EVT Limited (EVT) Earnings Call Transcript & Summary

Right. Before we begin today, I'd like to acknowledge the Gadigal people of the Eora Nation as the traditional custodians of the land on which we meet today. We pay our respects to elders past and present and extend that respect to all First Nations people joining us today in person and online. So thank you and welcome, everyone. It's lovely to see everybody in the same room here today, and welcome to everyone who's joining us online. Today is our first Investor Day, and it's a chance for you to meet the senior leadership team, so less talking from Jane, and get an insight on some of our key [indiscernible]. As we've shared with you, we have done some major transformation to the business over the past few years. We believe we're now stronger than ever. And most of you will know that we recently changed our name at the AGM to EVT. But what's really important to understand is the change of name means more than just a name change. It's about better telling our story. And as a reminder, E is for entertainment, to better highlight our entertainment brands and experiences in the eyes of our customers, that includes indoor and outdoor cinemas, restaurants, [ bars ], golf courses, any of our businesses seeking customer discretionary time and spend. V is for ventures, and we're driven by our passion for new opportunities from hotel management, which you'll hear more from Norman today; media partnerships to property developments, which Mat will touch on today. T is for travel, showcasing our expanded hotel strategy, we're now covering from luxury to budget. And also, of course, Thredbo, and Stuart will touch on Thredbo today. So E is for entertainment, V is ventures and T is for travel. It's what we do through the eyes of our customers, but how we do it is what makes us unique. We've got a single strategic framework that focuses all of our groups and divisions the same framework. It starts by putting our customer at the center of everything that we do. Our vision is clear. We want to be leaders in creating experiences that escape the ordinary. That means changing the game, making an impact, being bold, never cookie cutter. And we bring this to life through our 3 strategic goals. We grow revenue above market. Number two, we maximize our assets. And number three, we use business transformation initiatives to improve our margins. However, our success is not measured on profit alone. Each of the 3 goals is only successful if we're growing our customer satisfaction at the same time. This is why over the past few years, we've invested in listening to what our customers think via our Net Promoter Scores and our e-sentiment tracking and aligning our actions and investments to improvements. At the same time, we are responsible for constantly improving our workplace and employee engagement as a response to that. We give back to the communities we operate in. And we're taking our part seriously in creating a better tomorrow for the environment. These are all just as important. And this is what we define as our ELEVATE program, elevating our people, communities and environment. So you'll hear a little bit more about the ELEVATE program later today from Kerry and Dave. So before we begin, I'd like to welcome you all officially to EVT and want to show you our internal brand video. [Presentation]

It's pretty motivational. It's definitely been really motivational for all of our people internally, and it's bringing us together and galvanizing a new connection between our brands and EVT, which we're really excited about. So today, some of our leaders are going to focus on a few key strategic changes or initiatives within our EVT businesses. Under Entertainment, you'll hear from Luke Mackey, who runs our cinemas in Australia, about our premiumization strategy for cinemas. We'll also move down to the Vmax briefly so that you can experience the AVATAR 3D trailer. It's going to be amazing at Christmas, we want you to see just how incredible that 3D is. We're also going to go downstairs briefly for an introduction, if you haven't already been there. In fact, how many people here have been to 4DX? It's definitely going to be [indiscernible]. It's definitely going to be a new experience, not for everyone, but definitely drawing crowds from across Sydney. So you'll get to have a taste of that. And the Ventures. Mathew Duff, Director of Commercial, will share some detail on the project phases for our 525 project development. Then you'll hear from Norman Arundel, our Director of Hotel Operations, and he'll provide some insight into our hotel management model and what makes us stand out from the crowd. Then we're going to move through to a discussion around our -- sorry, under Travel, we're going to move next into -- we've got Tim out here. Tim, you'll be here? Tim is there. Tim has joined us, he's the Managing Director of LyLo, our new lifestyle budget hotel accommodation concept and Tim is going to talk to you more about that. And then Stuart Diver, General Manager of Thredbo, will provide some insights into our new business model and why we believe it's the right approach. And I think [indiscernible] quarter 1 results for Thredbo. So you should feel quite confident that it is a pretty good approach also. We're going to end the session highlighting our ELEVATE strategy and Kerry Westwood, Director of People and Culture, will share the key reasons on why people choose to work at EVT, which is really important in a competitive market. And David Stone, who you all know pretty well, will share more on our commitment to the EVT environment initiatives. Each session is planned to go for around 10 to 15 minutes of talking, and you'll all have -- we're going to allow about 5 minutes at the end of each session. So please ask questions of each of the executives, it's always fun for me to watch and hear all the answers as well, but feel free to engage. And obviously, you can ask questions beyond what they've presented today if there's something you want to know about the division. Of course, we're not giving any forecast. But feel free to ask questions [indiscernible]. And I really hope that in joining us today and taking the time which we appreciate that you do learn something new about us. So that's what we're going to do. Does it sound okay? It's got -- hopefully, everyone doesn't fall asleep with their feet up with this dim light and these comfortable chairs. But it's also a great way to show you, we are actually hosting a lot of conferences in our cinemas. So you can see how that works today. So before I say anything more, I'd like to welcome Luke, our Head of Cinemas Australia, to talk about our premiumization strategy.

Thank you. Very generous, thanks. Jane, I did discuss getting everyone to wear the leg warmers, but not this crowd, I think, is the answer we ended up with. So good morning. Thank you, Jane, for the introduction. I've worked with this company for over 25 years. I started as an usher at Greater Union Castle Hill in 1996, which seems like a long time ago. But this was 3 years before DVDs launched in Australia. Now for me, that was the first time that I heard cinemas wouldn't survive. We've beat that many times now. During my time in the industry, we've seen plenty of disruption, 35-mm projection to digital, the introduction of eCommerce, expanding cinema footprints, lots of new cinema concepts and most recently, the pandemic. Now in the last 28 months, it's been the most difficult period of my career. But equally, it's been one of the most rewarding to see our teams really thrive through this period. And as an overview of my responsibilities now as the Director of Entertainment Australia, my team and I set the strategy for the Entertainment division and oversee the operations for Event Cinemas, BCC, Moonlight Cinemas, State Theatre and our technology company Edge and, most recently, Cinebuzz on Demand. As you can see, the cinemas make up the largest part of my responsibility with over 70 locations, including the village locations, and almost 3,000 of the greatest employees I could ask for. And we've been delivering millions of memorable experiences annually. Now today, I must say I've never been more excited about the future of cinema. And why? And that's because we have absolutely transformed the way we think about the cinema business. And we are finding so many new opportunities now with this new lens. So when I say we've transformed, I mean we have absolutely evolved our business model, and this really translates into 4 strategic shifts. The first one is we have changed our mindset from just selling movies to selling seats and experiences. Second, we've shifted from experience-led decisions to data-informed and experienced-led decisions. Third, we've changed our operating model from One Size Fits All to Variable. And fourth, we've stopped chasing market share [ low costs ], and we've got fewer and best locations with a focus on overall profit growth. Now these 4 shifts are central to our premiumization strategy, which I'm going to talk about today. First, the shift was from selling movies to selling seats and experiences. Now of course, we still sell movies and they're critical. But by being so focused just on the movie screen and sound, we end up designing cinemas that look very similar, almost cookie cutter. And we put the same seats in every original auditorium. And aside from Gold Class recliners and our large screen format Vmax, we offered very limited choices on how customers could see a movie, which then limited effective yield growth strategies. And as we all know, a key revenue lever for cinemas, aside from their location, is the admission price. And so in order to grow the admission price, we needed more ways to yield on every single admission. And to improve that yield, we needed more reasons for people to pay more. So we needed to explore more of our seating options. Now globally, there's a large variety of seating experiences available in the cinema industry. And we needed just to understand what the right mix was to deliver the best returns. So we commenced our seating research program to test these seating types and the corresponding appetite or propensity for people to pay different prices for different seating experiences across all of those experiences. For us, the answer was overwhelmingly clear. Customers will pay more for a better seat and/or different experiences at all of our locations. So based on the results, we have created a road map of premiumization for our circuit, the seats we have across the circuit and increasing the experiences that can be achieved in each auditorium. Now our aim is for customers to find a new experience behind every auditorium. So currently, this includes Your Cinema, Your Way, which is an EVT-created experience that presents a range of seating options and price points within the one auditorium. And that's from [indiscernible] the front of our cinemas at $50 to an original seat at $10 towards the back or, the most comfortable recliners, which you'll see later today in Vmax, and that's available for a little bit more. This seating model of different seating types at different prices has been successfully added to our Vmax, which again, you'll see today. And that Vmax cinemas are already generating an additional surcharge now when you compare that to an original auditorium, and this is allowing us to further stretch the yield in all of our PLF cinemas. We will head later on to our Vmax. We will head to our newly refurbished Vmax later to enjoy the recliners, and we're going to watch a promotional clip of one of our new concepts called ScreenX. And we're going to also hear Atmos cinema in that auditorium and then you'll experience the only way you should experience a film like Avatar in 3D, and it is incredible. And then after that, as Jane said, we're going to walk down to 4DX and experience 4DX. Now I do need to provide a warning, if you have recently had surgery or you suspect you might be pregnant, let me know because I'd ask you not to sit in those seats because it's all pretty wild ride. Currently across the EVT VRL circuit, we've got 7 4DX locations, and they're in high volume locations. And we've identified another 5 possible locations, including South Australian WA coming next. Now the introduction of our global PLFs or premium large screen formats such as IMAX, we have a new one that's been added to the Queensgate location in New Zealand. And this is next to one of our Vmax cinemas, and we're going to test the content benefits over time. More EVT and innovated premium experience, including the stunning boutique in which we're in today are rolling out. And we've also got Event Junior for young families, which you can see the playground on the picture there. So more premium experiences with more seating options across locations is the key to growing yield and creating memorable experiences. These next few slides demonstrate on how we are thinking premiumization at a location level. The picture up here is the current project where it's underway at Chermside, and the first image shows you that what we had previously, which is 25% of the premium screens. 25% of our total screens were premium. You can see the 2 Gold Class in yellow and the 2 Vmax screens on the top of the screen. The next image that we're going to show, shows you what we mean when we talk about our premiumization strategy. We now are moving towards about 75% of the screens forming and having some sort of premium option, whether that be Your Cinema, Your Way in the Vmaxs, other auditoriums with multiple seating choices, Gold Class, a bigger bar, boutique cinemas and, of course, Event Junior. This project is currently scheduled to be completed by Q4. Now secondly, we've been leveraging data better to make more informed decisions. And over the past few years, we've invested in building out these insights' capabilities. Some examples of this, leveraging our more than 2.8 million contactable members that represent currently about 70% of our total cinema admissions. We currently -- we continue to enhance Cinebuzz database and its uses. Now this is incredibly powerful data, and it's used to drive admissions, frequency and yield. And we're using this customer film sentiment tracking to inform studios on the demand for film-based -- films, sorry, based on the pre-awareness campaigns that they have in market. We then track the film sentiment to derive propensity of members to watch titles and identify which experiences they would choose to watch their movie, for example, whether it will be in Gold Class or Vmax or, more importantly, the likelihood of repeat visitation or positive word of mouth. This all helps us to inform box office targets. We've also taken auditorium heat mapping, which means that we are using that to identify the lowest occupied seats by film, location and session. And this has been used to then inform our design decisions around where to invest. Now whether that be [indiscernible] the front and the premium recliners at the front of -- front section of the cinema. And this is which transform -- sorry, which transforms an underperforming part of the cinema into a much higher yield section of the cinema. So we've gone from low demand into a high demand and higher yield. Now that then also informs our demand-based pricing, which is intelligent, reviewed by day, time of day, session time, location and then considers the cost of demand to finally inform our pricing decisions on a daily basis. We've also used retail heat mapping where we track people's phones through their journey through Marketplace. And here is an example of that on the screen. These F&B layouts have materially changed since we started using this technology to increase the return on yield. These insights have been a large contributor to the record growth in spend per head that we have recently recorded. Thirdly, one good COVID outcome is the acceleration of change to our operating model. We have transitioned completely from a One Size Fits All operating model to be demand-based and Variable operating model where we open and close depending on the size of the trade. In practice, this means that every week, we are determining, based on the film lineup and demand, the best operating hours by location. Now this change has been material and critical to managing our costs over the past 28 months. Further, our investment in technology has aided our efficiency gains as well. [ Kiosks are ] installed across our busiest location, which has resulted improved efficiency, allowing staff to focus on experience more and leading to improved customer satisfaction and higher NPS. We've also been unlocking the expertise of our group, F&B teams, which have allowed us to elevate our dining options in our premium cinemas and ensure that we have the very best kitchen technology across the circuit. We've invested in proprietary functionality on our eventcinemas.com.au website, and that continues to make us a leading entertainment website and app in the industry. Our world-class e-com team have developed a fully self-service platform that enables access to digital tickets, the ability for customers to change their own seats, upgrade their seats into another session, swap their session or have their food and beverage delivered to their seat. And this is one of the only websites in the world that allows that all to happen. Our service to seat app, which we developed ourselves, and is again a world first, has revolutionized the ordering in our premium cinemas and has delivered returns of about 16% increase on our spend per head since we rolled that out last year. Finally, we are focused on fewer, best locations. And now whilst we had gained market share over the pre-COVID years, we had a tail of underperforming cinema sites, and our strategy was always to focus on fewer, best. And as a result, we have closed 13 locations, the ones marked in red and this, over the -- sorry, over the last 4 years. These changes have contributed positively to our EBITDA. I would like to note that whilst we've made these -- sorry, I'd like to note that whilst we've made these changes, our market share has not been impacted negatively. And on a like-for-like basis, under normalized trading conditions that we are seeing positive signs of growth as our premiumization strategy is offsetting these closures in a more profitable manner. So I hope that provides some insight into what we've been doing and how we're using this strategy to drive our premiumization. Our results to date have demonstrated record growth in key metrics, and we know that we are on the right track. We believe that further growth in yield can be achieved through continued investment in our premiumization across the circuit. So for the Australian Cinema circuit only, pre-COVID we had 15% of our cinemas were premium screens. That is currently at 25%. And we believe that the right premiumization target for the next 5 years is circa 60% of screens. Now the indicative financial returns from the premiumization of these upgrades and different seating types is circa 15% to 20% return on investment. Now it's also really important to note that our strategy is not to upgrade all auditoriums in a location all at once. And this enables us to continue to innovate. And as new concepts arrive, that we can continue to test those and roll those out. I know we're still in the movie -- we're still in the business of selling movies, but how we grow our business now has a much broader lens with our premiumization strategy. So as I said, we've completely transformed over the last 5 years, and that is why I am so excited about the future. Of course, before I take questions, I'm sure someone will be asking about what the lineup looks like for the next 12 months. This calendar here shows the key [ known ] titles that we believe will deliver box office of over $15 million national box office. So at this stage, we only have partial visibility, and I want to note that, whilst there's less titles currently than in 2019, we are confident that these titles will deliver. And I will note that internally, we're all about blue. It's all about Avatar for the December, January period. And as you know, little film, the original Avatar, is still the #1 box office title globally. And after seeing 30 minutes of it recently at a conference in 3D, I absolutely understand why the industry has very high hopes for this title. I'd also just like to point out that some of the reasons for lineup gaps currently is largely related to studios in post and -- having delays in post-production. And from the recent conversations we've had with the studios in L.A., they are absolutely thinking that, that will be 12 to 18 months and that will start to clear up. So I think we're going to have a Q&A. But I'll just -- we'll have the Q&A. And then what we'll do is we're going to -- I'm going to get everyone up. Well, a quick walk, we'll go down to Vmax and we'll watch those trailers and then we'll head down to 4DX. So any questions?

Right. I think we're going to try to keep this to, as Jane referenced, to about 5 minutes. But yes, I can see a question here.

And we've just got a roving mic coming around as well for the people online.

It's John.

John O'Shea from Ord Minnett. Just a quick question around cinemas at a big picture level. Is the industry now more reliant than ever on the blockbusters being successful? And how has it changed in terms of the film lineup because of the pandemic? Do you think it's a permanent change? Temporary change? I guess there's 2 questions in 1 there. But if you could comment on that, it would be great.

Yes. Thanks, John. I think that there's always been a reliance on blockbusters. And I think we have kind of 15 weeks of the year, where we have lots of people coming through the holidays and where our job is to make as much money as we can in those periods. And I think we've got the tools now to do that really well. Long term, the industry is still settling. But recently, we had meetings with the studios, and they're indicating, for example, Warner's are indicating that they're currently making about 8 blockbusters a year, they're looking at making film. So they're going sort of 8 year, 10 next year, 12 the next year. And there's definitely leaning towards theatrical first. And I think David Zaslav has been the most vocal in that recently. I think with Disney's announcements this morning, they might be reconsidering as well that theatrical has a really important place to play in that life cycle.

I think another thing to add to that is that we are -- Netflix is starting to play in the area again. Amazon are opening up. So it feels like post COVID, there's actually been a return back to cinema in a way, particularly with the studios, in particular with their blockbusters. But we're not going to -- because of those production supply challenges, which Luke highlighted, we're still going to be in a slightly COVID-interrupted pattern until they can complete the films. I mean, August and September, all the studios when we were [indiscernible] we not had a completed film that we could pop into that space and just on that audience, but it literally was that they couldn't complete the films on time to move the [ date ].

Luke [indiscernible]. I'm just interested in the 60% premiumization target for 5 years. Just any analysis that sort underpins that and a sense as to whether that's a limit that you'd push it to or when you get beyond the 5 years whether there's further upside to that.

Yes. Look, there's -- I think there's -- I think that's how far we've looked out and we continue to look out of that. And I think what we'll say is as we continue to -- like our approach recently is, let's roll them out and make sure that the returns are there. And I think we'll continue to look at -- that is -- I think that's the first point, the milestone, and then we continue to go from there.

So how did you arrive at 60?

So Luke and his team have counted every single one of our seats in every single location. And we have a capital plan. We've got draft premiumization concepts for every single seat. So that literally is a seat count conversion change. And we are intentionally, as Luke highlighted, leaving some of the cinemas as original. That's why the 60 could move up, because the 60 is not counting the cinemas that we're going. So as an example, in Chermside on that map, there were 3 cinemas left because we do believe that the innovation keeps happening. So we don't want to roll out all of our capital and not have room for growth. So the 60 can -- may potentially have room for growth, but we think that's the right amount based on the concepts that we believe in today. So that could evolve.

So just a clarification. What does the premium experiences mean? Does that mean a cinema which might have a couple of premium or actual seats or revenue? Because if it's the revenues like the 60% could be [indiscernible].

So it's not the revenue, it's the seats. So we are -- literally, we're in the seats business. We've counted up our 1,000 seats, thousands of seats, and we're going through every auditorium going, what's seating concepts, what takes there and makes it a little more premium? We're aware -- so our 3 seat concepts has been great, right? Because we could go -- we never thought we could get $50 at the front of the cinema. And they were the seats that you used to actually no one sat on the seat, you could reuse them up at the back of the cinema as older seats, they've replenished the cinema. So like these seats here, right? This is a really good example of -- this is another premium seat. There are so many. And this is not a cinema seat. It's wearing well, it's working well, we're happy with it, so we're going outside of the industry to find things, but it literally is a seat. It's not a revenue. Because some seats will deliver a lot more than what they currently are.

So 15% currently, experience will be like close to 20%, 25% revenue?

Pardon?

I'm just saying -- because you're charging more, if the 15% of seats are premium experiences, that will be a high proportion if you're looking at the revenue because you're charging [indiscernible].

Yes.

Michelle Wigglesworth, Washington Soul Pattinson. On the average cost spend per customer, you said there's record growth levels. I was just wondering if you could let me know how much an average customer spend, including F&B. And I've got a second question on content after that.

We can, of course, tell you how much a customer spends -- spend per head.

Yes.

So I guess why Luke's looking all over it is because we divide our spend per head into basically a return on seating premium experience. But overall, kind of a roundabout, it ranges, depending on the experience, between about, I'd say, $8. And then when you're in something like Gold Class, you're obviously getting kind of $80, $50 to $80. So overall, you're looking at a high teens.

A bit of an [indiscernible] question on content. Could you do a deal with Netflix and do something different than other than show movies? So for example, Squid Game would have been probably pretty good on the big screen. Is there something radically you could think about in terms of content for the industry?

Everyone is having those conversations. The problem is actually how they are licensing either the story or the talent or everything else. So they're currently licensing for a platform, they're not licensing for multiple platforms. But I think that you can see that -- I'm talking about Netflix at this point, they're getting a taste for the cinema returns now. And we can see that model evolving. We were actually working with Netflix [ almost ] for the last couple of years, what was the first one we did?

The first material one was Red Notice.

Yes.

But Jane's right, it's the licensing that's holding back episodical content from going on the big screen.

Just one from Nick McGarrigle, Barrenjoey. The road map to 60% is that -- how do you think about people uptrading during or coming out of COVID? I guess people have got more spend money, and when they come out, they want bigger experiences. But do you think that, that's something that will carry on? Is there data in the Cinebuzz member base that can inform that?

Yes. Because remember, we are a -- our app, it's $5 or $10, et cetera. It's not like buying a new television or a new car. It's not a major expense. And so if you're coming out -- remember, on average, in Australia, people are coming around 4x. So if you're coming out to see a great movie, people are prepared to spend more. So in that propensity research, like these seats here, we literally have customers sit in the seat. And then we do pricing sensitivity in terms of how far we can push it. And people are prepared to pay more. And it's not a location based on [ size ]. So when we first started rolling out premium, we put Gold Classes because we thought certain locations could have a Gold Class. So Gold Class audience everywhere. So yes, so we're feeling confident that because it's -- it's not a huge amount that we're actually asking in terms of premium, in terms of overall cost of going out for an entertainment experience, that we still have that room to move.

I think we've done our 5 minutes now.

Yes, I might just quickly check if there's any questions from the telephone system, just to give people online a chance.

[Operator Instructions] Thank you. There are no questions on the phone at this time.

Great. So let's go down to Vmax. We can't wait to hear your feedback on the Avatar 3D trailer. Then we're going to go down to 4DX, then we're back in here. And there'll be something to eat to take your seats as we head into the next session. [Break]

If we can make our way back to our seats, that would be great. So I did get -- we did get a couple of questions and we'll probably take a few before we hand over to Norm about what you just saw or if there's anything that you did want to ask. But a couple of the common questions were in 4DX, is it difficult to get films for 4DX? And we only invest in concepts where we know that they have agreements with the major studios, that the blockbuster films will be delivered in that format. So 4Dx will have blockbuster films for the year in that format. In terms of the ScreenX that you saw, where it wrapped around the screen, so that's the next concept that we are investing in. It has about, I think, Luke -- lost him. Probably about 40 minutes again of the film in ScreenX, you can imagine a Top Gun in your -- in the sky. The nice thing about the concept is when you don't have a film in that format, you can still use the cinema as a standard cinema, so it has versatility.

Are there any other questions in terms of what you saw? Other than the fact that Avatar is amazing?

Are there any concepts that you've declined to roll out? Or are you taking the approach, let's have a go at everything and see what.

No, there are a few concepts that we've declined. There are concepts popping up, but we really believe that until you have studio buy-in, and so we've got confidence that the content is going to be supplied in that format, we wouldn't do it. I think that's all the questions, it's good. Seriously, did you like Avatar? Did you think it looked amazing? I mean how those water scenes are just stunning. I think there was someone who spent 10 years just on working on the lighting [indiscernible] the water and making sure that all of that was as real as possible. That's quite amazing. So we're excited. So actually, we understand that Disney haven't seen the film yet and it's still being finished. They're perfectionists, and we want to give them all the time in the world to do what they need to do. So next we have Norman Arundel, our Director of Hotels and Resorts, and he's going to talk to you a little bit about our hotel management business and then touch on our hotel strategy. Thanks, Norm.

Thank you, Jane, and good morning, everybody. Yes, so I've been with EVT now for just over 15 years, but I've actually been in the hotel business for almost 40 years. And as you can imagine, I've seen a lot over that time, and I just wanted to really start by reinforcing Luke's confidence regarding the growth prospects of EVT, the growth prospects for the hotel industry in general and our hotel ownership management and licensing business in particular. But before we kick off, I just want to give you a bit of an overview as to our hotel business, the way we look today. So we've got 76 hotels with just over 11,600 rooms. We've got 134 F&B outlets. And we've got just over 4,600 staff. In FY '19, our owned hotels and the revenue from our owned hotels and the fees from our managed hotels totaled $353 million. We sold in our own portfolio just over 1 million room nights. And our EBITDA was $98 million. QT Hotels. We've got a great portfolio of brands. Everybody would know QT Hotels, we believe to be one of the world's hottest hotel lifestyle brands, now represented by great 10 great hotels in 9 city locations. The hotels are famous for a lot of things, but particularly their food and beverage. And one of the great things about QT is we're now trading about 14% better than our fair market share. Rydges Hotels, the genesis of our hotel hospitality business, still very much -- the very backbone of our hotel network, and we remain very, very focused on this brand and its prospects for growth and continue to invest to ensure that Rydges remains one of the region's leading big market hotel brands. Today, we've got 45 Rydges Hotels in 24 locations. Atura Hotels, our collection of quality, urban, industrial and art-inspired lifestyle hotels. We've got 5 hotels in this group at present. The brand is perfectly matched to the demands of the hotel developers in the new world, and we believe we're going to see good growth from this brand in the next few years. An exciting new brand, LyLo, and as Jane mentioned earlier, my colleague, Tim Alpe, who's the Managing Director of LyLo, will be expanding on this exciting new concept a little bit later on. And another new brand is such, for us, the Independent Collection, a brand-new brand that we launched in 2021. It's quickly grown to 13 hotels, all of them already growing -- enjoying good market share. And I will once again expand more on the Independent Collection shortly. So agreements of all sorts with third-party owners are an important component of EVT's ventures, and it's a growing contributor to the Hotels division's earnings. It's worth noting that this business offers us capital-light earnings growth potential as we drive increased earnings from our hotel business by leveraging our existing systems and the existing expertise of our people. So a key question. Why do hotel owners want to partner with EVT? We've been in the management business for quite some time, and hotel owners we work with for a long time typically tell us there are 5 key things that set us apart from that competition. And firstly, our people deliver better than fair market share results. We are hotel owners ourselves and developers in our -- hotel developers in our own right, and this gives us a unique mindset as far as other hotel owners are concerned because we think like owners. We run all our businesses like we own them. And as a result, we make owners more money. As I said before, we deliver above-market results. And this table behind me shows those results for the year, financial year ending June 2022. Hotel market share, just in case if people are not familiar with this, is measured in select competitor sets. Collections of hotels have similar demand dynamics, results are collected and compiled independently by a company called Smith Travel Research, and you might know them as STR. And the key measure of hotels performance against this competition is RevPAR, total revenue per available room. STR report RevPAR index, and they call it an RGI, revenue generation index. 100, obviously, indicates fair market share. And as you can see, as I've said before, all of our brands, QT, Rydges and Atura and Independent Collection are now all performing above their fair market share. And you might just wonder why Rydges is sticking its nose up there ahead of the other brands, that's really because of 2 particular regional properties that performed very well. And Rydges Sydney Airport, which is an extraordinary business, directly opposite the international terminal. Our brands now cover the entire market. We now offer a brand solution to suit every property, from budget to luxury. This means we can now have a conversation about all segments of the market, be it with one of our brands or, as is increasingly the case, with a local independent brand. We are a local team with global reach, and our owners really like being close to us. For all of our Australia and New Zealand hotels, we're just around the corner. And we, therefore, are far more agile and able to innovate more quickly as all decisions are made in Australia and New Zealand. This benefit was amplified during the COVID period, where we're able to stay very, very close to our hotels, close to our owners and make decisions very quickly. Further, being local enables us to be very hands-on from the most senior level of our organization right down to the front level of our hotels. And we believe this is actually quite unique, and it helps us build trust and enduring long-term relationships with our owners. We have a market-leading domestic distribution system, and our global distribution system today is equal to any global hotel chain. This is evidenced by the market share results you saw earlier on. Number four, food and beverage is a core way that we run our business. We have a strong award-winning F&B credentials. We believe F&B gives a hotel soul and character, and it's a key ingredient in making a hotel stand out from a competition. When we designed the food and beverage operations in our hotels, our goal is to be loved by locals and to become a key part of the local community, not just a good hotel restaurant and bar. Five, we're flexible. Our partnership and management models are flexible and innovative. Of course, we've got standard models. But we find almost every hotel owners need different, and we're happy to flex to the mutual advantage of EVT and the hotel. This approach has won us many contracts in the past, and we're confident it will continue to underpin our results in the future. Whilst we do managed hotels for an increasing number of institutions, we find that most of our hotel owners tend to be high net individuals, family offices or boutique investment houses. We recognize that these owners are looking for flexibility in brand and management agreements and long -- and value long-term relationships, and this fits very nicely with the way we like to do business. In addition to our full ownership strategy, we've now got 3 key models to grow the earnings from our Hotel division. One, hotel management. Hotel management makes -- our hotel management agreement makes us the agent of the owner. The business ownership and the business risk remains that of the owner. However, we take charge of all aspects of the operation. This includes branding, all responsibilities for operational matters from employment, training of people, distribution, sales, marketing and any other matter related to running a great hotel. A good example of a management contract, very close to where we're all seeing now, is Rydges World Square, 454-room hotel, owned by the Schwartz Family Company. We manage quite a few hotels for that organization. SFC owned the hotel and the business. We bring the brand, our management systems, our expertise, our distribution systems and take charge of all aspects of the business. We run the business as though we own it. And SFC pay us a fee for our services. The term of the management typically is about 10 years, but in most cases, they tend to be extended. Contracts in some circumstances can be terminated early either by us or the owner. Another new part of our business are brand license agreements, where we receive a fee for the use of our brand, sales, marketing, loyalty and distribution systems, while the owner manages the hotel in line with our brand standards. In the hotel business, our competitors typically call these kinds of agreements franchise agreements. We think they should be more correctly be called a brand license agreement. It's a relatively new venture for us, and we've currently got 6 Rydges Hotels with license agreements. But franchising dominates mid-market branded hotel agreements around the world, and we see good growth and opportunities in this area. So good examples of Rydges brand license agreements that we've entered into in recent years, Rydges Palmerston up in the Northern Territory, which is Gold Coast Airport, and Rydges Townsville. Third, another new part of our business, affiliate agreements, where an owner chooses to use their own local brand, manage the hotels themselves, becomes part of our group via our sales, marketing, loyalty and distribution systems. The Oval Hotel in Adelaide is a good example of an affiliate agreement. The term of a brand license and affiliate agreement tends to be from 5 to 10 years. Commercial terms of hotel agreements vary but are typically based on the share of revenue and profit and commissions from bookings that we push through our distribution system. In the current climate, it's also worth noting that most of the fees that come from these agreements are to an extent inflation-proof. And by that, I mean most of the fees are generated by revenue. For particularly desirable properties, we do pay from time to time key money to secure the right hotel in the right location. Key money is capitalized and amortized over the life of the agreement and is more commonly linked with reinvestment back into that property, which obviously then helps to drive higher fees. So our hotel brand strategy. Our hotel brand strategy has evolved a lot over the last few years to provide more opportunities for growth of our hotel portfolio. As I've highlighted earlier on, we now have a hotel solution that meets the needs of the entire hotel market, from premium to budget experiences, from leveraging one of our own brands or maintaining the independent brand and leveraging our capabilities. In 2021, we launched the Independent Collection by EVT. And this slide here basically shows you the capacity of this -- the growth that we believe we'll be able to get out of Independent Collection. The Independent Collection [indiscernible] provide flexibility to ensure we have an option for all hotel experiences. Simply put, we can now compete on a much broader range of hotels than ever before. We believe there's good capital-free growth potential for our new Independent Collection. We currently have 13 hotels in this collection, and our target is to double that in the next 3 to 4 years, although I regularly get the impression from Jane, she wants a lot more than that. And I suspect you could be right, that certainly, we'll be doubling that in the next 3 or 4 years. The sweet spot for fees tends to be in hotels of greater than 75 rooms. And we've done a very extensive market study, and we've identified 400 independently branded hotels, not part of a chain, over 75 rooms. So there's a big target market there. So in summary, we've transformed what we offer as management services in the market. We've expanded our hotel brands to be capable to respond better to market opportunities. And this gives us confidence in our opportunities, of course, Australia, New Zealand, and internationally as we continue to evolve. Now before I hand over to Mat, I just like to comment a little bit on the EVT-owned hotel assets, obviously a massive part of our business. So today, of all of the hotels we own, the majority are now in excellent condition, highly competitive and will have minimal medium-term capital requirements. They're also located in markets forecast to generate the fastest growth over the next 4 to 5 years. And this includes the upgrade of QT Gold Coast, which I'm going to show you some pictures off shortly, and the major refurbishment of the Rydges Melbourne, obviously in Melbourne. And as I say, those refurbishments, QT Gold Coast is nearing completion. And Rydges Melbourne is on track to open as our flagship Rydges Hotel at the end of Q4 this year. Most of the rest of the portfolio is also very well positioned for growth but offers further prospects for accelerated growth in return for smart capital investment focused on upgrading and expanding the existing facilities. Once again, these hotels are located in great growth markets. These hotels have opportunities to further maximize the asset by increased room count and an increase in the size of the conference facilities. So in summary, we've got good opportunities for investment, and we're in great shape to grow. Now I thought I'd finish just by -- I mentioned before about Rydges Melbourne. I just thought I'd finished by giving you a sneak peek of a fly-through from Rydges Melbourne upgrade, which, as I mentioned earlier on, is going to open there before the end of this financial year. [Presentation]

So exciting times in Melbourne. And as you can see, despite the development of all new brands, you can see that we're still taking our core brand Rydges very, very seriously. So before I really finish, just one more development I'd like to share with you, somewhat smaller than Rydges Melbourne, but equally as exciting, a brand-new concept and incorporated within QT Gold Coast that we're calling qtQT. Six Design-driven cabins constructed amongst the garden setting that we've created on a previously non-revenue-generating second floor terrace area of a hotel. qtQT will offer a completely unique experience to all our guests. It will be a separate, yet complementary component of QT Gold Coast competitive advantage, which we're very confident is going to be really warmly accepted by our guests. So that's qtQT. And as I say, forms part of the -- which effectively is the new QT Gold Coast, where the refurbishment is almost complete to where you can see a picture of one of our new rooms there. So that's it, and I would be very pleased to take some questions. Thank you.

Can you give us some color around where demand from large corporations are versus pre-COVID, how that's rebounding? And also what impact, if any, do you see the increasing cost of air travel having on that segment and the broader business?

Yes. Thanks, Sam. Look, the corporate market across our hotels in the last 2 or 3 months has actually started to return to pre-COVID levels. Although I will say it's actually made up quite differently to what it was pre-COVID. So across our hotels, we're seeing very, very good demand from the SME market. And we're seeing new segments starting to emerge from what we call the work-from-anywhere market, where people are traveling and mixing leisure and corporate together. The big corporations, the big banks are somewhat slow to arrive. We still haven't seen a lot of that business start to come back with the exception of the consulting firms. So the big consulting firms are out there in a big way. But Sam, safe to say that the SME market for us is sort of underpinning a lot of the business that we might have lost from the big corporations. And that big corporation business, we're quite confident will come back and that we think is going to push up the hotel -- the general hotel market occupancy, and that should be to the benefit of all hotel keepers.

Just any comments on the increasing cost of airfares, what that might do to the overall hotel industry going forward?

It's an interesting question because I read an article about that recently. What I was saying that the increasing cost of airfares is not good for corporate travel. I can assure you the only reason the airlines are charging like that is because people are paying those prices. So there's obviously very, very strong demand, which is pushing up airfares, pushing up hotel rates. And I would imagine the airlines will adjust those airfares if they need to. But certainly, at the moment, there just seems to be no sign of needing to do that. Sorry, the other thing, Sam, I should say is that the other change we've seen is longer stays, so -- which I think fits in with the airfare costs that you just mentioned and also with company's environmental focus these days. So we're seeing people where they might have had an average stay of 1.2 days, that's sort of pushing out now to almost 3 days in some cases.

A quick question from me on the concept of licensing franchisees, et cetera, those type of deals. How attractive without giving too much away are they from a financial perspective? Everybody seems to be chasing these in the market. Obviously, globally, the capital light story is a good one in theory to tell. But how attractive are they in terms of the actual returns from a company such as yourselves versus, obviously, clearly, in your case, you've got owned properties, which have been boarded lower levels. So that's a totally different scenario. But how attractive is this management market in reality?

Look, I think that the -- so it's probably 2 components there. So the management business, where we actually manage the hotel has always been quite a core part of our business and a growing part of our business. That is a very, very good business because effectively no real capital except for our key money, which we pay in some circumstances. That's a good business. The hotel owner basically pays all the costs. We have a general manager who is a hotel employee except directed by us. But all of the costs are basically the hotel owners. Sales and marketing, the hotel owner funds via a sales and marketing contribution into our business, and we make good money out of commissions, just like the big online travel agents. So we're effectively in the distribution business just like booking.com and Expedia. So we make -- so that's actually quite a good business. The licensing business, and as I said, our competitors call it a franchising business, that actually underpins the bulk of branded hotels in the world. Like I think I might -- I think I'm correct in saying that IHG and Marriott, the bulk of their portfolios are franchising. That again, is quite a good business because you're leveraging what you've got anyway. So I guess a long drawn-out answer, but yes, we're never going to return sort of earnings that we get out of the owned hotel, but we don't have the capital invested either. It is just good -- it's good income from systems that we've already got.

April, I think you are next?

April Lowis from Barrenjoey. Just a quick question on rates. Obviously, we've seen rates just being record over the past few months. I'm just wondering what your kind of predictions are for the coming months and maybe years. And whether you've seen any trading down between different brands?

We are -- it's a million-dollar question. What's going to happen with hotel rates? I suppose the only way I can answer that is what we're seeing today, we're actually seeing no slowdown at all in demand across our group. And just a bit of anecdotal evidence, we're talking about the corporate market earlier on, and one of our big customers is flight center in terms of the corporate accounts. Some of the feedback they're giving us is that one of the changes from pre-COVID, whereas before the corporate procurement manager buying travel was actually after obviously, a lower rate, i.e., a lower standard hotel. Now they're actually looking for -- one of the things -- the key things they're looking at is a great experience for their employees. Perhaps that's part of the battle for talent and making sure our corporation is looking after their people. So we're actually finding corporate market is actually trading up.

I'll try and make it a quick question, but it may be hard. But 16 years, you've been with amalgamated now event and then now EVT. Just the way that the portfolio on the hotel side is now positioned versus where it was for the first 5 or 6 years of your tenure. Can you just talk about the difference in the portfolio and the return on capital. I think we've been looking through the last cycle that it was on its way up, but just how you feel about the portfolio and how is in-house positioned post some of the divestments and reinvestment?

Look, I think we're a dramatically different company to what we were 15, 16 years ago. We were effectively a mono-brand organization with the Rydges Hotels, a terrific brand, but that was basically the extent of the organization and then QT came along, which has been like a major change for our organization, a whole range of ways, which I'll touch on one in a moment. Then Atura, now independent collection, and their team is going to talk shortly about [indiscernible]. So it's one of the key messages we were in one market. We're in the 4-star market. We're now right across the group. We actually used to walk away from a lot of agreements because we -- a lot of the management and franchise agreements, license agreements because we didn't have a brand and for those organizations. So we walked away from those. And so that's one of the reasons we've been able to grow our third-party ownership businesses. We've now got an option for everybody. The license agreement business, which is only something we've done in the last couple of years, I said probably the major part of branded hotels in the world. That was a business we're not in. So we're now in that business. Yes. So the company is dramatically different. And finally, with QT, which is, let's face it, we all love QT, it's a very sexy brand. And it's the brand, frankly, that most of our people want to -- most people we talk to want to talk about. But we signed a lot of Rydges deals out of QT Hotels. That it's a great introduction, and it's a great brand and flag for the organization.

Perhaps just one more.

I'm just interested with independent collection. Do you restrict -- because obviously most of your money from own brand hotels. Do you sort of say, hey, we're not going to help these guys out because it's around the corner from a QT? Or generally, do you restrict where you're going to actually sign people. If it's the same, it's a luxury around the corner from a QT that you owned, you might hurt you where you make all your money. How do you think about that?

Look, there's -- it's not one -- it's horses for horses. Yes. So certainly some -- I can think of one actually would have been a lovely independent collection hotel, which we didn't go with because of that exact reason. You just mentioned, it was just around the corner from a property we own. Other cases, though, I think there's actually an advantage in some circumstances of us controlling hotels. We've got 16 hotels in Sydney now. And that actually gives us a greater view of the market and better control. So the answer to that is we just have a look at every single opportunity very, very carefully.

I think that's probably all we've got time for today. Thanks, Norman.

Great. Thanks, Norm. Now we're going to hear from Matthew Duff, our Director of Commercial, and he's going to cover 525 and other property matters.

Thanks, Jane, and good morning, everyone. Today, we're going to share with you some more insight into our proposed major developments in George Street, Sydney and an outline of some of our other key projects over the next few years across our property portfolio. The first of our major property developments will be 525 George Street in Sydney, which is basically 20 meters that way, essentially where we are today. It is going to be a mixed-use development with a truly integrated lifestyle, hospitality and entertainment offer, which will be unique to Australia, and we think actually unique globally. The development comprises residential, hotel, conference area, bar and restaurant, premium cinema, retail and which will all be integrated across the development. There will also be 6 levels of car parking with 114 car spaces. The total gross floor area of the development is approximately 28,500 square meters. The residential component in the Stage 2 DA design consists of 115 apartments in the upper section of the development. I should note that we will be reviewing the mix between residential apartments and hotel rooms to ensure we maximize the long-term value of the development for the group. So there may be some modifications to the number of residential apartments and hotel rooms and areas in due course. Importantly, all of the residential apartments are in the upper section of the building, which is an advantage compared to many other residential developments where the lower level apartments are generally considered inferior. As an apartment owner, you'll be able to access all the hotel and entertainment services if desired throughout the development. This means you could access in-room dining and housekeeping, have priority at the bar and restaurant and the premium cinemas. Approximately 85% of the apartments are 2 and 3 bedrooms with the 2-bedroom apartments having an average size of 90 square meters, and the 3-bedroom apartments having an average size of 128 square meters. These include 3 penthouses and 3 sub penthouses on the top 2 levels. The remaining 1-bedroom apartments will have an average size of around 50 square meters. The total residential apartment sale area as per the Stage 2 DA is approximately 10,500 square meters. We have specifically designed the apartment sizes to reflect current trends and likely buy a profile. The apartments are going to be designed as large, high-quality boutique apartments that maximize the views and natural light from the high levels of the tower. We will create a sense of belonging and village character that comes with the mixed uses in the proximity and integration with the hotel, cinemas and retail. We intend for a certain percentage of the apartments to be sold off the plan prior to commencing development with the remainder to be sold through the construction phase with settlement at completion. We also note that there's been recent changes to the Sydney CBD Planning Controls, which will likely limit the amount of new residential development in the Sydney CBD. Any Stage 2 DAs lodged from 1 July 2022, will receive 50% less floor space ratio over and above the core floor space ratio of 8:1. And for Stage 2 DAs lodged after 1 July 2023, there is essentially no additional floor space ratio for residential above the core of 8:1 -- core FSR of 8:1. Fair to say, we're quite pleased to lodge our Stage 2 DA before 30 June this year. The hotel will consist of approximately 300 rooms, and we're proposing for this to be a QT branded hotel, reflecting the quality nature of the development. In addition to the conference and F&B facilities, the hotel will include a pool and gymnasium. The main hotel entry will be of Kent Street, although guests will be able to access the hotel of George Street through Albion Lane. The room configuration will be a mixture of standard rooms and suites with the interiors to be designed by Nic Graham, who has led the interior design on the majority of our QT hotels to date. The dedicated conference area is approximately 500 square meters and is on the same level as the Sinisabaran Restaurant. In addition, the conference space will integrate with the premium cinema formats on the adjoining levels below, which can also use for conferences. So as a corporate customer, you can have a conference experience that can be delivered on premium cinema formats, which we think sets the experience apart from many of our competitors. The bar and restaurant will deliver a cutting-edge F&B experience that is synonymous with the QT brand and the bar will include an outdoor area overlooking George Street at the top of the podium. The bar and restaurant will also integrate with the premium cinemas below with cinema guests able to access designated areas of the bar and restaurant before and after screening. The cinema itself will comprise 1 VMAX screen and 4 premium screen formats. The ground floor, the development will have the hotel entrance and for on Kent Street. The George Street frontage itself will be retail of approximately 180 square meters. In addition, Albian Lane will be activated with 380 square meters of additional retail, which will be either leased or operated by EVT. We'll also have in that line, the cinema entrance, dedicated residential entrance lobby and a dedicated entrance to the bar and restaurant at the top of the podium. We're really thrilled and excited to be designing the experience that we believe will set this development path for residents, hotel and cinema customers, and we're also committed to sustainability and design with the building to be designed to a minimum 5-star Green Star rating and a minimum 5 Star NABERS energy rating for its ongoing operation. In terms of indicative time lines, we lodged our Stage 2 DA in May this year and expect approval in quarter 3 of this financial year. We're currently undertaking the detailed interior design work, having appointed Nic Graham for the cinema and hotel interiors, and we're currently running a process to appoint the residential interior designer. The time lines are all subject to prevailing market conditions at various milestone dates, satisfactory construction price tender and obviously successful residential presales. Subject to those, construction is targeted to commence at the end of FY '24 or early FY '25. The outcome of the development will entail EVT retaining 100% ownership of the hotel, including all conference bar and restaurant areas, the cinema and retail. I'll now move on to our other proposed major development at 458 to 472 George Street in Sydney. We've previously received DA approval from the City of Sydney for the pad component of the development, which comprises an extension of the QT Hotel with conference space and retail areas. We've also lodged the Stage 1 DA for the commercial office tower in March this year. Following approval of Stage 1 DA, which we expect by June 2023, we will be required to undertake a design excellence competition followed by a Stage 2 DA. So that planning approval process is still got at least 2 to 3 years to run. Once we receive our Stage 1 approval, we'll provide a further update on timing, but our goals on this development are clear, and that is to realize the value of the undeveloped available gross floor area that we currently have of around 38,000 square meters across the going state theater and 48 to 472 George Street properties, while at the same time, growing the value of our core business within the podium development, which comprises the extension of the QT Sydney Hotel. As we've stated previously, we will look to bring in a development partner on the commercial office component when the planning approval process is further advanced. In terms of our broader property strategy, this has evolved to focus on ownership of key city locations that can be developed or our existing operating assets within our core businesses. This evolution of our strategy resulted in the identification of non-core assets, which we have successfully divested over the last 18 months, which you are aware of. We do have some further property assets where we will consider divesting in the future when the time is right. These include the 4 freehold properties in Germany; some hotels, including the Arrow Park Hotel, which was formerly Ridges Rotorua and Rigids Hove. The timing is not right for the sale of these properties, but we'll continue to review these through 2023. We also consider a disposal of regional cinema freehold properties being Wangan and Darwin, and we expect to perhaps get some transactions away on those in 2023. The sale of these properties in total could be circa around AUD 100 million. Timing, I guess, as I said, subject to market conditions. We may also consider retaining the German freehold to be part of a sale of the Sydney Star business rather than as a separate property divestment. Within our existing portfolio, as Norman covered, we've recently completed the or soon to complete, the EVT Gold closed upgrade and the Ridges Melbourne upgrade will be completed at the end of FY '23. We have additional key priority properties that we know will deliver a good return on investment. These include QT Canberra, where we're currently planning an upgrade of the rooms and conference space. This is a very well-positioned property in the Canberra market and believe an upgrade of the hotel can generate additional value for us. Works on that project are likely to commence in calendar 2024. At Rydges Queenstown, the East and West wings of the hotel comprising 89 rooms have been closed due to seismic issues. We still trade out of the original central building with 76 rooms, conference restaurant and bar facilities and the 69 room QT Hotel, which was completed around 2017. We're currently working through the seismic rectification works with our structural engineering consultants. The nature of the rectification work will mean in the project will be conducted in various stages and could take 3 to 4 years to complete. That project is a key focus for us given the hotel is in a prime location in Queenstown, and we expect the Queenstown market to perform strongly over the long term. At Thredbo, we are well advanced on our plans for a development application for a new bed release within the Golf course precinct. The golf course will be retained but reconfigured with plans for a subdivision to release approximately 190 beds. This will be the first major land release that we've done at Fred Bow since the Kraken back Ridge development in the late 1990s. The structure of the development would involve Thredbo, EVT obtaining DA approval for the subdivision and undertaking the civil works. We will then enter into subleases with developers who would pay a premium to enter into a sublease and then develop the accommodation on the lots. And then they would then provide -- or pay an ongoing annual bed rental through the life of the lease. This is essentially the same model that has been used for accommodation development at Thredbo over a long period of time. We're at the early stages of the process with the priority at the moment to submit the DA by the end of FY '23. We also continue to identify opportunities for property acquisition in key markets and have recently exchanged contracts for the acquisition of the freehold building at 54 Cook Street Auckland, which will be the location of the new Lila property to be opened in December this year. This was originally to be operated under a leasehold and this will be our first freehold property ownership in Auckland. Settlement of that acquisition is expected in Q3 of FY '23. So I trust that's given you a bit more insight into our major development projects, our general property strategy and what our key priorities are. We remain confident that in our ability to continue to grow the value of our property assets and value in coming years. I'll briefly touch on CineStar Germany, which I also have responsibility for. You'd be aware of our recent financial settlement with you, which we were pleased with in the context of us financial position. Our position remains that this is a non-core asset, which we will look to dispose of at an appropriate time. Our focus over the last 16 months has been on the operating business, given it was mandated to close for a continuous period of 8 months through to June 2021 with COVID in Europe. The extent of German government subsidies and our freehold property assets has ensured the liquidity and balance sheet of the business is in a really strong position. We'll obviously continue to monitor and assess when it will be an optimal time and approach to dispose of that investment. So thank you. I'll go and join my colleagues/bodyguards. Over to you for some questions.

We're running a few minutes behind, so maybe just a couple of questions from that, if there are any or you might be lucky, Matt. All right. Let's go on.

Can you just walk us through the development of the existing QT Sydney, just how we should think about bringing on that investment partner? What additional capital EVT team may have to put in and just how the potential commercial arrangement there might work?

Look, it's -- we're probably a bit premature to discuss that. Our focus at the moment is on the planning approval. As I said, it's going to be probably a 3-year process around approvals. At some point in that period, we'll look to bring a partner in. And I think when we get to that point, it's probably more appropriate to go through those type of issues and numbers.

Okay. Good. Any questions on the phone lines?

[Operator Instructions] There are no questions.

Thanks, Matt I'm now going to introduce you to [indiscernible], who's going to give you a brief insight into [indiscernible].

Thanks, Jane. I actually didn't see anything in that building, Matt, where we're going to put Lilo. So I need to find something for that. Thanks a lot. It's great to be here. I've been in the tourism game for about 20-plus years, having cofounded Juicy tourism brand other Dan before selling the Juicy business to EVT and taking on the role of MD for Lilo. Look, funding somewhere awesome stay shouldn't be hard and to be honest, it shouldn't be expensive. That's why we've created a place where everything is easy and life is just good, where you can let loose or lounge around, fly back or live it up, work or play or do absolutely nada. We have survived, life's just bloody good at Lilo. I have the privilege to lead our exciting evolution from JUCY Snooze and the growth opportunities that presents for EVT. What I thought I'd do first though is take you through a few insights into the sector, what's on offer globally and probably more importantly, what's happened in the New Zealand and Australian market as a result of COVID. The New Zealand Hostel Association recently published figures showing that the total available beds in New Zealand and key locations such as Auckland, Wellington, Crisis and Queenstown had reduced by over 54% as a result of the pandemic. That's 54% leased beds in the market. These figures aren't necessarily available for Australia, but we believe is a similar situation over here. Quite simply, the hostel market was designated as a result of the international borders closing. The market has traditionally been dominated by small independent owner-operator businesses. And many of these businesses simply just didn't have the horsepower to be able to survive the revenue downturn that we all saw as a result of the pandemic. Adding to that, many of these businesses would have been struggling pre the pandemic, largely due to having aged and competitive product, which we're then able to compete with the unique generation of offerings that are being launched into the market by operators like JUCY Snooze. We believe that now is the most brilliant time and see the massive opportunity for growth in the sector. And there's no better time to establish a really strong market position across New Zealand and Australia and actually beyond. Hostel represent a niche segment within the global accommodation offering but was the fastest-growing segment pre-COVID. Before COVID, the industry was worth about $10 billion global addressable market annually. They're currently very fragmented with about 18,000 hostels worldwide. As I mentioned earlier, the majority of these are mom and opo individual owned properties. However, things are changing fast, and we're starting to see a lot more investors into the space under the growth opportunities that present itself. Over $2 billion was invested into the sector by private equity of Hotel Corporation in 2017 alone. A&O, Generator, Safe Stay are the largest hostel-focused brands, all owned by multibillion-dollar overseas investors. Accor, Hilton, Marriott and others are also entering the space with new brands and concepts and pricing. Hostels are traditionally defined as lodging with multiple beds per room and share facilities for people who mostly don't know each other. And when I talk about hostels, it's important to understand there's an increasingly blurred line between what hospitals are and what traditional hotels are, but there's definitely a preference to become more value focused and experimental. Travel's needs for accommodation can increase increasingly be met by mid- to low scale properties. What's important to our customers has actually also changed with security, privacy, sustainability and wellness playing a massive part in the decision-making of where they choose to stay. Our target market reaches well beyond the traditional backpacker. While the target -- we target our core market of 18 to 35 year olds, we're actually also finding we're becoming really attractive with other sectors, which we would never have targeted pre-COVID. Things like sporting groups, family leisure, leisure travelers and even sort of value-seeking corporates are looking at this type of offering. Thanks to COVID, there's also a massive increase in the number of people who are working remotely. And it's now not uncommon to see a guest day a month in Queenstown and then move to Byron for a month and then move to Sydney and then to Bali. The ability worked from Zoom and Teams is definitely there. Basically, any traveler seeking a venture value whose young at heart is welcome at Lilo. The days of dodging spaces, fleet and bunk beds are well and truly gone. New hostels are purposely designed to balance privacy and social spaces, with style and facilities that resonate with locals. After all hanging out with locals is actually really important to experimental travelers as it is for locals to hang out with back packers as well. Stylists, functional and adaptive properties are becoming the norm in most European cities. We're designing our hot offering, which you'll see right here, we decided to speak directly to our customers to understand what they love and what they headed about hostile life four key things came out of the research from the research. First thing that had it was the head of the gear getting stolen. It's really common in bunk rooms and hostels for your gear to get solar. They also had the effect there to go to bed at the same time, referring to it being like present or a boarding school. They had not been able to chase their devices. These guys travel with multiple devices. We also learned the biggest argument and fight in any hostels around PowerPoints. So that was good. And lastly, ahead of the idea of waking up looking over in someone watching them while they're slept, just all a little bit creepy. We took all that feedback and designed our pods to include Bluetooth lockers, where you controlled your phone, pods have multiple power and USB charging points, light, privacy shield that come across to get an even bed night nice sleep. So thanks to Lilo, no longer wake up, look over and see someone to steering at you. The economics of [indiscernible] model are also really compelling. And there's just a few statistics of note that I want to give you. On the accommodation floors of a traditional 4-star property, we tend to -- you tend to get about 1 bed per 34-meter square of floor space. In a 5-star property, that increases to about 43-meter square floor space. In a Lilo property, such as what we've just -- you've just seen in Auckland here, we get 1 bed per 10 meters of for space. Further, in our pod rooms, we're getting about 8 beds in a pod room, which is about 21 meters square, similar to the size of a very small 4-star property. And as you can see, and we're selling these beds for about $45 a night minimum. So the mass is actually really strong. The capital requirement to fit out at Lilo property is also really attractive and should see us improve returns when you compare to a traditional 4-star hotel model. As mentioned, the opportunity for Lilo is now and we're actively sourcing new locations, our focus over the next 3 years is to establish Lilo in key gateway locations in Australia and New Zealand as well as look at opportunities in other markets, which we see would have real appeal for Lilo. We've recently acquired the Lime's Boutique Hotel and Fortitude Valley Brisbane, which we're currently trading under the independent collection, but we plan to convert to a Lilo property in early to mid-2023. The lower model could be adapted to -- for developments of new builds, building conversions or even existing retail space takeovers. The low-cost model provides opportunities for both pod and room concepts to be integrated into minimal space requirements at a very scalable model. Whether it's partial takeover of a site or full take over a site, Lilo's modular concept will allow for customized development approach. Give us 4 walls and we'll basically give you a Lilo. Look, I just want to thank everyone for the opportunity. I'm super excited about where we can take this incredible brand. Really looking forward to launching our first property in Australia very shortly and redefining Lilo and expanding across Australia and hopefully, to the world. Thank you. I'll take some questions. If anyone's got them? One from John.

Just a quick question for me as to the scale of this sort of business. So what do you sort of have in your head is the type of trajectory as to how you see the growth of this moving forward in the context of the group.

To get Pete for this one.

Yes. Look, the opportunity, as I said before, is significant. I mean, the market has been decimated, and the demand is becoming really strong, and there's not a lot of supply left across New Zealand and Australia. So for us, it's about growing, and we want to grow fast. It's looking at opportunities and whether we look at purpose built Lilo. We've done so conversion of what we did in Auckland and what we're doing in Lime is also a conversion. Whether we look at a licensing model, a management model. We look at all options to grow the brand out, John. So I mean, our preference is to own a lot of the properties, but we're also looking -- and part of the beauty of being part of the EVT environment and model is actually we get to learn from the best in terms of how we do management agreements, how we do licensing. So for us, in terms of scale, we want to be in the major gateways across New Zealand and Australia in a pretty quick period of time.

I'd just be interested in some insights on the transition for you from selling a business to a company to now running a business within a company. And just -- I guess you seem pretty excited, but the pros and cons of the role you're doing now versus what you're doing before?

I'll leave.

That's a brilliant question. That's a great question. Look, it's always interesting when you go from a business that you started sort of 20 years ago and you grew up in a very entrepreneurial business. And coming here, I remember saying to Jane when she said to me we really want you to come across and help us roll this concept out. And I thought I always said that I was unemployable. I like it in terms away. But I must say I found what's been really good as I've been very much left to be entrepreneurial. They wanted an entrepreneurial leader in this business and to grow this brand out. And I think that's been being really fortunate. And I think having the expertise, having a strong balance sheet is great as well. It means that we'll be able to do deals that we may not have been able to do or may have taken longer to do. Look, it doesn't come without retake that all corporates and especially ASX-listed businesses have, but it hasn't been as onerous I thought it was going to be. And look, I'm excited about it. And I think we can grow a lot faster as being part of the EVT family. And we're also learning a lot. I think what's been really good, our food offering is a perfect example. In the Auckland property, which you saw up there, we're launching a brand-new food offering called [indiscernible] offering. And we've adopted the gold class boutique cinema food offering. So there's no more executive shifts. It's an 18-year old. if we can't produce the meal 4 minutes not on the menu. Stuff like that, we would never have been able to do -- even know how to do without embracing the opportunity to grab on to other things than their business is really strong. I think [indiscernible] for questions.

And I think that goes both ways. Like when you're bringing that kind of fresh thinking into the business, it also applies into your own business in terms of how to sweat over some things less. So I think the learnings go both ways, but we have a mission to leave Tim alone. He gets to come in and pull whoever he needs, but he has full control to tell everyone to go away, which is important. Exactly. It's being tested. Okay. So now we're going to welcome Stu to give you an overview of the new business model at Thredbo. Thank you, Jane, and good afternoon, just to everyone. I'm obviously Stuart Dive, General Manager of Thredbo, worked in the ski industry for the past 28 years, and I've never seen a more dynamic time within our industry. Before I talk about the new model in Thredbo, which I'm very excited about. This is what Thredbo's made up of. We not only operate the mountain for skiing and snowboarding as well as mountain biking and tourist rides. We also operate snow sports school retail and rental outlets, the Thredbo Alpine hotel, 65-room hotel, which obviously encompasses 16 food and beverage outlets as well. Thredbo leisure center, indoor headed Olympic swimming pool, all the village infrastructure that goes with that as well as which is joyous at times, 750 subleases who directly report into us and we employ about 1,200 staff year-round at winter peak. So it's a big business. Today, I want to share a little more about our new business model and how well it's working. For many years, our model was about volume. But in pursuing volume, we did not put enough emphasis on the fact that Thredbo is a single resort with limited capacity. The COVID restrictions stopped us in our tracks with the capacity we could offer creating a situation where we would not be able to fulfill our season pass customer demand. And if we did, it would have cost the business and shareholders. We had to get a blank sheet of paper and work as a team to redefine ourselves and our strategy. Thredbo is unique, not only in the terrain, but the fact that we are a single resort. Of course, we've developed partnerships with many overseas resorts through our Mountain Collective and icon past agreements. But the reality is the Australian scare is loyal and looking for unique Alpine resort experience in the snow, and that's what Thredbo offer. The majority of the World care resorts were and still are very much focused on a volume-based business model. But with increasing capacity constraint issues across the majority of resorts in the world, there are a number of resorts now bucking that trend. We decided that our strategy is to optimize the premium experience by offering new products that attract a higher yielding customer. So whilst everyone else was and is exploring volume, we have explored experience. We want to ensure that our customers can maximize their day on the mountain with minimal queuing time, and we are now with customers averaging an additional 2 runs per day over this season. The key changes we've made include better capacity utilization and growth of volume and revenue contribution from the day pass market while still retaining revenue from our season pass market. It's important to note, I think, that our day pass price is still cheaper than our nearest competition. This past season, our day part being at $189 versus [indiscernible] at $210. The U.S. pricing at some resorts this year, which has just been released over the last month, has the peak price at Vail and Beaver Creek resorts at USD 285 or AUD 438 per day. So when people say it's cheaper to ski overseas, I think you need to have a bit of a look at it. However, our season pass price is more expensive than our competitors, and we've limited the inventory of season passes to drive customers towards our day pass products. The recent winter result of a 33% increase in EBITDA above any previous Q1 record shows we are definitely heading in the right direction, and our customer sentiment remains high. But the business model is not just all about winter. Summer follows a similar pattern with capacity constraints during periods with mountain biking, allowing us to generate higher yields whilst providing a wide range of premium experiences to take advantage of the increasing volume of summer guests. Today, we're focused on the business model, but there is a lot more to the Thredbo transformation. We have changed how we operate across the resort from recruitment, induction and retention of our team members to how we communicate with our people and guests just to name a few things. We know that as travel opens up, more will explore other overseas resorts. However, the demand for Thredbo has remained strong over the past few years and at peak times, demand for Thredbo is definitely likely to continue. In relation to Thredbo developments, major upgrades to the snowmaking system, including the installation of 10 new snowmaking fan guns on Friday flat were completed in time for the '22 winter season. What this did was allow us to operate our main beginner area on Friday flat for 15 out of 16 weeks this season, which was a great achievement, given it was such a marginal snowmaking season. You can see from the chart up there on the screen, the top 1 and the bottom one, the blue means the deepest snow bet we can get. And you can see that's 2023 versus -- 2022 versus '21. You can see how much more snow that upgrade put on Friday flat. On average, this is 2 to 3 weeks more than previous winters. As part of our property development strategy, we unlock the value from unutilized bed rights in Thredbo, realizing revenue of $7 million this year. Further initiatives are in progress to unlock more development opportunities, including the potential of the Tribe golf course area with 190 beds to be developed, which Matt highlighted earlier. Construction of a further 3 new beginner Mountain Burke trails in the Cruise area has commenced with completion scheduled for the coming summer with an expectation that demand for new trails from increased MTV presentation will continue for at least the next 5 years. Summer is now profitable. And given it is the time that we invest a lot in resort maintenance, our aim is to increase summer visitation and not return to the years where summer was unprofitable. Looking further ahead, the proposed Alpine Coaster installation is expected to add a further year-round attraction to the resort and is scheduled subject to the required approvals to be completed for the 2024 winter season. This strategy includes the further exploration of other year-round attractions, which I think are going to be crucial to the future of Thredbo business. We've also started preparatory work for the replacement of the 2 [indiscernible] Charlie, our oldest chairlift with a new 6-seater chairlift with construction scheduled for completion for winter 2025. These key projects and continued future capital investment are a key part of the journey to provide our guests with a premium experience that they now demand. The upside in pricing is closely linked to our ability to continue to provide these premium experiences and products. Before I take questions, I'd like to share with you just how good the experience this was this season in Thredbo. The skiing and boarding experience was exactly as we had envisioned with short leaf fines and more space on the slopes for people to enjoy our unique experiences and events were truly world class. If you missed out this year, make sure you book early for next year because I think it's going to be a big one. And just to show you how good it was, I have a look at this quick video. [Presentation]

So thanks, everyone, for your time and just open up to any questions, if anyone wants to know anything more about Thredbo.

Any questions? Street make incredible VDA content, as you can see, always making me wish I was in Thredbo winter.

I was just wondering what's the cost of those snow maker machines? And if they're so fantastic, would you not get more to ensure every season is good.

Absolutely. I mean our planning for snowmaking upgrades goes out 5 years and beyond. And a big part of that will be the fan guns, but you do need a mix of all the technologies. So we're exploring -- snowmaking is obviously going to be a big part of the future Thredbo we go forward and maybe natural snow becomes slightly limited as the years go on. So yes, we explore the technology. As our upgrades come, we obviously invest in those and then and fan guns are a big part of that. There's another 10 coming this summer, and then we'll continue on with those.

What's an ROI [indiscernible] So what's the ROI on one of the machines?

It's very good. I mean as Stu said, the extends that beginner area a Friday flat by a couple of weeks, this season. So I probably won't give you a number, Michelle, but it's a very good ROI in those guns.

I'd just be interested in a sense, borders fully reopened and people moving around the world again. What would that mean for Thredbo, positives and negatives, for the earnings at Thredbo?

Yes. I mean I think we -- the Australian skier, the bots, they're very loyal. They're very welded onto their Australian ski experience. So we feel that as people do move and have their Aspen Ski holiday, the European ski holiday, they will remain loyal to Thredbo and come back. We've seen that in previous years, and I don't see why that would change. I think the great thing that COVID did for us is it's given us the ability to show people that skiing in Australia is actually an awesome experience as well. So those people who couldn't get overseas. We've got a lot of people come back to the Australian industry, and they have said that they will continue to come and visit. So I see it as being really positive moving forward for us. I don't think that that's going to detract from future visitation to Thredbo.

Stuart Simon on. Just can you just remind us the ground lease? Like when do you have to renew that? What rent do you paid? How does it grow at CPI linked? How many bed rights have you got and what more can you develop? Because I think when you're in new leases, you can get more bed rights space, I think.

A lot of questions there, and it's multifaceted. Obviously, the current head lease expires in 2057. We would obviously expect that we will be able to extend that at some point in the future. As bed rights is probably the other out of the 10 points there. Bed rights is the other one that's in there. Obviously, Thredbo sits within one of the New South Wales special activation precinct, under the snowy SAP plan, which has just been released and we in that. They've obviously nominated that further bed rights should be issued into the resorts. Thredbo being a part of that. So we're excited, and we think that, that would give us definitely plenty of beds to develop further into the future. So that plan has been great for the area.

And should highlight the current plans we have now within our current bed capacity.

Any other questions? Good.

We're into the final 15 or 20 minutes, and we're going to talk about our greatest assets. I'm going to welcome Kerry to talk about our Elevate and why people choose EVT.

I'm Cari Westwood, the Director of Elevate, which is EVT's people and culture team, making all of what you have heard about today possible are our amazing teams of people. Our Elevate people and culture team is relatively new. In fact, we were only established 4 years ago when we truly recognized that our people were our most important asset. Our people are the ones who make the day better. They are our daymakers. And it all starts with creating the best workplaces and experiences to help them be their best. I could talk to you all day about how much we have established over the past 4 years to become the EVT of today. However, I thought I would just focus on the 5 key reasons people choose to join EVT and then choose to stay with us. Our workforce is quite young with around 60% of the team under 30 years of age and our retention of key talent is high, sitting at approximately 80%. We live and breathe our EBT values of empowerment, possibilities and community. And we hold people accountable to them through their behavior, performance and KPIs. At EVT, we believe in inclusivity. We want our teams to mirror our customers and our communities. We believe in flexibility and have designed options to suit key areas of our business and not a one-size-fits-all approach. As an example, hybrid working arrangements are available for our HQ teams, where flexible start and finish times, compressed working weeks, and choice of shifts are available for our operational teams. We also believe in family and providing an opportunity for our teams to spend time with their families with our 26-week paid parental leave program. We believe in well-being and we have a range of options available, including paid well-being leave, access to coaching and counseling services, health programs and lifestyle and fitness benefits. We offer security of employment. EVT is local, reliable and has a strong balance sheet. This matters to our people. We want our people to experience our businesses, our businesses and be brand and experienced advocates. So we make sure access to amazing discounts are available to the team. Our Elevate perks are unique and highly valued by the team. When you think about going to the movies, which is $2 or receiving 50% of accommodation food -- accommodation and food for a weekend getaway or half price lift passes to experience that beauty of Thredbo in summer or winter that we've just seen on the screen. These are just some of the amazing perks that we have available. At EVT, we don't believe in hierarchy. We believe that everyone can have a great idea and we share openly and we seek feedback. The way we use workplace, our communications platform has been one of our key differentiators. Workplace is used to share all information, positive and negative, from COVID updates and operational impacts through this challenging period to sharing information about new hires, great results and great ideas and opportunities for collaboration. We encourage comments and feedback to be shared for all to see, and we respond openly and honestly. We encourage communication and we are trusted. Almost 80% of our team members have activated their workplace accounts and almost 70% of team members have either posted, commented, light or viewed our workplace content. We talk about all of these things that are important to us, and we measure if we're doing okay via our eNPS surveys. We are tracking employee Net Promoter Score or eNPS. And based on our most recent survey, our eNPS scores for each of our divisions are ahead of comparable industry benchmarks. We hold our leaders accountable as they all have an eNPS improvement target to demonstrate how important this is to us. EVT careers. We strive to hire people at the start of their careers, their first jobs and invest in development programs that are practical and grow their leadership capacity and their career potential. We have so many examples of our leaders starting in entry-level roles and over time, gaining skills that enable them to move into more senior positions. One example in the room today is Luke from our entertainment team. We recognize our role in the community as an employer of young people, often in their first jobs, and we provide support and training that meets the needs of these team members to set them up for future success. We know how important a first job is to young people in our local communities and also how hard it can be to get the experience necessary to kick start a career. We proudly support youth education and employment by partnering with registered training organizations in Queensland and New South Wales to offer nationally accredited training programs. When the going gets tough, we're the first to roll up our sleeves. No action is too small from donating beds and cleaning supplies to volunteering in the cleanup efforts. Our team members continue to be actively involved in their local communities and even more so when needed, including the devastating Lismore floods and the bushfires. We are now working on developing our reflect reconciliation action plan, and we look forward to sharing this with you in 2023. The launch of EVT amplifies for the very first time, what we have to offer at evt.com. Opportunities for career mobility across the range of experiences, brands and locations really sets us apart. We have made great progress over the past 4 years and are truly excited about our plans for the future. I'll now hand you over to Dave Stone to talk more about our commitment to the environment, which is the third component of our Elevate strategy.

Thanks, Kerry. Sustainability has been a core part of our strategy over the past 5 years and we're now providing clear disclosure on what we already do and what we plan to do with the launch of our Elevate our environment framework earlier this year. In recent years, our sustainability efforts are focused on Thredbo Alpine Resort including our renewable electricity purchase agreement with Snowy Hydro, and that's been in place since 2019. And across our cinemas and hotels were well progressed with the program of replacing older plants and equipment with new, more efficient, lower carbon emitting models. As you know, and Luke mentioned earlier, we introduced a new demand-based variable operating model during the pandemic and this has helped us to reduce our energy consumption for certain locations by operating for fewer hours. Our Elevate our environment framework will help us to take our sustainability initiatives to the next level. Now this year, for the first time, we've aligned under 3 key pillars: number one, sustainable design; number two, sustainable practices and procurement; and thirdly, transparency and reporting. And within these pillars, we're working towards 7 shared goals across the group. It's also the first time this financial year that every EVT leader will have an environmental sustainability performance goal included in their short-term incentives tailored to their local business and the achievement of this scale will form part of each leaders sort some incentive outcome for FY '23. We're already making great progress with our 7 goals in the sustainable design focus area. And Matt mentioned this earlier, for 525 George Street major development, we're targeting a minimum 5-star Green Star rating for the building design and a minimum 5-star Neighbors rating for the ongoing operation of the building. We're also well progressed with completing Neighbors ratings for our owned hotels with around half of our Australian loan hotels completed so far. And we've also recently joined the Green Building Council of Australia to support our efforts in the sustainable design space. In relation to sustainable practices and procurement, we're commencing a program of waste audits at a site level to ensure that waste management and recycling aligns with best practice. We're also at an early stage of assessing renewable electricity purchase options for beyond Thredbo for the group that will underpin the development of a formal net zero target. Our supplier code of conduct, which is available on our website, sets out our requirements for suppliers in relation to the community, our environment, corporate governance and modern slate rerisk. Finally, in relation to transparency and reporting, in our annual report, we disclosed the results of our climate-related risks and opportunities assessment, and we expect to achieve full alignment with the TCFD recommendations by no later than FY '24. This financial year, we will also develop a boundary statement for our Scope 3 emissions, and I'm aiming to share details of this with you in next year's annual report. I'm really excited about our Elevate our environment framework and all the work that's happening across the group. And I can't make to share more details of our achievements with you as we move forward. So to summarize, our Elevate strategy is about elevating our people, our community and our environment. Thank you.

Sorry. Did anyone have any questions for Kerry or Dave? Wow. We've exhausted people for questions. Okay. So I just sort of make some closing remarks, and then I'm happy to take some more questions at the end or so. So as you all know, the financial year got off to a great start with group reporting normalized EBITDA of $70.6 million, up 32% on the same quarter 1 pre-COVID 2019, which we're using as our basis year. A really pleasing result despite the fact that revenue was relatively flat, down 0.3%. And we're in a market with all of the cost increases that you're hearing about daily and media and when you're talking to other companies. The result was a direct outcome of the efforts from all of the teams and business transformation. We know that 3 standout result, the first quarter from -- relating to the new business model, which Stew commented on briefly earlier today. And it makes it sound very simple, but I can tell you there was a lot of hours and blood, sweat and tears put into working out what way to go and when we were closed through COVID. And despite by having variable snow conditions, throughput quarter 1 revenue was $74.3 million, up 27.7% on the quarter 1 of FY '19. The Thredbo team are now really busy preparing for the summer mountain biking season. We started the season. We had season passes sell out in 5 days with volume and yield up on prior year. So it's a good indication of the season to come. Our date-based mountain biking product sales -- thanks, Kerry. Just a little -- sorry. Date-based biking products, presales are tracking below prior year marginally currently due to weather conditions because people are still seeing snow on trails and they're not in the mindset of mountain biking. And we know that customers will keep an eye on the conditions and look closer to the date of their trip. The summer season opens on 19th of November, subject to snow stopping to fall, I think, at the top of the mountain. And we think performance will be relatively in line with the FY '22 season. For Entertainment, in July, you know we benefited from the key blockbuster titles. August and September were quiet months with no major films released. The normalized EBITDA for the Entertainment Group, including Sunstar was $10 million, which was up 5.3% on the quarter 1 of FY '19. Moving into October. We saw the release of Black Adam, and that performed relatively in line with the expectations, and we continue to see our yield results grow, which we were pleased with. Based on insights from our Sunny bus members, there's high anticipation for Black Panther, which opens later this week, I think Wednesday night is the previews. And then we have Avatar, which I think we've emphasized enough today, and you've got to see a sneak but of. As Luke mentioned earlier, they -- it's all about blue in December. And a lot of the studios have moved their product to create space for Avatar and that quarter, and that will determine the strength of our second quarter result for entertainment. At this stage, we've still only got partial visibility on the second half release slate, and we think that more films will start to pop in as the studios complete them. What we do know is that the changes we've made -- we expect to continue to benefit from with improved margins as we've seen today. For hotels, as Norman has touched on, we continue to outperform our competitive sets, which is one of our key goals with the hotel division generating normalized EBITDA of $21.3 million, up 5.7% on the quarter 1 of the FY '19 year. A really pleasing result considering that we had Rydges Melbourne out of that assessment period, and we look forward to that opening. Occupancy and rate momentum experienced over quarter 1 continued into October with owned hotel occupancy of 78%, the highest experience since the beginning of the pandemic. And average room rate was $247, which was also a record for the month. All brands continue to trade ahead of their respective competitive sets. Demand for the group's hotels, as Norm's highlighted, is expected to continue to grow with recovery in the corporate travel market and that will assist the balance of FY '23. We expect occupancy to continue to improve incrementally whilst rate may moderate a bit as lower-yielding segments of the market start to come back into the MAX. And I think we've emphasized that we cannot wait to open Rydges Melbourne because we think that will do very well. I don't know if many of you saw it before the refurb, but that is quite a difference. So we anticipate that a full recovery of hotels are still likely to be FY '24 because we are dependent on the international market recovery, and that's all subject to airline capacity to returning to more normalized levels. The Property segment result, as we've highlighted, we think will continue to track below the prior year following the successful divestment of the non-core property assets. Overall, we expect the group's performance to continue to be subject to the release of blockbusters, the weather conditions we've always experienced and also the airlines returning to their pre-COVID normalized level of capacity for customer behavior to return to normalized levels for hotels. We are facing headwinds, including energy cost increases, particularly in Germany and other inflationary cost pressures. We are investing in compliance and risk like every other company is every day with growing requirements. And we're also investing in our sustainability initiatives, which we believe are really important. But as you've seen today, we're doing a lot of transformation and you don't put a full stop at the end of that sentence. We're continuing to find ways to do things smarter to help mitigate some of the impact of these things. Our maximized assets plan, we'll see our capital expenditure for the full year to return to the pre-COVID levels at around $120 million to $150 million. But overall, it was a really pleasing start to the year, and we can see a pathway to getting back to reestablishing 2019 revenue levels. Now before closing, I'm happy to take any further questions. All hands up.

It's been really insightful to learn more about what's happening within each of the businesses. Just in terms of medium-term CapEx plans, there's a lot going on with cinema premiumization, property developments, hospital expansion and more. How should we think about annual CapEx in FY '24 onwards? [indiscernible] over a specific number, but maybe just a range or a ballpark or compare it to this '23 guidance?

Yes, we've said it's going to really maintain at this level based on the plans that we see today and subject to the timing of projects moving around, but that's what we're anticipating item.

No, that $120 million to $150 is what we see for the next few years.

Just on Germany, I mean, you're talking about energy costs, I think at the full year, you also talked about a pretty big minimum wage rise coming through. So can you give any color on how financials there were in the first quarter and how bad that is and what you're sort of doing to try and offset that, if anything?

So wage costs, we've had pressure in New Zealand and Germany in all markets. So we find ways to mitigate that. And I think we do a pretty good job with the new operating models and other things that we can lever. The energy costs are challenged. I think you're reading what we're reading in the media. And they're a little unpredictable at the moment. We are expecting -- the government has actually announced a program. They're still working out how that works and who that applies to. So we would like to see or we're hoping for some sort of government assistance in the German market to help offset the growing price of energy. But did you want to comment on that in terms of our -- maybe our pre normalized energy costs and what we're seeing?

Yes. So in Germany, it is challenging, right? But pre-COVID in the '19 year, I think on a like-for-like basis, our energy costs were probably about EUR 4.8 million, EUR 4.9 million. In our forecast now that's twice 2 or 3x that. That's the sort of range we're looking at. But as Jane said, there is support. It's been announced. Germany out of any of the countries in the European Union is in a good position, probably a privileged position. There's been some flack about that. So just watch that space. That's what we're seeing. It's hard to give you any more guidance than that currently.

And then sorry, just one other one. The purchase of the Auckland property, is that included in the $120 million to $150 million? Or is that on top of that?

No, that's included.

And that will be in the '23. Yes.

Jane, thanks again, reiterate Sam's comments. Very, very useful today. Just a question from me. Your comment around the pathway to FY '19 revenue recovery. Just, I guess, how we should think about that in the context of, obviously, profitability is the key. You can't eat revenue, but you can certainly eat profit. How we should think about that pathway to the earnings? Should we be thinking about a better margin on same revenue? Or should we be thinking about -- how should we be framing the way we think about not so much the timing but the trajectory of that improvement or the recovery.

It's a good question. I think we've been cautious because we're touching on things like energy costs in Germany, which are bouncing all over the place at this point in time. But outside of that, all of our businesses are targeted with improving margins on like revenue. So we've demonstrated some examples of that as we've had some like revenue periods. And we're not seeing any reason why we can't continue to deliver what we've already seen. But we've just been cautious because of things that are creeping in and still forming and changing.

John, overlaid on top of that, like we've mentioned electricity, but there's also other potential headwinds like insurance. You read about that in the paper every day. Insurance costs continue to grow, and we're impacted by that. But also FX, too, in this time of volatility. Remember, some of our earnings are denominated in euros and in New Zealand dollars. So there are impacts that we don't necessarily call out. But you should think about when you're thinking about the future. But yes, with sort of scenario planned, which we have for the last 2 or 3 years, got scenarios going left right and center, but it's hard to give you any more guidance on that.

Just attempt to fish in the same area that John just did. Once we get through this financial year and you're in FY '24. Do you expect to still be quoting FY '19 figures through the releases? Is sort of that period done by the time we get through this year?

We can't wait to stop quoting FY '19. Yes. Look, we would like to think in FY '24, we won't quoting FY '19. But we just think that -- we're going to give you 500% increases if we start quoting prior year because we've had so many clock stop and starts. It's just not for us what we're targeting ourselves with. We want to get back to better than pre-COVID and keep growing. So we're using that this year as the basis because we think that's important. And it keeps all of our teams really focused on where we're heading.

So with Thredbo coming in light, if we just COVID with last year and it was partly closed, it wouldn't that useful.

We'll make a great headline on -- we did write it down to make sales fell better, but we it was useless.

So once we get through this year, I guess the only thing is just borders opening for hotels is really the only COVID-related thing that you sort of still adjusting back to. Is that fair?

So film supply so content. So I think Luke mentioned the production delays for the studios in terms of getting the film slate up and running. And then we've got the hot like international market, when is that fully going to love. We haven't -- there's no return from the China market yet, et cetera. So yes, so it's trapped are the 2 areas. With Thredbo, we feel like we feel steamer. I mean we've got a new business model, and that's subject to weather conditions. And so that's what we're focused on.

Just one more on cinemas. Obviously, it's all about Avatar, but the other big one is Black Panther. Can you talk to us about how initial sales are going versus your expectations? And what does a good result look like for that movie?

We are pleased. We were pleased with the presales demand. In fact, I've got Luke in the room. I don't need to answer all these questions, so you can talk about it.

I thought you're doing a great job. The current Black Panther presales are ahead of the initial film, ahead of Captain Marvel. So that's putting us in -- making us pretty confident that we'll see a pretty good result that's consistent with the Marvel title.

Okay. That's the questions. I should now close. Look, you guys know we're a diverse business. And today, we've only touched on a very few areas. But whilst we are diverse, you can see that our strategic framework is aligned across every business. And that means that are growing revenue above market because we now have the ability to use data more effectively to inform our pricing strategies, and each business has reset almost completely their inventory and capacity strategy, which has then created a new product set, which we will continue to trial and innovate with, but they're delivering good results. We're maximizing our assets. We've redefined our property strategy, divested underperforming and non-core assets, and we're unlocking the value of our priority development opportunities. We also have a common purpose across each business to improve the customer experience, which is what we really refer to as premiumization with targeted upgrades and hotels, the Thredbo investment in the premium facilities and in our cinemas business. We have and will continue to transform our business. EVT is one of the very few companies in the pandemic to experience what it is like to drop to zero revenue overnight, take care of 9,000 people and shareholders. It completely rocked our world, and it was a challenge like no other. But it accelerated what we believe has been a really incredible journey for EVT and we are stronger for it. So when we use the word transformation, we mean it. From our investment in new capabilities, upgrades and technology, process improvements, the entire creation of the Elevate program to ensure we do elevate our people, community and environment. We know we're going to face headwinds and challenges ahead, but I don't think we've ever been more challenged fit as a team and with all the great people that support us. I want to really thank my team for taking the time to present this morning. I hope you've enjoyed getting to meet them. They're a great team, but supporting them are thousands of amazing people, and we get great ideas right through our business to ensure that we can keep making ourselves better. I also want to say a very special thank you to this lovely lady, Alex, in the corner, who's been hiding and Annie who's floating around and [indiscernible] in the background because trying to herd this team together to come and talk about what they did rather than get on with what they're going to do is quite a challenge, and I think they've done an amazing job. Thanks, [indiscernible] George Street team for looking after us. They've done a really great job into the visual event management team for making sure that we could have people join online as well as here today. And most of all, thanks to all of you for supporting us through this period and for taking the time to come in person, we love in-person events, and thanks for joining us online. For those of you with us in person, the bonus is we have a grab-and-go lunch prepared for you. It's probably going to be delicious. If you are online, you missed out, but that's just what happens. Thanks, again. Have a great afternoon, and feel free to connect with any of the execs on your way out. Thank you.