Cuộc họp công bố kết quả kinh doanh Quý 3 năm tài chính 2026 của OneSpaWorld (OSW): Doanh thu tăng 7%, nâng dự báo

Điểm chính

• Doanh thu quý 3 năm tài chính 2026 tăng 7% so với cùng kỳ năm trước lên 276,5 triệu USD, trong khi EBITDA điều chỉnh tăng 12% lên 39,2 triệu USD. Ban lãnh đạo cho biết cả hai kết quả này đều vượt mức trần trong khoảng dự báo đưa ra vào tháng 7.
• Lợi nhuận ròng tăng lên 28,2 triệu USD, tương đương 0,28 USD trên mỗi cổ phiếu pha loãng, từ mức 24,3 triệu USD, tương đương 0,23 USD trên mỗi cổ phiếu pha loãng, trong quý 3 năm tài chính 2025. EPS pha loãng điều chỉnh tăng từ 0,30 USD lên 0,34 USD.
• Chi tiêu bình quân của khách hàng tăng 3,3%, chủ yếu nhờ cơ cấu dịch vụ phong phú hơn thay vì tăng giá. Ban lãnh đạo nhấn mạnh sự tăng trưởng ở mảng Medi-Spa, châm cứu, liệu pháp truyền dịch IV và các dịch vụ sức khỏe và trường thọ có giá trị cao hơn.
• Doanh thu đặt trước tăng 20% và chiếm 23,2% doanh thu dịch vụ, so với mức 21,5% của một năm trước đó. Lượng đặt chỗ trước cho các kỳ tiếp theo tăng 18% so với cùng kỳ năm trước.
• OneSpaWorld đã nâng mức trung vị trong triển vọng năm tài chính 2026. Công ty hiện dự kiến doanh thu đạt từ 1,033 tỷ USD đến 1,038 tỷ USD và EBITDA điều chỉnh đạt từ 138 triệu USD đến 140 triệu USD.
• Hội đồng quản trị đã thông qua chương trình mua lại cổ phiếu mới trị giá 100 triệu USD và tăng cổ tức hàng quý thêm 25% lên 0,0625 USD mỗi cổ phiếu.

Dữ liệu tài chính trọng yếu

Kết quả kinh doanh và hoạt động

Mức tăng doanh thu 18 triệu USD bao gồm 8,2 triệu USD đóng góp từ mức tăng 3,3% chi tiêu bình quân của khách hàng, 7 triệu USD từ các tàu đóng mới năm 2026 và số ngày tạo doanh thu cao hơn, cùng 4,3 triệu USD từ lượng khách hàng tăng.

OneSpaWorld vận hành các trung tâm sức khỏe và chăm sóc thể chất trên 207 tàu vào cuối quý, với số lượng tàu trung bình trong quý là 206 tàu. Số liệu này so với 204 tàu và trung bình 199 tàu trong quý 3 năm tài chính 2025. Công ty dự kiến sẽ kết thúc năm 2026 với các trung tâm trên 208 tàu và tại 12 khu nghỉ dưỡng điểm đến.

Dịch vụ Medi-Spa đã có mặt trên 157 tàu, tăng so với 150 tàu của một năm trước đó. Ban lãnh đạo tiếp tục đặt mục tiêu đạt 159 tàu vào cuối năm. Các dịch vụ có giá trị cao hơn bao gồm Thermage, truSculpt, CoolSculpting, liệu pháp truyền dịch IV, châm cứu và liệu pháp ánh sáng LED đã mang lại mức tăng trưởng hai chữ số mạnh mẽ.

Ban lãnh đạo cho biết các giao dịch Medi-Spa có thể tạo ra mức chi tiêu gấp 3 đến 4 lần so với một liệu trình massage hoặc chăm sóc da mặt thông thường, mặc dù Medi-Spa vẫn chiếm chưa đến 9,5% tổng doanh thu gộp. Hạn chế về không gian và hiệu quả kinh tế từ các mục đích sử dụng thay thế khác trên tàu đã hạn chế việc triển khai dịch vụ này trên toàn bộ đội tàu.

Tỷ lệ giữ chân nhân viên vượt quá 81%, cải thiện gần 5 điểm phần trăm so với một năm trước đó. Ban lãnh đạo kết nối đội ngũ nhân viên giàu kinh nghiệm với việc đưa ra các khuyến nghị tốt hơn, bán chéo và bán hàng nâng cấp hiệu quả hơn.

Doanh thu từ các khu nghỉ dưỡng điểm đến giảm 1,4 triệu USD, một phần do các khách sạn đóng cửa. Doanh thu từ sản phẩm giảm 1,3 triệu USD sau khi tái cấu trúc hoạt động tại Anh và Ý.

Công ty đã gia hạn thỏa thuận với Azamara Cruises và Silversea. Tàu Azamara Quest đã hoàn tất việc nâng cấp spa, bổ sung thêm phòng trị liệu, không gian bán lẻ, dịch vụ Medi-Spa và liệu pháp truyền dịch IV.

Dự báo của ban lãnh đạo

Ở mức trung vị, ban lãnh đạo cho biết triển vọng này thể hiện mức tăng trưởng doanh thu 10% và tăng trưởng EBITDA điều chỉnh 13% so với kết quả năm tài chính 2025, ngoại trừ các hoạt động đã chấm dứt và tái cấu trúc.

Trong quý 4 năm tài chính 2026, ban lãnh đạo dự kiến doanh thu đạt từ 248 triệu USD đến 253 triệu USD và EBITDA điều chỉnh đạt từ 32 triệu USD đến 34 triệu USD. Triển vọng này phản ánh đà tăng trưởng từ đầu năm đến nay và triển vọng kinh doanh rõ ràng, đồng thời ghi nhận môi trường hoạt động đầy biến động.

Rủi ro và các yếu tố cần theo dõi

• Ban lãnh đạo cho biết áp lực địa chính trị đã ảnh hưởng đến hoạt động đặt chỗ tại Địa Trung Hải vào đầu năm, mặc dù OneSpaWorld không gặp phải sự sụt giảm như lo ngại.
• Việc đóng cửa các khu nghỉ dưỡng điểm đến và rút khỏi các trung tâm sức khỏe và chăm sóc thể chất trên đất liền tại Châu Á đã làm giảm quy mô hoạt động trên đất liền của công ty.
• Phần mềm định giá linh hoạt cần có quá trình phát triển, quy trình vận hành mới và thử nghiệm. Ban lãnh đạo dự kiến thời điểm triển khai sớm nhất sẽ không trước quý 4 năm tài chính 2027.
• Mở rộng dịch vụ Medi-Spa phụ thuộc một phần vào việc tiếp nhận hoặc chuyển đổi mục đích sử dụng không gian trên tàu, vốn phải cạnh tranh với phòng ngủ, sòng bạc, quán bar và các mục đích sử dụng khác của hãng tàu.
• Ban lãnh đạo chưa định lượng đóng góp tài chính tiềm năng từ việc định giá linh hoạt trong năm 2028 và các năm sau đó.

Điểm nhấn phiên Hỏi & Đáp với chuyên gia phân tích

Chi tiêu bình quân của khách hàng: Ban lãnh đạo lý giải mức tăng 3,3% là nhờ cơ cấu dịch vụ, mức độ tương tác và số lượng sản phẩm bán lẻ kèm theo, chứ không phải do tăng giá. Các dịch vụ châm cứu, Medi-Spa và dịch vụ trường thọ có giá trị giao dịch cao hơn so với dịch vụ massage, chăm sóc da mặt và làm móng chân truyền thống.

Cơ hội đặt dịch vụ trước: Các dịch vụ đặt trước hiện khả dụng trên các nền tảng phủ sóng khoảng 94% số tàu được phục vụ. Ban lãnh đạo đang hợp tác với các đối tác hãng tàu để cải thiện hình thức hiển thị số và tài nguyên số, với mục tiêu dài hạn là đưa doanh thu từ đặt trước tiến gần mốc 30% trong vòng 2 đến 2,5 năm tới.

Biên lợi nhuận và trí tuệ nhân tạo (AI): Ban lãnh đạo cho biết biên lợi nhuận dịch vụ được cải thiện là nhờ cơ cấu dịch vụ. Các sáng kiến AI hiện tại tập trung chủ yếu vào tự động hóa, đưa ra đề xuất và giải phóng quản lý để họ quay lại với các hoạt động tạo ra doanh thu, thay vì tạo ra tác động doanh thu mang tính đột phá ngay lập tức.

Amanda, nền tảng tối ưu hóa doanh thu và đưa ra đề xuất hỗ trợ bởi AI của công ty, hiện đang hoạt động trên 188 tàu. AVA đã xử lý 90% số yêu cầu hỗ trợ trong quý 3 mà không cần chuyển lên cấp nhân sự cao hơn, giúp tiết kiệm khoảng 150 giờ làm việc của nhân viên. Serena đã thực hiện 1.287 cuộc hội thoại với khách hàng kể từ khi ra mắt vào tháng 5.

Định giá linh hoạt: Ban lãnh đạo dự kiến hệ thống sẽ ra mắt trước cho việc đặt dịch vụ trước và sau đó là trên tàu. Thời điểm triển khai sớm nhất dự kiến là quý 4 năm tài chính 2027. Mục tiêu là cải thiện hiệu suất doanh thu bằng cách điều chỉnh giá phù hợp hơn với cung và cầu, đồng thời giảm bớt việc giảm giá không cần thiết.

Phân bổ vốn: OneSpaWorld đã mua lại 1,4 triệu cổ phiếu với giá 37,2 triệu USD trong quý, hoàn thành hạn mức 75 triệu USD đã được thông qua trước đó. Ban lãnh đạo cho biết các ưu tiên của họ vẫn là đầu tư vào hoạt động kinh doanh, mua lại cổ phiếu khi có cơ hội, trả cổ tức và giảm nợ.

Toàn văn biên bản cuộc họp báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Greetings, and welcome to OneSpaWorld's Third Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Allison Malkin of ICR. Thank you. You may begin.

Allison Malkin

Good morning, and welcome to OneSpaWorld's Third Quarter 2026 Earnings Call and Webcast. Before we begin, I'd like to remind you that certain statements and information made available on today's call and webcast may be deemed to constitute forward-looking statements. These forward-looking statements reflect our judgment and analysis only as of today, and actual results may differ materially from current expectations based on a number of factors affecting our business. Accordingly, you should not place undue reliance on these forward-looking statements.

For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our third quarter 2026 earnings release, which was furnished to the SEC today on Form 8-K. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

In addition, the company may refer to certain adjusted non-GAAP metrics on this call. Explanations of these metrics can be found in our earnings release issued earlier this morning. Joining me today are Leonard Fluxman, Executive Chairman and Chief Executive Officer; and Stephen Lazarus, President, Chief Financial Officer and Chief Operating Officer.

Leonard will begin with a review of our third quarter 2026 performance and provide an update on our key priorities. Then Stephen will provide more detail on the financials and guidance. Following our prepared remarks, we'll turn the call over to the operator to begin the question-and-answer portion of the call. I would now like to turn the call over to Leonard.

Leonard Fluxman

Thank you, Allison. Good morning, and welcome to OneSpaWorld's Third Quarter 2026 Earnings Conference Call. I'm pleased to share we delivered an excellent third quarter performance. Our results exceeded the high end of our guidance and marked our 22nd consecutive quarter of record year-over-year growth for total revenue and adjusted EBITDA.

Our sustained momentum reflects the durability of our business model, the successful execution of our strategy and our unwavering commitment to deliver memorable experiences for guests of our health and wellness centers at sea and on land. I want to thank our outstanding global team members for their continued commitment to deliver our strong performance. Our strength was broad-based. We saw gains across all key operating metrics, and we set the stage to further expansion by entering into new agreements that extend our long-standing cruise line partnerships, which I'll discuss in a moment.

In addition, our asset-light business model has led to consistently strong and growing free cash flow. This, along with the confidence we have in our near- and long-term outlook, paved the way for our Board to approve a new $100 million share repurchase program and a 25% increase in our quarterly dividend.

Looking ahead, we expect continuation of our strategy to give us our fourth consecutive year of record results in fiscal 2026. Turning to some of the highlights of the quarter. Total revenues increased 7% and adjusted EBITDA increased 12%. At quarter end, we operated health and wellness centers on 207 ships with an average ship count of 206 for the quarter. This compares with a total of 204 ships and an average ship count of 199 ships at the end of the third quarter of 2025. Also at quarter end, our cruise ship health and wellness centers were fully staffed with 4,645 personnel compared with 466 personnel on vessels at the end of the third quarter of fiscal 2025.

The quarter marked continued progress on our key priorities. Let me discuss some of those highlights. First, we continue to grow with our cruise line partners. During the quarter, we entered into new agreements with Azamara Cruises and Silversea. These agreements extended our long-term partnerships and enable us to enhance and elevate spa facilities to broaden the range of services, products and experiences we offer to cruise line guests.

Under the renewed agreement, Azamara completed its first spa refit on board Azamara Quest, adding treatment rooms, a retail space and importantly, a new Medi-Spa and IV therapy services. We remain on track to introduce health and wellness centers on 2 additional ship builds this year.

Second, we continue to expand high-value services and products. These services, including our innovative offerings of Thermage, truSculpt, CoolSculpting, IV therapy, acupuncture, and LED light therapy, continue to drive strong double-digit growth compared to last year.

We remain focused on expanding these services across our fleet while introducing new offerings that address guests interest in longevity and wellness. In addition, we continue to broaden our product range with red light masks now available for purchase on a select pilot group of ships. At quarter end, Medi-Spa services were available on 157 ships up from 150 ships at the end of the third quarter of 2025. We continue to expect to have Medi-Spa offerings on 159 ships by the year-end 2026.

Thirdly, we focused on enhancing health and wellness center productivity. This is best reflected in the continued growth in key maritime operating metrics, including revenue per passenger per day, weekly revenue and revenue per staff per day. In addition, prebooked revenue increased 20% and represented 23.2% of service revenue, up from 21.5% a year ago, and our forward booking position is up 18% compared to the same time last year.

Staff retention reached over 81% at quarter end, up nearly 5 percentage points from a year ago. Experienced staff remain an important contributor to our operating metrics. These team members drive incremental revenue through more effective guest recommendations, cross-selling and upselling. We remain committed to investing in best-in-class training to support productivity and long-term growth in our operating metrics.

Fourth, we maintained our strong balance sheet and continue to generate strong free cash flow. During the quarter, we returned $42.3 million to shareholders through share repurchases and dividends while also reducing debt. Together, these actions advance each of our capital allocation objectives and underscore the strength and durability of our asset-light business model.

In addition, as a further indication of our conviction in our ongoing growth, our Board approved a new $100 million share repurchase program and a 25% increase in our quarterly dividend to $0.0625 per share, which Stephen will discuss further.

In summary, our results reflect our unique experiences in the operations of health and wellness centers on land and at sea. We entered the fourth quarter with positive momentum, and this, along with our strong first 9 months performance, has led us to raise the midpoint of our guidance ranges.

We expect 2026 to represent our fourth consecutive fiscal year of record performance and remain focused on executing our strategy, serving our cruise line and destination resort partners and their guests and creating long-term value for our shareholders. I'm now going to turn the call over to Stephen. Stephen?

Stephen Lazarus

Thank you, Leonard. Good morning, everyone. We are pleased with our third quarter performance with total revenue increasing by 7% and adjusted EBITDA increasing by 12% compared to the third quarter of 2025. Both of these exceeding the high end of the guidance ranges we provided in July. Our results were driven by higher average guest spend and higher volumes, reflecting ongoing innovation in our guest services and products and our continued collaboration with our cruise line and destination resort partners as well as growth in our fleet from new ship builds.

Combined, this served to further bolster our competitive position and deliver consistent growth. Total revenues increased 7% to $276.5 million compared to $258.5 million for the third quarter of 2025.

The $18 million increase was driven by a 3.3% increase in average guest spend, fleet expansion due to 2026 new ship builds and higher volumes, primarily reflecting a 1.8% increase in revenue days net of 2026 fleet expansion and an increase in guest count contributing $8.2 million, $7 million and $4.3 million, respectively.

Contributing to the increased volume and spend was $6.9 million in increased prebook revenue at health and wellness centers included in our ship count as of September 30, 2026. Growth in our Maritime total revenues was partially offset by a $1.4 million decrease in destination resorts, partially due to the closure of hotels where we had previously operated. The decrease in product revenue was driven by the previously announced reorganization of operations in the United Kingdom and Italy, which decreased product revenue by $1.3 million.

Cost of services increased $12.2 million attributable to the $18.3 million increase in service revenue compared to the third quarter of 2025. Cost of products decreased $300,000 attributable to the decrease in product revenue. Administrative expenses were $7 million compared to $4.6 million in the third quarter of 2025. The increase was primarily due to $2.1 million in third-party fees for certain management and logistics services as a result of our previously announced reorganization of operations in the United Kingdom and Italy, pursuant to which services previously performed internally by company staff and related costs have shifted from salaries, benefits and payroll taxes to administrative expenses.

Salaries, benefits and payroll taxes were $8.7 million compared to $8.4 million in the third quarter of 2025. The increase was primarily due to annual merit increases and higher incentive-based compensation after giving effect to the reorganization of operations in the United Kingdom and Italy noted above. Net income was $28.2 million or net income per diluted share of $0.28 compared to net income of $24.3 million or net income per diluted share of $0.23 for the third quarter of prior year.

The increase was attributable primarily to a $3.6 million increase in income from operations and a $200,000 decrease in interest expense net. The decrease in interest expense was primarily attributable to lower debt balances. Adjusted net income was $34.8 million or adjusted net income per diluted share of $0.34 compared to adjusted net income of $30.7 million or adjusted net income per diluted share of $0.30 for the third quarter of 2025. Adjusted EBITDA was $39.2 million compared to adjusted EBITDA of $35 million in the third quarter of 2025.

Turning to the balance sheet. We maintained a strong balance sheet at quarter end with total cash of $32.1 million after repurchasing $37.5 million of our common shares paying $15.2 million in quarterly dividends and repaying $13.8 million of our long-term facility during the 9 months ended September 30, 2026.

Total liquidity, including available under our undrawn credit facility was $80.9 million at quarter end. Total debt, net of deferred financing costs was $70.5 million at September 30, 2026. During the third quarter, we repurchased 1.4 million common shares for $37.2 million, completing the $75 million share repurchase program we adopted in April 2025.

In total, we have repurchased 3.2 million common shares under that program. Our Board of Directors have approved a new share repurchase program authorizing the repurchase of up to $100 million of our common shares, which replaces the program we have just completed.

Our Board also approved a 25% increase in our quarterly dividend to $0.0625 per share payable on December 2, 2026, to shareholders of record on the close of business on November 18, 2026. We remain focused on disciplined capital allocation, supported by our cash flow generation and balance sheet flexibility. We will continue to prioritize investing in the business, returning capital to shareholders through share repurchases and our quarterly dividend and reducing debt.

Before reviewing guidance, I would like to provide an update on our AI initiatives. The first relates to revenue enhancement. Amanda is our AI-powered recommendation and yield optimization platform that provides daily yield improvement recommendations to our managers on board. We are continuing to see favorable results and to enhance this platform, having just added NAD+ and IV therapy recommendations on all 188 vessels where Amanda is in play.

Up next will be success indicators for every recommendation, ranking recommendations by impact as well as post-voyage assessment of strengths and opportunities. Second, we continue to expand our operational AI capabilities. AVA, our virtual assistant supports managers with shipboard operations. During the third quarter, 90% of tickets handled by AVA were closed with no human escalation, freeing up 150 hours of staff time that we can redeploy to generate revenue. We have expanded AVA to more use cases, including maritime labor convention courses, material safety data sheet retrieval and spa equipment knowledge-based search capability.

Up next, we'll be rolling out AVA to all onboard staff and adding inventory and order query capability. Third, on automation, Serena, the guest-facing conversational assistant on our e-commerce platform, has handled 1,287 guest conversations since its May launch. We continue to refine Serena with 28 improvements delivered to date. Up next, we will refine guests return options while maintaining our high customer service standards through seamless handoff to human support and guest satisfaction tracking. We also launched Marina during the quarter to enhance post-cruise customer service with 39 improvements having already been added since launch and up next is enhancement to customer artifact retrieval.

Finally, Claude, our enterprise-wide AI assistant is absorbing a growing share of routine work, being people for judgment and strategic thinking and training on this application continues to be extremely well received. As it relates to guidance, based on our year-to-date performance and momentum entering the fourth quarter, we are raising our full year 2026 guidance at the midpoint of the ranges previously provided. We now expect total revenue in the range of $1.033 billion to $1.038 billion and adjusted EBITDA in the range of $138 million to $140 million. This compares to our previous guidance of $1.018 billion to $1.038 billion and $130 million to $140 million, respectively, and raises the midpoint by $7.5 million for total revenue and $4 million for adjusted EBITDA.

At the midpoint, our guidance represents growth of 10% in total revenue and 13% in adjusted EBITDA compared with actual fiscal 2025 results excluding exited and reorganized operations. As a reminder, fiscal 2025 reported total revenues included $23 million associated with the reorganization of operations in the United Kingdom and Italy and the exit of destination resort operations in Asia, including $5.7 million in the fourth quarter of 2025.

For the fourth quarter of 2026, we expect total revenues in the range of $248 million to $253 million and adjusted EBITDA in the range of $32 million to $34 million. We expect to end the year with health and wellness centers on 208 ships and 12 destination resorts, reflecting the completion of our exit from land-based health and wellness centers in Asia.

Our guidance reflects our confidence in our ability to deliver sustained momentum and the visibility of our growth pipeline while acknowledging the dynamic environment. With that, we will open the call for questions. Maria, thank you. We are now ready for that.

Operator

[Operator Instructions] Our first question comes from Randy Konik with Jefferies.

Phần hỏi đáp

Randal Konik

I guess, first, to start off, one metric that really stood out to me in the quarter was average guest spend. It looks like it was up 3.3% in the quarter. And when I looked over the last few quarters, it looks like that metric accelerated about 200 basis points in the second quarter, and that average guest spend metric was the fastest growth it looks like I've seen in 4 quarters. So maybe if you could just unpack what's driving that or the main drivers there? And how do you think about average guest spend growth ahead? I really appreciate it.

Leonard Fluxman

Yes. No, it's a good observation and something that we focus on very, very much every single week, every single day is guest spend, frequency and attachment of the retail product, all which drive higher guest spend. So we're looking at different ways for -- to improve our penetration, Randy, going after, obviously, the best 11% of the guests. But at the same time, focusing on those higher-end services. And quite frankly, when we see the growth in Acupuncture Medi-Spa and our health and longevity services, all which sell at much higher prices than massage or Pedicure all contribute. So it's really, in summary, a mix of business. There's no pricing in that increase. It's more mix of business that's driving it as well as higher engagement and a good retail attachment of products in the third quarter.

Randal Konik

Got it. And I think you mentioned that Medi-Spa is on about 157 ships out of the 207. Is there a way to think about what the average guest spend difference is on -- is in the ships, the 157 ships that had Medi-Spa versus the ships that don't? Just want to get a feel for the differential there. And as you continue to put more of these Medi-Spas on ships over time, it just seems to be more opportunity to drive more spend per guest, more spend per ship, et cetera.

Leonard Fluxman

No, fair enough, Randy, and it's probably something I'm not going to get too granular about because we just don't give that as a reported metric. But look at it this way. On average, you're spending, let's just take the average with Botox and the like. We're certainly seeing the average spend well in excess of $1,500. So you have a group of injections, you have occupancy, you come back to some other Medi-Spa treatments, some of the technology stuff goes for much higher than $1,500. So when you're comparing that to the average ticket in a massage or facial, which is around about, say, $250, $300, you're looking at, in some cases, 3x, 4x on Medi-Spa. But let's not get too far ahead of ourselves. Medi-Spa still has not tipped past 9.5% of our total gross revenue.

Clearly, that's driving a nice mix of business. It's helping a little bit on the margin side. But it's still not going to be on 207 ships, but it's certainly going to be on any of the ships that we can get a retrofit such as the one that we just mentioned, the Azamara Quest, things like that where we can change the configuration and emphasize more Medi-Spa acupuncture space and maybe even look at the gym to capture some of that for some of our IV lounges and any of the new technologies, those will going forward, help stimulate not only the mix of business, but slight and emphasize more of the higher-end treatments that we are able to do right now.

Operator

Our next question comes from Steve Wieczynski with Stifel.

Steven Wieczynski

So I want to ask about the prebooking opportunity moving forward. I mean we're now openly hearing your cruise line partners call out the strength in prebooked onboard revenues. I mean just go listen to yesterday, what Royal said, listen to a couple of weeks ago, what Carnival said on their conference calls, it's very positive. So I guess the question is, have you seen your cruise line partners start to give you more resources or tools, whatever you want to think about it, to make it easier for customers to prebook your services before they come on board? And then also maybe now where you guys think prebooking revenues could get to over time?

Leonard Fluxman

Yes, absolutely. It's also another huge focus as we've been mentioning over the last 2 years or 3 years as we continue to build. Remember, this number used to be like a nice 14%, 15%, bumped up a little bit more. We are definitely getting more time with the cruise lines going through best-in-class on any of the platforms, which is about 94% of the ships that we service and making sure that they see what's good, what's bad, what's not working on their site. And they are starting to add resources because they -- as you say, they're talking about a lot, they see the spend better. So why not focus on it when they're getting just a big -- a nice chunk of that revenue.

So we want to continue to sit in front of them, show them best-in-class, and we're getting baseline with them with respect to -- and I think the meetings that we've had over the last 6 months with the cruise lines focused heavily on how do we improve the prebook is starting to pay off. Where can it get to is your last question? I mean, I've set the target to get to at some point. I'm not sure how soon. But over the next 2 years, 2.5 years, we should try and move this thing up closer to 30%, which if the cruise lines give us the resources, we could probably get there over time.

Steven Wieczynski

Okay. Got you. That's good color. And then, Leonard, I want to ask about the service margin in the quarter, which I think was 18.5%. I mean I think that's the highest level we have seen from you guys on that margin line. So any help in terms of what drove the margin this quarter? I mean, obviously, you called out a couple of things that probably helped there. But maybe where that service margin could eventually get to over time? And I assume some of that is going to be potential AI benefits, which I'm still not sure you're willing to give too much color there at this point.

Leonard Fluxman

Well, let me start with the last part. AI is not necessarily going to be as big a catalyst on boosting revenue just now. I mean what we're doing is boosting automation, giving the managers back more time to focus on day-to-day at the front desk, assisting receptionist do the cross-marketing, rebooking, obviously getting higher frequency. So it's really about automating some of their very, very manual tasks that they have to do in the back office either before the opening of the cruise or during the cruise.

So yes, effectively by having them on the floor more often in front of their staff, it's going to help drive revenue and focus. But in and of itself, it's not transformative. It's just -- I think at the point that we are able to start looking at how we prebook, how we prebook without a discount, how we maximize yield with a proper dynamic pricing prebooking engine, I think that will certainly be accretive to revenue. With respect to margin, it's purely mix that's driving a better service margin there.

And clearly, to the point that's raised is to the extent that we can continue to grow Medi-Spa above 10%, that will have some positive effect on service margin.

Operator

Our next question comes from Sharon Zackfia with William Blair.

Sharon Zackfia

Sorry if I missed this, but where are you at on the thought on timing for rolling out dynamic AI influence pricing?

Leonard Fluxman

Sharon, I don't think we'll have it in play before the fourth quarter of 2027. We have, I believe, selected and gone through an RFP with a vendor -- a couple of vendors. I think we've landed on someone we're comfortable with. So now the hard work comes, which is specking it out and then creating all the new SOPs and how we want it to work. But we're going to be working with a high-quality vendor. And these things take time, and then we've got to test them out there. But that would be sort of the earliest point that we get into play just because it takes time to develop the software.

Sharon Zackfia

Yes. Do you have -- can you give us any kind of context around what you think that could mean for the business in kind of '28 and beyond, whether it's port day utilization or anything that we could kind of start to think about numerically?

Leonard Fluxman

I'd love to Sharon, but I can't. It's just not possible at this point.

Sharon Zackfia

All right, fair. Does that count as my follow-up?

Leonard Fluxman

No, no, no. I'm just like there's no way I can really tell it to you because, let me put it to you this way. if this helps understand why we're doing it. What we have determined, even though we have sort of a manual dynamic pricing system in place where it's really the human in the loop. We have seen days where we ought not to be giving up margin or where we shouldn't be giving up yield on a particular day where, in fact, we could have sold it at full price. And I think that's going to be the differentiator and positiveness that's going to come out of the dynamic pricing, which is going to be truly dynamic based upon supply/demand, and we'll know what the advantage is. I believe it will be accretive for sure.

Sharon Zackfia

Are you still expecting that to roll out for prebooking first and then eventually onboard?

Leonard Fluxman

Correct. Yes.

Operator

Our next question comes from Max Rakhlenko with TD Cowen.

Maksim Rakhlenko

Congrats guys on a really nice quarter. So my first question is just given continued really strong performance sort of quarter after quarter, can you speak to how your conversations with the cruise partners are evolving and the opportunities to get greater square footage, whether it's on new ships or retrofits?

Leonard Fluxman

Those conversations happen as much as possible. We take areas of success, particularly Medi-Spa, IV Lounges, new Longevity Lounges, which are going to come into effect, which we haven't spoken much about, but we certainly had a nod from cruise lines where we will take a portion of new facilities and convert and establish a complete longevity experience for the guests where they'll be able to do a lot of different types of longevity offerings that's in play. That will commence at some point as we get into the new builds that are going to happen. So that's going to be a new trend that we're going to have there as well.

So we're excited about that. But getting Medi-Spa into more and more is always a difficult conversation because is it the highest and best return for the cruise line compared to something like casino or bar, no? As we well know, we're not nearly as big as that. And whether you give up a cabin for that, it's not. It's really just saying which areas of our existing facilities on some of the ships could be better utilized. Maybe it's slightly less relaxation area or the relaxation area now includes an IV Lounge experience or the gym includes that. So we've repurposed some areas. We've added some stretch classes into the gym. So we're trying to get that space utilized as much as possible where we see the opportunity.

Maksim Rakhlenko

Got it. That's super helpful. And then I just want to touch on capital deployment. This last quarter saw you guys buy back a bunch of stock, repay some debt. And obviously, you just increased the dividend by 25%, so sort of hitting on all 3 -- has there been any change around how you're thinking more tactically quarter-to-quarter around those 3 options? Obviously, you've got the new $100 billion deployment that you could use for buybacks coming up. So just curious how we should think about those 3 buckets of capital returns here in the near to medium term?

Leonard Fluxman

We have not changed tactically our thinking around that, Max. Our capital allocation priorities remain share repurchases opportunistically paying and increasing the dividend over time and reducing debt while at the same time, investing in the growth of our business. So how we've been doing it thus far will remain the same in the near term.

Operator

Our next question comes from Gregory Miller with Truist Securities.

Gregory Miller

I'd like to start off asking about the spa menu that you've condensed over the course of this year, at least in some of the cruise lines that have toured. And I'm curious how that's impacted your earnings, if at all. Are you seeing any improvement from a margin perspective? Is it showing up in terms of revenues as passengers choose different service offerings? And are you adding back any services that you removed earlier this year?

Leonard Fluxman

No, we took a long time to sort of look at the data, look at the demand, and we've really come up with what are the best services to put on that menu that are going to have the requisite take rate. And I think we've landed where we need to come to. So I think we're in a good place. Unlikely, we will return any of the old stuff on there unless we see a trend or demand for those services. But I think what we've come back to now is a solid state where it's what we want to offer, and it's certainly what's in demand by the guests.

Gregory Miller

Okay. For my second question, I'd like to ask about any implications to OneSpaWorld from the Royal partnership with Sandals. Is there an opportunity for you to be a part of Sandals spas, if that's of interest to you? Or how do you see overall this partnership impacting your company?

Leonard Fluxman

Well, it would be nice to think that maybe there'd be a conversation at some point in the future, but it's certainly too soon to talk about this. We haven't engaged. But yes, could we certainly help them? Absolutely. Is that something that they want to do? We'll see in the future.

Operator

Our next question is from Assia Georgieva with Infinity Research.

Assia Georgieva

Congratulations on yet another excellent quarter. My first question is more general. With the war in Iran, we clearly had some reduction in demand by North Americans to go to Europe. So I think in our data, we saw basically rotation into the Caribbean, which also was getting a lot of capacity. So would you characterize sort of the summer as a better-than-expected North American summer? And the reason I'm asking this is because next year, we'll have to absorb this capacity that came in this year and some more about 7%, 8% additional Caribbean capacity. So I wondered whether the quality of guests might suffer a little bit when we look out to next year? And also sort of my second question is, what are you seeing over the past month or so as we're getting into sort of the sloppier winter quarters?

Leonard Fluxman

Yes. We certainly -- based upon cruise line commentary and booking commentary with respect to the Mediterranean earlier on this year and some of the commentary was obviously quite negative with respect to how they feel the booking was going. But it turns out that despite all the geopolitical pressure, the Iran war oil, I mean, look how well the cruise lines have performed despite that. Can you imagine without it, how much better they would have done.

We actually did not have a bad Europe. We didn't have a bad Mediterranean, and there were plenty of North Americans out there. And so we certainly didn't see a downtick. We didn't see as much as we feared. Alaska performed well and the excess capacity that was put into the Caribbean started out a little soft, but then it strengthened very nicely.

Assia Georgieva

And does it make sense for us to kind of be viewing the fact that there is more capacity in the Caribbean, which does cater to North Americans who tend to spend more on spa coming in '27, that's a natural tailwind for you in '27?

Leonard Fluxman

It's a huge tailwind. If we love North Americans, that they spend the best on both, yes.

Assia Georgieva

And I think generally, you prefer sort of shorter cruises that attract new to cruise, because the spend there is larger. And I think we're seeing a little bit of a shift towards that in addition to just the pure capacity increase. Is that a fair statement?

Leonard Fluxman

I think you're probably looking at much closer in data than I have. But we're -- the Caribbean, more North Americans cruising here has never -- short cruises -- I mean, a 3-day cruise is much harder than a 4-day cruise because there's less time at sea, the 4-day cruise actually has a day at sea. So we kind of try and market it in the exact same way that we do a 7 days. The 7-day cruise week is by far the best week for everybody, and it's certainly the one that we do the best in.

Assia Georgieva

Okay. Great. This is very helpful. And can I just sneak in a very quick question on average guest spend. That seems to be a metric that we've been using only recently. And there is no way we can -- I can build my model by kind of assuming number of guests by using number of ships and all that. And I don't think that you disclosed the components. You just gave us basically the 1.2% in Q2 and the current 3.3%. Am I missing anything?

Leonard Fluxman

I mean everybody drives the model differently, Assia. I mean if you're just using that metric alone, you're probably not going to get to the right number. You got to look at total births, you've got to look at penetration. I mean we can take this offline and help you sort of formulate your thoughts around your model if you want.

Operator

We have reached the end of our question-and-answer session. There are no further questions at this time. I would now like to turn the floor back over to Leonard Fluxman for closing comments.

Leonard Fluxman

Thank you again, everybody, for joining us today. We appreciate your support and look forward to speaking with many of you at the upcoming investor conferences and wish you a very happy and healthy holiday season. Thank you.

Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.