On this page of StockholderLetter.com we present the 4/25/2024 shareholder letter from ONESPAWORLD HOLDINGS Ltd — ticker symbol OSW. Reading current and past OSW letters to shareholders can bring important insights into the investment thesis.

 •  4/25/2024 Letter Continued (Full PDF)
 •  4/28/2023 OSW Stockholder Letter
 •  4/24/2025 OSW Stockholder Letter
 •  More "Sporting Goods & Activities" Category Stockholder Letters
 •  OSW Benford's Law Stock Score = 59

OSW 4/25/2024 Shareholder/Stockholder Letter Transcript:

O N ES PAWO R LD AN N UAL R EP O RT 2 0 2 3


Wellness is a journey.
The pathway to your destination
belongs to you.

Dear Fellow Shareholders,
First and foremost, thank you for your support of us,
your counsel to us, and your con   dence in us as we
have sought day in and day out under the most
extraordinary of circumstances to deliver outstanding
shareholder value. We have,    nally, returned to fully
normalized operations since the onset of the
extraordinarily destructive Covid-19 pandemic over
four years ago. And we have emerged stronger, more
powerful, better positioned and, as a team, more
cohesive and resolute than ever before. I also want to
express my profound gratitude to our cruise line
partners, destination resort partners and brand
partners for their con   dence in OneSpaWorld to
deliver accretive and strategic value.
Our Company delivered record results for    scal
2023 driven by the outstanding performance of our
incredibly talented team, that continually innovates,
enhances and leverages the strength of our
partnerships; our category dominant and highly
complex business model and strategy; our expansive
global operating platform and capabilities; our guest
services and products o   erings; and our mission to
execute flawlessly at sea and on land to deliver
extraordinary guest experiences and outstanding
service to our cruise line and destination resort
partners.
By year-end 2023, all our health and wellness centers
at sea and on land had returned to full sta   ng and
services, delivering outstanding guest experiences
and fueling increasing productivity and performance
across virtually all our key operating metrics. As a
result, we delivered four consecutive quarters of
record year-over-year performance in 2023 leading to
record annual    nancial results that substantially
eclipsed our    scal 2019 pre-pandemic record
performance.
Compared to    scal 2022, Total revenue increased 45%
to a record $794 million and Adjusted EBITDA
increased 77% to a record $89.2 million; and    scal
2023 Total revenue and Adjusted EBITDA were 41% and
53% higher, respectively, than the prior    scal 2019
records.
We achieved this exceptional performance while
investing in all aspects of our operations to drive
ongoing growth, pro   tability and shareholder returns.
I am con   dent that our operating platform investments
and our positioning to exploit the growth
opportunities we see ahead position OneSpaWorld to
continue our strong momentum over both the near
term and long term.
Throughout    scal 2023, the key strategic priorities that
drove our record performance, and we believe will
continue to drive our positive trajectory for years to
come, included:
Cementing and growing our cruise line partnerships.
During the year, we commenced operations on ten
new ships introduced into service by our cruise line
partners, and we were awarded long-term contracts
by Crystal Cruises and Adora Cruises, luxury cruise
lines currently operating four ships, with future ships
expected during the contract terms. In addition,
following year-end, we executed a new exclusive
agreement with Royal Caribbean Cruises and
Celebrity Cruises for their 40 ships currently in service
and future ships entering service during the agreement
term.
These partnerships further strengthen our marketleading competitive positioning (with an over 90%
share of the outsourced maritime wellness market) and
evidence our best-in-class operating capabilities and
service in support of our cruise line partners. With the
introduction of    ve new ship builds for 2024
announced by our cruise line partners, we expect to
end    scal 2024 operating aboard at least 198 vessels.
Expanding and introducing high value guest services
and products. We expanded our med-spa o   ering to
139 ships and innovated and introduced exciting new
enhancements across our wellness services and
treatments o   erings, including IV therapies, immunity
protocols and facial toning. We also added highly
sought after prestige brands, including Grown
Alchemist  , to complement and expand our
partnerships with premier brands, including Dysport  ,
CoolSculpting  , ELEMIS   and Kerastase  . Our
innovation pipeline is robust with our 2024
introductions of cryotherapy body services and new
cryotherapy and LED light facial services to
complement the new technology driven ELEMIS  
Biotec 2.0 facial.
Enhancing cruise productivity. We continued to
increase pre-booking of our health and wellness
services and treatments by leveraging our data
analytics capabilities to illustrate for our cruise line
partners the accretive impact of pre-booking. Prebooking guests spend on average 30% more than
those who book on board. Pre-booking also enables
our spa managers to better optimize sta   ng, facilities
and services capacities to drive higher health and
wellness center economics. At year-end, pre-booking
was available on 91% of our shipboard footprint, while
pre-booking as a percentage of service revenue grew
at a double-digit pace versus 2022.
We also continue to drive higher revenue services by
simplifying service options and modifying treatment
lengths, which contributed to growth in average spend

per guest service. These initiatives, among many
others, drove double-digit increases across key
metrics, including average weekly revenue per ship,
average guest spend, and revenue per sta    per day,
compared to previous records set in 2019.
Strengthening operational e   ciencies and
enhancing delivery of guest services. Throughout
2023, we achieved meaningful gains in service level
optimization across our health and wellness centers
worldwide, enhancing capacity utilization and
increasing pro   tability, while elevating the guest
experience. Key drivers included our strength in
shipboard sta    recruiting, training and onboard
management continuing to increase the number of
tenured shipboard sta    well above pre-pandemic
levels, enhancing guest service delivery and reducing
recruiting and training costs.
We also focused training on sophisticated sales
protocols to improve guest service-to-retail product
attachment, and introduced targeted packages,
promotions and marketing campaigns to create
top-of-mind awareness,    ll otherwise unsold capacity
and stimulate guest demand for incremental spa,
med-spa, salon and    tness personal training services
and retail products purchases. These multi-faceted
and integrated initiatives enabled us to better achieve
optimal sta   ng levels to exploit high onboard guest
demand, resulting in record sta    utilization metrics
such as revenue per sta    per day.
Enhancing our    nancial position and flexibility.
Fiscal 2023 also marked meaningful progress in
enhancing our    nancial flexibility, strengthening our
already durable balance sheet and generating robust
free cash flow. The year saw us fully repay our second
lien term loan and signi   cantly reduce the outstanding
balance on our    rst lien term loan. We simpli   ed our
capital structure through the completion of a warrant
exchange and utilized our positive cash flow to
repurchase our common stock. In total, we invested
$65.1 million in 2023 for debt repayment and share
repurchase, while ending the year with total liquidity of
$48.9 million and no material debt maturities until
2028.
Following year-end, we further enhanced our    nancial
position and liquidity as all remaining public warrants
were either exercised by their holders prior to their
expiration or canceled. Finally, with the full exit of
ownership by our private equity investor, Steiner
Leisure Limited, we move forward with a simpli   ed
capital structure and increased trading liquidity and
public float for the bene   t of our shareholders.
As we look forward from today, the future of
OneSpaWorld has never been brighter. The past four
years have demonstrated our amazing team   s ability to
execute our incredibly complex business model under
the most extreme conditions and in all types of
environments, culminating in a record year in 2023.
And our greatest growth and shareholder value
creation opportunities remain squarely in front of us.
The momentum for cruising remains strong and we
continue to add new health and wellness centers to
our fold and forge new and extended agreements with
our partners.
As we look to build on our 2023 milestone
achievements, we remain focused on elevating our
guests    overall cruise experience through innovative
health and wellness o   erings and our trademark
exemplary guest service. Our culture of service
excellence to our guests and to our partners clearly
positions OneSpaWorld to capitalize on a favorable
market outlook and deliver sustainable, pro   table
growth in the current year and well into the future.
In closing, I want to express my deepest gratitude to
our global team members whose passion and
commitment drove our 2023 success. Your hard work
has truly set a new standard for our Company   s
performance. And, again, my thanks to you, our
shareholders, for your steadfast support and
con   dence as we look to build upon an exceptional
2023 this year and in the years to come. I have never
been more excited about our team, our competitive
positioning, the trajectory of our business and our
opportunities ahead. I look forward to realizing what
we can accomplish together.
Sincerely,
Leonard Fluxman
Executive Chairman, Chief Executive O   cer
& President



 4/25/2024 Letter Continued (Full PDF)