Pursuit Attractions (PRSU) Q3 2026 Earnings Call Transcript

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DATE

Wednesday, Nov. 4, 2026

CALL PARTICIPANTS

• President and Chief Executive Officer - David Barry
• Chief Financial Officer - Michael Heitz
• Investor Relations - Carrie Long

TAKEAWAYS

• Revenue -- $251.5 million, up 4.4% year over year driven by geographic growth and the Eagle Wing Tours acquisition, partially offset by the Flyover divestiture.
• Adjusted EBITDA -- $125.5 million, up 7% year over year reflecting strong flow-through on higher revenue and 1 percentage point of margin expansion.
• Adjusted Net Income -- $85 million, compared to $75.3 million in the prior year due to higher adjusted EBITDA and lower depreciation.
• Adjusted EPS -- $3.03, increasing from $2.65 in the third quarter of 2025.
• Same-Store Attraction Ticket Revenue -- $93 million, up 6% year over year driven by 9% growth in effective ticket prices despite weather-related visitation headwinds.
• Same-Store Room Revenue -- $60 million, representing a 7% year-over-year increase supported by strong demand for iconic lodging locations.
• Same-Store Effective Ticket Price -- Up 9% year over year, reflecting successful yield optimization and guest experience enhancements.
• Same-Store ADR -- Up 7% year over year, driven by higher-end demand and recent room renovations.
• Same-Store Occupancy -- Improved 2 percentage points year over year, contributing to a 9% increase in same-store RevPAR.
• Flyover Divestiture -- Approximately $75 million in proceeds from the sale completed on July 31, 2026, representing a transaction multiple of approximately 14.5-fold.
• Eagle Wing Tours Acquisition -- Approximately $16 million investment to expand into the Victoria, British Columbia market, completed on July 14, 2026.
• 2026 Adjusted EBITDA Guidance -- $130 million to $136 million, narrowed from the previous range with a midpoint representing 14% year-over-year growth.
• Full-Year Revenue Guidance -- $485 million at the midpoint, compared to $452.4 million in total revenue during 2025.
• Growth Capital Expenditures -- $70 million to $80 million planned for 2026 to advance strategic multiyear organic growth projects.
• Maintenance Capital Expenditures -- $31 million to $36 million, representing approximately 7% of total revenue.
• Liquidity -- $293 million as of Sept. 30, 2026, consisting of $64.3 million in cash and $228.7 million in revolving credit facility capacity.
• Net Leverage -- 0.6x as of Sept. 30, 2026, remaining significantly below the company's target range of 2.0x to 3.5x.
• Share Repurchases -- 1.2 million shares repurchased to date at an average price of $35.72 per share.
• Organic Project IRR -- 15% minimum hurdle rate for more than $300 million in planned organic growth investments through 2030.
• Tabacon Performance -- 20% adjusted EBITDA growth during its first year under company ownership.
• Forest Park Hotel ADR -- 22% rate lift following the completion of the first phase of room renovations at the property.
• Flyover EBITDA Impact -- Approximately $7 million contribution to 2026 adjusted EBITDA prior to the sale.

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RISKS

• Heitz stated, "this year, our third quarter was impacted by a higher portion of poor weather days, primarily from smoke in Canada, which hampered site seeing visitation," identifying environmental factors as a headwind for attraction volume.
• Heitz stated, "there are a few discrete projects that will have some temporary impacts next year as we work through construction," noting that the Jasper SkyTram will be taken offline during its replacement.

SUMMARY

Pursuit Attractions and Hospitality, Inc. (NYSE:PRSU) reported record third quarter financial results, completing its transition to a pure-play attractions and hospitality entity following the $75 million divestiture of its noncore Flyover business. Management reported that same-store revenue grew 6% when adjusting for acquisitions and divestitures, supported by 9% growth in both attraction effective ticket prices and lodging RevPAR. The company stated it is advancing a multiyear organic growth strategy with approximately $200 million in total commitments for projects including hotel transformations and new attraction infrastructure. Management reaffirmed its full-year 2026 adjusted EBITDA midpoint of $133 million while narrowing the guidance range to reflect strong performance during the peak summer season and positive early booking trends for 2027.

• CEO Barry stated, "the acquisition of Eagle Wing Tours, a leading site seeing attraction in Victoria, British Columbia, expanded our portfolio and is already delivering strong results."
• The company submitted a proposal for the Glacier View Tram near Glacier National Park, which Barry noted would feature two 100-passenger cabins traveling more than 3,000 vertical feet.
• Management reported the expected launch of the new pursuit.com digital platform later this year, designed as a scalable digital growth engine for itineraries and direct bookings.
• The company ordered a new sightseeing lift for the Jasper SkyTram, with construction expected to begin in 2027 and target completion scheduled for 2029.
• Heitz reported that early booking pace for 2027 is tracking ahead of the prior year, with strong demand from tour and travel partners seeking increased allocations.

INDUSTRY GLOSSARY

• ADR: Average Daily Rate, a measure of the average rental income per paid occupied room per day.
• EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of core operating profitability.
• ETP: Effective Ticket Price, the average revenue generated per ticket sold at an attraction.
• IRR: Internal Rate of Return, a metric used to estimate the profitability of potential capital investments.
• NEPA: The National Environmental Protection Act, which governs the environmental review process for projects on federal lands in the United States.
• RevPAR: Revenue Per Available Room, a hospitality metric calculated by multiplying average daily rate by occupancy.
• Vision 2030: The company's long-term strategic plan to deploy more than $300 million into high-return organic growth investments.
• Sky Lagoon: A geothermal lagoon attraction in Iceland operated by the company.
• Tabacon: A luxury thermal resort and spa in Costa Rica owned by the company.

Full Conference Call Transcript

Operator: Good afternoon. My name is Jesse, and I will be your conference operator today. At this time, I would like to welcome everyone to Pursuit's 2026 Third Quarter Earnings Conference Call. [Operator Instructions] Thank you. Carrie Long, you may begin the conference.

Carrie Long: Good afternoon, and thank you for joining us for our 2026 third quarter earnings conference call. During the call, led by David Barry, our President and CEO; and Bo Heitz, our Chief Financial Officer, we will reference our earnings presentation, which is available on the Investors section of our website. We encourage investors to monitor the Investors section of our website in addition to our press releases, filings submitted with the SEC and any public conference calls or webcast.

Before I turn the call over to David, I would like to draw your attention to some important disclaimers on Pages 2 and 3 of our presentation regarding non-GAAP financial measures and the use of forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Page 2 identifies forward-looking statements and discusses risks and other important factors that could cause results to differ from those expressed in such statements. And Page 3 identifies and defines the non-GAAP financial measures we use. Reconciliations to the most directly comparable GAAP financial measures are provided in the appendix of the presentation and in our earnings release.

And with that, I am pleased to turn the call over to David, who will start on Page 4.

David Barry: Thanks, Carrie, and thank you all for joining us. I'd like to start with a quick welcome to Pursuit. We believe that the world's most incredible destinations deserve iconic experiences. And that simple phrase sets out a clear mission to connect guests and staff to iconic places through unforgettable inspiring experiences. Pursuit operates one-of-a-kind attractions and hospitality experiences in iconic supply-constrained destinations with perennial global demand. Our assets are difficult to replicate, and our integrated model creates a seamless guest journey that grows value across the entire experience. And it's all brought to life by our amazing team members and a world-class hospitality culture.

For those newer to our business, Pages 5 through 12 provide more on what makes Pursuit special. And as you know, we're always happy to discuss that in greater detail, but today, we'll move quickly and dive right into our results, starting on Page 14. We're excited to review our strong third quarter results and to share our view to continued long-term growth and value creation. We delivered record results during the third quarter with exceptional guest experiences, strong execution and margin expansion. Adjusted EBITDA grew 7% year-over-year with continued growth across our geographies. We completed 2 strategic transactions during the quarter that advance our growth strategy.

The acquisition of Eagle Wing Tours, a leading site seeing attraction in Victoria, British Columbia, expanded our portfolio and is already delivering strong results. The sale of our noncore FlyOver business bolstered our balance sheet for future growth investments that are aligned with our strategy and Vision 2030 targets to grow shareholder value into the future. With our great third quarter results and positive outlook, we remain on track to deliver 14% adjusted EBITDA growth year-over-year at the midpoint of our 2026 full year guidance. Now I'll turn it over to Bo to review our third quarter financial results and 2026 outlook in more detail, starting on Page 15.

Michael Heitz: Thanks, David. Our third quarter revenue reached a record level of $251.5 million, representing an increase of 4.4% year-over-year. This increase primarily reflected continued growth across geographies and contribution from Eagle Wing Tours, partially offset by the sale of FlyOver, which was divested in July 2026. When adjusting to exclude Eagle Wing Tours and FlyOver, our revenue growth was approximately 6%, primarily driven by strong yield optimization and ongoing demand for experiential travel and iconic destinations. Adjusted EBITDA improved by $8.1 million year-over-year to $125.5 million, primarily driven by strong flow-through on higher revenue with margin expansion.

And adjusted net income grew to $85 million as compared to $75.3 million in the prior year, primarily due to higher adjusted EBITDA and lower depreciation. Now, let's look at our Attraction's performance on Page 16. Third quarter same-store attraction ticket revenue, which excludes Eagle Wing Tours and FlyOver, reached $93 million, reflecting a 6% year-over-year increase, driven by 9% growth in same-store effective ticket price. This year, our third quarter was impacted by a higher portion of poor weather days, primarily from smoke in Canada, which hampered site seeing visitation.

Our ability to drive strong revenue growth in the face of these headwinds illustrates the power of perennial demand, our relentless focus on elevating the guest experience and the underlying resilience of our business. Next, let's turn to our strong hospitality performance on Page 17. Third quarter same-store room revenue totaled $60 million, reflecting a 7% year-over-year increase, driven by 7% growth in same-store ADR and a 2 percentage point improvement in occupancy. This same-store hospitality performance, which is less impacted by inclement weather days, highlights the continued strong demand for our iconic locations.

Our same-store view excludes Forest Park Hotels Woodland Wing, where we're nearing completion of the final elements of its renovation and repositioning in the year-round Jasper market. Next, let's turn to our 2026 financial outlook on Page 18. As David mentioned earlier, we are reaffirming our full year 2026 adjusted EBITDA midpoint expectation of $133 million, which represents 14% growth over 2025. With our busy third quarter successfully in the books and continued strong demand during October, we're narrowing our full year adjusted EBITDA guidance range to $130 million to $136 million. And as highlighted on Page 19, we're well-positioned for continued growth in 2027.

As usual, we'll provide formal 2027 guidance during our fourth quarter earnings call, but we do want to take this opportunity to start framing up the factors that will drive our growth next year. As a reminder, we completed the sale of our noncore FlyOver business on July 31, which was the final chapter in Pursuit's transformational story of becoming a pure-play attractions and hospitality growth engine. The disposition of FlyOver at a premium multiple of about 14.5x sharpens our singular focus on delivering great guest experiences where nature is our content and supports the acceleration of growth in these experiences with an even stronger balance sheet.

FlyOver contributed approximately $7 million towards our adjusted EBITDA in 2026 prior to the sale. We expect to more than offset the $7 million of FlyOver adjusted EBITDA through growth in our core business. First, we expect continued growth across our existing experiences, supported by a favorable macro and market setup, perennial demand for our destinations and the strong underlying fundamentals of our business. While it is still early in the booking cycle, we are seeing healthy advanced bookings and strong demand from our tour and travel partners. Next, we expect a net benefit from our organic growth investments as growth from completed projects more than offsets temporary impacts from construction on new projects.

David will cover our various growth projects in more detail shortly. And finally, we expect approximately $1 million of incremental adjusted EBITDA from a full year contribution of Eagle Wing Tours, which we acquired in July 2026. And with that, David, I'll turn it back to you.

David Barry: Thanks, Bo. Turning to Page 21. We're making great progress across all 4 growth levers. First, we're improving performance across our existing businesses, driving same-store revenue growth through our relentless focus on the guest experience. Second, we're investing organically with more than $300 million of high-return organic growth projects planned through 2030. These are low-risk investments in well-instrumented businesses that we already own, know and operate with a clear path to exceed our 15% IRR hurdle rate. In 2026, we continue to expect to deploy $75 million of growth CapEx at the midpoint as we advance transformative projects across the portfolio. That level of investment will increase in 2027 as we continue accelerating work on strategic multi-year projects.

Third, we're pursuing strategic acquisitions with discipline. Tabacon continues to validate our approach, delivering approximately 20% adjusted EBITDA growth in its first year with Pursuit, and we're advancing new growth investments across the property. Eagle Wing Tours is further strengthening our portfolio with the expansion into the iconic Vancouver Island market and is performing strongly. Our acquisition pipeline remains robust and will stay selective, focused on iconic irreplaceable assets with perennial demand and compelling returns. And our fourth growth lever is the repurchase of our own shares when we see significant disconnects between market value and intrinsic value. To date, we've repurchased approximately 1.2 million shares at an average price of $35.72 per share.

Our shares have since appreciated more than 50% relative to that price, providing a strong return for shareholders. As shown on Page 22, our balance sheet strength gives us substantial capacity to invest in all 4 growth levers concurrently. We ended the third quarter with approximately $293 million of liquidity and net leverage of less than 1x, well below our target range of 2x to 3.5x. This position reflects years of disciplined capital allocation decisions and strong operating performance, and it's a real competitive advantage for our growth. We have the capacity to fund high-return organic growth projects, pursue one-of-a-kind acquisitions and repurchase our own shares when valuations are compelling.

Few companies in our space combine iconic assets, a deep pipeline of growth opportunities and this level of financial flexibility. We're uniquely positioned and ready to act on the right opportunities. Pages 23 and 24 highlight how we think about investments in attractions and lodging properties, both of which drive meaningful value. Our model is attractions first. We own and operate must-do sight-seeing attractions in iconic markets that are economic engines. Investments to enhance and thoughtfully grow existing attractions and those that bring new attractions to market elevate experiences for our guests and drive strong returns.

Our attractions are supported by our strong lodging base in limited supply markets, where our lodging guests are helpfully connected to our booking ecosystem and can package their stay with pursuits attractions and other ancillary services. We work hard to make it easy for our guests. And when we make investments at our lodging properties that improve the guest experience, those investments support both higher occupancy and room rates and leverage our vertically integrated operating model. Turning to Page 25. I'll highlight several exciting organic growth projects underway that will contribute to our growth in 2027. At our Forest Park Hotels Woodland Wing in Jasper, our phased transformation is nearing completion.

The room renovations are already delivering a strong ADR lift. And by the end of this year, we expect to complete the project with the reopening of transformed dining and public spaces. This is thoughtful reinvestment to reposition a year-round property with strong returns. Our transformation of Grouse Mountain Lodge into Hotel Whitefish has entered its second and final phase of renovation, which includes the remaining rooms, dining and public spaces. We're excited to complete the full transformation ahead of the 2027 peak season, bringing an elevated year-round experience to the vibrant Whitefish Montana market. In Alaska, we're bringing back the world-class Denali Backcountry Adventure attraction next summer with the reopening of the Park Road to permit holders.

Imagine traveling deep into Denali National Park for a premium bucket list Wildlife Safari. It will be an unforgettable experience into Denali scenic and Wild Back Country. At the east side of Glacier National Park in St. Mary, Montana, we're adding 41 Wildscape cabins in an absolute showstopper of a location with spectacular views directly into Glacier National Park. It's going to be a really special way to stay near the east entrance of this iconic destination. At Tabacon, we're adding 3 premium villas for families and multigenerational groups looking for more space and a truly differentiated guest experience in the Arenal area of Costa Rica.

And as the Prince of Wales Hotel approaches its 100th anniversary in 2027, we're refreshing all guest rooms and corridors and making other updates at this historic crown jewel property. Perched high above Waterton Lake with sweeping views, this iconic landmark is one of the most recognizable properties in Canada and an experience that simply cannot be replicated. We're proud to invest in its next century, preserving its legacy while enhancing the guest experience for generations to come. Page 26 highlights several additional organic growth projects in our pipeline that will begin contributing to our growth beyond 2027.

In Banff and Jasper, we're expanding capacity at our Lake Cruise experiences with the addition of a new sightseeing boat to meet strong demand in these 2 truly iconic locations. The new boat has been ordered and will be ready for guests for the 2028 season. And at Pyramid Lake Lodge, we have plans to enhance landscaping, the level of finish and add outdoor hot tubs in sauna, overlooking the Lake and mountains by 2028. This will be a powerful enhancement, bringing wellness, nature and an already extraordinary property together. And we're excited to kick off transformative multiyear growth projects at Lobstick Lodge in Jasper, the Jasper SkyTram and the Banff Gondola.

At the Lobstick, we're planning a full transformation that will reposition this year-round property and meaningfully elevate every part of the guest experience. Similar to our renovations at the Forest Park Hotel in Grouse Mountain Lodge, we will be undertaking a phased renovation that keeps rooms online during the peak summer season to minimize revenue disruption. For the Jasper SkyTram, we're planning a complete replacement of the existing aged infrastructure with a world-class sightseeing gondola experience, including new base and summit facilities that offer dramatically improved and expanded guest amenities.

And as we've continued to work through the construction plans, we've determined the best course of action for both speed and safety will be to take the existing tram offline during construction. We've already placed the lift order with Leitner-Poma and expect to begin construction in 2027 with the new site in Gondola complete in 2029. And at the Banff Gondola, we're planning to replace the existing lift and four-person gondola cars with a modern state-of-the-art site in gondola. This necessary replacement presents us with an opportunity for continued improvement of the guest experience and thoughtful year-round growth at this already must-do attraction in Banff.

Although, there will be some temporary operational impacts along the way, these investments will create meaningful long-term value through exceptional guest experiences that deliver high returns for decades to come. We couldn't be more excited about what we're building and the growth these projects will unlock. And none of this could happen without our great team and the growth mindset that permeates our culture. Turning to Page 27. Tabacon's new private terraces are a textbook example of our growth mindset in action. The team saw an opportunity to make a premium room category even more special by extending the guest experience directly from the room into nature.

We're adding outdoor terraces to 77 guestrooms, giving guests their own private space to relax and connect with Tabacon's extraordinary rainforest setting. We completed the first phase of 19 rooms during the 2026 shoulder season, and they look stunning. The remaining rooms will be completed in 2027, positioning Tabacon for strong ADR growth in 2028. And this is a great example of our growth mindset, start with an irreplaceable asset, understand what matters to the guest and thoughtfully make the experience better. That creates stronger demand, stronger revenue and attractive returns, and it's repeatable across all of Pursuit. Turning to Page 28 is another growth mindset example, the proposed Glacier View tram near Glacier National Park in Montana.

On October 1st, we submitted a proposal to the U.S. Forest Service to create a new world-class sightseeing experience on Columbia Mountain that is accessible to guests of all ages and abilities. If approved, this project would be incremental to our Vision 2030 plans and likely completed after 2030. The concept features two 100 passenger cabins traveling more than 3,000 vertical feet in roughly 6 minutes. At the top, spectacular views of Glacier National Park, Hungry Hurst Reservoir and the surrounding Flathead Valley. The investment case is very compelling, an iconic location with perennial demand and approximately 3 million visitors traveling by the proposed site each year.

It also builds on Pursuit's more than 60 years of experience operating attractions and allows us to leverage our bed base of over 600 lodge rooms throughout the region to drive attraction visitation. The strategic fit is unmistakable, iconic, accessible year-round, difficult to replicate and synergistic within a well-established Pursuit market. There's considerable work ahead, but we're excited about the potential to create an unforgettable new way to experience one of the world's most spectacular landscapes. Before wrapping up the call, I want to talk a little bit about AI on Page 29 and how we view that as something that benefits Pursuit, both as a business and as an investment opportunity.

Artificial intelligence is a tremendous enabler for the gathering and acceleration of information. And we know that guest reviews, credible editorial coverage, strong social media influencers and world-class photography are all important factors in how our guests learn about our destinations and experiences. AI helps guests make important decisions. AI is powerful and is quickly evolving as a planning tool. It's important that our digital infrastructure evolves to connect with the latest technologies. And I'll just share that why I may be looking forward to evolving technology and someday having my own personal robot pull weeds in my garden, I don't want a robot or AI agent to go hiking or will watching for me.

That's something I want to do for myself. As the world transforms, Pursuit is well-positioned as a counterbalancing investment to the tech sector. We're deeply rooted in iconic places with unforgettable inspiring experiences. Productivity gains in society will lead to more free time and greater interest in searching for authenticity and real connection. Finally, on Page 30, we're thrilled to share an important upcoming milestone in Pursuit's digital transformation. We've been working hard to modernize our digital infrastructure, and our new pursuit.com is expected to go live later this year. This is much more than a new website. It's a scalable digital growth engine, one seamless place to discover, compare and book every iconic Pursuit experience.

It's mobile-first, optimized for modern search and AI discovery and makes it easier to build itineraries, combined stays and experiences and book directly in one checkout. For guests, a simpler, richer experience and for Pursuit, higher direct conversion, stronger cross-selling and faster speed to market. We'll share more as the platform ramps, but we expect it to support growth in 2027 and beyond. Check out the link on the slide and experience a quick high-level video intro to the new pursuit.com for yourself. So I'm so energized about the strong momentum and progress across Pursuit and our journey. To our incredible team members, thank you for a powerful summer season and record third quarter.

Your energy, commitment and exceptional hospitality bring the magic of Pursuit to life every single day. And to our shareholders, thank you for your continued support. We're proud of our progress and even more excited for what's ahead. With that, let's open up the line for questions.

Operator: [Operator Instructions] Your first question comes from the line of Tyler Batory with Oppenheimer.

Tyler Batory: First one for me on the results in the quarter. Obviously, some weather disruption, but the 9% growth in ETP was certainly a standout. How much was mix or the weather disrupting that compared with like-for-like pricing? Is there a way to segment out or split out price increases versus maybe some other items that might be impacting that metric?

Michael Heitz: Yes. Tyler, thanks for the question. On the yield side, honestly, almost all of it is really about just what we do best, which is focusing on the guest experience and continuing to make improvements along that. It always helps the markets that we operate in and the demand that we're seeing consistently in those markets. But I wouldn't point to weather as a unique variable that's distorting yields on this one.

Tyler Batory: Okay. Okay. And then a follow-up on the 2027 commentary and some of the building blocks that you provided there. Is there any way to size or give us some more detail on the incremental contribution you're expecting from some of your CapEx projects? And then from a visitation perspective, again, back to the web, I mean you did call it out. So should we be thinking about perhaps a favorable comp next year because of that dynamic?

Michael Heitz: Sure. I can take those. So on the capital side, the reality is we're right in the throes of our business planning. So we'll put out more color around our plans for '27 next quarter on this. We do have a number of projects that we highlighted coming online in 2027 on growth capital that we're really excited about. The thing that we wanted to just point out today is that there are a few discrete projects that will have some temporary impacts next year as we work through construction. Jasper SkyTram is one that I would draw your attention to, but there's also a few lodging properties around it.

As we said, I'm still expecting a net benefit from all of the growth capital projects combined, but not quantifying at this point how much. On the visitation side, 2026, you're right, it had a number of weather-impacted days in Q2 and really in the first half of Q3. The good news is we then had a really strong end of the season into September and October. And so that combined then with you have to remember this is a seasonal business, and our team really appreciates that fact.

And so we spend a lot of time as things are coming together to pull levers like on the revenue side, but also on the cost side as we see things play out. And so when you take a step back and look at 2026, we're still right at the midpoint of our guidance range. And so yes, I think it's fair to say that, there's some weather impacts that will factor in as we get into '27, but there's also small sets that we'll be planning around, too.

David Barry: And Tyler, I'll just add, super tough to predict weather patterns when you might have smoke-related disturbance when you might have heavy rainfall, et cetera. So we try to plan for normal as normal can be. And then as we get closer to the year, we'll be able to give everyone a clear view to what our expectations are.

Tyler Batory: Okay. Last question for me, bigger picture, the Glacier View Tram, obviously, you mentioned that's not something that's going to be completed until after 2030. But just help us think about what are some of the milestones needed to get that going? I would assume if you get some approvals that maybe there could be some CapEx dollars going out the door before 2030. So how do you think about spending for a project like that and advancing that project versus allocating that capital towards M&A or some of the other capital projects that you have on the schedule here?

David Barry: Well, first, I would say that the Glacier View Tram in itself as a concept is separate from whatever we've articulated for 2030. So we're able to pursue all opportunities, including the Glacier View Tram without slowing down some other project or not concluding an acquisition. So think of those as disparate projects completely. And obviously, we're at the beginning of a process with the U.S. Forest Service. So for those on the call that are familiar with, say, the ski areas of the United States, most of them operate the vast majority on public land that is administered by the U.S. Forest Service.

The Forest Service has 3 locations: timber harvesting, wildland fire mitigation and developed recreation on public land. So over the last, gosh, I would say, 7 or 8 years, as I've been driving around Montana, we've been looking for the great location. And we've worked hard on this sub-middle. So the process is a long one. we submit an idea and then the Forest Service reviews that at the very beginning of the process, which is where we are today. They then weigh in and consider whether they will accept the application more fully. So that's the process stage we're at now.

If they view this as favorable, we would enter into what's called the NEPA process, which is part of the National Environmental Protection Act. And then that would go through a period of public consultation planning, working with various groups, whether it's support of wildlife and habitat to forestry to water, et cetera. So it's a long process, but it's something that over the coming 2 years or so, we'll have a much greater view as to the planning window and when we would move to more of an execution stage. So stay tuned. There's a really compelling video link that I encourage everybody to click on. You can go see the website that we've done.

And we're in a very transparent and public process with the Forest Service in the Flathead National Forest. Today, the land on Columbia Mountain is used for mechanized recreation, so motor cross riding and mountain biking. Also, there's hunting both with firearms, but also bow hunting on Columbia Mountain. And into the future, this would be something that would create tremendous attraction. Three million folks drive by on the road right at the base of where Columbia Mountain is on their way into Glacier National Park. And when you understand the success we've had with the Bam Gondola and upcoming with the Jasper SkyTram, this is a dead fit for Pursuit strategy.

And so we're really excited about the opportunity, but it's very early days. We have a super working relationship with the Forest Service and working through that process now. So more to come.

Operator: Your next question comes from the line of Eric Des Lauriers with Craig-Hallum.

Eric Des Lauriers: First one on the Jasper SkyTram investment. I believe this was the first time you provided details around 2029 go-live. So I mean nice to see a sort of launch date expected here. I know having to take down the existing tram or not was sort of a big factor. What else, if anything, needs to be done regulatory-wise or I guess, otherwise before construction can start here? Just want to kind of level set the outlook for that investment here.

David Barry: Great question, Eric, and thank you for that. So a couple of things just to confirm to everyone. We've placed an order for the lift, the new lift with Leitner-Poma, and there's really 2 manufacturers in the world, Doppelmayr and Leitner-Poma. So we've placed an order, which signals that the lift has begun its manufacturing process. As you can imagine, those things don't sit on a shelf ready to ship, right? So it takes a while for them to be built. In the meantime, we're working super closely with Parks Canada on the final details around exactly what we're doing. Our leasehold gives us the privilege to continue and to replace the existing facilities that are there.

And so that's what we're working with Parks Canada on. And so both alignment of the lift, positioning of buildings at the base and the summit how far from the edge of the mountain they might sit and so on and so on. And you can imagine that, that's a fairly detailed process. But we have strong confidence in the outcome, which is a positive thing. And then we will begin construction, we expect within '27. And that we expect will take somewhere around 20, 18 to 24 months and have targeted '29 as an opening to the public.

Our follow-up call in February when we talk about our final earnings for the '26 year and also give you guidance for '27 and still finalizing some of those details and how you might match an operation together with construction and so on, but that's where we sit today.

Eric Des Lauriers: That's very helpful. And then my second question is basically quite similar, but just as it relates to the Banff Gondola investments. How should we be thinking about potential timing here? I think this is a little bit earlier stage. So I understand that it could be a wider sort of outlook here. But just how should we be thinking about timing and sort of what steps remain for this and whether this would sort of come offline as well?

David Barry: Think about your best exercise for building patients. That's what I would suggest is that it will take some amount of time in the planning cycle with Parks Canada and that obviously, a lift replacement is due for the Banff Gondola. And then the opportunities that we have are to make the guest experience better. And we've got an entire season. That's a 12-month of year operation. And so it's really about thoughtful growth at times of the year that will support that. And so when you have white space, say, in February or January, those are great opportunities as we move forward. So still much to come, and we're in a process with Parks Canada.

So again, not trying to put you off in terms of an answer, but I don't have much to give you certainly until we get into the February earnings call.

Operator: Your next question comes from the line of Chad Beynon with Macquarie Capital.

Chad Beynon: I wanted to start with the hospitality metrics. Occupancy is up 200 basis points, as you mentioned, there was really good compression. So you saw ADRs increase. Could you provide just a little bit more color in terms of how you're getting there? Obviously, there's low supply in these markets. Was it a mix product from the trade business and FIT or just higher visitation in these areas?

David Barry: You bet. Thanks, Chad. I'll give you just my view and then welcome my colleagues to jump in. So it's a combination of factors that each of our channels of distribution, if you think broadly, we have our tour and travel partners that create the foundation and the base for our business, then obviously work with the OTAs and consumer direct. And so as we work through and build, there are times of the year, obviously, that we're maximizing utilization of inventory allocations, how we're balancing those. If we see one channel perhaps is slowing, we pull inventory back and put it into the other channel. Also, I would say that the team, we experienced a terrific September and October.

And as we expected would happen, it turned out to be the case that our tour and travel partners who were facing some challenges in the major urban markets in Canada, just based on World Cup and FIFA, where hotels had taken prices very high, that didn't affect us except to push business into the fall period. So we saw some good growth there and also extending the season in a variety of locations. We had terrific weather through the fall season. And so we extended whether it be the Prince of Wales or a few other spots that we were able to prolong the season.

So I would say just good old-fashioned inventory allocation, strong performance on managing revenue and yield and just being attentive to maximizing the opportunities every single day in the season.

Chad Beynon: Great. And then next, in terms of the M&A environment, I know the assets that you've acquired are very unique and it's more of a handshake relationship that you evolve over time with the seller. But with the elevated interest rates right now, does this help or hurt you given that you have a strong balance sheet and maybe some others might not have access to capital? Or could this potentially delay some of the potential M&A for you and others in the industry?

David Barry: You bet. We do not believe that interest rates will have any sort of delaying factor to any of our M&A. We have a robust pipeline. We have identified some terrific opportunities. Everyone knows we can't share anything until things become really locked in. So we'll share as soon as we can on the exciting things that we're working on behind the scenes. But I would say that we see opportunity broadly across all of Pursuit and forgive the pun, but we're pursuing those opportunities with vigor and energy and look forward to bringing things forward. And it's one of the nice things about the position that we're in.

We're able to really work our 4 levers of growth simultaneously and concurrently. We don't have to slow down on an organic growth investment in order to do an acquisition, and we remain quite focused on actively working each of our 4 growth levers.

Operator: Your next question comes from the line of Jordan Bender with Citizens.

Jordan Bender: You highlighted strong early '27 booking momentum. Can you just kind of shed some light on how does that current booking pace maybe compare to the same point last year in terms of occupancy and rate? And are you seeing that pretty broad-based across the portfolio? Or are you seeing particular strength in certain experiences or customer channels? Anything there would be helpful.

Michael Heitz: Yes, sure. I can take that one. I'll start with the same caveat David provided earlier, which is that it is really early days in our booking curve. With that said, early booking pace is strong for 2027 and really tracking ahead of prior year at this point. Very strong in the U.S. on the Canadian side. The only nuance is adjusting for the ongoing room renovations that we have. But when we take that into account, we're tracking well ahead of prior year.

And then the other piece that we talk often about at this time of year, but it doesn't show up in the booking pacing specifically yet, but we are getting strong demand from our tour and travel partners as they're pushing to get more and more allocation heading into 2027 itineraries.

David Barry: And Jordan, for your benefit, One of the things we've learned over history is not to over-allocate to one country specifically. So working with our tour and travel partners is to allocate space based on their consumption and historical patterns, but also to keep the ability that as markets recover, China is a really good example. China was shut down through COVID, took a much longer time to recover. But now we're seeing signs of life from China. It's early days, so I can't give any more color than that, but just that growing enthusiasm.

For instance, there are Chinese flights heading directly from Mainland China to Iceland, as an example, in the winter season, looking to experience Icelandic winter, and that looks favorable for Sky Lagoon and the Icelandic market in its entirety. So summer patterns are what they are, and we see that early booking pace is favorable. I'm also excited about the benefits that we expect to get from Pursuit.com. Again, that will take some time as that builds, but it really is a big shift to the quality of our digital capabilities, and I think that will lend itself to greater conversion and ease of booking, better information for guests, helping their searches, et cetera.

Jordan Bender: I appreciate that. And then just on the follow-up in some of the CapEx that's going to be happening over the next year or the next couple of years, through earnings so far, some other consumer companies have talked about cost inflation starting to creep back in. I guess, I'm just curious, are you guys starting to see that at all? Or as you look out to some of these projects is the spend or return dynamics changing under the current inflationary pressures?

David Barry: Yes. We've been smart in how we planned projects. So we have a very clear view to the supply chain how we're going to execute on these projects. So we're not anticipating nor are we being surprised by changes in cost. And one of the interesting things with this whole tariff situation back and forth is it's given us really robust supply chains no matter what happens. So historically, we might have used one cabinet maker for North America, but the whole tariff situation forced us to evolve. So we've gotten really good at managing supply chain. And I think that helps keep downward pressure on cost, keeps things competitive.

And then just the strength of the project planning by the team, they're doing a terrific job with the implementation of the capital expansion projects. And yes, so I think we're in a good spot, and we're not surprised.

Operator: Your next question comes from the line of Jeff Stantial with Stifel.

Jeffrey Stantial: Maybe just starting off on the quarter. We did hear from some destination leisure operators this earnings cycle that demand started to weaken quite materially later in the summer just as higher airfare and gas prices seem to finally start to eat into consumer travel budgets. David or Bo, whoever wants to take this. Obviously, the metrics you gave are all headline are all very strong. But I'm wondering if you sort of peel back the onion a bit, if you saw any signs of this sort of impact looking across your various footprint or across the different customer segments?

David Barry: Jeff, we must be the beneficiary of them not visiting those other businesses because they must all come to us. I mean we had a terrific September and October. I saw no signs of any sort of weakening demand. And in fact, saw the opposite. So we had a terrific fall.

Jeffrey Stantial: That's great. David, and then turning to the AI and the website initiative. I think the intuition you laid out earlier of your markets being really well set up here for me and these agents that are trying to find, I would imagine, trying to find good value and great trips that all makes a lot of sense to me. My question is more sort of like how you position yourself accordingly to be picked up best by these agents. Are there any sort of investments in marketing that need to be made to improve your authority, whether it's into influencers or anything like that, anything material on the cost side? And then from a labor perspective, have you hired?

Or is there anything going on sort of to familiarize yourself with how these agents work and make sure you're sort of gaining the system, so to speak?

David Barry: You bet. I'll give you a couple of points of view and then again, encourage my colleagues to jump in with what I miss. First, we welcome Scott Eller, who's joining us as our new Chief Commercial Officer with overall responsibilities for marketing, sales, communications, guest analytics, web and digital, all of those things. And Scott joining us from Ticketmaster has a really fantastic set of experiences that lend itself well to Pursuit as we modernize and get better at communicating. Second lesson or I would say, great benefit that we've learned is that over time, we've really paid a lot of attention to the power of perennial demand and how people are searching for a particular destination.

And I'll use, say, Alaska as an example. So you're searching for Alaska. What drives a model's compilation of results for Alaska? Well, first, it's guest reviews are more important and more powerful than ever. That's the first one. And so we work really hard at getting great guest reviews. The second is the power of influencers where working with influencers broadly, both those that approach us and those that we approach to tell a story and to bring it in a very human way for folks that are paying attention and follow specifically those influencers. The third one is when really credible publications write stories that tell our story.

And so if you're Conde Nast or Afar or Travel + Leisure, and there's been a wide range of stories. And our communications team does a terrific job out there working with travel writers to represent Pursuit. And the final one that what's surprising to me, but it's really powerful is having the absolute best photography that agents, language models that are building and searching and scraping through all kinds of data, photography has a big impact. So that's one. Then go to our investment in the new pursuit.com, which, again, as I mentioned in the call itself, is more than simply a new website.

It is an investment in a digital infrastructure because, obviously, digital revenue continues to grow, and we've worked hard to create an ecosystem that gives us what we think is a real advantage that historically, you visited, say, Talkeetna Alaskan Lodge and then the Alaska Collection and then you found yourself to the rest of Pursuit or your way to the rest of Pursuit. The new pursuit.com gives you a view to the company at large. And I think that's going to do a couple of things. One, really improve the platform for the gathering of information and the execution of bookings.

Second, helps the process of migration because perhaps you went on the website to learn about Alaska, but you ended up learning about other destinations that we have within Pursuit, and that's really powerful. So all of those, and we'll be able to share more as we get into 2027, but those are the types of things and the focus that we have on evolving technology.

Operator: [Operator Instructions] Your next question comes from the line of Anthony Burney with Jefferies.

Anthony Burney: Going back to the ETP. Based on the disclosures you provided, it seems like FlyOver was a lower average ETP than the rest of your system. Is it fair to assume a bit of a mix shift benefit to ETP going forward? And any color you can give on the same-store ETP growth that you're expecting as well?

Michael Heitz: Yes. So Anthony, you're absolutely right that FlyOver had a lower ETP than Pursuit overall. So you'll see that increase in the go forward of this. I would direct you and anyone else to -- we have a detailed page in the earnings presentation in the appendix. I believe it's Page 40, and it shows all of our key revenue and KPI disclosures, excluding FlyOver for the last -- by quarter for a couple of years. That should give you a good sense of the visitation and yield dynamics. We're not guiding forward-looking at this point in terms of the improvement in those metrics over time, but that at least gives you the right foundation to build off of.

Anthony Burney: Got it. That makes a lot of sense. And last one for me. Your margin expansion was solid this quarter. Can you talk a little bit about what worked, how we should think about margin expansion going forward? Where should we see the biggest benefits? And are there any items to be aware of as headwinds?

Michael Heitz: Thanks. Yes. No, we're feeling really good about the margin expansion that we had in Q3, which was about 1 point of margin expansion. I would call out that there is a little extra benefit going on there with the sale of FlyOver. That was a lower-margin business. So it did result in some pretty strong flow-through for the quarter. That said, even when you exclude FlyOver, it ends up being in terms of revenue to EBITDA flow-through about 56% ex FlyOver. So we view that as really strong, and that speaks to when you're in a period like Q3, that's a peak period. There's a relatively fixed cost base that we operate on.

And so we can generate some great returns on that. And you always have to take a step back looking at the full year in that we are always investing in our Q1, Q4s to then help support that what we can generate in terms of margin expansion in our peak summer season. But I feel like that's a pretty healthy mix of flow-through that we were able to achieve.

Operator: There are no further questions at this time. David Barry, I turn the call back over to you.

David Barry: Well, thank you, everyone, for joining us. We appreciate you joining and listening to our third quarter earnings call. We look forward to follow-up after the call. Have a great rest of the afternoon.

Operator: This concludes today's conference call. You may now disconnect.

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