Lindblad Expeditions Holdings, Inc. (LIND) Q4 2018 Earnings Report, Transcript and Summary

Good morning and welcome to the Lindblad Expeditions Inc Fourth Quarter and Full Year Financial Results Conference Call. All participants will be in a listen-only mode [Operator Instructions] After today's presentation, there will be an opportunity to ask questions [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Craig Felenstein, Chief Financial Officer. Please go ahead, sir.

Thank you, Jed. Good morning, everyone and thank you for joining us for Lindblad's 2018 Fourth Quarter and Full Year Earnings Call. With me on the call today is Sven Lindblad, our Founder and Chief Executive Officer. Sven will begin with some opening comments, and then I will follow with some details on our fourth quarter and full year results before we open the call for Q&A. You can find our latest earnings release in the Investor Relations section of our website. Before we get started, let me remind everyone that the company's comments today may include forward-looking statements. Those expectations are subject to risks and uncertainties that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of any forecast or estimates, and we undertake no obligation to update any such forward-looking statements. If you would like more information on the risks involved in forward-looking statements, please see the company's SEC filings. In addition, our comments may reference non-GAAP financial measures. A reconciliation of the most directly comparable GAAP financial measures and other associated disclosures are contained in the company's earnings release. And with that out of the way, let me turn the call over to Sven.

Thanks, Craig, and thank you everyone for joining us this morning. It's a pleasure today to review Lindblad's strong performance in 2018 and to highlight some of the key factors that contributed to the results this past year. I would also like to discuss some of the opportunities we see ahead. As we look to further build upon our long-standing position as the preeminent expedition company having delivered authentic and immersive expeditions to guests for the past five decades. Perhaps the most significant development this past year was the November 30 launch of our second new-build, the National Geographic Venture. It is only been operational for a few months, but both we and our guests are extremely pleased with the ship's performance and we look forward to a full year of operation in 2019. The National Geographic Venture is the fourth ship in our U.S. coastal fleet which along with the National Geographic Quest, Sea Lion and Sea Bird provides us with a strong position in primary markets Alaska, the Pacific Northwest, Baja, California and Central America. The addition of the Venture has also created an opportunity to deploy the National Geographic Sea Bird and Sea Lion differently. At times launching new product lines with shorter ship duration for new audiences that do not, as yet have the free time to devote to longer endeavors. We have experimented with four and five night offerings in Alaska, Coastal California, Baja, Belize and the Galapagos and the response has been extremely favorable resulting in expansion of this new approach in 2019 and beyond. When we decided back in 2015 to expand our fleet, the thesis was primarily the growing demand for high-quality expedition travel would provide a long runway for growth if we could thoughtfully increase our capacity, while maintaining high occupancy rates and net yields that thesis began playing itself out in the second half of 2017 with the launch of the National Geographic Quest in July and we built upon that in 2018 with available guest nights up another 8% this past year. Despite the added inventory, we were able to grow occupancy across our eight owned and five chartered vessels to 91% while net yields increased 6% to $1044, and this strong momentum is poised to continue in 2019 as the pace of bookings remains very solid with broad-based demand across our fleet and the diverse geographies we explore. It's clear that there is an ever-increasing hunger for people to connect with nature and culture, so many places in the world that are easily accessed are being rampantly overbuilt, crowded, the experience denuded. That has been our belief for decades, so what many are referring to as a new trend is really what we've been doing all along. People are inundated with technology and noise in one form or another and expeditions are a meaningful antidote to these and other pressures. And so I see no other future than increasing interest in this sector. At the same time, I believe the people who seek these activities tend to be highly intelligent and discerning. I believe our value proposition where legacy, experience, commitment and ships of appropriate size will continue to lead the way in seaborne expedition travel. Our newest ship, the National Geographic Endurance slated to begin operation in April of 2020 is a testament, technically innovative with the highest ice class of any purpose-built passenger ship ever. She will represent a whole new level of capability in expedition cruising both in terms of the level of comfort and the itinerary she is able to deliver. Interest in her breakthrough itineraries is off the charts with early reservations for the Endurance propelling bookings for 2020, up over 60% versus bookings for '19 in the same point a year ago. As a result of a clear indication of market enthusiasm this morning, we announced the signing of another contract with Ulstein in Norway to build the sister ship to the Endurance, which will be the fourth ice class ship in the Lindblad National Geographic fleet. I wish, I could tell you the name, but we have to keep it secret for a little bit until it's fully registered. But we are very, very excited about adding this ship to our fleet. This will be the next step in our -- in the evolution of our company and we continue to believe that our depth of experience, our focus, our deep understanding of what it takes to meaningfully deliver expeditions is unparalleled and of course the multi-faceted collaboration and brand value of National Geographic continues to be extremely relevant and powerful. At the same time, while demand for Lindblad is comfortably strong, we also realize that we are in a unique point in time. The expedition ship segment of the industry whilst still small compared to the cruise industry more broadly is growing at unprecedented levels. We want to ensure that we capitalize on this exponential increase of interest and have committed to a significant increase in our marketing spend as well as marketing, sales and communications platforms. Our reservation system while it has served us well for decades is being totally upgraded with features far beyond our current capabilities. We are investing and developing a new CRM system to become more efficient and effective with regards to our marketing efforts. And our website will be overhauled to better accommodate the increase of mobile as a prime technology platform. In other words, we are expanding our geographies and our fleet, but we are also ensuring that the systems and communication reach are as capable as we need them to be, to effectively handle the growth. As we expanded our marine-based operations, we are also continuing to drive growth at our land-based operator, Natural Habitat. Ben Bressler and his team are attracting more and more guests across a diverse set of product offerings. A key driver is based on the original theory behind our acquisition of Natural Habitat back in 2016. And that is our guests have a diverse portfolio of travel interests. In other words, a traveler to Antarctica one year may be compelled to take an African safari the next and vice versa. The original theory is now a fact and the crossover activity of Lindblad and NatHab constituencies growing exponentially each year and there are also additional benefit, particularly in the realm of best practices with each organization capitalizing on core abilities of the other. And finally, although it may not seem as relevant to all listening today. We are really stepping up our relationship to meaningful science together with the National Geographic Society. We both know that our ships explore areas that are both visited and often un-visited. These ships could be platforms for broadening our understanding of the world beyond what we currently do. Innovative technologies combined with scientific interpretation can -- and will add value to the world's knowledge base. This could be disseminated in myriad ways, editorial through global systems, scientific institutions and of course our guests, who truly value and appreciate the connection. At the end of the day, we are a growing and prosperous business. However, we are also an enterprise with a purpose beyond. We believe it's a winning combination on a multitude of fronts and one that will build significant shareholder value in the years to come. And now, I'd like to turn the call over to Craig.

Thanks, Sven. As Sven mentioned, Lindblad generated strong growth during 2018, as our strategic investment in expanding our capacity and developing our sales and marketing capabilities, along with a proven track record of delivering high quality and authentic expedition experiences, allowed us to further capitalize on the growing demand for immersive adventure travel. With the launch of the National Geographic Venture in December and a strong booking environment, we are poised to build on this momentum in 2019. Bookings throughout 2018 for future travel increased by 20% versus 2017. And we already have over 10% more bookings for 2019 than we did at the same point a year ago for 2018 with broad demand across our growing fleet. For the full year 2018, total company revenue increased 16% to $309.7 million with 14% growth at the Lindblad segment and 28% growth at Natural Habitat. We also delivered significant operating leverage as the strong revenue increase resulted in adjusted EBITDA growth of 26% to $54.8 million with a 24% increase at the Lindblad segment and a 46% increase at Natural Habitat. Turning to each of the segments, the Lindblad segment generated revenues of $246.3 million during 2018, 14% growth over a year ago with increases across all key metrics. Available Guest Nights expanded 8% primarily due to a full year of operations for the National Geographic Quest, which launched in July of 2017 and to a lesser extent from the launch of the National Geographic Venture in December of 2018. The prior year did also include the impact of the voyage cancellations on the National Geographic Orion and Sea Lion that we have previously discussed, partially offset by a transatlantic voyage on the National Geographic Orion as the vessel travel from Portugal to Chile in October of 2017. This voyage was not repeated in the current year. Occupancy in 2018 increased to 91% from 87% a year ago, as we saw increased broad-based demand across our fleet and we further expanded our net yields with 6% growth to $1044 per night. Reflecting the strong occupancies and higher prices across our entire fleet for most of the year. Turning to the cost side of the Lindblad segment, operating expenses in 2018, increased 8% versus 2017, primarily reflecting a 9% increase in cost of tours due in large part to a full year of operations of the National Geographic Quest and launch costs related to the National Geographic Venture as well as higher fuel costs in the current year. Fuel costs in 2018 increased 32% versus the prior year, primarily due to the fleet expansion as well as from higher prices. Fuel was 3.7% of revenue in 2018, as compared to 3.2% in 2017. Overall, adjusted net cruise cost on a per-night basis increased 2% to $806 due predominantly to the launch related to the National Geographic Venture with a limited number of revenue days given the timing of the launch, as well as from higher overall fuel costs in the current year. Sales and marketing expense in 2018 increased 10% primarily due to higher commissions associated with the strong revenue growth while G&A expense was in line with 2017 as higher personnel and credit card costs to support our growth initiatives were offset by lower severance costs and a decline in stock-based compensation expense associated with shares granted under the CEO allocation plan a year ago and due to the majority of our outstanding options being fully expensed at the end of 2017. Depreciation and amortization increased 21% this past year primarily due to the launch of the new vessels. When you exclude the stock-based compensation, severance cost and DNA, total operating expenses at the Lindblad segment were 11% higher than 2017 with the majority of the increase associated with the new vessels. Overall, the Lindblad segment delivered significant operating leverage during 2018 with 14% revenue growth resulting in 24% adjusted EBITDA growth. Turning to the Natural Habitat segment, revenues for the full year grew 28% versus 2017 to 63.4 million due to additional departures and higher pricing. Natural Habitat also delivered real operating leverage this past year with adjusted EBITDA increasing 45% to 7 million as the revenue growth was partially offset by a 26% increase in operating expenses due to the higher marketing and personnel costs to drive long-term growth initiatives and as well as increased cost of tours for the additional departures this past year. Total company net income available to common stockholders in 2018 was 11.4 million or $0.24 a share versus 8.7 million or $0.19 per share of a net loss available for common shareholders in 2017. Due to the improved operating results as well as from lower tax expense primarily due to a $12.7 million impact from the enactment of the U.S. Tax Cuts and Jobs Act in December of 2017 that we discussed a year ago. Turning quickly to the fourth quarter of 2018. Total company revenue growth was 12% versus the fourth quarter of '17 while adjusted EBITDA declined by 0.7 million as the revenue growth was more than offset by higher costs, most notably from the timing of the launch of the National Geographic Venture as expected. The Lindblad segment generated 6% revenue growth to 51.8 million from the launch of the National Geographic Venture in December. Occupancy expansion to 91% versus 86% in the fourth quarter of 2017 and 16% net yield growth to $1071 per night, which was partially offset by a 9% decline in Available Guest Nights. The decline in Available Guest Nights versus the fourth quarter a year ago despite the launch of the Venture was primarily due to the trans-Atlantic voyage on the National Geographic Orion in Q4 that I mentioned earlier and increased drydock days due to the timing. The trans-Atlantic voyage also negatively impacted occupancy and net yields in Q4 a year ago. Lindblad segment operating expense increased 10% on a reported basis versus the [fourth] quarter of 2017 and increased 10% excluding stock-based compensation and depreciation and amortization. The year-on-year growth was primarily driven by cost from the launch of the Venture, increased commissions due to the revenue and booking growth we generated this year and higher drydock and personnel costs. Fuel costs in the fourth quarter were 9% above the prior year, due in large part to the additional operating nights from the Venture as well as from higher pricing, fuel was 4.5% of revenue, which was slightly higher than the fourth quarter of 2017. Adjusted net cruise costs on a per-night basis increased 20% due predominantly to the launch of the Venture with a limited number of revenue days given the timing of the launch, as well as from the higher overall drydock due to timing and personnel costs in the current year. Overall, the Lindblad segment 6% revenue growth in the fourth quarter was more than offset by higher costs, most notably from the launch of the National Geographic Venture which as expected resulted in adjusted EBITDA declining by $1.6 million compared with the fourth quarter a year ago. At the Natural Habitat segment, revenues in the fourth quarter grew 31% versus a year ago to $18.8 million due to additional departures and higher pricing, adjusted EBITDA increased 30% to $3.8 million with the revenue growth, partially offset by a 32% increase in operating expense due to higher marketing and personnel costs and increased cost of tours for the additional departures. In the fourth quarter, total company net loss available to common stockholders was $4.6 million or $0.10 a share versus a loss of $16 million or $0.36 a share reported in the fourth quarter a year ago. As the improved operating results and lower taxes improve the results, the taxes primarily improving due to the enactment of the U.S. Tax Cuts and Job Act in December of last year. Looking at our balance sheet, we remain extremely well positioned to invest in future growth opportunities. We ended the year with $113 million in unrestricted cash, free cash flow for 2018 was $2 million including $43 million spent on the new-builds if you include only maintenance CapEx, free cash flow was $45 million for 2018. We did spend $900,000 this past year under our $35 million stock and warrant repurchase plan and we have approximately $12 million remaining under the existing plan. We will continue to be opportunistic with our buyback program, but our first priority for capital allocation remains investing in our existing business and external growth opportunities that will enhance our long-term growth profile. Turning to our expectations for the full year of 2019. We anticipate significant growth driven by capacity expansion, as well as increased net yields. Available Guest Nights overall, are anticipated to increase in the high single-digit range in large part from a full year of operating the National Geographic Venture. The Lindblad segment for 2019 is currently pacing 10% of the -- same point a year ago with regards to bookings and we are already at 87% of our full year projected ticket revenues for 2019 despite the additional inventory, as compared with 89% of the 2018 full year ticket revenue at the same time a year ago. It is important to note that while our next new vessel, the National Geographic Endurance is scheduled for delivery in 2020. It will have a negative impact on EBITDA in 2019 as it will have startup costs this year ahead of its launch. We do also anticipate an increase in marketing spend in 2019 as we look to further capitalize in both the short and long-term on our increased capacity and the growing demand for expedition travel. Lastly, we will begin incurring operating costs associated with the rollout of our new CRM and reservation systems later this year, which given our average nine month booking window will help drive further revenue growth beginning predominantly in 2020. Factoring in these items, the impact of the additional capacity in the current year and the strong booking trends we are generating, we expect total company tour revenue in 2019 between $350 million and $358 million, 13% to 16% growth versus 2018. And adjusted EBITDA between $67 million and $70 million or 22% to 28% growth versus 2018. We also anticipate another year of strong free cash flow generation excluding the new vessel spend. Maintenance CapEx will increase this year to approximately $20 million primarily from the fleet expansion as well as development costs related to implementing a new CRM and reservation system later this year as well as scheduled additional spending on our international vessels. Growth CapEx in 2019 will primarily include two installment payments for the new blue water vessel that we announced this morning as well as spending in preparation for the delivery of the National Geographic Endurance in early 2020. Thank you for your time this morning and now Sven and I would be happy to answer any questions that you may have. Operator?

Thank you [Operator Instructions]. The first question will be from Steve Wieczynski with Stifel. Please go ahead.

So I guess the first question will be around the guidance and Sven and Craig, you talked about the higher marketing spend for 2019. I guess, what I'm getting at here is, as we look past 2019, will that -- do you guys think that marketing spend will continue to be at the elevated levels in 2020 and beyond. I am just -- we're just trying to get a feel for how that EBITDA flow through should kind of look over the next couple of years if that makes sense.

Sure. Yes, we'll give you dual answer. Craig will weigh-in as well. Well, first of all, the reason for increasing the spend is if you have an environment where it is our belief that -- and if you have an environment where there is a significant growing interest in this sector that generates a lot of noise in one form or another. And we believe that there is an opportunity to really solidify our position and take advantage of that noise and that requires a certain amount of investment to accomplish. And we do believe that that is very, very much in the long-term interest of the enterprise. How that will -- you don't necessarily have to do that like forever at that sort of level, but we want -- kind of want to kick-start this from the perspective of there is this significant growth in the sector broadly happening in '19 and '20. We want to make sure we're absolutely at the forefront from the perspective of people's consideration. So we believe, it's largely a long-term investment that will pan out over the next couple of years and beyond and then, we'll adjust it accordingly as we move forward.

Yes, thanks for your question, Steve. So the other thing that I would add is -- we always anticipated when we were launching these vessels that we would have to ratchet up, our marketing spend in conjunction with the excess capacity that was always part of our long-range plan. I do think when you look at the step function of the spend in those marketing dollars that 2019 will be a bigger step-up than most years, that all depends obviously on how much inventory we add and how much capacity we add over time. But I would expect not the same level of increase in future years at the current capacity levels, but a normalized increase from current levels.

And then second question would, just Craig, I know if you can help us maybe think about, you talked about the high single-digit range for cruise days this year, but is there anything from a quarterly cadence perspective that we should be thinking about, whether it's drydocks or itinerary ships and also in terms of spending for Endurance and those pre-launch costs, maybe when will -- I assume those will kick in more in 3Q and 4Q, is that the right way to think about it?

Sure. So we will handle those separately. So when you look at the year, the dry docking year for 2019 is very similar to the dry docking year for 2018 with the exception of that we now have another vessel in the Venture which will have a drydock in the predominantly in the fourth quarter. But when you look at the Available Guest Nights growth throughout the course of the year, you're going to see the first quarter will be very similar to the full year, you'll have it little bit less, probably in the second quarter and then the third and fourth quarter will be go back to that kind of a high single-digit range, maybe even a little bit higher. Couple of things to know when you look at the year, obviously the positives of the growth are the Venture which certainly will provide a benefit throughout the course of the year. We do have a little bit of headwinds with the Orion in the second and third quarter just in terms of transit days because her itineraries that she is doing this year require more transit days getting from one location to the next. It was a conscious decision that was made because the itineraries that we're doing this year will have higher yields and higher occupancy rates than we did a year ago. But we do lose a couple of days because of that and then we lose Cuba this year, which is kind of a first quarter item in 2019, but we do gain some Egypt itineraries really predominantly in the back half of the year. So that's kind of the way it would shake out really from Available Guest Nights perspective. When you look at the -- turning to your second question on the Endurance, I really don't expect much operating expense in total fourth quarter. There will be some spend, certainly with regards to CapEx throughout the course of the year but with regards to OpEx, I don't expect to see much during the fourth quarter. In order of magnitude, I'm not going to break it out specifically, but when you look at some of the spend that we're going to have to do with IT, the operating expenses related to the new reservation system, related to the CRM system, plus you add in the impact of the Endurance, those two things combined would probably be somewhere in the $3 million to $4 million of additional expense in the current year.

And then real quick, one more, if I could. Whatever you're going to call, I'm going to call it Endurance 2. Is the costs similar to the original Endurance?

The cost overall is up about 10% versus what the original Endurance was. We still expect there to be a significant return on this vessel from an invested capital perspective, somewhere in the high teens. When you look at the yields we are able to achieve on this vessel and the occupancies that we expect on this vessel. So we expect overall the price to be up about 10% to 12% or so, given currency.

The next question comes from Greg Badishkanian with Citi. Please go ahead.

Hey guys, good morning, it's actually Fred on for Greg. Just a follow-up on that last question for the new-builds, it's up 10%. Is that an increase? Is it just due to currency or is there actually a change in what you guys are requesting? So I thought that the Endurance was a prototype, so I thought that -- the costs over time should come down.

So it's up for a number of reasons, one is currency, that's not the primary driver. The primary driver is the first vessel was a prototype, certainly, but it was a prototype also for the yard. And the cost of materials at the yard, the cost of labor at the yard and the understanding where it takes to build a vessel of this size and this type and this intricacy, as we are negotiating with the yard, they were looking for certain kind of return on the vessel and this was the ultimate price that they felt they had to have to build the next vessel. The good thing for us as I mentioned earlier is when you do look at the return on this vessel given the yields that we are able to achieve and we are already seeing that with the -- I would say massive bookings that we're seeing on the Endurance and the really high yield that she is attracting already well over a year before she even travels. It has been encouraging. So the ability to continue to generate a return on this vessel somewhere in the high teens made in a very attractive investment opportunity.

Okay, that's fair. And if we look in Alaska, specifically, there's been lot just with the capacity growth in that market. Specifically, I know that it's not exactly your customer base on the contemporary capacity that's coming in there. But can you just sort of talk about what you're seeing in that market?

Yes, Sven here. So what we saw was -- it was -- this was a very, very interesting year in that -- a couple of months ago, we saw some softness in the Alaska market. We are concerned about it and reacted to it, but what we've discovered was in fact it was more than anything else, it was for reasons that we don't 100% understand. But there was somewhat of a delayed fuse and for example in normal years, we would not have any inventory or prior to the Quest and the Venture, we would have no inventory available in the beginning of a particular year for Alaska, it was basically gone. And this year, really for the first time, we still had some availability in January and now in February, little bit more now for the rest of the period leading up to Alaska and the booking pattern for Alaska continues and continues robustly but we never knew what that pattern was until this year because with the level of inventory we had, we were done by the end of previous year. So we foresee that Alaska still remains very, very strong and it's just an adjusted, sort of time frame in terms of how we aggregate the bookings to get to where we -- where we want to be.

Yeah, I think, hi, this is Craig. I think, it's important to know that for us this year especially not only do -- did -- as Sven mentioned that the fuse last a little bit longer. We have significantly more inventory, right. So we have a Quest and Venture in addition to the Sea Bird and Sea Lion and what we are seeing across all four of those vessels is a lift. Now, in total dollars, so for us, we're seeing significant demand in terms of quantity. It just took a little bit longer to get there this year than it would have in the past, partially due to the environment. I think also partially due to the fact that we have more inventory than we did a year ago.

Significantly more inventory.

Okay. So just to sum that up, the slower booking patterns in Alaska is partially due to what you guys are seeing from the capacity you're adding but kind of also just some market dynamics, is that fair?

No -- it's more, if you think about it, prior to Quest, we had a 124 beds in Alaska and the Quest and the Venture have 100 each, so I mean, it's a significant change in inventory, right. And so our entire system, adjusted for the larger inventory and so like while we only had the Sea Lion and Sea Bird by December of a particular year for the following year, we were essentially full, our 124 beds were gone. Now we've tripled that basically and so they weren't all gone by the end of December and so they just continued into January and February, where previously, we would have to reject people in January and February, March, if they wanted to go to Alaska.

This was the exact thesis that for why we build the -- the Quest, the Venture in the first place, which is we knew we had significant wait list on these kind of vessels, because they were sold out bit so early and now, we're able to achieve much higher dollars, because we can accommodate a lot of those people who wanted to book later on.

[Operator Instructions] The next question comes from George Kelly with Imperial Capital. Please go ahead.

Just a couple of questions for you. So first, the sales platform you talked about. Wondering, if you could talk more about the biggest components. What does that mean and then what is the opportunity, what can you improve?

Yes. So let me -- let me touch upon a few of those things and Sven could maybe add some color if you'd like. So the new reservation system really does a number of things for us that our previous system did not. I think the first and foremost, it will allow us to be a little bit more dynamic with our pricing. So today, we tend to set our pricing and we tend to either pretty consistent after that fact. What this system will allow us to do, it will allow us to start out with a certain price level and if demand ultimately ratchets up, so dramatically, it will allow us to raise pricing over time. Just to take advantage of the demand in the marketplace. So that's certainly a first thing. Another item is today with regards to online bookings, a customer can make an online booking effectively to a reservation specialist here at our company who is ultimately taking that booking and ultimately making it happen. The system in the future will allow that to happen seamlessly online, which is fantastic. It will also allow for a number of other items like multi-currency booking, it will allow us to distribute live inventory to third party travel agents. So there's a number of things associated with, not to mention the user interface will be much more easy for folks around the company to use as well. So it's a variety of options there. At the same time, on the CRM side of things, right now, we have a pretty good view of our guests. But it's very, very manual and what the CRM system that we're investing in will allow us to do will -- to have a really a 360 degree view of that guest. We could have more personalized interactions with them over the web, over the phone, through various marketing channels. We'll be able to create dynamic customer journeys which will be allow us to understand what the customer wants and needs, which is fantastic, and allow us to capture what the guest interests are both on board and off board. So it allow us to really be more intimate with our guests and understand what their desires are just allow us to be more efficient with our marketing dollars, moving forward.

Got you, that's helpful. And when will we see -- when will that stuff start rolling out?

I think the second half of this year, you'll start to see some real influence. There is some things that will roll out before then in the first half of the year. But really will be less customer facing in the first half that the functions and features of the new systems will really rollout in the back half of the year, which is why the -- the benefit of that will really take place in 2020 -- starting 2020.

Okay. And then second question on Natural Habitat, big growth rate this year especially back half of the year. How is that happening? How are you guys growing that business?

Sven here. In any case the way that's happening is, and when you think about it, a company like NatHab which is obviously a land-based company can adjust inventory in a very, very different way than we can from the perspective of deciding to build the ship, it takes couple of years and it gets launched and so you can kind of ratchet up or down inventory at in a much shorter time frame and that has particularly found a tremendous increase in the interest in African travel. That's been the primary growth driver this past year. And of course, having access to our mailing list and our constituents is a huge benefit to any land-based travel company because all of a sudden it's cost effective access to highly targeted list of people that are interested in those kind of thing, plus the fact that NatHab is able to offer our voyages to their guests and that has grown exponentially over the years in terms of what they are sending this way. So what they're sending this way and what we're sending that way is like a chemical reaction, which is very very powerful.

Just a little bit of color behind that. The last comment that Sven made. If you look at the amount of trips that were booked from the Lindblad guest list on Natural Habitat, that's up over, well over 60% this year versus where it was in the prior year. And conversely, when you look at the stuff that we've been able to generate from Natural Habitat, that's up over 80%. So we're seeing really nice cross promotion and that's on top of really nice growth in 2017. So I think both of the companies are working really well together and maximizing the opportunity across both platforms.

Last question from me, it sounds like Endurance's -- the bookings that you've seen so far it's been positive and I'm sure you look to that when you were considering ordering this new vessel. So can you maybe provide a bit more color or compare what you're seeing so far with Endurance compared to the other ships the two ships that you launched recently or just any more data around what you've seen so far. Thanks.

Yes, well, first of all, the Endurance, the way she is being built, her ice class, her technical features really opens up totally new horizon. So for example, we will be in the Arctic beginning in April. I mean that was unheard of years ago and it's not something we would do with our other ships even though they do have a significant ice class. This has way more of one. We will go through the Northeast passage, that's something that is entirely new for us. We will have a 35-day voyage from Argentina to the Antarctic -- cross Antarctica to New Zealand and back, and these are virtually sold out. The first one is virtually sold out. The second one will be in the next, I would say month or so, in all likelihood. So the ability for us is to really open up new geographies and new ways of traveling at different times of year as well and so it's additive, it's not. One of the things we wanted to make sure, was that we were not creating an environment where one ship unduly competes with another ship and its ideas and so you get into value judgment about is this one better than that one. So we are vigilant about making sure that these operate in ways that are distinctly different and so they appeal to an entirely different audience from the perspective of what the itineraries are and what people's aspirations are.

Yes, I think -- the other thing to add on that front is, when you look at the 60% plus growth that we've already seen in 2020 bookings that Sven touched upon earlier that is driven almost wholly by the early bookings for the Endurance. Now what's interesting is, we're still seeing the same bookings that we would expect across the remaining fleet that we have. So our existing vessels are doing what they want and when you're ordering a new vessel, you want to make sure that there is additional capacity out there, not just replacement capacity. So the fact that our existing vessels are still selling really, really well for 2020 [indiscernible] and Endurance has just been additive that gave us a lot of confidence that we can certainly add another vessel here for the end of 2021.

Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Craig Felenstein for any closing remarks.

Thank you everybody for joining us this morning. We appreciate your time. If you have any further questions, please give us a call, we'll be happy to answer anything you may have. Thanks.

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