Ryman Hospitality Properties, Inc. Q3 FY2024 earnings call

• Colin Reed noted strong third quarter 2024 results, with same-store hospitality and entertainment businesses performing well. Progress on major capital investment initiatives was highlighted, including repositioning at Gaylord properties and advancements in the Entertainment segment with Category 10 in Nashville.
• Mark Fioravanti reviewed third quarter results, emphasizing strong same-store hospitality performance despite leisure softness in some markets, and robust group and out-of-room spending. He discussed revised guidance ranges for the remainder of the year.
• Key operational highlights included renovations at Gaylord Rockies, Opryland, and Palms, the soft opening of Category 10 in Nashville, and plans for Opry 100 around the Grand Ole Opry's 100th anniversary.

Hospitality Segment

• Consolidated total revenue for the third quarter was $550 million, a third quarter record, up 4.1% year-over-year.
• Same-store hospitality delivered year-over-year RevPAR growth of 2.1% and total RevPAR growth of 4.2%. ADR of $245 was a third quarter record, up 6.2% year-over-year. Same-store hospitality adjusted EBITDAre was $142 million, a third quarter record. Same-store hospitality margin increased 30 basis points year-over-year to 34.4%. Same-store group rooms revenue was a third quarter record, up 6.8% year-over-year. Banquet and AV revenue was a third quarter record, up nearly 16%.

Entertainment Segment

• Entertainment business delivered revenue of $83 million, a third quarter record, and adjusted EBITDAre of $22 million, driven by continued strong performance of the recently opened Ole Red Las Vegas venue.

• Revised same-store hospitality guidance ranges for RevPAR growth, total RevPAR growth, and adjusted EBITDAre. Raised the midpoint and tightened the range of full year 2024 adjusted EBITDA guidance for the JW Marriott Hill Country. Lowered the midpoint and tightened the range of full year 2024 adjusted EBITDA guidance for the Entertainment segment. Full year 2024 capital expenditures are expected to be in the range of $400 million to $450 million. Declared a fourth quarter dividend of $1.15, a 4.5% increase.

• Leisure transient softness in the Nashville and Orlando markets continued into the third quarter. Incremental construction disruption at the Gaylord Palms due to labor shortages from the new Universal Theme Park construction. Lost business related to Hurricane Milton. Disruption at the W Austin Hotel and Category 10 construction in Nashville.

Q: Can you talk about the modest increase in full year CapEx and what's driving it?

A: It's a function of timing of cash spend; not adding incremental projects or changing project scope, just timing of cash payments.

Q: Any color on potential expansion at the Colorado property and target ROIC?

A: Target mid-teens ROIC. Have explored expansion, with conversations with Board upcoming, and geographic positioning and business on the books for the Rockies looking strong.

Q: Are you trading group OC for rate?

A: Goal is to maximize RevPAR and total RevPAR in yield. Not assuming lower occupancy, as demand continues to grow and assets are well-positioned relative to peers.

Q: Thoughts on leisure outlook and Q4 group bookings?

A: Leisure trends have continued, with Q4 being heavy leisure with low visibility. Group bookings are strong, with October being the best ever in terms of rate and production. Lift expected in 2025 as refurbishment programs complete.

Q: Operating cost outlook, especially labor?

A: Union hotel has new 6% CAGR collective bargaining agreement. Nonunion side has moderate growth. Margin improved despite wage pressure due to efficiencies from revenue management and sales efforts.