Ryman Hospitality Properties, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Strategic Rationale: Emphasized a multiyear transformational capital program to attract premium group customers, with investments in Gaylord properties and entertainment to drive unlevered returns.
• Fourth Quarter Insights: Leisure demand at Gaylord Texan and Opryland was below expectations in the last two weeks of December due to consumer price sensitivity, macroeconomic uncertainty, etc. Bright spots included strong same-store hospitality revenue, ADR record, and milestones at Gaylord Rockies, National, and JW Hill Country.
• Bookings Production: Fourth quarter booked a record 1.3 million same-store gross group room nights, with full-year bookings at 2.9 million same-store gross group room nights.
• Capital Investment Progress: Major projects at Gaylord Rockies and Opryland completed on time, with ongoing work on meeting space expansions and renovations at Gaylord properties, aiming to enhance competitive advantage.

Segment Performance

• Hospitality Segment: Fourth-quarter same-store hospitality generated revenue of approximately $496 million, the second-best quarter ever. Consolidated revenue increased 2% compared to the prior year, consolidated adjusted EBITDAre increased 1%, and AFFO increased 4%. ADR reached a new quarterly record of $260, with growth in both group and leisure rate. Gaylord Rockies delivered record revenue in December, Gaylord National achieved adjusted EBITDAre margin expansion despite wage increases, and JW Hill Country had strong RevPAR and total RevPAR growth.
• Entertainment Segment: Fourth-quarter OEG reported record revenue of $98 million, an increase of approximately 12% year over year, with adjusted EBITDAre increasing approximately 6% though impacted by construction disruption.

Guidance

• 2025 Outlook: Hospitality RevPAR growth projected at 2.25%-4.75%, total RevPAR 1.75%-4.25%, adjusted EBITDAre $675-$715 million. Entertainment adjusted EBITDA expected $110-$120 million. Consolidated adjusted EBITDAre forecast $749-$801 million, AFFO $510M-$555M, AFFO per diluted share $8.24-$8.86. Factors include Easter holiday shift impact, Tennessee franchise tax refunds, Southern Entertainment consolidation, and OEG put rights conversion.

Risks

• Macro Factors: Consumer price sensitivity, macroeconomic uncertainty, and challenges with government-related group business.
• Construction Disruption: Initial disruption from renovations, but efforts to improve design and construction processes to manage disruption going forward.
• Labor Market Challenges: Wage increases and labor market issues encountered in some areas affecting costs.

Question and Answer

Q: Talk about renovations planned beyond current ones and headwinds in 2025 A: Renovations at Gaylord Opryland ballroom done, space expansion to continue through 2027; Gaylord Texan room renovation starts Q2 2024. Headwinds in 2025 comparable to 2024 disruption but more volume, with less same headwinds as Gaylord Palms in 2024 Q: Labor and wage costs A: Wages increased ~3.3% in 2024, expecting similar increase in 2025, with wage margin remaining flat due to productivity offsetting increases Q: Group bookings and profile of bookers A: Higher mix towards corporate, with Opryland achieving highest ADR growth, moving to higher-rated groups, and intentional walk away from lower-rated groups to attract premium Q: Ice results at Texan and Opryland A: Ice admissions flat, but overnight stays decreased due to lower-rated customers trading down; working to understand customer behavior Q: CapEx plan and future announcements A: CapEx plan through 2027 baked in, with consideration of demand characteristics of assets; more expansions possible if forward demand accelerates Q: Gaylord National performance and reliance on local market A: Forward bookings good, minimal government exposure, not overreliant on local market, with efforts to mix towards higher association business Q: Group revenue growth in 2026 and rate potential A: 2026 group revenue up 11% with EDR growth 4.5%, opportunity to push rate higher as booking window shortens and more corporate business books Q: Entertainment segment investment plans A: Excited about investment in Southern Entertainment, with other opportunities being prioritized Q: Premium corporate customer vs others A: Corporate rate generally higher, outside-the-room spend significantly higher, group sizes not materially different, with large corporate customers driving growth Q: Drivers of guidance high end and competition A: Potential upside from better leisure performance and improved construction disruption management; no significant new competition, with focus on internal enhancement and remixing to attract premium groups