Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ryman Hospitality Properties Inc (RHP, Financial) reported strong second-quarter 2024 results, with consolidated total revenue reaching a record $613 million, up 21.5% year-over-year.
- The company's same-store hospitality segment delivered record second-quarter revenue driven by continued strength in group business and all-time record adjusted EBITDAre.
- Group bookings production accelerated meaningfully, with gross group rooms revenue and ADR booked for all future years reaching all-time records.
- The Entertainment segment reported all-time record revenue of $94 million, an increase of 8.1% year-over-year, driven by strong show calendar and performance from Ole Red Las Vegas.
- Ryman Hospitality Properties Inc (RHP) has a robust liquidity position with $1.3 billion in total available liquidity and a net leverage ratio of 3.9 times, indicating strong financial health.
Negative Points
- There was noted leisure transient softness in key markets like Nashville and Orlando, which impacted overall performance.
- Despite strong group business, the company had to lower its full-year same-store Hospitality RevPAR and total RevPAR growth outlook due to continued leisure transient softness.
- The JW Hill Country resort is expected to experience several hundred basis points of adjusted EBITDAre margin compression in the third quarter due to unfavorable incentive management fee comparisons and P&L impact of investments.
- The company faces potential risks from economic softness and budget-conscious leisure consumers, which could impact future performance.
- Ryman Hospitality Properties Inc (RHP) has significant capital investment plans for 2024, totaling $375 million to $425 million, which could strain resources if not managed effectively.
Q & A Highlights
Q: Colin, in the prepared remarks, you mentioned some transient softness. Could you elaborate on where you're seeing this and if things are deteriorating sequentially? Also, how fully derisked are you for Q4 around holiday programming?
A: Colin Reed, Executive Chairman: The leisure decline is focused on budget-conscious consumers, particularly in Nashville and Orlando. This is not surprising given the slower-than-expected rate cuts and inflation easing. We are not seeing sequential month-over-month declines. Our customized leisure programming has been successful, and we feel cautiously optimistic about Q4.
Q: What are the majority of ICE! reservations made?
A: Patrick Chaffin, COO: The majority of ICE! bookings occur within a 30- to 90-day window. We start the booking process in July and open ICE! and holiday programming around November 18. We have a greater number of group room nights on the books for December than last year, which positions us better.
Q: How much of the leads pipeline today is for meetings in 2025?
A: Patrick Chaffin, COO: In the second quarter, we had about 4.3 million leads for 2025, an improvement over last year. We made progress against 2025 over the past three months, and leads continue to improve. We feel great about 2026 as well, with many guests looking forward to new renovations at Opryland.
Q: Are you seeing any choppiness around the election week and the following week?
A: Patrick Chaffin, COO: We are not seeing any choppiness. Room nights on the books show no discernible difference. We have booked most of what will be booked for this year, so we don't expect much impact from the election process.
Q: Are you seeing any change in the composition of group bookings or certain sectors coming back?
A: Patrick Chaffin, COO: We've seen a resurgence in corporate interest and demand. Corporate mix has increased significantly, and we continue to invest in our value proposition. We've also seen growth from West Coast tech companies. Our sales team has done a great job targeting these sectors.
Q: Despite lowering RevPAR guidance, you mentioned better-than-expected group demand in the second half. Can you break this down further?
A: Patrick Chaffin, COO: The RevPAR guidance decrease is due to transient softness. Group demand, particularly in catering and outside-the-room spend, has helped mitigate this. We have an increase in group room nights and revenue on the books for the second half, and we expect this trend to continue.
Q: How are you managing costs given the transient softness?
A: Jennifer Hutcheson, CFO: We identified transient softness early and challenged our operating teams to get disciplined. This has allowed us to maintain strong EBITDA performance and improve our guidance.
Q: Are you seeing any impact from the Jewish holidays or the election process on bookings?
A: Patrick Chaffin, COO: We are not seeing any impact from the Jewish holidays or the election process. Most of our group bookings for this year are already in place, so we don't expect much change.
Q: How are you positioning for long-term growth given the current market conditions?
A: Colin Reed, Executive Chairman: We are investing in high-quality salespeople and focusing on segments with strong potential. We believe this will pay huge dividends for our company over time.
Q: How do you feel about the back end of this year and into 2025?
A: Colin Reed, Executive Chairman: We are very proud of our results and excited about the future. Our business is in great shape, and we look forward to continued growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
