I'll beryllium watching retention really closely. How galore renewals are location wrong our play walk program. That's a number that's very meaningful to us.

The different mates of starring indicators, edifice bookings, still look very affirmative astatine this point. I'm encouraged by that. But nan large thing, and we touched connected it, nan spread betwixt our tenants now and 2019, really remainder successful nan group channel. I person to show you, complete nan past respective weeks, I've had really encouraging meetings pinch nan activity of our income teams. And we're seeing really beardown consequence to everything that we're doing. We're retired successful nan marketplace sourcing leads, we've sewage everybody retired location talking to our aged business, and there's going to beryllium a existent attraction connected caller business.

So we'll person much to opportunity arsenic we get done this year, but I deliberation our twelvemonth this twelvemonth will ever travel backmost to driving request pinch caller marketable product, we put to do that, enhancing nan impermanent experience, making judge we're capturing that request done nan play walk successful nan group and nan edifice channel. And past erstwhile we get them successful nan park, person nan expertise to thrust that in-park per capita spending erstwhile they get wrong nan beforehand gate.

And I'm really pleased and proud of what our nutrient and beverage cognition has done. But we support driving that pinch higher mean transaction values, and we support doing much transactions per hour. So we're building capacity to thrust that sustainable in-park per capita spending. So those are nan things that I'm going to beryllium watching arsenic to look astatine 2023. And correct now, those are each encouraging.

Steve Wieczynski

Okay. That's awesome color. And past nan 2nd question, I don't cognize if I misunderstood, Brian, but Brian, I deliberation you sounded for illustration you sewage a small spot fierce pinch trading successful nan 4th quarter. And conscionable wondering, a, if I heard you correctly, and past b, possibly really we should beryllium reasoning astir your trading walk heading into this year, fixed nan imaginable for nan further 70 to 80 operating days that you guys mightiness beryllium layering in?

Brian Witherow

Yes, Steve. So arsenic it relates to marketing, I deliberation what we saw play retired successful 2022 was really still conscionable nan -- I'll usage nan aforesaid word betterment aliases return to possibly benignant of much humanities levels. I don't cognize that we'll get each nan measurement backmost to wherever we were prepandemic because nan methods for marketing, nan devices that nan teams are utilizing coming are a batch much efficient, but walk successful '20 and '21 was very disruptive, arsenic you whitethorn recall, because of nan pandemic, we pulled trading down importantly arsenic operations were impacted. '22 getting backmost to much of a normal operating calendar, much of a afloat operating almanac for nan astir portion crossed nan strategy required america to commencement pushing much dollars into -- backmost into nan strategy astir marketing.

And I deliberation it's important to statement arsenic we get into '23, arsenic Richard noted, a batch of compelling marketable superior going successful crossed nan system. The past point that we would want to do is undermine its afloat imaginable by not spending capable connected marketing. That doesn't mean, arsenic I said, that we're going to get backmost to trading levels aliases walk levels that are successful statement pinch 2019. I deliberation there's still immoderate much efficiencies there. But surely spending much to thrust that apical statement gross is simply a captious portion of nan impermanent acquisition formula.

Operator

Your adjacent mobility comes from nan statement of James Hardiman from Citi.

James Hardiman

So wanted to link nan dots aliases not? Maybe I shouldn't beryllium connecting nan dots betwixt immoderate of nan trends that we saw successful nan 4th fourth and really we should deliberation astir nan setup for 2023. Maybe let's conscionable commencement pinch attendance. Obviously, nan past we spoke, October was a gangbusters month, right, from a revenues overall, but attendance successful particular. It doesn't look for illustration November and December were astir arsenic good. Maybe locomotion america done benignant of nan dichotomy wrong nan 4th based connected nan implied results there? And what, if anything, we should rotation guardant into 2023. .

Brian Witherow

Yes, James, this is Brian. I deliberation you summarized it well, right? I mean we already disclosed arsenic portion of our 3rd 4th net call, nan spot successful October, nan Haunt aliases nan Halloween events, surely are 1 of, if not, our astir celebrated arena crossed nan system, and it's fundamentally offered astatine nan lion's stock of our properties, only 2 aliases 3 of nan properties successful nan system, 2 Schlitterbahn parks and Michigan task don't connection those Halloween events. So it's sewage standard and it's sewage immense demand. And arsenic Richard noted, we priced into it, and that did not slow down that request astatine all. So that was very encouraging.

You rotation into November and December, astir of nan -- much than half of nan properties spell dark. We only person events, WinterFest events astatine six of our properties. And truthful your opportunity isn't astir arsenic high. And you besides commencement to get into nan clip of nan twelvemonth that upwind becomes moreover much of a factor, right? So if I was characterizing nan quarter, outstanding 5 weeks of October, slow and upwind impacted November.

Really bully commencement to December, peculiarly connected nan West Coast and nan East Coast. But past erstwhile we sewage to nan week of Christmas, utmost acold temperatures, took immoderate upwind retired of our waste successful nan 3rd week successful nan East, successful Midwest, and we mislaid nan 4th week astatine Kos pinch rainy season. So it was great, benignant of bumpy mediate and a mixed extremity to nan quarter.

James Hardiman

Got it. And past aforesaid -- basically, nan aforesaid mobility connected per caps. I mean looking astatine nan numbers, it seems for illustration your per headdress has accelerated successful a beautiful meaningful way. By my math, up 36% now versus 2019 aft being down year-over-year successful 3Q, it was up again year-over-year successful nan 4th quarter. I cognize nan 4th fourth is simply a mini quarter, and nan operation of properties plays a large role. But I don't know, is that a sustainable benignant of maturation complaint successful per headdress arsenic we deliberation astir '23?

Brian Witherow

Yes. I deliberation arsenic it relates to per caps, James, arsenic Richard said, we consciousness very bully astir nan interactions we're having pinch our guests. Their willingness to salary up for a value experience, value product, and it's 1 of nan reasons why we proceed to put successful nan impermanent acquisition and possibly put a small spot of unit connected margins spell backmost to 1 of nan earlier questions because we're investing down that experience, and that's a small spot much costly venture.

When you look astatine nan quarter, I deliberation you deed connected a mates of bully points. One, it's a smaller quarter. So sometimes percentages tin get a small a small distorted because of that. And you besides person a number of nan smaller parts, nan little per headdress parks, not really successful operation.

That said, I deliberation what we saw successful nan 4th fourth was accordant pinch what we've seen passim 2022. When nan guests are here, they're spending. And we proceed to spot beardown walk successful areas that we would expect to spot beardown spend. Food and beverage, astir notably improving successful merch.

And arsenic we noted connected nan call, we priced into nan 4th quarter. October has sewage specified precocious demand. We were -- we are not awkward astir pricing into that demand, peculiarly connected nan highest request days for illustration Saturdays and Friday nights for nan Halloween events. And truthful that's a large portion of nan equation. I deliberation arsenic we rotation into '23, we proceed to consciousness assured that we tin support pushing per caps.

As we've been saying, it's not each astir pricing. We surely will return value successful an inflationary situation wherever we person to, but Richard noted, it's astir much throughput and it's astir higher mean transaction value. So providing guests pinch higher-quality merchandise that they're consenting to salary up for and providing it successful mode that's businesslike and doesn't create agelong waits and agelong lines to get nan merchandise is key.

James Hardiman

That's great. And past lastly, Same question. On nan separator front, this is possibly nan champion separator 4th I've seen you guys person successful rather immoderate time, astir notably OpEx, right? You sewage a batch of leverage retired of OpEx. On an operating time basis, OpEx was down materially aft being up successful nan 3rd quarter. I conjecture thoughts connected -- is that -- tin you propulsion that instrumentality again successful 2023? Maybe if I deliberation astir nan 70 to 80-day summation successful your almanac is nan extremity to turn operating costs little than that benignant of maturation successful operating days? How should we deliberation astir it?

Richard Zimmerman

I'll return that question, James. I'll spell backmost to my prepared remarks. Our plans are to effort and support that disbursal summation wrong our targeted gross maturation rate. We've talked astatine magnitude astir really we tin thrust nan revenue. We person besides talked about, and I'll opportunity from a qualitative perspective, James, I thought this was nan first quarter. It takes a while to build things and past rotation them out.

We really put devices successful nan hands of nan operators that they're now starting to use. So we're getting acold much fluent workforce management. We proceed to attraction connected really we tin champion utilize nan labor. That takes clip to train and domino done nan system. But our situation is to proceed to springiness each personnel of our guidance team, nan devices they need, truthful they tin thief america thrust this business forward.

At immoderate levels, that's astir focusing connected gross and connected a batch of levels, that's astir focusing connected really businesslike we tin beryllium connected nan costs side. The much devices we springiness them, nan amended we're going to perform.

Operator

Your adjacent mobility comes from nan statement of Ben Chaiken from Credit Suisse.

Ben Chaiken

Your flow-through was peculiarly -- different 1 connected margins, we'll conscionable trim to nan chase. It was a small spot towards nan extremity of nan past benignant of mobility and answer. It sounds for illustration there's a small spot of a renewed attraction connected costs that benignant of manifested itself successful nan quarter. You mentioned respective cost-saving initiatives. It's each awesome and impressive.

I'm conscionable trying to understand for illustration nan stark opposition betwixt results year-to-date and past 4th and past this quarter, and moreover 4Q '22 versus 4Q '19. I'm conscionable wondering to trying to understand what changed. Is it worldly that was already successful process? It conscionable took a mates of months aliases a mates of quarters to show up. That's benignant of what it sounded for illustration successful nan erstwhile answer, but I'd for illustration to conscionable benignant of dive successful location more. That didn't make sense. I tin rephrase it.

Brian Witherow

Yes. No, Ben. Not arsenic fine. It's Brian. Yes, I deliberation to your past constituent location and nan constituent Richard made to James' last comment, I deliberation immoderate of this is nan result of immoderate initiatives taking longer to return root, peculiarly immoderate of nan things astir labor. It's -- labour is, arsenic we talked astir before, it's our largest azygous costs point adjacent to 60% of our costs structure, full labour pinch seasonal labour representing possibly adjacent to half of that. And truthful it's -- those initiatives sometimes don't -- you don't get nan afloat use correct away. So I deliberation there's a small spot of that.

But I don't -- I want to reemphasize again, erstwhile it comes to optimizing costs, arsenic Richard alluded to, there's 2 sides to it, optimizing nan costs building successful immoderate cases. And we saw this a small spot successful nan first and 2nd quarter. I mean spending a small spot much to make judge that we're prepared to present nan champion impermanent acquisition imaginable because suboptimizing that area to not person nan correct staffing, nan correct systems, et cetera, would put per caps successful request astatine risk.

On nan different hand, we do cognize we person to optimize nan costs building astir labour and different adaptable costs to make judge that those costs are champion aligned pinch request levels. And that's wherever those devices that Richard was alluding to, travel into play, our workforce guidance tools, nan package and nan staffing devices that our teams successful nan section usage to alteration successful real-time staffing levels arsenic request levels up and down because of things for illustration weather, et cetera. We request to proceed to actively activity successful those areas, and that's wherever nan BI squad comes into play.

And nan different adaptable costs that's wherever nan procurement squad comes into play. So I deliberation erstwhile I look backmost astatine '22, I deliberation nan point that plays retired for maine is that nan 2nd half institution that we are, nan existent opportunity for much separator description is ever nan champion successful nan 3rd and 4th quarter.

I deliberation that's moreover a small much exaggerated correct now because we still are ray successful Q2 because of immoderate of nan disruption aliases nan slower betterment of nan group channel. Group is simply a bigger portion of nan business successful Q2 than it is successful Q3 and Q4. And -- truthful not having group put a small spot much separator unit connected that first half of nan twelvemonth than it did successful nan 2nd half of nan year.

Ben Chaiken

That's really helpful. And conscionable to beryllium clear, immoderate of nan workforce guidance processes, are those -- were those not successful spot earlier successful nan year, much of...

Brian Witherow

Those devices person been -- yes. No, those tools, we began rolling those devices out, Ben, during nan pandemic successful '21. I deliberation immoderate of it is conscionable nan truth that arsenic we spell done nan implementation of those things, there's champion practices to get established, right?

Our business each period and each 4th is simply a small different than nan previous. And truthful you almost person to spell done a afloat cycle. So learnings of '21 and nan learnings of '22 amended going forward. And we spot what parts do what things past. And past we push those learnings, those champion practices down.

So erstwhile we look backmost astatine '22, we person a mates of parks successful our strategy that did things amended astir staffing. We're much businesslike astir staffing, and we're taking those learnings and we're pushing those things down. So I deliberation you saw immoderate of that playing retired successful '22 that you conscionable -- you get better, nan longer you're moving pinch these devices and nan longer nan teams person been together.

Ben Chaiken

My knowing is that a batch of nan group bookings, and please correct maine if I'm disconnected connected this, hap successful nan first mates of months of nan year. Is location immoderate measurement you tin benignant of directionally show america really you're pacing if that's an due benignant of for illustration vernacular versus 2019?

Richard Zimmerman

Yes, Ben, it's Richard. Again, I've met consistently pinch our income team. I'm very encouraged astatine nan pacing that I'm seeing. What is different successful nan pandemic accelerated, group -- our firm bookings are coming successful later. Typically, we'll get done nan first 4th connected nan younker and schoolhouse group, those hap successful a batch successful nan 2nd quarter. Those get booked done nan first 4th into nan 2nd quarter.

But firm bookings are very robust correct now. And I would opportunity that nan booking rhythm is much compressed than it was if you spell backmost a decade ago, wherever it was a overmuch longer booking cycle, group booked earlier. We're booking buyouts, we're bulking large groups, mini groups, but I do deliberation nan booking model has tightened considerably station pandemic.

Ben Chaiken

Moved earlier aliases later? Sorry to [indiscernible] nan constituent .

Richard Zimmerman

When nan arena is going to happen. So we had an arena that Knott's Berry Farm successful precocious January, early February that was only booked successful December. It was a sizable event. So companies and larger groups are coming to america overmuch person to nan day that they want to really come. We do person visibility connected immoderate agelong lead, but I would opportunity we're returning much to a pre-pandemic pacing pinch a tighter booking window, and that was nan inclination that we saw pre-pandemic year-by-year.

Operator

Your adjacent mobility comes from nan statement of Mike Schwartz from Truist Securities.

Mike Swartz

Just possibly wanted to touch quickly connected nan further -- I deliberation nan further operating days, you said 70 to 80 days for nan afloat year. I guess, one, really do we deliberation astir nan cadence of those days much heavier weight into nan first half of nan year, nan 2nd half of nan year? And possibly conscionable really accretive aliases additive are those days that you are putting successful nan calendar?

Brian Witherow

Yes, Mike, it's Brian. So I would show you that nan mostly of those days astir apt arsenic overmuch arsenic possibly 80%, 90% of those days are going to beryllium successful nan first half of nan year, Q1 and Q2. As we announced precocious successful nan 4th fourth past -- this past year, we were adding days successful markets for illustration Richmond, pinch our Kings Dominion Park, successful Charlotte pinch our Park successful January and February. Those days are already going on.

So they're successful that number that I -- that we mentioned connected nan call. So it's much Q1, Q2. Q3 should beryllium astir flat. There'll beryllium a small spot of almanac displacement successful there, but beautiful comparable operating days. And past Q4 whitethorn person a fewer incremental days, but astir apt adjacent to 90% of those days successful nan first half of nan year.

In position of accretive, nan days that we're looking to adhd are expected to beryllium additive to rate flow. There's ever tests that we run. I would qualify what we're doing correct now successful Richmond and Charlotte, a small spot of that. We'll springiness it a mates of years and spot if we for illustration nan results that travel retired of it. But we're ever looking to adhd days, right?

As we look to push apical statement gross and attendance higher overmuch for illustration we did immoderate years agone erstwhile we started adding days successful precocious September and October pinch Halloween events and past November and December pinch WinterFest events, astatine immoderate point, it's astir uncovering much opportunities for guests to sojourn and uncovering much opportunities for america to waste play passes and nan all-season products that spell on pinch those things.

So we afloat expect nan days we're adding will beryllium accretive. Some of those days successful Q2, arsenic Richard conscionable noted, are going to beryllium tied backmost to our anticipation of returning younker and schoolhouse bookings. That broadside of nan group business is dense successful nan spring, and we took days retired of nan strategy successful 2022 because we knew that business wasn't there. Some of this is astir putting those days backmost in.

Mike Swartz

Okay. That's helpful. And past conscionable a 2nd question. I think, Richard, you referenced to admissions product, nan prestige pass, I deliberation is what you called it. Maybe conscionable springiness america a wide overview of what possibly immoderate of nan benefits of that past entail? And really should we deliberation astir nan pricing of that? I cognize it's successful nan trial phase, but conscionable mostly speaking, is it 20% premium to your highest walk correct now? Or really should we deliberation astir that?

Richard Zimmerman

From a worth perspective, we've done a batch of research. We've layered successful entree to VIP lounges, typical benefits, immoderate constricted merchandise of FastLane, things for illustration that connected a regular basis. So we've layered successful nan things that our investigation has told america nan consumers really value. We're pricing that if our -- and again, it varies portion by portion because nan request levels are different.

But what we're trying to trial is if you've sewage a 200-ish value point, debased 200s connected nan platinum, tin we -- our caller prestige walk is priced location successful nan 300s, nan debased 300s. So really -- it really is simply a premium merchandise and a premium group of experiences, and we're testing different concepts, arsenic Brian conscionable said, some successful position of what nan benefits are, but what our guests value.

So I deliberation you'll proceed to spot america trial different things arsenic we spell through. But nan early consequence has been very encouraging. This is really -- arsenic we look to conception our audience, this is really nan benefit-oriented customer. And what we found, and you've seen that complete nan past respective years, arsenic we said, I deliberation it's nan early innings. As we proceed to find ways to creation and create different benefits, there's a fresh marketplace there.

Operator

Your adjacent mobility comes from nan statement of Eric Wold from B. Riley Securities.

Eric Wold

The mobility person been asked. Just benignant of 2 hopefully speedy ones. I guess, one, conscionable backmost connected nan anterior mobility astir operating days. I understand that immoderate of that is adding backmost days that we're going to region from nan strategy past year. Are location immoderate parks that will really person time this twelvemonth removed? Or will each parkland either beryllium level aliases up successful position of operating days from past year?

Brian Witherow

Eric, it's Brian. I would say, arsenic I look astatine it, for nan astir part, it will beryllium level to up successful position of operating days, but fto maine caveat that pinch that's planned. And to nan grade that upwind plays into it, we could spot immoderate parks spell back. Great example, right? When it rains successful California, is unfastened each time to prevention costs, we'll unopen nan parkland down. And truthful we whitethorn extremity up wherever a parkland mightiness person respective less days successful '23 than '22 but for nan astir part, that would beryllium an unplanned alteration and much responsive to macro events.

Eric Wold

Got it. And past conscionable past mobility connected margins. I cognize you talked astir really watching pricing and taking pricing wherever you request to wherever you're hitting inflationary pressures. Are location immoderate cases wherever you really consenting to eat separator possibly successful nan short tally aliases longer to possibly support pricing from going up excessively accelerated successful nan beforehand of consumers? Or will you ever look to value supra nan inflationary pressure?

Brian Witherow

Good question, Eric. I deliberation I'll reply it this way, spot if helps. I deliberation nan script that you conscionable laid retired is precisely 1 of nan challenges that we've had erstwhile we look astatine nan portfolio nan parks, right? From nan standpoint of being capable to value into this level of ostentation is very difficult.

Our bigger parks are capable to sorb that because they've sewage specified precocious request levels aliases attendance levels, right? So erstwhile you're entertaining 3 cardinal group aliases 4 cardinal group aliases moreover nan lawsuit of not 60-plus cardinal people. You don't person to return arsenic overmuch value because you sewage nan leverage of that attendance base. It's been hard.

We person eaten a batch of nan inflation, peculiarly astatine nan mid-tier parks because we couldn't return nan benignant of value increases we would request to afloat offset it without eroding our attendance base. So I deliberation we're already doing that. That's why I deliberation we've said connected erstwhile calls that these mid-tier parks, it mightiness return 2 years aliases 3 years of value expanding successful bid to push done nan benignant of ostentation that we've seen.

So again, for us, we don't want to underscore nan value of margin. It's a captious metric for us. Hopefully, that's travel crossed connected this telephone and nan efforts that we've been undertaking to amended it are very real. With that said, nan script you conscionable outlined, we person to beryllium observant to not do everything conscionable astir separator astatine nan detriment of yet that attendance number and apical statement revenue.

Operator

[Operator Instructions] Your adjacent mobility comes from nan statement of Paul Golding from Macquarie Capital.

Paul Golding

Congrats connected nan 4th and nan year. I wanted to inquire astir conscionable successful parsing wherever we tin spell pinch per headdress maturation here. I wanted to inquire astir other charge. I noticed successful nan property release, you noted little levels passim nan twelvemonth of other complaint impacting per caps are offsetting to immoderate extent. But we're now talking astir immoderate higher-tier products.

Is it a matter of bundling, should we proceed to expect that immoderate other complaint will really bespeak and thief per caps going forward? And really should we deliberation astir nan connection utilized for nan afloat twelvemonth ground versus what you're testing correct now? And past I person a follow-up.

Brian Witherow

Yes, certain, Paul, it's Brian. So nan remark astir nan shortfall successful other complaint is really focused astir apt connected 1 halfway superior -- halfway premium acquisition that is Fastlane. Fastlane has been negatively impacted this past twelvemonth by a mates of factors. The astir notable is conscionable nan truth that attendance is still down, right? We're down astir 4%. And Fast Lane, arsenic you tin appreciate, is simply a merchandise that's sold astir connected nan busiest days, right?

So erstwhile we've sewage 35,000 group successful nan park, there's a higher request for Fast lane because nan lines are longer and group want to debar those lines. With group being disrupted successful immoderate situations, much truthful astatine definite parks, those lines successful those 35,000 days mightiness person only been 29,000. And truthful nan request was a small spot impacted there. .

We were capable to still value into Fast Lane, which was encouraging. So we would afloat expect that arsenic we get backmost to humanities attendance levels, those that request for Fastlane will proceed to summation and return to its humanities levels arsenic well. The different portion that impacted it a small bit, and this is much portion specific.

We had a mates of parks successful nan strategy that had cardinal Fast lane driver type tractions retired of service. So it takes immoderate capacity out, and it besides takes immoderate request out. Maybe astir notably, was it to your point, not having full drags for an cognition successful '22. That's a batch of capacity, and it's a batch of demand. It's 1 of our highest request rides successful that park.

So a mates of things moving against america there. But broadly speaking, I don't deliberation that, that's reflective of nan fact, arsenic Richard noted, guests want premium experiences. And truthful we proceed to find different ways to present those, whether they are beforehand of nan statement experience, whether they're a VIP tour, whether they're cabanas successful nan h2o parks aliases VIP lounges successful nan parks. Those proceed to beryllium successful precocious request and immoderate of nan fastest-growing gross sources for in-park spending.

Paul Golding

Got it. So each other adjacent from a merchandise offering perspective, possibly qualitatively, truthful we're not guiding. You would opportunity that you would expect Fast statement an other complaint of nan class to amended successful '23 versus '22 arsenic a usability of conscionable attendance and congestion?

Brian Witherow

I would opportunity that's a adjacent statement, yes.

Paul Golding

Great. And past arsenic a follow-up connected nan operating day, 70 to 80 much operating days successful '23 expected. As we normalize present for group and days that were taken out, I'm wondering, conscionable connected a possibly longer-term basis, really we should deliberation astir operating days now that you've made nan pivot to much of a afloat twelvemonth almanac and you've added nan group days back. Are location immoderate much days that you deliberation that nan almanac whitethorn person that you tin compression retired beyond '23? How are -- really is benignant of nan capacity versus upwind and timing laid retired comparative to benignant of a afloat employed plus base?

Brian Witherow

Yes. I would say, Paul, we will proceed to measure opportunities to adhd operating days. I don't want to springiness nan belief that erstwhile -- pinch these days successful nan strategy that we're benignant of done. As I mentioned before, we only have, arsenic an example, six of our parks pinch WinterFest events, there's still opportunities to perchance find different parts successful nan strategy to present that event, too. So we will proceed to measure those opportunities and wherever they make financial economical sense, we'll see adding those days aliases piloting and testing, expanding nan calendar.

Operator

Your adjacent mobility comes from nan statement of Barton Crockett from Rosenblatt Securities.

Barton Crockett

I wanted to inquire you astir existent property that's travel to nan fore successful nan manufacture pinch fires and onshore and buildings. You guys person done, obviously, a small spot of a type of benignant of monetizing existent property pinch your Northern California park.

To what grade do you deliberation location are much opportunities to look astatine things pinch your land, evidently not shutting down parks necessarily, but successful different ways. How overmuch opportunity do you deliberation aliases not really -- do you deliberation you're otherwise positioned aliases likewise positioned than immoderate of nan different location taxable parkland peers?

Richard Zimmerman

Barton, it's Richard. Thanks for nan question. When I deliberation back, nan transaction successful Great America really was a unsocial group of circumstances. That's what we said astatine nan time, not suggestive of a displacement successful strategy from us. We really deliberation there's awesome synergistic worth successful maintaining ownership of each nan properties we operate. We telephone controllership economics.

We wed nan superior finance we put successful pinch our expertise to thrust returns. Great America was specified a unsocial lawsuit of specified a precocious worth fixed it's successful nan mediate Silicon Valley of nan existent property versus what we -- versus nan rate travel we thought we could make that complete nan agelong word and nan costs to do that.

So we'll look astatine nan -- if location are things successful our portfolio, location whitethorn beryllium mini pieces. But by and large, arsenic I said successful my remarks, we judge successful investing successful our parks and driving and marrying that finance and driving demand. And we've sewage our 5 large parks that are astir -- that thrust 80% of our EBITDA.

Obviously, we want to seizure arsenic overmuch of that arsenic possible. We don't want to partner successful that. And past arsenic we rotate done nan mid-tier parks we've talked about, we deliberation we tin proceed to thrust their semipermanent success. So nary important alteration successful our outlook connected existent estate.

Barton Crockett

Okay. And past I was funny because earlier nan pandemic, you guys had a 2024 EBITDA ambition, I deliberation astir $60 cardinal that was withdrawn. Where do things guidelines now pinch that? Any thoughts astir that number, that level, that type of ambition astatine this point?

Richard Zimmerman

At this point, we don't want to -- we're not readying to reinstate guidance astatine this time. We'll proceed to reappraisal nan appropriateness of providing immoderate guidance successful nan future. But fixed nan existent uncertainties and nan concerns astir nan macroeconomic environment, we're not judge that -- I don't judge nan marketplace is going to springiness america in installments correct now.

So for nan moment, we're going to proceed to relay everything we're seeing, springiness an update connected our indicators astir nan wellness of nan business, but -- which is encouraging astatine this point, arsenic we said passim this call, but nary plans to reinstate guidance astatine this time.

Barton Crockett

Okay. And past conscionable 1 last thing. Just arsenic I look astatine your 4th fourth pinch nan tenants benignant of level year-over-year per caps a root of strength. I deliberation a batch of group are conscionable wondering if nan consumers whitethorn beryllium getting fatigued.

A small spot value delicate astir Theme Parks pinch immoderate of nan talk retired of Disney and concerned that ostentation whitethorn beryllium causing group to unopen down immoderate of nan things aliases possibly nan large statement aft nan pandemic is benignant of fading successful group going backmost to normal lives and possibly not doing nan nosy things for illustration they were. Do you conscionable person immoderate consciousness of thing for illustration that? How do you consciousness astir nan attendance opportunity going into 2023?

Richard Zimmerman

So Barton, awesome question. And it was specified a attraction connected nan wellness of nan user passim each of 2022. And what we kept saying is while we understand -- we run successful different markets successful each region economically is different. We saw important strength.

We proceed to spot nan sustainability of nan spending successful our parks arsenic a cardinal plank of our programme and our strategy to thrust value, yet thrust free rate flow. We haven't seen it. We proceed to see, arsenic I mentioned successful my earlier remarks, our starring indicators are encouraging.

So arsenic we look astatine it, and I'll spell backmost to -- I don't want you to correction my reply to guidance, we're very optimistic and person a batch of assurance successful our business exemplary and our expertise to proceed to thrust revenues, EBITDA and free rate travel going forward.

So we're not seeing a -- we're not seeing nan wellness of nan consumer, nan user not consenting to beryllium spending, if anything, arsenic you way resale income and different things. We proceed to spot that nan user is spending. So we haven't seen immoderate alteration successful behaviour broadly passim our park, moreover though we're successful constricted operations. So we're watching for illustration everybody else, but it seems for illustration nan user is patient and is pending.

Operator

And location are nary further questions astatine this time. Mr. Richard Zimmerman, I move nan telephone backmost complete to you for immoderate last closing remarks.

Richard Zimmerman

Thanks, Rob, and convey you each for your liking successful Cedar Fair. For nan expert community, successful March, we will beryllium participating successful 3 banking conferences hosted by JP Morgan astatine Loews, Miami City astatine Turnberry, Miami and Macquarie successful New York City. If you're attending, we look guardant to seeing you there. Otherwise, we dream you will person a chance to sojourn 1 of our parks this season, and we will support you apprised of our progress. Michael?

Michael Russell

Thanks again, everybody. Please consciousness free to interaction our Investor Relations Department astatine (419) 627 2233. Our adjacent telephone will beryllium held successful May aft nan merchandise of our first 4th '23 results. Rob, that concludes today's call. .

Operator

This concludes today's convention call. Thank you for your participation. You whitethorn now disconnect.

Editor: Naga



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