Lindblad Expeditions Holdings Inc (LIND) Q2 2019 Earnings Call Transcript
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Lindblad Expeditions Holdings Inc (NASDAQ: LIND)
Q2 2019 Earnings Call
Aug 1, 2019, 8:30 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good morning, and welcome to Lindblad Expeditions Holdings, Inc. Second Quarter 2019 Financial Results Conference Call. [Operator Instructions].
I would now like to turn the conference over to Craig Felenstein, Chief Financial Officer. Please go ahead.
Craig I. Felenstein -- Chief Financial Officer
Thank you, operator. Good morning, everyone, and thank you for joining us for Lindblad's Second Quarter 2019 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 I will follow with some details on our second quarter 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.
Sven-Olof Lindblad -- Founder, Chief Executive Officer, President and Director
Thanks, Craig, and thank you, everyone, for joining us this morning. Lindblad's strong second quarter results further demonstrates the opportunity we have to deliver sustained growth as we expand our capacity while maintaining high occupancy levels and net yields. In addition, the addition of the National Geographic Quest and Venture to our fleet has increased our available berths by over 30% since -- from 200 -- 2016 levels and the growing demand for authentic expedition travel, along with a diverse base of loyal guests, has enabled us to fill our expanded fleet at healthy price points. What has been particularly gratifying, is seeing the U.S. fleet, which has grown from 124 berths to 324 berths, reaching strong occupancy levels, both heading into the Alaska season in Q2 and throughout the Alaska season in Q3. When adding capacity in a region, you always want to be sure that cannibalization does not materialize. And that certainly has been the case with Quest and Venture.
A big part of this success is certainly the allure of these remarkable geographies, but we have also taken the time to explore and develop a diverse set of itineraries within South America, the Pacific Northwest and Alaska. This has allowed us to differentiate the experiences and maintain pricing strength across both the new and existing vessels. Remember, the National Geographic Quest and Venture were the first newbuilds ever for Lindblad Expeditions, developing ideas, which allow both older and new vessels to maintain value represents an enormous opportunity. It took a bit of trial and error to find the right balance, but I believe we are now headed toward further maximizing the combination of old and new.
We expect to have the same outcome when we add the National Geographic Endurance to our fleet next year. It's so rewarding to watch this state-of-the-art vessel come to fruition, knowing all the thought and planning that went into her. And it's really, really gratifying to see how the public has responded, filling her diverse set of planned voyages really, really fast. Being able to take or to places at certain times of year, the Artic in April, for example, where we would never have considered before represents a vast new set of opportunities that has energized the entire enterprise. It also proves out the validity of having committed to such a high ice class vessel. We literally can go where no man or woman has gone before.
As we add inventory in our business, there are a number of key factors that are constantly dynamic in motion that we need to be very attentive to. An example, there are often shoulder seasons, where demand is softer, what are the best approaches to improve on shoulder season results is reconfiguring itineraries, value-added promotions, adjusting prices. It's a key to business success, because in aggregate, in a year, there are many months of shoulder season offerings. New geography. We must incorporate new geography, but it's not always going to be an instant home run. Sometimes you need to invest in building value, building a story. The South Pacific is such an example. We can absolutely do our best work here and provide some of the finest experiences. In fact, I was just in French Polynesia aboard National Geographic Orion this past quarter, and it never ceases to amaze me how remarkable this destination is and how positively our guests react to it.
Demand has grown steadily over the last 2 years, and we believe we are just beginning to tap into the potential that this region offers. While new geographies provide unique growth opportunities. So are -- so is the ability to reconfigure expeditions in existing regions. We now have developed 11 different itineraries under the definition of Wild Escapes, including trips to Channel Islands, the North Coast of Costa Rica and a whale-focused program in Bahis, Mandalay Bay. These are 5-night voyages with the opportunity to add other land components as extensions, which will also generate additional revenue. So so far, these have been wildly successful and preliminary analysis suggests the median age is nearly 10 years younger. From a lifetime value perspective this is a really big deal given the repeat rates that we have.
As we focus on strategically expanding our fleet and developing new itineraries, we also continue to invest in building out our infrastructure to efficiently support our growing enterprise. Q2 is a critical quarter on the technology front, as we push to implement 4 new technology projects. Our new CRM platform is slated to go live during the third quarter, and we made significant progress on a new reservation system as well as our new marketing cloud and website. Once fully online, these new capabilities will link our various marketing and reservation systems, provide a complete 360-degree view of the guests in providing us with a platform to create personalized and automated omni-channel journeys, improving our engagement and conversion rates.
Additionally, our new reservation system will enable more seamless yield management, including dynamic pricing capabilities as well as provide a host of other capabilities allowing us to provide a more frictionless reservation experience. We are also investing in The World We Live In. On July 7, we made a major announcement that I'm extremely proud of. Lindblad expeditions as of 2019 is a carbon neutral company. What does that mean? We've always taken meaningful steps to mitigate our carbon footprint. However, with today's technology, we still cannot completely avoid the use of carbon in our operation that we release into the atmosphere. For these tons, 50 metric tons in aggregate, we are offsetting our entire operation, ships, offices, all ground activities and all employee travel by investing in accredited activities that would not get off the ground otherwise in areas, such as clean energy, reforestation and other forms of diminishing carbon use or sequestering carbon. Why are we doing this?
We have historically committed to a broad-based platform to support science and conservation. We have always believed in investing in the health of places we visit and the environment generally. To that end, we raise between $1.5 million and $2 million annually to support meaningful work around the globe. We know that climate change and global warming, are one of the, if not the largest issues, humanity must face and deal with. Becoming carbon neutral was a strong statement, acknowledging that fact, and we believe we will catalyze many other enterprises to take greater responsibility for their contribution to the problems by becoming part of the solution. I firmly believe that the traveling public will in years ahead, view a company's relationship with environmental issues as a primary consideration in their choices.
Last year, we eliminated all guest-facing, single use plastic. We are putting pressure on suppliers regarding packaging, our commitment to sustainable food sourcing is both sophisticated and effective, and we will continue to be at the forefront of behavior that the public will reward. Before I finish up, I want to take a moment to discuss one of the most frequently asked questions I get. And that is, what is your view on the growth of Expedition cruising and the competition coming online? Well, Expedition cruising is definitely one of the fastest growing, if not the fastest-growing sector of the travel industry. There are many reasons for this, but I was particularly interested to read an article on July 21 by Hilary White entitled, "The 1 Thing You Should Be Spending Money on to Be Happy." She wrote, Dr. Thomas Gilovich, a Psychology Professor at Cornell University wrote study in the Journal of Consumer Psychology called A wonderful life: experiential consumption and the pursuit of happiness.
In it he concludes that as important as possessions might be to a person's identity and sense of self, they are not as important as a person's experiences. We are the sum total of our experiences. We are not the sum total of our possession, however, important they might be to us. If called upon to write our memoirs, it is our experiences we would write about not our possessions. It's true. And we've known it a long time, but it was particularly well-articulated in this article. There's also a sense of urgency about experiencing the natural world given all the changes that are going on and that we will continue to go through. As to competition, well, if you look at the growth of interest in Expedition cruising and the growth in the number of beds available to service that growth.
It's clear, as I've said in the past that all the newbuilds in '19 and '20 would amount to fewer beds and one new mass market cruise vessel, less than one. Think about it. And we still believe unequivocally that the increased exposure to the idea of Expedition cruising will drive people to us. We have the most diverse global platform in the industry, our geographic knowledge is unparalleled. Our field teams, captains, expedition leaders, naturalists, are the most experienced by far and the size of our ships speak volume. No greater than 126 on newbuilds, a critical, deeply thought out number, maximizing guest experience while minimizing impact.
Add to this, our 50-plus years of heritage and a productive meaningful alliance with National Geographic, and you have quite a compelling story to tell our prospective travelers. Honestly, I believe in my heart of hearts that going on an expedition cruise with anybody other than ourselves is simply a mistake. We have the right stuff and understand what it takes to provide travelers with an experience of a lifetime. Thank you for your time this morning.
And now let me please turn the call back to Craig.
Craig I. Felenstein -- Chief Financial Officer
Thanks, Sven. The strategic investments that Lindblad has made over the last several years to expand our capacity is generating strong financial results today, while we continue to invest to further capitalize on the long-term opportunity given the growing demand for adventure travel. Our expanded inventory, along with a proven track record of delivering authentic and high-quality experiences, is combining with a strong booking environment to deliver strong growth in the short term, while investments in additional capacity, upgrading our technology infrastructure and expanding our sales and marketing capabilities will provide us the ability to sustain this momentum for years to come.
Turning to the second quarter of 2019, specifically. Total company revenue increased 10% versus the second quarter a year ago, led by 9% growth at the Lindblad segment and 18% growth at Natural Habitat. The increased revenue growth contributed to a 9% increase in adjusted EBITDA led by 11% growth at the Lindblad segment. Looking at the individual segments, the Lindblad segment generated revenue of $64.9 million as compared with $59.6 million during the second quarter of 2018. That the 9% year-on-year growth was primarily driven by a 6% increase in available guest nights, mostly from the launch of the national Geographic Venture in December 2018. The quarter also included a 3% increase in net yield to $1,030 per night predominantly due to higher ticket prices across the fleet and higher other guest revenue as well as from the impact of changes to certain itineraries, while occupancy remained strong at 89%.
Turning to the cost side of the business. Lindblad segment operating expenses increased 10% on a reported basis primarily driven by a 9% increase in cost of tours, led by the addition of the National Geographic Venture to the fleet at the end of last year. Fuel costs in the quarter declined 5% versus prior year, as the fleet expansion was offset by lower fuel prices and the impact of changes in itineraries. Fuel was 3.8% of revenue as compared to 4.4% of revenue in the second quarter of 2018. Sales and marketing costs increased 17% versus a year ago due to higher commission expense associated with the revenue growth as well as from the planned marketing investments we have discussed previously, including costs associated with the rollout of our new CRM and reservation systems and increased marketing spend as we look to further capitalize on our increasing capacity and the growing demand for Expedition travel. G&A expenses decreased 2% primarily due to lower VAT taxes in Ecuador, which were partially offset by higher personnel costs and transaction costs related primarily to our warrant exchange that will be completed in the third quarter.
The second quarter of 2019 also included $1.1 million of increased depreciation and amortization, mostly related to the addition of the National Geographic Venture. Including stock-based compensation, depreciation and amortization and transaction costs, Lindblad segment operating expenses increased 9% versus the second quarter a year ago. Overall, adjusted net cruise cost on a per night basis increased 2% to $784 per night primarily as a result of the increased marketing and technology costs as well as from some additional transition days on the National Geographic Orion ahead of its Russia Far East itineraries. Overall, the Lindblad segment generated additional operating leverage this past quarter, with the 9% revenue growth, driving an 11% increase in adjusted EBITDA to $13.3 million, despite the investments in future growth initiatives. At the Natural Habitat segment, revenues grew 18% to $11.8 million (sic) [$11.7 million] due to additional departures and higher pricing.
Adjusted EBITDA decreased $0.2 million versus the second quarter a year ago to a loss of $0.8 million as the revenue growth was offset by a 19% increase in operating expense due to costs associated with the departures that I just mentioned as well as the timing of marketing and personnel spend to drive future growth. I should also note that we continue to see the benefits of combining the Lindblad and Natural Habitat businesses with cross-selling expanding further in 2019, including a nearly 30% increase year-to-date in Natural Habitat sales of Lindblad itineraries. Total company net income available to common stockholders in the quarter was $1 million or $0.02 per diluted share versus $0.1 million or $0.00 per diluted share reported in the second quarter a year ago.
The year-on-year increase was driven by the higher operating results along with a positive $1.6 million swing in foreign currency partially offset by the higher depreciation associated with the launch of Venture. Turning to our balance sheet. We remain extremely well positioned to invest in future growth opportunities. We ended the quarter with $79 million in unrestricted cash. Free cash flow for the 6 months year-to-date was a use of $5 million primarily reflecting $33 million spent on the newbuilds, including only maintenance capex. Free cash flow was $29 million year-to-date, an increase of 38% or $8 million from the same period a year ago. During the quarter, we also further expanded our financial flexibility by securing an export credit agreement with regard to our second Norwegian Blue Water build. This loan is available at our option when installment payments are due and will bear either a fixed interest rate of 6.36% or a floating rate equal to LIBOR plus a margin of 3%. The next installment payment for our second blue-water vessel of approximately $30 million is anticipated to be paid in September of this year.
Following the quarter, we further simplified our capital structure and reduced potential future dilution through an exchange offer to redeem all of the outstanding warrants of the company. Each warrant exchange as part of the offer received 0.385 shares of common stock for each warrant. 98.5% of the outstanding warrants were exchanged as part of the offer and the holders also approved an amendment to our existing warrant agreement permitting the company to require that the remaining warrants be converted into 0.36575 shares of common stock. We anticipate completing the exchange later today, and we'll ultimately redeem all of the outstanding warrants for approximately 3.9 million shares.
Turning to our full year expectations for 2019, we continue to anticipate significant growth driven by capacity expansion as well as increased net yields. The Lindblad segment is currently pacing 10% ahead of the same point a year ago with regards to bookings, and we are already at 99% of our full year projected ticket revenues for 2019 despite the additional inventory as compared with 99% of the 2018 full year ticket revenue at the same time a year ago. Given the current operating environment, the results year-to-date and the sustained booking trends, we continue to 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.
Thank you very much for your time this morning, and now Sven and I would be happy to answer any questions you might have.
Questions and Answers:
Operator
[Operator Instructions] The first question comes from Steve Wieczynski of Stifel. Please go ahead.
Steve Wieczynski -- Stifel -- Analyst
Yeah Hey guys good morning, So Craig or Sven, I kind of asked this question, I think you guys last quarter as well. But if we look at your EBITDA guidance for the year, which remains unchanged, and we back out the approximately $35 million you've done in the first half so far. I mean you guys are now expecting growth in the second half of the year, which is in the -- basically, the 50s kind of range. So I guess the question is what gives you so much confidence right now that growth -- the growth -- we'll be able to see that much growth in the back half of the year? And I guess that kind of goes on top of the increased spend as well on the marketing side. That EBITDA growth seems very, very tough to get to, I guess, what am I missing here?
Craig I. Felenstein -- Chief Financial Officer
Sure. So thanks for the question, Steve. So first off, I think it's important to note that the results year-to-date are exactly in line with where we expect it to be at this point through the year. When you look at the way the new inventory was coming on to the fleet. With the Venture, the bulk of that advantage or the bulk of that benefit was really going to take place toward the very tail end of Q2, throughout Q3 and Q4. So we were fully expecting to see a larger portion of that benefit in the back half of the year. At the same time, certain of our existing vessels, we're expecting to generate higher yields in the back half of the year.
Most notably, the Orion with her operations. Last year, she was predominantly in the South Pacific. And this year, she has a more diverse set of itineraries. So that was always anticipated in the back half of the year as well. So when you look at those 2 driving forces. We feel pretty confident. We also know how much bookings we've already taken for the back half of the year. So when you combine a double-digit increase in available guest nights in the second half, higher yields in the second half, and so much of that already on the books, we feel very confident in our guidance for 2019.
Steve Wieczynski -- Stifel -- Analyst
Okay. Great. I appreciate that. And then the second question, I wanted to ask about the occupancy, slight dip here in the quarter. And maybe I'm reading too much into this, but it's the first time, it has dropped in a while and it's -- it's a metric we're focused on given how much capacity you guys brought to the market and are continuing to bring to the market. And is that something I'm reading too much into? Or this could be just a function of some of the shorter itineraries that you guys have introduced?
Craig I. Felenstein -- Chief Financial Officer
Yes. So I certainly wouldn't focus on a 1% drop in occupancy as a significant item or an item all for that matter. When you look at the fact that we've added inventory, we're growing yields to see occupancy slightly down or flat, that's a normal course of action for the business. That said, the reason that you're seeing it where you're seeing it in the current quarter is because we added and Sven touched upon this in his comments, we added a bunch of inventory with the Venture in the shoulder season this year. And that's going to always have a little bit of lower occupancy than the, what I would call, peak seasons. So if I was looking at just occupancy, for example, in June, which is the season kicked off in earnest, our occupancy was up year-on-year. So it really, I think, is a matter of timing more than anything else, just given where we are in the course of the year, and you should see occupancy very strong in Q3.
Steve Wieczynski -- Stifel -- Analyst
Okay great. Appreciate it guys. Thanks for all the color
Craig I. Felenstein -- Chief Financial Officer
Thank you.
Operator
The next question comes from Greg Badishkanian of Citi. Please go ahead.
Spencer Christian Hanus -- Citigroup Inc. -- Analyst
Good morning guy, this is actually Spencer Hanus on for Greg. So I just had a quick question on the response to your shorter itinerary cruises? What has been the response there? And then do we have any sense of what the repeat rate looks like for these customers taking these shorter cruises?
Sven-Olof Lindblad -- Founder, Chief Executive Officer, President and Director
Yes. Yes. The -- so we have, as I mentioned, 11 new itineraries, some of which are brand new. So we have very -- not a lot of data in yet, and they haven't been going on that long. And so the repeat rates from this audience is not clear yet. But the ones we've launched so far, the indications have been very, very positive. The one that has been sort of going on for a while is in Galapagos or that's completely been sold out. And in fact, in 2021, we're moving one of our ships into entirely in the -- we're migrating it entirely into these shorter programs in terms of their construct. So we're going to learn a lot more about in the next 6 months or so, and it's going to take a little bit of time before we really understand what the repeat rate factor is. The key is that they're selling well, and they're selling to younger people, which is very, very -- a very good indication of future health.
Spencer Christian Hanus -- Citigroup Inc. -- Analyst
Great. And then any update on trends that you guys are seeing from non-U.S. sourced passengers? I know that's not a huge part of your sourcing, but any update there would be great.
Sven-Olof Lindblad -- Founder, Chief Executive Officer, President and Director
Yes. Yes. The -- so we have, as I mentioned, 11 new itineraries, some of which are brand new. So we have very -- not a lot of data in yet, and they haven't been going on that long. And so the repeat rates from this audience is not clear yet. But the ones we've launched so far, the indications have been very, very positive. The one that has been sort of going on for a while is in Galapagos or that's completely been sold out. And in fact, in 2021, we're moving one of our ships into entirely in the -- we're migrating it entirely into these shorter programs in terms of their construct. So we're going to learn a lot more about in the next 6 months or so, and it's going to take a little bit of time before we really understand what the repeat rate factor is. The key is that they're selling well, and they're selling to younger people, which is very, very -- a very good indication of future health.
Spencer Christian Hanus -- Citigroup Inc. -- Analyst
Great. And then any update on trends that you guys are seeing from non-U.S. sourced passengers? I know that's not a huge part of your sourcing, but any update there would be great.
Craig I. Felenstein -- Chief Financial Officer
Sure. So when you look at -- for those who aren't familiar today, about 90% of our guests and travelers are from the U.S., with another 10% outside the U.S., and that has been very, very consistent for us over the last several years. Part of that is we spend the majority of our time focused in the U.S., and we haven't really looked to expand yet internationally, in I would say, significant ways. But that will change over time. Today, we still see an enormous opportunity here in the United States. We think we're still just scratching the surface. When you look at the amount of guests that we ultimately take across our fleet over the course of a year, we're still 23,000, 24,000 guests.
And that's we think is just a start of what the U.S. can be. So when you look at the U.S. can grow, we still think that will be the lion's share of our guests, but we do anticipate in the future, starting to expand our marketing efforts and our outreach programs internationally. We have done some thus far, but we are relatively minor in that aspect. So I think you'll see that percentage not change too dramatically. We look forward because I think there's so much growth left here in the United States, but we will see the absolute number of guests coming from our international sources start to increase over time.
Spencer Christian Hanus -- Citigroup Inc. -- Analyst
Great. Thank you guys
Operator
The next question comes from George Kelly from Imperial Capital. Please go ahead.
George Kelly
So just a few for you. Wondering to start, if you could talk about the new reservation system and dynamic pricing. And wondering what the timeline is for that? And if you've been testing any kind of dynamic pricing so far, what you're seeing?
Craig I. Felenstein -- Chief Financial Officer
Sure. So we have -- let me answer the first question first, which is, in terms of timing of the rollout, we expect that our new reservation system will be functional either at the end of this year or the start of next year. So late fourth quarter or sometime in the first quarter. Once we do that, the implications and the impact of dynamic pricing will probably be felt toward the tail end of 2020. And then certainly, in bulk in 2021. That said, we're not sitting around waiting for that system to launch to experiment with dynamic pricing. We have taken opportunities to raise pricing on some itineraries that we think are selling out dramatically. It's been, I would say, very much a fits and starts kind of effort. We have not done it wide scale, but we do look for opportunities to take advantage of yields when we see significant demand for an individual itinerary. And the response rate has been very positive. We have not seen a whole lot of falloff when we raise pricing, which is good. But I would say it's very much done mechanically now as opposed to automated, and we look forward to the opportunity to automating the process.
George Kelly
Okay. Okay. Great. And then the other technology initiatives and marketing initiatives that are under way, I think you said there's the CRM goes live in the third quarter, and then there's some marketing -- additional marketing initiatives coming later? Can you be more specific about what those last -- I think it's marketing in cloud, kind of, what does that mean?
Craig I. Felenstein -- Chief Financial Officer
Sure. So well, the vast majority of the CRM will go live in the third quarter. We have actually started to roll out certain functionality within the CRM platform already. And we are, I would say, starting to see a very nice understanding of our customer flows and our ultimate guest 360 Viewpoint, which is great. The 2 pieces, which still are to come are the website and the marketing cloud. And what those are really done. They're tied to the launch of the reservation system, that we're going to launch because we don't want to obviously tie them into a piece of technology that's going to be obsolete come the start of next year. So we're holding off on those. But when we are able to do that -- first of all, on the website, you'll have improved mobile design. You'll have access to that website from third-party travel agents and items like that, which will allow for direct bookings, which will certainly increase the productivity there.
And on the marketing cloud, it really allows us to capture the guest interest on and off board, improve their overall onboard experience, we can generate greater ROI in our direct mail efforts by looking at effectively, who wants to see information on what pieces of itineraries or what geographies, so we can be much more targeted in our marketing efforts. Once the marketing cloud gets up and running. But again, it also will help us with our email performance and ultimately, what we're sending out digital communications to our guests, that will tie directly into our website to see where the demand is most needed. So there's a lot of additional productivity that we'll get once these new systems launch. But again, the cloud and the website are very much tied to the launch of the reservation system.
George Kelly
Okay. Okay. And then just a couple of modeling questions. These new vessels that you've launched in recent years. What -- how does the contribution margin change as the ship matures. Do you sort of overinvest in staff and having -- making sure the experience is just perfect for the first year or 2? Like, will margins optimize higher over time as the fleet matures?
Craig I. Felenstein -- Chief Financial Officer
Sure. And I think you have to look at each vessel individually depending on where it's going to launch and how it's going to launch. But from a broad stroke perspective, typically, what you would see is that the margins in the first year or so would be lower for a variety of reasons, one being, you're going to certainly market ahead of any kind of voyage. So that's going to, obviously, bring your margins down. You're also going to -- to your point, you could invest a little bit of additional staff into that vessel, both in terms of the office staff as well as the onboard staff. Certainly. And then as you launch a vessel, you start to see the things that you want to change to ultimately fit the ideal guest experience for that vessel. And that usually takes some fine-tuning over the first year, 1.5 years or so. So I would say, by year, 2, certainly by year 3, you're optimizing, certainly, your efficiencies on that vessel in achieving peak margins?
George Kelly
Okay. Okay. And then last question for me, just about your EBITDA guidance back to that topic. For the year can you remind me what sort of onetime-ish -- I know you don't generally back out a lot of the new vessel marketing and things out of your EBITDA, but what are the major -- there's incremental marketing this year? And then, I believe there's some new ship marketing-related costs as well. Can you quantify those?
Craig I. Felenstein -- Chief Financial Officer
Sure. So there's really 3 buckets of, what I would call, onetime items, and that relates predominantly to -- we increased our marketing spend in the year. We haven't quantified what that's going to be specifically, but the increased marketing spend is included in our guidance and our EBITDA guidance for the year. And that halfway through the year, we're spending exactly what we thought we would spend on the additional marketing side of things. And to be fair, we didn't increase that or decrease that, depending on the return we're getting as we spend those dollars. So that will be a byproduct of the bookings that we're seeing with regard to the marketing spend. Now obviously, the booking that we do see on that marketing spend will help us in 2020 and 2021.
So it will not have so much of an impact in 2019, but it is certainly money well spent for the future growth of the company. The 2 one-off items that we have quantified in the past, is we said that between the new operating expenses associated with the new IT projects as well as the new spend related to the launch of the Endurance. That would be things like hiring crew ahead of launch, buying things that you would aptly need to operate the vessel from an expense perspective. Those 2 things combined, when you compare the IT spend and the Endurance spend, it will be about $3 million to $4 million of costs, predominantly in the second half of the year. There was some spend on those things in the first half of the year, but the bulk of that will be in the second half of the year. And those are the primary onetime items.
George Kelly
Okay that's helpful thank you.
Operator
This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Felenstein for closing remarks.
Craig I. Felenstein -- Chief Financial Officer
Thank you for joining us this morning, everybody. We look forward to speaking to you in the future. If you have additional questions, feel free to give us a call. Thank you.
[Operator Closing Remarks]
Duration: 33 minutes
Call participants:
Craig I. Felenstein -- Chief Financial Officer
Sven-Olof Lindblad -- Founder, Chief Executive Officer, President and Director
Steve Wieczynski -- Stifel -- Analyst
Spencer Christian Hanus -- Citigroup Inc. -- Analyst
George Kelly
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