Experiential And Outdoor Travel Tailwinds Will Support Attractive Long-Term Upside

Catalysts

About Pursuit Attractions and Hospitality

Pursuit Attractions and Hospitality owns and operates sightseeing attractions and distinctive lodges in iconic, high-demand destinations across North America, Iceland and Costa Rica.

What are the underlying business or industry changes driving this perspective?

• Rising consumer preference for experiential, outdoor and wellness-focused travel aligns closely with Pursuit Attractions and Hospitality’s portfolio of natural destinations and thermal experiences. This trend supports higher revenue per visitor and stronger pricing power over time.
• The focus on integrated guest journeys, where attractions, lodging, dining, retail and transportation are combined into a single experience, is expected to increase guest spend per trip and support operating leverage. This dynamic can lift EBITDA margins.
• Destination travel trade partners continue to lean into curated itineraries and group travel that feature Pursuit’s “must do” attractions. This can provide multi-year visibility for room nights and attraction volumes and support steadier revenue and earnings.
• Growth investments such as the Jasper SkyTram gondola replacement, Banff Gondola capacity and experience upgrades, and the reintroduction of Denali Backcountry Adventure are aimed at reinforcing these sites as anchor experiences. These initiatives can support volume growth, higher effective ticket prices and improved EBITDA.
• Ongoing lodge repositionings in supply-constrained markets, including Forest Park Hotel, Grouse Mountain Lodge and Lobstick Lodge, are already supporting higher ADRs where completed. They are intended to support RevPAR growth, mix shift toward higher value guests and stronger net margins.

Assumptions

How have these above catalysts been quantified?

• This narrative explores a more optimistic perspective on Pursuit Attractions and Hospitality compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Pursuit Attractions and Hospitality's revenue will grow by 3.9% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 6.6% today to 12.5% in 3 years time.
• The bullish analysts expect earnings to reach $65.4 million (and earnings per share of $2.46) by about July 2029, up from $31.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 34.0x on those 2029 earnings, down from 48.9x today. This future PE is greater than the current PE for the US Hospitality industry at 23.6x.
• The bullish analysts expect the number of shares outstanding to decline by 3.38% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.83%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Pursuit Attractions and Hospitality is committing approximately $300 million of organic growth investments through 2030, with about $200 million front loaded in the next 2 years. If visitor behavior or spending on experiential travel softens over time, these multiyear projects could produce lower than expected yield per guest, which would pressure revenue and delay the targeted improvement in adjusted EBITDA and margins.
• The business model relies heavily on fixed cost sightseeing attractions and distinctive lodges in supply constrained destinations. If longer term travel patterns shift away from national parks and outdoor bucket list trips, occupancy and ticket volumes could fall below current expectations, which would reduce operating leverage and weigh on net margins and earnings.
• The growth plan assumes a continued ability to raise effective ticket prices, ADR and RevPAR in iconic destinations like Banff, Jasper and Costa Rica. If guests or travel trade partners become less willing to pay higher rates over time, pricing power could weaken, limiting revenue growth and constraining EBITDA expansion.
• Pursuit Attractions and Hospitality is counting on long term demand from global travel trade partners and curated group itineraries. Structural changes in how tour operators package trips or a gradual shift of travelers toward more independent, lower cost options could reduce trade volumes, which would lower room nights, narrow ancillary spend and put pressure on revenue and net margins.
• The acquisition and tuck in growth thesis, illustrated by Tabacon and a pipeline of experiential infrastructure opportunities, depends on continuing to find attractive assets and integrating them effectively. If future deals are smaller, more expensive or harder to integrate than past additions, the company could see lower returns on invested capital, limiting the contribution of acquisitions to earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Pursuit Attractions and Hospitality is $70.0, which represents up to two standard deviations above the consensus price target of $58.0. This valuation is based on what can be assumed as the expectations of Pursuit Attractions and Hospitality's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $70.0, and the most bearish reporting a price target of just $49.0.
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2029, revenues will be $523.9 million, earnings will come to $65.4 million, and it would be trading on a PE ratio of 34.0x, assuming you use a discount rate of 8.8%.
• Given the current share price of $55.47, the analyst price target of $70.0 is 20.8% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.