Business Overview

Ryman Hospitality Properties, Inc. (RHP) is a leading lodging and hospitality real estate investment trust (REIT) that specializes in group-oriented, upscale convention center resorts and country music entertainment experiences. The company's diverse portfolio of assets, innovative business model, and strong management team have positioned it as a premier player in the hospitality and entertainment industries.

Ryman Hospitality Properties, Inc. (RHP) is a Delaware corporation that was originally incorporated in 1956. The company was previously known as Gaylord Entertainment Company and underwent a restructuring in 2012 to facilitate its qualification as a real estate investment trust (REIT) for federal income tax purposes. As part of this restructuring, Gaylord merged with and into its wholly-owned subsidiary, Ryman, with Ryman as the surviving corporation.

Ryman began operating as a self-advised and self-administered REIT on January 1, 2013, specializing 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 9,920 rooms that are managed by Marriott International, Inc. under the Gaylord Hotels brand. These five resorts, known as the Gaylord Hotels properties, are located in Nashville, Tennessee; Orlando, Florida; Dallas, Texas; Washington D.C.; and Denver, Colorado.

Today, Ryman Hospitality Properties operates through two principal business segments: Hospitality and Entertainment. The Hospitality segment includes the company's Gaylord Hotels properties, the JW Marriott San Antonio Hill Country Resort & Spa, the Inn at Opryland, and the AC Hotel at National Harbor. These upscale, meetings-focused resorts are managed by Marriott International under the Gaylord Hotels and JW Marriott brands.

The Entertainment segment encompasses Ryman's diverse portfolio of entertainment and media assets, including the iconic Grand Ole Opry, the Ryman Auditorium, WSM-AM radio, Ole Red venues, Category 10 entertainment complex, and the recently acquired Block 21 mixed-use development in Austin, Texas. The company also holds a controlling 70% equity interest in the Opry Entertainment Group (OEG), which includes these entertainment assets.

Over the years, Ryman has faced various challenges, including the impact of the COVID-19 pandemic on the hospitality industry, as well as operational and financial hurdles associated with the management of its diverse portfolio of hotel and entertainment assets. However, the company has demonstrated resilience and the ability to adapt to changing market conditions, leveraging its unique portfolio of group-oriented, destination hotel properties and its strong entertainment brands to navigate these challenges.

Financial Performance

In the fiscal year ended December 31, 2024, Ryman Hospitality Properties reported total revenues of $2.34 billion, a year-over-year increase of 8.4%. The company's Hospitality segment generated $2.00 billion in revenues, while the Entertainment segment contributed $342.18 million.

Net income available to common stockholders for 2024 was $271.64 million, or $4.38 per diluted share, compared to $311.22 million, or $5.36 per diluted share, in the prior year. The decrease in net income was primarily attributable to a $107.54 million increase in the provision for income taxes, partially offset by a $37.20 million improvement in operating income.

For the full year 2024, Ryman reported operating cash flow of $576.51 million and free cash flow of $168.60 million. In the most recent quarter (Q4 2024), the company generated revenue of $647.63 million, representing a year-over-year growth of 2.3%, and net income of $68.77 million. The company cited softness in leisure demand at the Gaylord Texan and Gaylord Opryland properties during the last two weeks of December as the main driver for the results coming in slightly below expectations. However, the company saw strong bookings production during the quarter, with a record 1.3 million same-store gross group room nights booked for all future years.

Liquidity

Ryman's balance sheet remains strong, with $477.69 million in unrestricted cash and $754.70 million in available borrowing capacity under its revolving credit facilities as of December 31, 2024. The company's net debt to adjusted EBITDA ratio was 3.9x at the end of the year. Additional liquidity metrics include:

• Debt/Equity Ratio: 6.36

• Current Ratio: 1.18
• Quick Ratio: 1.18

Operational Highlights

Throughout 2024 and into 2025, Ryman has continued to invest significantly in enhancing its portfolio of properties and entertainment assets. Some of the key initiatives include:

• Completing a $98 million multi-year interior and exterior renovation project at the Gaylord Rockies Resort & Convention Center to better position the property for group customers.

• Announcing plans for a $225 million multi-phase capital improvement plan at the Gaylord Opryland Resort & Convention Center, including a 108,000-square-foot expansion of premium meeting space.
• Undertaking a rooms and lobby renovation at the W Austin hotel, part of the Block 21 mixed-use complex.
• Opening the new Category 10 entertainment venue in Nashville, which replaced the Wildhorse Saloon.
• Investing in Southern Entertainment, a leading independent music festival and events production company, to expand Ryman's live events platform.

These strategic investments are aimed at driving long-term growth, enhancing the guest experience, and solidifying Ryman's position as a premier hospitality and entertainment destination.

Segment Performance

Hospitality Segment The Hospitality segment, which includes Ryman's network of five Gaylord Hotels properties, accounted for 85% of total revenues in 2024. Segment revenues increased 8.9% to $2.00 billion, driven by a 6.2% increase in room revenues to $744.59 million and a 13.1% increase in food and beverage revenues to $940.83 million. Occupancy across the Gaylord Hotels properties was 69.1% in 2024, up 2.5 percentage points from the prior year, while average daily rate (ADR) increased 4.9% to $257.81.

The segment's operating income grew 10.9% to $467.11 million in 2024, reflecting operational leverage and effective cost management. Management fees paid to Marriott increased 10.7% to $73.53 million in 2024.

Entertainment Segment

The Entertainment segment, which includes assets such as the Grand Ole Opry and Ryman Auditorium, represented 15% of Ryman's total revenues in 2024. Segment revenues increased 5.4% to $342.18 million, driven by the opening of the new Ole Red location in Las Vegas in January 2024, partially offset by the temporary closure of the Wildhorse Saloon for its conversion to Category 10 and decreased revenues at the W Austin due to construction disruptions. Operating income for the Entertainment segment was $66.19 million, up 13.0% year-over-year.

Guidance and Outlook

For the full year 2025, Ryman Hospitality Properties provided the following guidance:

• Hospitality segment: - RevPAR growth of 2.25% to 4.75% - Total RevPAR growth of 1.75% to 4.25% - Adjusted EBITDAre of $675 million to $715 million

• Entertainment segment adjusted EBITDA of $110 million to $120 million
• Consolidated adjusted EBITDAre of $749 million to $801 million
• Adjusted funds from operations (AFFO) to common shareholders and unitholders of $510 million to $555 million
• AFFO per diluted share of $8.24 to $8.86

The company's guidance reflects the estimated impact of construction disruption, including a 250 to 350 basis point impact to RevPAR, 200 to 300 basis point impact to total RevPAR, and a $30 million to $35 million impact to adjusted EBITDAre in the Hospitality segment.

Ryman also expects to invest $400 million to $500 million in capital expenditures in 2025, primarily at the Gaylord Opryland and Gaylord Texan properties, as it continues to execute on its long-term transformational investment program.

Risks and Challenges

Despite Ryman's strong performance and growth initiatives, the company faces several risks and challenges that investors should be aware of:

1. Dependence on Marriott: Ryman's hotel properties are managed by Marriott International, and the company's financial results are largely dependent on Marriott's ability to effectively operate and manage these assets.

2. Concentration in the hospitality industry: Ryman's business is heavily concentrated in the group-oriented meetings sector of the hospitality industry, which exposes it to risks related to economic conditions, government policies, and industry trends.

3. Execution of capital projects: The company's ambitious capital investment program, while aimed at enhancing its competitive position, carries risks related to cost overruns, construction delays, and disruption to ongoing operations.

4. Regulatory and tax considerations: As a REIT, Ryman must comply with various tax regulations and requirements, which could limit its flexibility or result in additional expenses.

5. Competition and market saturation: The hospitality and entertainment industries are highly competitive, and Ryman faces intense competition from other convention hotels, publicly-financed civic centers, and entertainment venues.

Despite these risks, Ryman Hospitality Properties has demonstrated its ability to navigate challenging environments and capitalize on opportunities in its core markets. The company's diversified portfolio, strong balance sheet, and experienced management team position it well for continued success in the years ahead.

Industry Trends and Market Position

The U.S. hotel industry is expected to see a compound annual growth rate (CAGR) of 9.14% from 2024 to 2032, driven by the post-COVID travel rebound, increased leisure and business activity, and rising disposable incomes. Ryman's focus on group-oriented, upscale convention center resorts positions it well to capitalize on this growth trend.

Ryman's hotel properties are concentrated in the U.S., with locations in Tennessee, Florida, Texas, Maryland, and Colorado. While this geographic concentration exposes the company to regional economic fluctuations, it also allows for operational efficiencies and targeted marketing strategies.

Human Capital and ESG Initiatives

As of December 31, 2024, Ryman had 1,930 employees, including 1,050 full-time and 882 part-time/on-call employees in its Entertainment and Corporate segments. The company does not have any employees represented by collective bargaining agreements.

Ryman has made Environmental, Social, and Governance (ESG) initiatives a priority, publishing its latest Sustainability Report in September 2024. Key ESG initiatives include investments in energy efficiency, water conservation, and waste reduction at its hotel properties, as well as charitable programs through the RHP Foundation.

Conclusion

Ryman Hospitality Properties is a unique and compelling investment opportunity in the hospitality and entertainment sectors. The company's strategic focus on group-oriented, destination hotel assets and its vast portfolio of iconic entertainment properties have allowed it to establish a strong competitive advantage and deliver consistent financial performance.

With its robust pipeline of capital projects, strategic investments, and disciplined approach to asset management, Ryman is well-positioned to capitalize on the growing demand for premium group-oriented hospitality experiences and country music-themed entertainment. While the company faces certain risks, its proven track record, strong management team, and solid financial position suggest a promising future for Ryman Hospitality Properties and its shareholders.