Good morning. My name is Chris and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Cedar Fair Entertainment Company 2022 Third Quarter Earnings Call. [Operator Instructions] Thank you. I’ll now turn it over to Cedar Fair.

Thank you, Chris and good morning to everyone. My name is Michael Russell, Corporate Director of Investor Relations for Cedar Fair. Welcome to today's earnings call to review our 2022 third quarter results ended September 25 as well as trends we are seeing through this past Sunday, October 30. Earlier this morning, we distributed via wire service our earnings press release, ir.cedarfair.com. On the call with me this morning are Richard Zimmerman, Cedar Fair President and CEO; and Brian Witherow, our Executive Vice President and CFO. Before we begin, I need to remind you that comments made during this call will include forward-looking statements within the meaning of the federal securities laws. These statements may involve risks and uncertainties that could cause actual results to differ from those described in such statements. For a more detailed discussion of these risks, you may refer to the company's filings with the SEC. In compliance with the SEC’s Regulation FD, this webcast is being made available to the media and the general public unselectively disseminated. All content on this call will be considered fully disclosed. With that, I’d like to introduce our Chief Executive Officer, Richard Zimmerman. Richard?

Thank you, Michael and good morning, everyone. Earlier this morning, we announced record results for the third quarter and for the first 10 months of 2022. As you all know, the third quarter of the year is our biggest and most important quarter. And I'm extremely proud of what our team accomplished over the last few months and since we reopened our parks. There's no better group of professionals in the business. Together, we have quickly and effectively addressed the effects of the pandemic on our business and put Cedar Fair back on course to drive significant growth. Our strong recovery and record performance this year has allowed us to deliver on our capital allocation priorities of reducing leverage and returning capital to unitholders. Brian will provide more detail on the state of our balance sheet in just a moment. But I am extremely proud of the fact that we have already reduced net leverage back inside 4x adjusted EBITDA, in line with pre-pandemic levels. This morning, we also announced that the Board has authorized the fourth quarter cash distribution of $0.30 per limited partner unit which is in line with our third quarter distribution. In addition to our quarterly cash distribution, we are returning capital to unitholders through our $250 million unit repurchase program which was initiated in August. In just a few short months, we have repurchased approximately 2.8 million units or 5% of Cedar Fair's outstanding units at an average -- at an aggregate cost of approximately $115 million. We believe that a combination of quarterly cash distribution payments and buying back units is the most effective and value-enhancing path to return capital to our unitholders in the current environment. And we will continue to execute on our capital return plans as we head into 2023. Before…

Thanks, Richard and good morning, everyone. I'll start by discussing our third quarter operating results compared to last year's third quarter before providing an overview of our preliminary year-to-date results through October 30. I'll wrap up my remarks with an update on our balance sheet and free cash flow outlook. During the quarter, our parks had 1,088 total operating days compared with 988 operating days in the third quarter of 2021. The increase in operating days reflects the impact of the pandemic on last year's operations and the benefit of a return to a normal operating calendar in 2022. As Richard mentioned at the beginning of the call, we delivered an outstanding quarter with meaningful year-over-year increases across our key performance metrics. In the third quarter, we entertained 12.3 million guests and generated record net revenues of $843 million, representing 12% or $90 million increase compared to the third quarter of 2021. The increase in net revenues was largely attributable to the 100 incremental operating days in the period which contributed to a 1.5 million visit gain in attendance and a 17% or $14 million increase in out-of-park revenues. The increase in out-of-park revenues reflects incremental third quarter results at Castaway Bay and Sawmill Creek Resort, 2 properties that were closed for renovations during the third quarter last year as well as higher occupancy rates and higher ADRs across the majority of our resort portfolio. As we noted on our last call, the continued strong performance of our resort properties validates the investments we made in recent years to refresh and expand that side of our business. Meanwhile, in-park capital spending in the quarter totaled $62.62, down 3% compared with the third quarter last year. The decline in per capita in the period was due primarily to lower levels of…

Thanks, Brian. While we are extremely pleased with our performance year-to-date, we are just as excited about the remainder of 2022 and the compelling opportunity that we have to build on our momentum in the coming year. In the weeks ahead, a number of our parks and resort properties will be transforming themselves into winter wonderlands and hosting holiday events. These immersive season-ending holiday events have proven to be extremely popular with everyone from grandkids to grandparents, while offering our loyalties and pass holders another compelling reason to visit the park. We believe the success of our fourth quarter events which now account for more than 15% of our annual attendance is the catalyst for expanding our appeal as well as the steady growth of our season pass sales program. To ensure our parks remain a top entertainment choice among consumers, we continually improve the quality and breadth of our offerings and enhance our guest experience. That is why we continue to invest a significant amount of our free cash flow back into our properties each year, creating a powerful economic life cycle that benefits our guests, our associates and our park communities and ultimately drive sustainable growth and value creation for our unitholders. The guest-focused strategies we have in place are producing record results, none more effective than our expanding season pass program -- we are also generating excellent returns from the capital we have invested to improve the quality and scale of our food and beverage offerings. Food and beverage is a top priority for our guests and we are focused on continuing to invest in our capabilities to improve and grow our offerings. For 2023, we are investing in marketable new attractions at our 5 largest parks and 7 parks overall. These include large-scale updates to major…

[Operator Instructions] Our first question is from James Hardiman with Citigroup.

So a lot of data, a lot of math to sift through here. But basically, since your Labor Day release, it looks like we saw a pretty material deceleration in September ultimately through the end of the third quarter and then a pretty significant reacceleration in the month of October. I guess, a, sort of verify or dispel that just broad narrative and b, any why as to why you think that’s happening?

James, great question. I think we would say exactly what you just said which is September was a tough month in part because of the weather that impacted us in the early part of the month. But I think what we've seen in October is our markets respond to the quality of our Halloween events. We know that with our season pass sales up 20% this year, there are a lot of folks out there that were itching to come. The weather was really good in October. But the appeal of our events really carried through and we saw that through all of our channels, demand group and season pass. Every year, we look at October and go, it's been another great October. I think it speaks to the appeal of the product not just the holiday but the appeal of the product culturally and that people look forward to holidays. But overall, we continue to see a strengthening of demand in the fall. And that seems to be an ongoing, almost multi-decade trend.

Makes sense. And then let’s talk about costs for a little bit here. A significant amount of operating expense deleverage here. I think by my math, that line is up 42% versus 2019. I guess maybe – I mean just given that, that is so much more than revenues are growing, I don’t know if there’s a way to do sort of a bridge. I know you now have an incremental lease that is adding to some of your costs, I think, in that line. Obviously, operating days were up as well. But I’m struggling to sort of bridge the gap in that number, particularly when it sounds like you guys have done a good job in sort of staving off labor increases – or at least the wage rate increases.

James, I'll let Brian weigh in here. But overall, listen, we've tried to be as transparent as possible as we went through the pandemic about what we thought the effects were. See, labor is our single biggest line and we've been very transparent about what we needed to do in each of our regional markets to be able to get the staff we needed to run our parks and get the experience. When I look back on where we are year-to-date through the third quarter, we’re down approximately 1 million seasonal hours to 2019. So we have focused on efficiencies. But we’ve also focused on driving the revenue. But when your single largest line item is going up by a significant percentage, that’s the challenge. We think we can work that out over time and get back to pre-pandemic margin levels. But that takes time and it certainly takes a recovery to 2019 attendance levels. Brian?

Yes. Just adding on, James, to Richard's comments. I think the efforts to take hours out of the system are certainly producing. There's more opportunity there to optimize some of those workforce management tools. Being able to flatten that growth rate around seasonal labor for the full year, as Richard noted, down slightly in the third quarter, is certainly helping. But to your point, there is pressure the other way by the incremental days that are in the system. And then when you look at it versus last year, the recovery of some of the attendance and the variable-related costs. But when we look at it overall, I think you hit on it, labor is the largest single cost item. And it would represent probably more than 2/3 of that increase that you're seeing in the third quarter versus where we were in '19 and that's primarily right. We'll continue to focus on it, as Richard noted. I think there's opportunities given the momentum we've established more recently but there's more work to be done.

And let me maybe ask the question in slightly different way. I mean that line seems to be growing faster than revenues. And so to turn around margins, we need to get that line to grow, at least start by getting those 2 things to grow at a commensurate rate. Any thoughts on when that might happen? Is there sort of an opportunity to get back on par with at least not a big deleverage item?

Yes. I think, as Richard noted in his prepared remarks, I mean the focus is to get back to those pre-pandemic margin levels. One of the key factors that will assist in accomplishing that is getting back to those pre-pandemic attendance levels, right? We talked about group remaining disrupted. That certainly puts more pressure on margins earlier in the season, still somewhat in the third quarter as well. But as we've talked about in prior calls, youth and school groups being lost in the spring is a big headwind when it comes to margins. So I think we're covering volume and we feel very good about that. The trends we're seeing in that area as we wrap up 2022 and head into '23, particularly around youth and school. And so I think that's the first step. And the second piece is we've already started to show some wins in this area. It's flattening out and starting to decelerate that growth around the labor rate. More of that was accomplished here recently. I think we'll have the benefit of that now for a full season as we roll into 2023. And there's -- and we feel very good about the other -- the top line metrics. We're seeing guest spend in the park, as I noted in my prepared remarks, up 20-plus percent to -- or 30-plus percent, I'm sorry, to 2019 levels and 2% still to last year. Some of the admissions per cap pressure we're seeing is really more mix driven and not a reflection of the consumer pulling back, just really more of a reflection of season pass growth. So I think we think that things are aligned to start seeing that margin expansion. It's just going to take -- takes more time.

The next question is from Steve Wieczynski with Stifel.

So Brian or Rich, I want to go back to the in-park. You just made some comments about the in-park spend levels which were down year-over-year. And it's probably one of the first times we've heard any kind of slowdown in spend levels across multiple consumer verticals that we look at. So is there anything you can help us think about as to maybe what drove that slowdown? And look, I understand you just called out lower spend levels and extra charge products and some negative headwinds from a higher season pass mix. But I guess the question is, if you look at the average person, Joe Schmo coming in, are they still spending more as they come in the park versus what they – where they were last year?

Yes. Steve, it's Brian. Yes, I'll reiterate what I said to James' question. The -- when I -- when we split it apart and we look at those pure in-park areas, where we take math, a big piece of the math out that season pass represents, right? That impacts admissions more than it affects those in-park spend areas. We're still seeing the stickiness in growth, as I noted, up 2% from third quarter of last year, when we look at just food and beverage, merch games. That's transaction count improvement. That's higher average value per transaction. The one in-park area that saw a little bit of pressure was extra charge. Overall, revenues are up based on pricing. But given that we're not at its higher peak attendance days, particularly in the summer, more July, August, at some of our big parks, that's a reflection of some of the disconnected group still. It's also a reflection of us moving guests off of some of those busier days through our dynamic pricing techniques. That definitely takes -- took some of the demand for fast line, as an example, down a little bit. But overall, revenue is still up in that as we price more into it. So the one area that we've seen the most pressure is more mathematical or accounting and that's admissions. And that, again, ties back more towards that mix, as we noted. We're pushing close to 60% of our attendance coming from season pass this year versus mid 55%, 56% range last year.

Okay. Got you. And then second question is, you keep talking about trying to get back to those pre-pandemic attendance levels which I think was around 28 million. I guess as we kind of think about the 2022 winding down at this point, how should we think about ‘23? And I’m not sure how you really want to take this question but is it possible to get back to those levels in ‘23? I mean I think that would kind of infer, let’s call it, a 3.5% to 4% kind of growth rate in terms of attendance. Is that too quick? Or – and is this more of a ‘24 type story? Or is that still a potential in ‘23?

Steve, when I think about what we saw this year, a 20% increase from 2.6 million season pass to 3.2 million, we had more of our loyal customers step up to buying our most expensive ticket, if you think about it as a ticket, the highest price ticket. I think that bodes well as we look forward in terms of our ability to mine more out of our existing customer base. We've been transparent from the beginning on the group channel on what we thought it would take. You go back to '08, '09, it took a full 3 years to get back to similar levels. We see that kind of recovery happening now. I'm really excited. By the way, the phones are ringing, as Brian said, as we, in particular, look at the big chunk we get back in the spring, early summer which is the youth and school groups. So I think that, combined with one of our strategies and our look at the world coming into it, it's tough to go back 12 months and say what we were thinking as we went into 2022. But when we looked at this, we felt there'd be pent-up demand. We've seen that across the board and certainly have seen that up in Canada this year. But we did -- we invested heavily in food and beverage to drive that in-park spend. We thought we could have the demand we needed within the channels. I think the season pass 20% up shows that. But as we look at next year, now we're back to our more traditional approach which is we're going to have something new in 7 different -- in 7 of our parks that we talk about. I think it's probably the deepest and most complete product lineup I've seen us have over the course of -- since I've been doing this. So, I think we have what we need in terms of our marketing folks to go out there and drive demand. So all of that factors into how I kind of look at next year.

The next question is from Chris Woronka with Deutsche Bank.

I’m going to try to come at, I guess, the margin question, one different way which is, I think you’re back to 93% or so of 2019 attendance in the third quarter of ‘22. If you get back to 100% next year, is there – how much incremental labor do you really need to get that, right? The question – I guess the question, or the observation would be, are you kind of – with a higher fixed cost base when the parks are open, is there a lot of incremental labor hours that need to come in to make up that final 7% of attendance?

Chris, when we think about the business model we have -- it's a fair question, I think a really good question. The incremental attendance on any given day really doesn't drive a lot of extra cost. So every time we drive higher attendance on different days, we really -- those are our high-margin days. Go to October; we just talked about being some of our most profitable days. That's really true. So I think the more we can drive back that 7%, the more likely we're going to push deeper into the higher margins. But what I'll also tell you and this is what Brian always says, where we get the growth from sometimes determines the impact on margin which parks are doing well. And I'll even go to something like our Canadian park which is park in Toronto, Canada ones are having a phenomenal year. But because the dollar has weakened, that's probably taken our estimate about 50% -- 50 basis points off of our consolidated margin because that's not flowing through. So there's a lot of things that impact that but it's a fair question.

Okay. And then I guess, secondly, I know we’re not really talking about 2023 yet but how much confidence do you have based on what you’ve seen to date in ‘22 to kind of move pricing up further, whether it’s on certain ticket plans or whether it’s on some of the food and merchandise? Do you feel confident if you had to make that decision today that you could take additional price for next season?

Chris, as I look at our approach, it's always been to take price every year and dynamically price. The early indicator for me would be season pass. And we've, on average, targeted a high single, low double-digit increase in our pricing. Now mix will impact what comes through which far sell. But we think there's an opportunity to always move price. So I also firmly believe when you take price every year, you're sort of training the market than expected. So our approach is always in dynamic pricing lean into demand. We -- you always hear me talk about price value. Our guests got great value this year. That gives us an opportunity to continue to take price. I'll answer your question a different way, Chris which is if I go back and look what we saw '08 into '09, the health of the consumer back then, we saw hotel booking dropping -- dropped. We're not seeing that. We saw a season pass soften considerably. We're not seeing that. And group dried up on us, both corporate and school. We're not seeing that. Schools are calling us and the phone's ringing. So the things I would be looking at, to answer your question, I don’t see them right now. So I’m really confident that we can continue to try and take our approach where we try and both get – recover volume but get price.

The next question is from Mike Swartz with Truist Securities.

Maybe just a question on your plans for marketing in ‘23 and then maybe how they differ versus how you’ve marketed historically and then look at the – sounds like season pass visitation is probably higher than it was. Pre-pandemic group, obviously, we know is starting to come back. But is that single-day visitor, is there anything you’re planning to do differently to drive those attendance levels back in ‘23 and beyond?

Yes. Mike, it's Brian. As we look at where marketing has pivoted or changed over the last couple of years and we've talked about this on prior calls, shifting during the pandemic out of necessity away from traditional media more heavily into digital. And as Richard just mentioned a moment ago, we felt coming into this year, there was going to be a lot of pent-up consumer demand. And so we were pretty aggressive with paring back our advertising dollars and mining some savings there and trying to ride that pent-up demand wave. As we look at 2023 and Richard highlighted what's going to be a very strong capital program. Big new attractions going in, in our 5 largest parks and 7, 8 parks overall. We want to lean into that and make sure that we're not penny-wise, dollar-foolish on the advertising side. So I think as we look towards '23, we may accelerate some spending around that capital program. I don't think it's going to be material, nothing we believe the returns are there to warrant it. But it will be still a somewhat similar approach, heavy on digital because of the efficiencies, cost-wise but also the flexibility of that but also getting a little bit back more into mainstream media as we lean into that capital program.

Mike, as we think about marketing, I had -- Kelley Ford, our CMO and I were discussing yesterday. We're so excited about the digital shift because as she would tell you, we need to be where the customers are, not where they've been. They're not watching linear TV anymore. We've got to be out there where they are. And we're trying to be -- look forward and invest where we think we can get them, not just mine the efficiency but get the most impact.

Okay, perfect. That's helpful. And then just maybe on -- I think you said season pass sales, if I heard that correctly, were up 20%. I apologize if I missed it but was that versus '21 or '19?

Yes. I’m sorry. That’s whole year 2022 versus last year, $3.2 million for full year 2022 versus $2.6 million in ‘21.

The next question is from Ben Chaiken with Credit Suisse.

Just going back to cost briefly. Your 3Q flow-through was, I think, around 5%. Now it’s following 10% in 2Q. Regardless of how you look at trends, revenue is up materially and it’s not necessarily translating to EBITDA. I guess as you reflect on your business in ‘22 season to date, do you think you made the right moves on labor hours and rate and/or operating days? Or would you change anything?

Fair question. Certainly, we've always been -- we always look at how we've approached the year and what lessons can we learn and what can we mine out of our experience. If you go back to -- and again, we've been transparent with our interim updates. We took a number of days out of the calendar early on. We weren't sure what demand was going to look like in the springtime. And we had some challenges on the staffing front. As I look at – and as we think about next year, we want to make sure that we’re giving ourselves a chance to drive as much revenue as possible. And when we think about how to mine that most effectively, as I said, through year-to-date, through the end of the third quarter, we’ve taken over 1 million hours out. We want to make sure that we’re fine-tuning that approach and giving us the ability to drive deeper and recover our margin, continue to drive the revenue, get far more efficient. I touched on that with Chris’ call. But as we look forward, I think there’s some things that we’ll look at. Brian talked about our ability to invest a little bit more in marketing to make sure we’re capturing both the demand for 1-day tickets but also make sure we are optimizing those price breaks that are so critical for us for season pass. Brian, anything you want to add?

Yes. I mean, just to reiterate, Ben, as we came into this year, the focus was on recovering volume and driving guest spend. As we said in the prepared remarks, it's critical that we have all of our revenue centers and our attractions adequately staffed to the expected demand levels on a day-by-day basis. There were -- as Richard noted, times early in the year that we weren't able to open several of our parks because of shortage of staff, more of a shoulder season issue when students weren't out of school yet and we felt that we wouldn't be able to deliver the right guest experience. We unplug those operating days in a few markets. Saved some operating costs. But I think to Richard's point, we hurt ourselves in the revenue line item. So, I think we can always get smarter and there's always more upside on the cost side of things and more efficiencies to be gathered. As I noted, I think the progress we've made around the labor rate structure was huge, probably seeing more benefit of that in Q3 than we did in the first half of the year. And that's going to translate into 2023. But I think as we look at where -- what we did in 2022, we delivered on what we intended to which was to achieve record revenues and record adjusted EBITDA. And we'll get better at margin and optimization of those revenue dollars as we roll forward.

Got you. And just to make sure I’m kind of interpreting – first of all, that’s all super helpful color. I appreciate it. And then just to make sure that I’m interpreting your comments correctly, it sounds like the – getting back to ‘19 margins will be a function of kind of like operating leverage on incremental growth because it sounds like you guys are talking about like maybe some marketing dollars coming in and driving incremental revenues. So the point – the way that we should be thinking about it is operating leverage on incremental revenues rather than necessarily like absolute costs coming down. Is that fair?

I'd say it's more heavily skewed towards what you just described. There are definitely some places where we're going to look to mine some more cost efficiencies. And then back to Richard's point, ultimately, that 2019 margin level -- and Chris' question about if we get back to those attendance levels, you get to that margin level. Part of it's going to depend on the performance, right? I mean Canada's Wonderland had a fantastic year, a record performance year for that part coming out of the pandemic. But unfortunately, when we bring that back over into U.S. dollars, the FX is hurting us, as Richard noted, to the tune of maybe 50, 60 basis points of margin.

Ben, the other thing that I'll jump back to. When we went into the pandemic, a lot of question marks, we issued a $1 billion bond in April of 2020 to make sure we had adequate liquidity. Yes, you look at what we've done on the capital structure, paying down 90 -- more than 90% of the debt that we incurred to survive the pandemic and get us through. The reinstitution of the distribution, getting down to that 3.7. I'm really pleased with the rapid recovery, if I could put it that way. And I’m really pleased with what we’ve been able to do with the free cash flow to set the foundation on the capital allocation side for how we create some – create even more value for our unitholders. I don’t want to step over that because I think the impact of that rapid recovery has really let us get healthy very quickly. And that’s going to let us drive growth in the future.

[Operator Instructions] The next question is from Eric Wold with B. Riley Securities.

A couple of questions, kind of somewhat like follow-ups and I’ll not try to beat on these too much. I guess, one, you talked about obviously the amount of season pass contribution to total attendance up well above last year, well above ‘19. Is this something you’re seeing kind of in the demographics coming in the park given kind of the economy we’re in now? Are you seeing single-day passes get impacted because of maybe the lower income consumer that normally wouldn’t buy a season pass? You’ve got to be impacted there but you can hold up in-park spending at these elevated levels because that consumer is still there. Anything to read into that? Or is that looking at the wrong way from your point of view?

No. What I would say, Eric -- it's Richard and great question. What I would say is when you think about season pass, what we think we saw this year as we got more into dynamic pricing and price -- and took the price of our demand tickets on the web up, the gap between the demand ticket and the season pass, we had more people look at that gap and go, let me trade up. So what we're seeing is a trade-up to our highest ticket that helped drive the 20% increase in season pass that I referenced earlier. Once they get in the park, we continue to sell more All-Season Dining, more All-Season Beverage. We're seeing people bundle together a full year's worth of experience in our parks. And then once they come to the park and we track their spending, they spend on other things as well. So people trading up from a 1-day ticket to a season pass is always good for our business. The question we always get is, is there an optimal limit? No, we'd like to sell as many season passes as we can because once they come, they keep enjoying the benefit of the park. And even in terms of what we're seeing now, we continue to see an increase in All-Season Dining. We're up year-over-year in our -- as we look at that line item for the 2023 passes. So they see value there; they come to the park. And then once they come to the park, they want to enjoy the visit. If you go all the way back to '08, '09 in the staycation, if people stay close to home, they still want to treat themselves well. And when they come to our parks, they want to indulge themselves a little bit. And that's what we see.

Got it. And then just another one on labor. I apologize. I know, obviously, you made the decision to staff up early and heavy to drive attendance and guest experience in spending the parks. I get all that. You've taken some labor hours out so far. So maybe there's room there. If you can kind of walk through the goal of kind of closing the gap in attendance to leverage the current spend levels, I guess what are your early thoughts on what hourly wage pressures may look like next year? And kind of how will you compete maybe against – I think you kind of paid up early in this cycle to get people in the park. How will you kind of compete as we think about next year, how do we think that labor pressure may look like on the hourly wage side?

Yes. Eric, it's Brian. I think when we look at labor for next year, broad comment, the availability and affordability challenges aren't going away. We believe those are largely structural. That said, there have been some tailwinds this year that we've leaned into and benefited from, right? The return of the J-1 Visa program brought more international students over at our parks. That was extremely helpful. Our ability to, as I mentioned on the call, sort of put in place a more pay program and scale more aligned with where we've been in the past, not everybody at that max level, right? So we'll pay up for certain jobs. We'll pay up for seniority and experience. But the newer first year associates that come in or maybe those J-1 Visa students are only here for a short period in the summer, we'll keep them at the lower end. And so we still, in each of our markets, want to remain the market center and be the first choice for folks seeking a job during the summer season. And so that’s not going to change. But I think leaning into that structure that we did this year, continuing to benefit from some of those same tailwind factors will allow us to offset significant pressure. I think we’ll see if we have to pay up in some markets, we’ll pay up because what we do know is if we’re not staffed appropriately, we’re losing revenue. And I think that’s the key message that we want to make sure we deliver. And we saw it play out this year. In some of our markets, when staffing was more challenged, our per caps were challenged. When staffing was adequate or at its right level, we are delivering our best per caps on those days. So it’s critical that we maintain those adequate staffing levels and that will be the focus.

The next question is from Barton Crockett with Rosenblatt Securities.

One thing I was wondering about was the October trend, how reasonable it is to think about that as a baseline for what could happen in the other holiday period here at the end of the year in December and talk about puts and takes around the reasonableness of extrapolating that trend to the balance of the quarter.

Barton, Richard, good question. When I think about the appeal of the holiday events, they fall a different time of year. Halloween sort of leads into November. And not all of our WinterFest events open up right away but they do open up shortly thereafter. So what we've seen is there is such a thing as momentum. When we're top of mind and people visited and they go home and tell their friends about their visit, it keeps us in the consideration set. So we've always seen that good momentum leads to better next year performance. We've always seen strong spring performance when we have a strong fall. So I think it's a really good sign. I think it gives us great momentum. We're starting to see some markets pick up. I anticipate that Canada, in particular which had a great opening WinterFest in 2019. Given the strength we've seen there all year long and their recent trends, I think they'll have a phenomenal WinterFest. So I do think with our always normal weather caveat, if it rains, it's tough to get people to come out. But with reasonable weather, I anticipate that the momentum we've seen in October is sort of sets the table and positions us for a successful WinterFest, Knott's Merry Farm season once again.

Okay, that's helpful. And I wanted to step back a little bit on the macro view because you guys are in an interesting position, right? You see where the consumers' appetite is and willingness to spend their pricing sensitivity, also buy a lot of things. You pay a lot on labor. You buy a lot of products. You have a CapEx cycle that will be buying a lot of commodities, maybe some steel. And we have a Fed right now that's bound to determine to keep raising interest rates until they end this inflationary spiral. And there's a lot of speculation about whether there has to be kind of a wage cost spend kind of cycle that has to be ended. And what I hear from you guys is a lot of sense of strength from the consumer, maybe some easing of some cost pressures. And I'm just wondering how you kind of fit that into what you believe is happening macro-wise based on your view of the world and how that kind of informs how you think about what the most likely macro set up is as we navigate through next year?

I'll go back to as we went through the pandemic, we said pre-pandemic experiences, consumers were prioritizing experiences over possessions. Clearly, that wasn't the case during the pandemic. During the heart of it, they prioritized possessions and were buying goods. Everything that we're seeing is being collaborated by those that I talked to within the broader leisure hospitality world. Hotels are doing good. You continue to see strong interest in all the different sectors of the leisure and hospitality sector. I think we’re back to consumers prioritizing experiences over possessions. Whether that’s pent-up demand or event spending, all those things we’ve talked about, experiences are what consumers in the U.S. and in Canada are looking for. And they’ll pay up to go get the experiences that they want, particularly after being through the depths of the pandemic, however it impacted everybody. I do think from a broad front, consumers continue to be in pretty good shape even though the lower end is getting increasingly pressured. And our broad macro view is that we think there’s a lot of demand that will continue to come back for us. That’s code for we continue to see our ability to close the gap on the attendance levels for 2019 being a reasonable estimate of next year. Brian, anything you want to add?

No. I mean I think you said it well. While there's a lot of uncertainty around the macroeconomic environment and our crystal ball isn't any clearer than anybody else is, all we can look at, Barton, is the trends we're seeing. As you noted, the most recent trends, October, extremely strong, underscoring, again, the demand for that event. Great weather in October, we can't ignore that, as Richard noted. But the longer lead indicators, we -- along with those strong attendance numbers, we saw outstanding sales of the 2023 products which tell us the consumers still feel pretty good about looking forward because in some cases, these are products they're not going to be able to use for another 5 or 6 months.

But on the flip side of that, cost pressures, are you seeing any deceleration? It sounds like maybe wage is less of an issue. Other things, or is it still is kind of inflationary as it ever has been?

Yes. Around labor, I think what we've experienced is the result of strategies that we've deployed. There is certainly still pressure around wage rates. We've just deployed a different strategy that is allowing us to flatten that curve as I noted. In other areas, you’re right. I mean we are seeing an acceleration of costs. We noted it in terms of the impact it’s having on things like cost of goods sold. As we work on our capital programs for next year, those projects are certainly under pressure, increasing costs. We are making adjustments within the capital program where we can to absorb those pressures without sacrificing the impact of the product. It may mean deferring some infrastructure things here or there but we’re certainly doing everything we can to offset those pressures.

We have no further questions at this time. I'll turn it over to Richard Zimmerman for any closing comments.

All right. Thank you all for your interest in Cedar Fair. As a heads-up, we will be participating in three banking conferences before the end of the year, hosted by Stifel in Chicago, Deutsche Bank in West Palm Beach and Truist in Boston. We hope to have a chance to visit with you in person at one of these events. Otherwise, I want to wish you and your families a safe and happy holiday season. Michael?

Thanks again, everybody. With additional questions, please feel free to contact our Investor Relations department at 419-627-2233. And our next earnings call will be held in mid-February after the release of our full year results for 2022. Chris, that concludes our call today. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.