Ryman Hospitality Earnings Call: Strategic Growth Amid Challenges

Ryman Hospitality Properties ((RHP)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Ryman Hospitality Properties was characterized by a generally positive sentiment, underscored by strong strategic investments and record group bookings. The company noted significant growth in both consolidated revenue and their entertainment segment. However, the positive news was slightly overshadowed by underperformance in the fourth quarter and anticipated construction disruptions affecting the 2025 outlook.

Strategic Investments and Record Group Bookings

Ryman Hospitality Properties has embarked on a multiyear transformational capital program, emphasizing investments in properties such as Gaylord Opryland and Gaylord Rockies. The aim is to attract high-rated corporate group business. The company reported record group bookings, with 1.3 million same-store gross group room nights in Q4, representing a 5% increase over the previous year, and achieving a record average daily rate (ADR) of $284.

Consolidated Revenue and EBITDAre Growth

Despite facing some challenges, Ryman Hospitality Properties experienced a consolidated revenue growth of 8% for the full year of 2024. Additionally, there was a 10% growth in consolidated adjusted EBITDAre and a 12% growth in adjusted funds from operations (AFFO).

Performance of Entertainment Segment

The entertainment segment reported record revenue of $98 million in the fourth quarter, which marks an impressive year-over-year increase of approximately 12%. The segment’s adjusted EBITDAre grew by approximately 6%, with Old Red Las Vegas performing beyond expectations.

Below Expectations for Q4 2024

The fourth quarter results fell slightly below the guidance ranges provided in November, primarily due to factors affecting the same-store hospitality portfolio in the last two weeks of December.

Leisure Demand Shortfall

There was a noticeable decline in leisure demand, particularly at Gaylord Texan and, to a lesser extent, Gaylord Opryland during the peak holiday period in December. Leisure room nights at Gaylord Texan were down 19%, while Gaylord Opryland saw a 6% decrease.

Construction Disruptions Impacting 2025 Outlook

Looking ahead to 2025, Ryman Hospitality Properties anticipates a significant impact on adjusted EBITDAre due to construction disruptions, primarily at Gaylord Opryland and Gaylord Texan. The impact is estimated to be between $30 million and $35 million.

Forward-Looking Guidance

During the earnings conference call, Ryman Hospitality Properties provided guidance for the upcoming year, projecting a stable macro environment. For 2025, they expect RevPAR growth of 2.25% to 4.75% and total RevPAR growth of 1.75% to 4.25% in their hospitality segment. They anticipate an adjusted EBITDAre between $675 million and $715 million, despite construction disruptions impacting RevPAR by 250 to 350 basis points. The entertainment segment is expected to generate adjusted EBITDA of $110 million to $120 million, with consolidated adjusted EBITDAre forecasted to range from $749 million to $801 million. The company also projected adjusted funds from operations (AFFO) for common shareholders and unitholders to be between $510 million and $555 million, translating to an AFFO per diluted share of $8.24 to $8.86. Additionally, a first-quarter dividend of $1.15 per share was announced, with the intention to pay 100% of REIT taxable income through dividends.

In conclusion, Ryman Hospitality Properties’ earnings call reflected a generally positive sentiment, driven by strategic investments and growth in various segments. However, challenges such as the underperformance in the fourth quarter and construction disruptions could have a notable impact on future performance. Investors will be keenly watching how the company navigates these challenges while leveraging its strategic initiatives to sustain growth.