PRKS - NYSE

Good day, and welcome to the United Parks & Resorts Third Quarter Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Matthew Stroud of Investor Relations. Please go ahead.

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

Thank you, Matthew. Good morning, everyone, and thank you for joining us. We're obviously not happy with the results we delivered in the quarter. Performance during the quarter was negatively impacted by an unfavorable calendar shift, poor weather during peak holiday periods, a decline in international visitation, and less than optimal execution. The consumer environment in the United States appears to be inconsistent as has been outlined by a number of other leisure and hospitality businesses. Nonetheless, we can and expect to do better. Attendance in the third quarter was negatively impacted by approximately 150,000 visits from unfavorable calendar impacts, particularly the timing of the 4th of July holiday, and was also impacted by poor weather over peak 4th of July and Labor Day weekends. We saw a decline in international visitation of approximately 90,000 guests during the quarter, which was a reversal of earlier trends we saw in the first half of the year. Adjusting for these calendar shifts and the international visitation declines, attendance would have been roughly flat for the quarter. On the positive side, we are pleased to report growth in in-park per capita spending, which has grown in 20 of the last 22 quarters. Our Halloween events just concluded last week, and we saw meaningful year-over-year growth from our separately ticketed Howl-O-Scream events, including record attendance in Orlando and San Diego for these events. Looking forward, we are encouraged by the forward booking revenue trends into 2026 for our Discovery Cove property and our group business, both of which are up over 20% compared to the same time last year. We are also happy to report that our attendance at SeaWorld Orlando is up year-to-date. We're also pleased that during the third quarter, stockholders granted authority to the Board of Directors to approve and implement additional share repurchases. The Board previously announced a $500 million share repurchase program contingent on receiving this approval, and we have already repurchased 635,020 shares for an aggregate total of $32.2 million through November 4, 2025, underscoring our strong balance sheet, significant free cash flow generation, and our strong belief that our shares are materially undervalued. Later this month, we will begin our award-winning Christmas events at our SeaWorld, Busch Gardens, and Sesame Place Langhorne Parks. This year, we believe our Christmas events will be our best ever with the popular rides, attractions, and exhibits our guests have come to expect, plus additional new and exciting events, specialty food and beverage offerings, and holiday shopping for everyone. I want to thank our ambassadors for their dedication and efforts during our busy summer season and as well during our Halloween events and upcoming Christmas events. As we move into 2026 and beyond, we firmly recognize there is significant opportunity to execute better and drive meaningfully more attendance to our parks, grow total per capita spending, and continue to reduce costs and find efficiencies. While this year has been disappointing to date, we have high confidence in our ability to deliver operational and financial improvements that will lead to meaningful increases in EBITDA, free cash flow, and shareholder value. We are focused, well-positioned, and confident in the investments we are making, the operational efficiencies we expect to achieve, and the value we plan to build for stakeholders. We have announced several of the upcoming new rides, attractions, and events and upgrades for 2026. This includes the following: SeaWorld Orlando is pushing the boundaries of family thrills once again with its new attraction, SEAQuest: Legends of the Deep. Guests will embark on a vibrant, submersible adventure through dazzling undersea ecosystems where they will encounter extraordinary life forms, breathtaking environments, and inspiring stories of the sea. This groundbreaking attraction plunges explorers into an environment of awe and mystery, guided by the SeaWorld Adventure team. SeaWorld San Diego is creating a reimagined and immersive version of the Shark Encounter, which will debut in the spring of 2026. SeaWorld San Antonio is making waves once again with an all-new thrill ride, Barracuda Strike, Texas' first inverted family coaster. The one-of-a-kind attraction invites guests of all ages to dive into the deep and experience the ocean's most agile predator like never before. With every twist, drop, and tight turn, Barracuda Strike will deliver a rush of excitement that's bold enough for thrill seekers yet built for the whole family. Suspended beneath the track, riders will glide above the park's iconic water ski lake in a high-speed pursuit that captures the speed, power, and precision of the Barracuda. Busch Gardens Tampa Bay is roaring into 2026 with an all-new Lion & Hyena Ridge, an extraordinary new addition to the park's award-winning animal care portfolio and the most ambitious new habitat in more than a decade. This reimagined area of the park expands the existing space to more than double its previous size, creating nearly 35,000 square feet of dynamic Savannah terrain where two of Africa's most iconic species will thrive, a pride of 5 young male lions and a pair of playful hyenas. Busch Gardens Williamsburg will be announcing their upcoming attraction later this week. Our balance sheet continues to be strong. On September 30, 2025, net total leverage ratio was 3.2x, and we had approximately $872 million of total available liquidity and approximately $221 million of cash on hand, including restricted cash. This strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders. I'm disappointed in our management of costs during the quarter. We have made changes to address our execution issues in this area and have implemented new processes and initiatives to address cost opportunities across the enterprise. Moving on to an update on select strategic initiatives. On the sponsorship front, we have made good progress on several partnerships that we expect to announce in the coming months. As a reminder, we have over 21 million annual visitors across our park portfolio and the average length of stay is over 6 hours. We continue to expect approximately $20 million of annual sponsorship revenue in the coming years. On our international opportunities, we are in active discussions with multiple potential partners. We signed one MOU during the quarter with an international partner and have since entered a development advisory agreement and have begun concept development work. We expect to sign at least one additional MOU in the coming months. In regards to the mobile app, we continue to make progress on functionality, adoption, usage, and financial impact. The app is being used by an increasing number of guests in our parks to improve their in-park performance. The app has now been downloaded more than 16.8 million times, up from 15.6 million at the end of Q2. Total revenue generated on the app continues to grow, and we are now seeing an approximate 37% increase in average transaction value for food and beverage purchases made through the app compared to point-of-sale orders. We're excited about the potential of the app and its ability to improve the in-park guest experience, drive increases in revenue, and decreases in costs. On real estate, we continue to discuss alternatives with potential partners and have recently received specific proposals that we are actively evaluating. As we have discussed, we own over 2,000 acres of valuable real estate in desirable locations, including approximately 400 acres of undeveloped land adjacent to our parks, including significant developable land in Orlando. We do not believe that the public markets have or are appropriately giving credit to these attractive and valuable 100% owned real estate assets. I'm excited about the significant investments we are making and the many initiatives we have underway across our business that we expect will improve the guest experience, allow us to generate more revenue, and make us a more efficient and more profitable enterprise. We are building an even stronger, more resilient business that we are confident over time will deliver improved operational and financial results and meaningful increases in value for all stakeholders. With that, Jim will discuss our financial results in more detail. Jim?

Thank you, Marc, and good morning. During the third quarter, we generated total revenue of $511.9 million, a decrease of $34.1 million or 6.2% when compared to the third quarter of 2024. The decrease in total revenue was primarily a result of decreases in attendance and admissions per capita, partially offset by an increase in in-park per capita spending. Attendance for the third quarter of 2025 decreased by approximately 240,000 guests or 3.4% when compared to the prior year quarter. The decrease in attendance was primarily due to an unfavorable calendar shift, including the timing of the 4th of July holiday and a decrease in international visitation compared to the prior year quarter. In the third quarter of 2025, total revenue per capita decreased 2.9%. Admission per capita decreased 6.3% and in-park per capita spending increased 1.1%. Total revenue per capita lowered due to decreases in admissions per capita, partially offset by increases in in-park per capita spending. Operating expenses increased $7.1 million or 3.4% when compared to the third quarter of 2024. Selling, general, and administrative expenses increased $5.3 million or 9.6% compared to the third quarter of 2024. We reported net income of $89.3 million for the third quarter compared to net income of $119.7 million in the third quarter of 2024. We generated adjusted EBITDA of $216.3 million in the quarter. Looking at our results for the 3 quarters of 2025 compared to 2024, total revenue was $1.29 billion, a decrease of $51.9 million or 3.9%. Total attendance was 16.4 million guests, a decrease of approximately 252,000 guests or 1.5%. Net income for the period was $153.3 million, and adjusted EBITDA was $490 million. Now turning to our balance sheet. As Marc mentioned, our September 30, 2025, net total leverage ratio is 3.2x, and we had approximately $872 million of total available liquidity. We had approximately $221 million of cash on hand, including restricted cash. The strong balance sheet gives us flexibility to continue to invest in and grow our business and to opportunistically allocate capital with the goal to maximize long-term value for shareholders. Our deferred revenue balance as of the end of September was $145.5 million. Through October 2025, our pass base, including all pass products, was down approximately 4% compared to October 2024. We have launched our 2026 pass program, which includes our best-ever pass benefits program. We're excited about our new 2026 pass program and expect to see improvement in growth in our pass base as we progress into next year. We started our Black Friday sale earlier this week. It's one of our bigger selling periods for the year, and we are encouraged with the preliminary results so far. Finally, as of September 30, 2025, year-to-date, we have invested $167.2 million in CapEx, of which approximately $142.2 million was on core CapEx and approximately $25 million was on expansion or ROI projects. For 2025, we expect to spend approximately $175 million to $200 million on core CapEx and approximately $50 million of CapEx on growth and ROI projects. Now let me turn the call back over to Marc, who will share some final thoughts. Marc?

Thank you, Jim. Before we open the call to your questions, I have some closing comments. In the third quarter of 2025, we came to the aid of 192 animals in need. Over our history, we have helped over 42,000 animals, including bottlenose dolphins, manatees, sea lions, seals, sea turtles, sharks, birds, and more. I'm really proud of the team's hard work and their continued dedication to these important rescue efforts. I'm excited about the opportunity set in front of us, both in the near term, where we see a clear path to drive meaningful progress, and over the medium term, where the growth potential is greater. We are focused, well-positioned, and confident in the investments we are making, the operational efficiencies we are realizing, and the value we are building for stakeholders. Now let's take your questions.

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

So Marc, if we go back to your last call, which was early August, I think you noted then that attendance was up on a day-to-day basis through early August. So I'm just wondering maybe what happened from early August through the end of the quarter because that would kind of tell me that you witnessed somewhere low to mid-single-digit declines for the rest of the quarter. And this was also off of an easier comp since the third quarter of '24, I think you had a weather headwind of somewhere around 300,000 guests or somewhere in that range. So maybe just trying to figure out what kind of happened through August and September.

Yes, Steve, I can help you with that. So look, August is where we started to see -- I should say, we expected to get more of the weather recovery. We got some early in the month, early on, and then we did not get as much as we expected over Labor Day and obviously into September. You also had the international attendance impact in there as well. And that was there a little bit -- it was there in July as well, but obviously, there in August and more pronounced in September and here in the October. And I think that's been pretty well reported that we view that as more of a macro issue. And I'm sure there's things we can be doing better, too, but more of a macro issue. You also have at kind of the end of the quarter, and this is just a function of how we report our results, we report at the end of the month regardless of what day a week it is. So if you kind of go back and look at the days in the quarter, right there kind of at the end of the month, you have a negative calendar shift that happens, and that's just unique to us. Some of that, we will get some benefit of that back in Q4. But that was another pretty meaningful impact in the quarter, obviously.

Okay. Got you. And then second question, Marc, you noted -- in your words, the consumer is inconsistent. And just maybe want to understand what that means a little bit more. And then maybe if you could kind of touch on as well the impact from -- or lack of impact from Epic through the summer and into the fall so far.

Sure. So I'll take your second one first. So on Epic, I mean, you heard me say in the prepared remarks that year-to-date attendance was up at SeaWorld Orlando. I'm not going to really comment much beyond that, obviously. But the thesis hasn't changed. We still view the Epic opportunity as a very good opportunity. We welcome investment into the market. We think it benefits the market in general. And obviously, we can share in that market improvement, if you will. And that's evidenced by more than 50 years of being in Orlando and continuing to grow and adding our own additional parks and things like that. So that has not changed. Obviously, it's going to ebb and flow from quarter-to-quarter, I'm sure, and they're going to do things, and we're going to do things and others in the market are going to do things. But I think we're going to continue to optimize and learn and take advantage of what will be more people coming to the market, obviously. As far as the consumer, I said last quarter -- what I look at a lot of times is the in-park spend and our in-park spend was up in this quarter. So people are -- at least in our park, the in-park spend is growing. We recognize that there's a lot of companies talking about the consumer and the health of the consumer. So it's hard for us to pinpoint if it's having a significant impact on us, but we're not ignoring that. Obviously, a lot of people are talking about it. So I'm sure there is some impact to certain guests across our portfolio. It's just really hard for us to tell. And like I said, we see our per cap on an in-park basis up in the quarter. And I can tell you, it was up again in October. So that's kind of the commentary there around. It's just a little bit mixed. We're going to continue to move forward on our end. And like I said, the things we got to do to continue to drive our results. And we know there could be some challenges with consumers, obviously, but at least from where we sit, looking at our in-park per cap, which is the one thing I do look at, that is positive in the third quarter and positive in October as well. Steve, I'll add -- sorry, just one quick thing to add to that. I kind of mentioned it, but if you do look at our pass base, we know that's been down. And look, I'm sure when we -- some of the peak selling seasons for our passes were around when the tariff noise was happening. I said this last quarter, it's hard to know if that had an impact on us. I'm sure it didn't help us is, I think, what we're trying to say. And so we have opportunities to close that gap, and I can talk more about that I'm sure a little later.

Our next question comes from Arpine Kocharyan with UBS.

I have a couple of quick ones. First, what do you think drove the reversal in international visitation you were seeing in the first 6 months of the year? It seems like you're saying it is not Orlando. What do you think drove that? And then I have a quick follow-up.

I think the -- if you're asking specifically about international attendance, I mean, we saw it up in the second quarter and then obviously, a decline in the third quarter. And I know I think Visit Orlando has put out some projections that it's going to be -- to the market in Orlando for the year. And so I think it's more macro factors. Obviously, there's always things we can do better, but I think this one is pretty well understood on the macro side that international visitation to the United States is slowing, and we see that mentioned. I think some of you guys even mentioned that in some of your reports this morning, so...

Okay. And you don't see that tied to some of the immigration stuff and harder to get visas and whatnot versus macro?

No. All those things you said, I'm sure, are factors. That's what I'm saying. I think there are more macro factors that aren't necessarily in our control. So whether it's visas or immigration costs, whatever it may be, that's what I'm saying. I think all those things are a drag for just the international visitation in general.

Our next question comes from Thomas Yeh with Morgan Stanley.

Yes, I just wanted to follow up a little bit more on that Orlando market comment. Can you maybe just flesh out what you're seeing at the regional level a little bit more because you did cite SeaWorld Orlando attendance up year-to-date. And I would imagine most of the international visitation headwind you cited stems from that market. Is that fair? And if so, then were the other markets kind of underperforming even relative to that?

Thomas, I think you can, as we've said in the past, assume that the international attendance is, as you noted, more of an impact to the Florida market and Orlando. So the fact that we're up year-to-date at SeaWorld Orlando with that headwind, I think you could view that as a positive. We'll see where we shake out, obviously. But your point is a valid one on a relative basis, there's other parks that we need to see do better that are outside of the Orlando market.

Okay. That's helpful. And then for October, you cited per caps growing. How is attendance pacing? If you can comment on that, particularly given I think you're comping the Hurricane Milton issues that you were facing in early October last year.

Yes. So on October attendance, we had the hurricane recovery in Tampa, which we got a good portion of that and to some extent here in Orlando as well. There's been a couple of headwinds against that, mainly the weather in Williamsburg, which is one of our more popular Halloween parks. You guys might remember over Columbus Day, a pretty big nor'easter up the East Coast that really impacted that park and to some extent, our Sesame Park in Langhorne for a number of days. And then we did have a couple of rain weekends here in Orlando. So we did get -- and then we have the continued international decline as well. I mean when you net it all up, attendance was up in October, not as much as we'd like because the weather recovery was not as strong in part due to just poor weather in other places and the international decline. I will say, I think it's important to note, I said in-park per cap was positive for October. Admissions per cap was also positive as well for the month. No one has asked me yet about this, but the comment I'd make around that is I think we're doing a better job of managing the admissions per caps here in October, and we'll see where that goes going forward, but that's a couple of data points for you.

Our next question comes from Chris Woronka with Deutsche Bank.

Marc, I guess, as you guys kind of collect feedback from guests and any surveys you do, your marketing approach. I mean, do you get the sense that you need a more strategic pivot, whether it's in part of offerings or marketing approach and thinking about things like social media versus traditional. But really, the gist of the question is, as you're collecting feedback from customers, is there something more different they want to see outside of price value situation?

Well, look, Chris, thanks for the question. I mean when you kind of back up in the quarter and you take out the weather and the calendar shift, those are things that just kind of happened. So I don't think that has to do with necessarily what we offer in the parks or anything. The international impact is a new emerging thing, and that's more macro related. So look, there's obviously things we can do better in our parks, and we got to execute better on some things. But I think as far as the events and the rides and the attractions we offer are compelling, and we're going to continue to do that. We saw, like I noted for our Howl-O-Scream event in San Diego and Orlando, record attendance for those events. And we have a good Christmas event ready to start this weekend in one of our parks and then the rest of the parks later on. But one of the, I think, key things, I don't know that pivot is the right word, I think we will continue -- and I think this is really important. We are going to continue to invest in our parks. We're going to continue to drive improvements in putting new attractions in, updating venues, aesthetics, all those things that have been things we've done for years. And so we're not ever going to neglect the parks or anything. We're going to make sure they're fresh and reasons to visit. So we'll continue to make that capital investment. So there's no change in that strategy. That will attract people if you give them some good reason to come and it's new and exciting and things like that. Where I think we could do a better job is obviously on the execution around that. And some of that comes down to marketing. Some of that comes down to the different ticket offers we have and whatnot. So we've got to do a better job on some of those areas. But the core of what we do to our parks, the rides, the attractions, the collection of assets still remains really strong, and we'll continue to invest in those.

Okay. And then as a follow-up, I think you mentioned the MOU being signed internationally in the third quarter and one, I think you said you expect to sign soon. Can you maybe give us just a little bit of an overview of the overall size of that pipeline and knowing that things may or may not happen, but how big can that get over the next 3, 5 years? And then also on the sponsorship side, you gave us kind of a run rate number you expect I think in the next couple of years. Same question, is there a -- is the pipeline growing there as well?

Sure. So on international, I think what's exciting is people continue to reach out to us. And so we talked about in our release or in my prepared comments, the two things that we're comfortable mentioning the 2 MOUs, one signed, one we expect to sign in the coming months. So I think that outreach should continue. I don't want to guide you to anything. Obviously, these things can take a while to develop. But certainly, I think having people see the potential in our product, the park in Abu Dhabi, if you've not seen it, go there or look online, it's a really well-done park. I mean it just really showcases the brand well, in my opinion. And I think people see the potential of what our kind of know-how and knowledge can bring to wherever they may be located, right? And it doesn't just have to be SeaWorld. I mean we have obviously other brands, whether it's Busch Gardens or Aquatica or even Discovery Cove. So I expect outreach will continue. And -- but I don't have anything specific to guide you to. We'll update you each quarter. On the sponsorships, similar. I mean, people recognize that we have over 20 million visitors coming to our parks on an annual basis. It's somewhat of a captive audience, and there's a lot of activation and different things we can do. And so there's a list that we're working through, and we're excited about those opportunities going forward. So I expect we'll continue to find more opportunities in that over the coming years.

Our next question comes from James Hardiman with Citigroup.

This is Sean Wagner on for James. I guess you've talked somewhat about the international weakness. Are you able to break down domestic visitors? Are you seeing any differences there between destination of fly-in versus local drive-in?

Yes. I don't know that we'll comment a whole lot on just the nuances. I mean just a lot of our parks get visitation from closer in, right? So even here in Florida, where we're sitting today, a lot of our attendance is coming from the state of Florida. And things move around from quarter-to-quarter. I think the most pronounced thing like we saw, which is why we called it out was the international attendance changing.

Okay. On the attendance per cap front, are you able to provide any more color on how that breaks down by park? Are you more aggressive in Orlando versus other markets given some of the international and competitive headwinds there?

Yes. I don't think we're going to break it down by park. But I think a couple of comments since you kind of asked. I mean, obviously, you have a lot of things that impact your admissions per cap. So you kind of mentioned international decline. That's typically a higher per cap guest. So when that -- for all the reasons that were mentioned earlier, why those folks -- when that attendance goes down, that can have an impact on your per cap, obviously. The weather and the holiday shift as well, you can't wait around for weather to get better in a compressed summer. I think summer is, in my opinion, getting more compressed. So you don't have a whole lot of time. You have to react somewhat quickly. And then obviously, with our pass base down, you're looking to fill the gap, and we do -- there's different strategies for doing that, which we went after. We also -- when I talk to our revenue management team. We have a little team that manages this process. They see more competitive offers, if you will, more promotions from some of our competitors in several markets, right? So I think we're not the only ones -- or maybe said another way, we're sometimes having to react to some of those offers that other competitors are putting out in more than one of our markets. The good news, as I said, is we did see improvements in the per cap in October. And I mentioned -- or I think Jim mentioned in his prepared remarks that we just launched our 2026 passes and one of the big kind of acquisition periods is around Black Friday. And that's kind of our first kind of big time of the year where we start to acquire passes for the following year. And so that sale has just started this week. It's very early, but obviously, we're encouraged by the trends, as Jim said, that we see there. We know it's very important that we close that gap. And early on here, we're encouraged, still a long way to go and still that gap can live with you for a little while because it's a yearly pass. So that will start to cycle through as we go into next year and into the spring and summer of next year and hopefully become more of a tailwind for us. And we -- I'm not going to give you specific what we did. But obviously, we've done a few things differently with some of our pass products that we think are going to be compelling to guests. And we continue to have very good benefits as well. And I think most importantly, to give you a really long-winded answer is the key thing you need -- one of the key things you need for a strong pass program is to have reasons to visit. And I said this already, but we have another exciting lineup of new things coming to our parks next year, whether it's attractions, rides, events, refresh venues, that type of thing. That you fundamentally need to have, I think, in most years to continue to have pass members visit and continue to also give them reasons to come. The second thing would be continue to give them a compelling value proposition. Our passes are among, I think, one of the best values you can buy for entertainment, for your family and friends and things like that. If you look at the kind of the value you get in a season pass for coming to our park. So the investments in the product is there. The value proposition is there. We have to do a better job of driving the awareness around those pass products, the -- how we're marketing those products and how we're driving people to buy that product.

Our next question comes from Lizzie Dove with Goldman Sachs.

I guess just to go like bigger picture for a second, it feels like as an industry and for you guys, like attendance isn't back to 2019 levels and for you guys not back to the peak levels either that you've kind of laid out in the past. Like what do you think is the kind of gating factor to growing attendance longer term? Like is it something structural, more competition, maybe not even from other parks, but just other kind of in-home, out-of-home entertainment? Or how do you kind of think about that forward trajectory?

So look, I still have a lot of confidence in the industry as a whole. It's a good industry. And there's a lot of -- I kind of mentioned on the last question about the value proposition and things of going to a theme park. And I think we line up very nicely with that. And we're continuing to make the investments in the product, which I think is really important to do that, and we'll continue to do that. In our case, we've not had the best weather over the last several years here. We know there's a lot of competition for people's time more than ever. And I think we've got to continue to kind of break through on the awareness and why you should have a ticket or a pass to our park. We sometimes talk about like if you moved into town, if you moved into Tampa and you were a new resident, like it should almost be like your neighbor should be telling you like, hey, you got to get a pass to Busch Gardens. It's a great value. Everybody has a pass. So we've got to, I think, market that better, give people reasons to buy our product. And we will -- the way to do that is to continue to invest in the parks, continue to give a strong value proposition and people reasons to visit. And so I'm still real confident in not only our business, but obviously, the industry as a whole.

Got it. That makes sense. And then just to kind of ask one of the other cost questions in a slightly different way, but you've got these kind of cost saving targets. Your margins are still higher generally than the rest of the industry. And look, I know there's nuances with footprint and operating days and all of that. But I guess just can you maybe speak to the confidence of being able to kind of grow margins from here or whether there is some reinvestment needed, whether that's events, marketing, anything like that?

Sure. Well, look, you know that we hold ourselves to a pretty high standard, and we've executed over the years, I think, reasonably well with some of the cost initiatives. Now obviously, I said I was disappointed in the quarter with the cost saves and efficiencies, and I was. And we've got some new efforts around kind of how we're processing some of that, how we're managing that. And I think we're going to do a better job of managing that going forward. There's obviously, as you noted, always new costs and new things that emerge, and we have to do a better job of managing those things as well. So I think the stuff that is in our cost plan, we're managing. It's some of the new things that emerge that we've got to address more quickly and be more able to mitigate those as much as possible. So I don't know -- I'm not going to guide you to where margins can go. Margins, we're not guiding to that. But what I can say is a core kind of piece of our strategy going forward is continuing to find cost efficiencies and managing our costs. Like you said, the margins are still strong for the industry. And if you look at the cost -- I call them the adjusted EBITDA cost, the difference between revenue and adjusted EBITDA. If you look at that growth this year, it's, I think, under 2%. So it's not like we're out of control or anything. We've managed to a fairly low level. But we know we can do more, and we got to execute better on that, and we're addressing that as we speak.

Our next question comes from Patrick Scholes with Truist.

I got on to the call a little bit late, so I apologize if any of these have been asked already. Any initial expectations or how should we think about CapEx spend for next year?

Yes. So I can take that. I mean, I think you would expect us to be in a similar range to where we are this year. And that -- it might move around slightly, but that's been our kind of target somewhere in that range. For the most part, we haven't given you anything specific. I think the key thing for you, and I know I've said this already, but we're going to continue to make investments in the parks. We're not going to suddenly change that mindset. So we'll continue to invest in the parks with capital, with new events, with aesthetics, whatever it may be to keep our parks fresh and reasons to visit.

Okay. And then -- my next question is just sort of a high-level sort of thematic question. Certainly, attendance in the last quarter was soft, but then you point out some really strong initial metrics for next year with Discovery Cove and group up 20%. When I think about especially Discovery Cove, a really high-end type of exclusive type of product, would you say that -- in your business, you're seeing these bifurcated trends where, say, Discovery Cove doing initial bookings looking really well, but then sort of last minute, more mass market attendance softer. Is that something that you also see in your business, this K-shape bifurcation? And then any other those types of trends that you see?

Yes. Sure, Patrick. So look, I'm glad you called out Discovery Cove. And that park is on pace this year to have record attendance and revenue. And as I mentioned in my prepared remarks, the revenue trends for next year are up. The bookings and revenue for next year are up over 20% compared to the same time last year. So that's a good sign. It's a really good park, and it's our most expensive park, right? So that kind of feeds into the comment about we look at that park, it's solid bookings. We look at our in-park per cap growing in the quarter and again in October. So there's -- are there consumers that are being impacted as part of our kind of guest mix? I'm sure there are. So I don't want to say they're not. But we see other things, like I said, like Discovery Cove and our in-park per cap that tell us there's also consumers who are fine, right? So kind of the mixed bag there, as you noted. But I think the takeaway, Discovery Cove, which is in Orlando, pacing well this year to a record attendance and revenue and looking solid for next year as well.

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

Yes. Thank you. On behalf of Jim and the rest of the management team here at United Parks & Resorts, I want to thank you for joining us this morning. As you heard today, we're confident in our long-term strategy, which we believe will drive improved operating and financial results and long-term value for stakeholders. So we thank you, and I look forward to speaking with you next quarter.