Ryman Hospitality Properties, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Hospitality: There was a strong short-term pickup in corporate group meetings. The leisure hotel market in Nashville improved, and the upscale and luxury segment saw positive ADR growth in September. Gaylord properties like Gaylord National, Gaylord Rockies, and Gaylord Palms had record revenues. The JW Marriott Desert Ridge underwent renovations and conversion of office space to meeting space. There is healthy group business booking for future years, with ADR on bookings at an all-time high.
• Entertainment: The Opry had a successful international performance in London with over 1.2 billion media impressions. Category 10 development in Las Vegas is under construction, set to open in 2026. The OEG's adjusted EBITDAre guidance was revised due to local market supply, but long-term demand drivers for Nashville, such as stadium and airport developments, remain strong.

Segment Performance

• Hospitality Business: The same-store hospitality portfolio outperformed the industry in Q3. Group business had a stronger short-term pickup in corporate group meetings. The leisure hotel market in Nashville improved, with transient ADR growth in the upscale and luxury segment turning positive in September. Gaylord properties like Gaylord National, Gaylord Rockies, and Gaylord Palms had strong food and beverage outlet performance. The JW Marriott Desert Ridge saw renovations and conversion of office space to meeting space. For the fourth quarter, same-store group rooms revenue is comparable to last year, and early ticket sales for holiday programming are pacing ahead. Same-store gross group room nights booked for future years were up 9% in Q3, with ADR on those bookings at an all-time high.
• Entertainment Business (OEG): Q3 revenue was approximately $92 million, and adjusted EBITDAre was approximately $25 million. Growth from Category 10 and Block 21 was partially offset by softer volumes at downtown Nashville venues. The full-year adjusted EBITDAre midpoint for the entertainment business was revised to $112 million, representing ~6% growth year-over-year and ~12% annualized growth since 2019.

Guidance

• Full-Year 2025: Consolidated adjusted EBITDAre is expected to be in the range of $772 million to $802 million, AFFO in the range of $509.5 million to $538 million, and AFFO per fully diluted share in the range of $8 to $8.38. The hospitality segment guidance was maintained. The entertainment segment's adjusted EBITDAre midpoint was revised to $112 million.
• 2026 and Beyond: Same-store group rooms revenue on the books for 2026 and 2027 was up approximately 8% and 7% respectively compared to the same time last year. Capital expenditures are expected to be in the range of $375 million to $425 million based on current construction timelines.

Risks

• Macro Uncertainty: Macroeconomic factors and government policy pose risks to the broader lodging industry. Elevated cancellation activity, primarily in the government sector, is a concern.
• Market Saturation: Near-term absorption of new live entertainment supply in Nashville has affected the volumes at downtown Nashville venues for the entertainment business.

Question and Answer

Q: Curious if you could provide us with updated thoughts on the entertainment market in Nashville, acknowledge that drove the guidance reduction in the quarter. Just curious how you're thinking about that business over the next couple of years, as it seems like supply headwinds are persistent.

A: Colin Reed said the market stabilized, airport traffic in October was up 10% over last year, and long-term demand drivers like stadium and airport developments in Nashville are strong.

Q: Maybe first on cancellations, which ticked up in the quarter. Can you provide a little bit more color on recent trends? What have you seen here in October? And is this still mostly government-related or any other sectors where you've seen an uptick?

A: Patrick Chaffin said cancellations were up due to the tariff situation starting in Q2, mostly in government and government-related sectors, but corporate leads and booking volumes are strong.

Q: Bennett Rose: I wanted to just ask a little bit about, I guess, the relationship between gross definite room nights that you show quarterly and the net definite room nights. Obviously, the gross improved nicely year-over-year. The net declined for the second quarter sequentially. I'm just wondering, do those 2 go together? Should be looking at the flow-through of one to the other? Or maybe you can just speak to what those numbers are telling you?

A: Patrick Chaffin explained gross is sales team production, net accounts for cancellations and revals, with corporate bookings strong despite cancellations.

Q: Charles Scholes: Question for you specifically on the D.C. National. Are you seeing any impact from the government shutdown as it relates to 4Q expectations or just forward bookings in general?

A: Patrick Chaffin said there was some impact from the government shutdown, but it was isolated and not material.

Q: Daniel Politzer: Group, it's pacing up nicely for 2026, up 8% and 2027 up 7%, I believe you said. Can you maybe talk about how the conversations with group and meeting planners ex ex-government, obviously, have evolved? Like, have they meaningfully improved versus 3 or 6 months ago, that gives you maybe increased confidence as you look out to that '27 guidance that you still have out there?

A: Mark Fioravanti said meeting planners are pausing but not wholesale pullback, and the company is well-positioned for 2026.

Q: Duane Pfennigwerth: Within your corporate group bookings, are there any specific industries you would call out from a recovery perspective?

A: Patrick Chaffin said corporate bookings are strong across the board, with some focus on fintech but no single sector being significantly stronger.

Q: Chris Woronka: I want to ask, as you look out, this is more of a multiyear, longer-term question, if that's okay. When you look at the composition of groups, and I'm really talking about by size, but also maybe a little bit corporate versus association. Is there any desire to maybe reduce your mix of the smaller short-term groups that can be more unpredictable? And are you seeing greater, I guess, growth in demand from the larger groups on the corporate side or from the smaller groups that like to book closer in? And then I have a follow-up.

A: Mark Fioravanti said there's growth in larger groups, but small groups are still essential, and the company is increasing the mix towards larger groups.

Q: Jay Kornnerbreg: Last quarter, I believe you guys had commented on the expectation for RevPAR in the third quarter to be down mid-single digits and reverse for the fourth quarter. And so I guess just curious now that the third quarter came in ahead of those expectations and yet the annual guidance was maintained, I guess where are you maybe seeing some 4Q softness? Is it really just related to government or anything else that's worth calling out?

A: Jennifer Hutcheson said there's government-related weakness, but leisure is pacing well, and the company is cautiously optimistic about the fourth quarter.

Q: Chris Darling: Colin, you mentioned that in all likelihood, OEG will expand into other markets in the coming years, or at least you have the opportunity to do so. How do you think about the international opportunity for OEG? Any thoughts on growing overseas? Or were you primarily referencing new U.S. markets?

A: Colin Reed said there's interest in international expansion, especially with Luke Combs' popularity, but challenges in finding partners in the U.K. exist.

Q: John DeCree: Maybe just one on that same theme about international next year, the World Cup in North America. I know there's only a handful of games in Dallas, but how do you think about given Country Music's penetration in Europe, follow-on trends? Is there any programming that you're thinking about doing? Have you seen any early bookings yet? I know it might be early, but I think it dovetails with our conversation on country music expansion in Europe, given there might be some customer overlap. Curious if you have any initial thoughts.

A: Colin Reed said there will be international travel for the World Cup, and Nashville is active in seeking hosting opportunities, but early bookings are not significant yet.