Ryman Hospitality Properties, Inc. (RHP) is a real estate investment trust (REIT) that specializes in group-oriented, destination hotel assets in urban and resort markets. The company's core holdings include a network of five upscale, meetings-focused resorts totaling 9,917 rooms that are managed by Marriott under the Gaylord Hotels brand. These five resorts, which the company refers to as the Gaylord Hotels properties, consist of the Gaylord Opryland Resort & Convention Center in Nashville, Tennessee, the Gaylord Palms Resort & Convention Center near Orlando, Florida, the Gaylord Texan Resort & Convention Center near Dallas, Texas, the Gaylord National Resort & Convention Center near Washington D.C., and the Gaylord Rockies Resort & Convention Center near Denver, Colorado.

Business Overview

In addition to the Gaylord Hotels properties, the company owns the Inn at Opryland, an overflow hotel adjacent to Gaylord Opryland, the AC Hotel at National Harbor, Washington D.C., an overflow hotel adjacent to Gaylord National, and effective June 30, 2023, the JW Marriott San Antonio Hill Country Resort & Spa. The company also owns a controlling 70% equity interest in a business comprised of a number of entertainment and media assets, known as the Opry Entertainment Group (OEG), which the company reports as its Entertainment segment.

Financials

For the full year 2023, Ryman Hospitality Properties reported annual net income of $311,217,000, annual revenue of $2,158,136,000, annual operating cash flow of $557,056,000, and annual free cash flow of $350,280,000. In the first quarter of 2024, the company generated total revenues of $528,345,000 and net income of $42,761,000.

The company's Hospitality segment, which includes the Gaylord Hotels properties and other managed hotels, accounted for 87% of total revenues in the first quarter of 2024, while the Entertainment segment contributed the remaining 13%. Within the Hospitality segment, rooms revenue was $173,633,000, food and beverage revenue was $235,083,000, and other hotel revenue was $52,754,000 in the first quarter of 2024.

Recent Developments

Despite facing some headwinds in the first quarter, including the impact of the Easter holiday shift and transient softness in certain markets, Ryman Hospitality Properties' overall performance remained strong. The company's same-store Hospitality segment RevPAR declined 4.6% year-over-year, while total RevPAR decreased 4.1% due to the challenging comparison to the record-setting first quarter of 2023. However, the company's rate strategy continued to pay dividends, with same-store Hospitality ADR reaching a new first-quarter high.

Furthermore, the company's focus on the group meetings market continued to drive strong performance, with same-store Hospitality banquet and AV revenue marking the second-highest first-quarter performance on record. The company's JW Marriott Hill Country property, acquired in June 2023, also performed well, with RevPAR and total RevPAR increasing approximately 26% and 28%, respectively, compared to the same period in 2023.

Outlook

Looking ahead, Ryman Hospitality Properties is reiterating its full-year guidance for same-store Hospitality RevPAR and total RevPAR growth, as well as its guidance for the Entertainment segment and consolidated adjusted EBITDA. The company is also raising its full-year guidance for adjusted funds from operations (AFFO) and AFFO per share, reflecting the net interest expense savings associated with its recent refinancing transactions.

Liquidity

The company's balance sheet and liquidity position remain strong, with $455 million in unrestricted cash and $738.7 million available for borrowing under its revolving credit facilities as of the end of the first quarter. In March 2024, the company completed the private placement of $1 billion of 6.5% unsecured senior notes due 2032, which were used to repay the Gaylord Rockies secured term loan and a portion of the corporate Term Loan B. Additionally, in April 2024, the company repriced the remaining outstanding Term Loan B, reducing the applicable interest rate margins.

Strategic Initiatives

Ryman Hospitality Properties' long-term strategic plan focuses on several key initiatives, including the expansion of its hotel asset portfolio, continued investment in its existing properties, and leveraging the brand awareness of its entertainment assets. The company is consistently considering acquisitions that would expand the geographic diversity of its existing asset portfolio, as evidenced by the purchase of the JW Marriott Hill Country in June 2023.

The company's investments in its current portfolio are also a key focus, with ongoing projects at the Gaylord Rockies, Gaylord Palms, Gaylord Opryland, and Block 21 in Austin, Texas. These projects are aimed at enhancing the guest experience and positioning the properties to better serve the group meetings market.

In the Entertainment segment, the company continues to explore opportunities to capitalize on the brand recognition of its iconic assets, such as the Grand Ole Opry and the Ryman Auditorium. The company has invested in six Ole Red locations and purchased Block 21, and in April 2023, announced a partnership with Luke Combs for Category 10, an entertainment venue concept expected to have a phased opening beginning later in 2024.

Conclusion

Ryman Hospitality Properties' focus on the group meetings market, its strong balance sheet and liquidity position, and its strategic initiatives position the company well for continued growth. The company's ability to generate consistent cash flow, maintain a disciplined capital allocation strategy, and capitalize on opportunities in both its Hospitality and Entertainment segments make it an attractive investment proposition in the hospitality REIT space.