Ryman Hospitality Props (NYSE:RHP) reported first-quarter financial results on Friday. The transcript from the company’s first-quarter earnings call has been provided below.
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Summary
Ryman Hospitality Props reported a strong start to the year with first-quarter results exceeding expectations despite a complex geopolitical backdrop.
The company’s hospitality segment saw revenue and market share growth, with notable record performances from Gaylord Opryland, Gaylord Rockies, and Gaylord Palms.
Ryman Hospitality Props announced a development partnership in Indianapolis, indicating strategic growth in the entertainment sector with plans to expand the All Red brand.
Future outlook remains positive, with the company on track to meet its 2027 financial targets, supported by robust group booking trends and strategic capital investments.
The company raised its full-year guidance midpoints due to strong first-quarter performance, maintaining a measured confidence amidst potential external economic headwinds.
Full Transcript
OPERATOR
Welcome to the Ryman Hospitality Properties first quarter 2026 earnings conference call. Hosting the call today from Ryman hospitality properties are Mr. Colin Reed, Executive Chairman, Mr. Mark Fioravanti, President and Chief Executive Officer, Ms. Jennifer Hutchison, Chief Financial Officer, Mr. Patrick Chaffin, Chief Operating Officer and Patrick Moore, Chief Executive Officer, Opry Entertainment Group. This call will be available for digital replay. The number is 800-723-0607 with no conference ID required at this time. All participants have been placed on listen only mode. It is now my pleasure to turn the floor over to Ms. Jennifer Hutchison. Ma’am, you may begin.
Jennifer Hutchison (Chief Financial Officer)
Good morning. Thank you for joining us today. This call may contain forward looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company’s expected financial performance. Any statements we make today that are not statements of historical fact may be deemed to be forward looking statements. Words such as believes or expects are intended to identify these statements which may be affected by many factors, including those listed in the Company’s SEC filings and in today’s release. The Company’s actual results may differ materially from the results we discuss or project today. We will not update any forward looking statements, whether as a result of new information, future events or any other reason. We will also discuss non GAAP (Generally Accepted Accounting Principles) financial measures today. We reconcile each non GAAP (Generally Accepted Accounting Principles) measure to the most comparable GAAP (Generally Accepted Accounting Principles) measure in exhibits to today’s release. I’ll now turn the call over to Colin.
Colin Reed (Executive Chairman)
Thanks, Jen. Good morning everyone and thank you for joining us today. We delivered a strong start to the year with results that exceeded our expectations. Despite the complex geopolitical backdrop. Our first quarter performance reinforces what we’ve long believed about this company. The quality of our assets, the durability of our business model and the way we allocate capital delivers superior outcomes for our customers and attractive, sustainable returns for our shareholders. In our same store hospitality business, we grew revenue and market share and expanded margin on slightly fewer room nights, a clear demonstration of pricing discipline, mix management towards higher value customers and enhanced monetization of on site demand. Results were particularly strong for the assets that we have that have recently benefited from the capital investments. Gaylord Opryland delivered record first quarter revenue and adjusted EBITDAre (Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent expenses), Gaylord Rockies delivered record first quarter revenue and Gaylord Palms delivered record revenue and adjusted EBITDAre (Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent expenses) of any quarter in its history. The JW Marriott Desert Ridge also delivered strong first quarter results which, given the seasonality of that market, is especially meaningful for the full year profitability. Though we’ve owned this hotel for less than a year, the benefits of our ownership are already evident. A group focus yield strategy resulted in meaningfully higher group volumes which supported strong outside of the room spending and margin outcomes. Together, this property and the JW Hill Country which is now undergoing the capital investment that we identified at the acquisition, create a tangible Runway for growth over the medium term and I couldn’t be more excited about their role in our future. On the entertainment side, demand for live entertainment remains incredibly healthy. Our All Red brand continues to resonate in a meaningful way, particularly in markets like Nashville and Las Vegas. And soon, we believe, Indianapolis. Indianapolis has long been on our radar as a vibrant convention and leisure market with strong economic and demographic drivers and a deep base of country music fans. To that end, we were excited to announce just this week a development partnership with the organization behind the NBA Pacers and the WNBA Fever. This All Red development will contribute to the broader revitalization of the downtown corridor between the convention center and the Pacers Arena. This announcement marks our third development update this year and our team remains active in evaluating both organic and inorganic growth opportunities toward expanding our platform and enhancing the value proposition for artists and consumers alike. Looking ahead, the future looks very bright for both of our businesses. Over the last two years, we’ve meaningfully improved the growth profile and pipeline for each, while continuing to build customer satisfaction and loyalty through consistent execution and focused capital investment. We remain on track to achieve the 2027 financial targets we set in early 2024 and we look forward to updating you on our continued progress. Now, before I hand over to Mark, let me go off script and say just a couple of things about our team. Our asset management team led by Patrick Chapman I believe is the best in the industry and our team at OEG led by Patrick Moore is firing on all cylinders. Mark, Jen and Scott and their teams are showing tremendous leadership and our company couldn’t be in better hands. So Mark, what have you got to tell us?
Mark Fioravanti (President and Chief Executive Officer)
Thanks Colin and good morning everyone. I’ll provide more color on our operating performance and business momentum before discussing our updated outlook. From an expectation standpoint, we entered the quarter assuming relatively flattish revenue and some margin pressure in our same store hospitality business along with softer profitability trends in entertainment due in part to mix driven seasonality and a challenging year over year comparison. Entertainment performance finished in line with our expectations. While the hospitality business delivered meaningful outperformance. Same store ADR (Average Daily Rate) increased just over 5% year over year, more than offsetting lower group occupancy. As you’ll recall, the timing of Easter last year resulted in unusually strong group demand in the first quarter, creating a challenging year over year comp. High quality corporate group demand proved far more resilient than lower contribution segments resulting in higher ADR (Average Daily Rate) and higher levels of outside the room spending. Compared to both our expectations and last year banquet NAV (Net Asset Value) revenue contribution per group room night increased more than 6% year over year with gains at nearly every property in the portfolio. Our leisure business, while a smaller contributor to the first quarter results, also surprised to the upside. Both demand and rate increased compared to last year supported by seasonal spring break travel with particular strength at the JW Marriott Hill country and Gaylord Rockies. Higher flow through from growth in room rate and catering business together with ongoing efficiency initiatives drove adjusted ebitdare margin expansion in the quarter. Looking forward, the leading indicators of group demand remain resilient. The elevated attrition and cancellation activity we experienced last year has largely normalized. Excluding January which was impacted by Winter Storm Fern attrition improved year over year and cancellations for the year were essentially flat. On the heels of record monthly production in December, group bookings activity continued at very strong levels in the first quarter. Gross group room nights booked in the first quarter for all periods increased nearly 27% year over year, representing the strongest first quarter production since 2018. Reflecting our continued focus on premium corporate groups. Corporate bookings comprised approximately two thirds of production. Association bookings were also strong, surpassing pre Covid first quarter levels for the first time, setting aside pandemic related rebooking activity. As a result, growth in same store group rooms revenue on the books for all future periods compared to the same time last year accelerated sequentially from 6.5% as of December 31 to 7.6% as of March 31. Across the portfolio and most notably at Gaylord Opryland, we’ve invested in food and beverage offerings and carpeted meeting space to attract and serve the premium corporate group segment. In support of our capital deployment strategy and the increasing corporate demand for our hotels, we’ve refined our inventory management approach to make more sellable inventory available through the entire 24 month corporate booking window. Enhancing the corporate mix of our hotels drives higher room rates outside the room spending and profitability. However, these changes in our inventory management approach create challenging year over year comparisons as we move into the prime corporate booking window for 2027 and 2028. For 2027, same store group rooms revenue on the books is up over 3% compared to the same time last year and down 1% for 2028. Importantly, ADR (Average Daily Rate) growth for both periods is pacing up mid single digits and corporate meeting planner feedback and lead volumes are strong. Given this interest, we’re confident that we are well positioned to achieve the booking goals required to enter 2027 and 2028 with our targeted 50 points of occupancy on the books and strong rate growth. Now I’ll turn to JW Marriott Desert Ridge which also delivered a terrific first quarter. Prior to our ownership, the property prioritized higher rated leisure demand during the peak first quarter period. Under our group first sales and revenue management strategy, Group mix increased by nearly 200 basis points and group demand grew more than 9% while maintaining ADR (Average Daily Rate) discipline. In fact, total ADR (Average Daily Rate) for the Property increased nearly 8% year over year with growth across group and leisure segments and banquet and AV revenue up 25%. We expect these trends to build over the next several years as the property grows its share of the meetings market under our group strategy. Supporting this strategy, we completed the 5,000 square foot meeting space conversion in April which we believe will further enhance the hotel’s ability to attract high quality corporate groups. Turning to entertainment, first quarter results declined year over year due to a challenging comparison seasonality associated with our new business line and the impact of Winter Storm Fern. Overall business performance was in line with our expectations and we continue to be encouraged by the underlying trends. Both old red and category 10 exceeded our expectations with particular strength in Nashville in Las Vegas in the back half of the quarter, March represented a new high watermark for Old Red Las Vegas with the venue generating the highest monthly revenue and adjusted EBITDA re in its operating history. Finally, I want to spend a few minutes on our outlook. As we noted in the press release, we’re raising the midpoints of our guidance ranges to reflect the first quarter hospitality outperformance. Our outlook for the rest of the year is essentially unchanged from our prior expectations, reflecting measured confidence in our business. We continue to feel good about the areas of the business within our control sales, production, pricing, discipline, margin initiatives and execution of the capital projects we have underway. And so far, meeting planner sentiment and the leisure guest willingness to visit our properties has remained resilient. What gets us to the high end of the range is continued strong near term group business trends including normalized levels of attrition and cancellations, healthy in the year for the year production and strong on property spending as well as continued momentum in leisure. The low end of the range assumes some hesitation in near term meeting planner decision making, a potential pullback in …
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