UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

_______________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended ~~September 30, 2022~~March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

COMMISSION FILE NO. 1-38012

Playa Hotels & Resorts N.V.

(Exact name of registrant as specified in its charter)




The	Netherlands	98-1346104
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

Nieuwezijds Voorburgwal 104

1012 SG

Amsterdam,

the

Netherlands

Not Applicable

(Address of Principal Executive Offices)

(Zip Code)

+31 6 82 55 84 30

(~~Registrant's~~Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Ordinary Shares, €0.10 par value	PLYA	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past ninety (90) days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of ~~October 31, 2022,~~April 28, 2023, there were ~~162,387,308~~152,255,818 shares of the registrant’s ordinary shares, €0.10 par value, outstanding.

Table of Contents


Playa Hotels & Resorts N.V. TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of ~~September~~ ~~30, 2022~~M arch 3 1 , 202 3 and December 31, ~~2021~~20 2 2	1
	Condensed Consolidated Statements of Operations for the three ~~and~~ ~~nine~~ months ended ~~Sept~~e ~~mber~~March ~~30, 2022~~3 1 , 202 3 and ~~2021~~2 02 2	2
	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three ~~and~~ ~~nine~~months ~~months~~ ended ~~September~~March ~~30, 2022~~3 1 , 202 3 and ~~2021~~20 2 2	3
	Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity for the three ~~and~~ ~~nine~~months ended ~~September~~ ~~30,~~March 31, 2023 and 2022 ~~and 2021~~	4
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September~~March ~~30, 2022~~3 1 , 202 3 and ~~2021~~20 2 2	65
	Notes to the Condensed Consolidated Financial Statements	87
Item 2.	~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations	2521
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5642
Item 4.	Controls and Procedures	5743
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	5844
Item 1A.	Risk Factors	5844
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5844
Item 3.	Defaults Upon Senior Securities	5944
Item 4.	Mine Safety Disclosures	5944
Item 5.	Other Information	5944
Item 6.	Exhibits	5945

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Playa Hotels & Resorts N.V.

Condensed Consolidated Balance Sheets

($ in thousands, except share data)

(unaudited)


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2022		2021			2023		2022
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	371,688	$	270,088	Cash and cash equivalents	$	281,465	$	283,945
Restricted cash		—		23,489
Trade and other receivables, net	Trade and other receivables, net	47,792		45,442		Trade and other receivables, net	74,268		62,946
Insurance recoverable	Insurance recoverable	41,315		—		Insurance recoverable	20,586		34,191
Accounts receivable from related parties	Accounts receivable from related parties	5,164		7,981		Accounts receivable from related parties	11,408		8,806
Inventories	Inventories	19,007		18,076		Inventories	20,607		20,046
Prepayments and other assets	Prepayments and other assets	43,209		38,640		Prepayments and other assets	40,958		44,177
Property and equipment, net	Property and equipment, net	1,547,595		1,584,574		Property and equipment, net	1,527,188		1,536,567
Derivative financial instruments	Derivative financial instruments	4,979		—		Derivative financial instruments	—		3,510
Goodwill, net	Goodwill, net	61,654		61,654		Goodwill, net	61,654		61,654
Other intangible assets	Other intangible assets	6,843		7,632		Other intangible assets	6,293		6,556

Deferred tax assets						Deferred tax assets	7,334		7,422
Total assets	Total assets	$	2,149,246	$	2,057,576	Total assets	$	2,051,761	$	2,069,820
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES AND SHAREHOLDERS’ EQUITY						LIABILITIES AND SHAREHOLDERS’ EQUITY
Trade and other payables	Trade and other payables	$	217,911	$	160,222	Trade and other payables	$	200,694	$	231,652
Payables to related parties	Payables to related parties	5,417		5,050		Payables to related parties	9,144		6,852
Income tax payable	Income tax payable	345		828		Income tax payable	785		990
Debt	Debt	913,111		944,847		Debt	1,064,391		1,065,453
Related party debt		196,569		194,472
Derivative financial instruments		—		22,543
Other liabilities	Other liabilities	30,471		29,882		Other liabilities	31,149		30,685
Deferred tax liabilities	Deferred tax liabilities	71,692		68,898		Deferred tax liabilities	73,064		69,326
Total liabilities	Total liabilities	1,435,516		1,426,742		Total liabilities	1,379,227		1,404,958
Commitments and contingencies (see Note 7)	Commitments and contingencies (see Note 7)					Commitments and contingencies (see Note 7)
Shareholders' equity
Ordinary shares (par value €0.10; 500,000,000 shares authorized, 168,240,253 shares issued and 165,058,318 shares outstanding as of September 30, 2022 and 166,646,284 shares issued and 164,438,280 shares outstanding as of December 31, 2021)		18,696		18,518
Treasury shares (at cost, 3,181,935 shares as of September 30, 2022 and 2,208,004 shares as of December 31, 2021)		(22,470)		(16,697)
Shareholders’ equity						Shareholders’ equity
Ordinary shares (par value €0.10; 500,000,000 shares authorized, 169,423,980 shares issued and 154,402,852 shares outstanding as of March 31, 2023 and 168,275,504 shares issued and 158,228,508 shares outstanding as of December 31, 2022)						Ordinary shares (par value €0.10; 500,000,000 shares authorized, 169,423,980 shares issued and 154,402,852 shares outstanding as of March 31, 2023 and 168,275,504 shares issued and 158,228,508 shares outstanding as of December 31, 2022)	18,822		18,700
Treasury shares (at cost, 15,021,128 shares as of March 31, 2023 and 10,046,996 shares as of December 31, 2022)						Treasury shares (at cost, 15,021,128 shares as of March 31, 2023 and 10,046,996 shares as of December 31, 2022)	(103,843)		(62,953)
Paid-in capital	Paid-in capital	1,186,245		1,177,380		Paid-in capital	1,192,134		1,189,090
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(10,088)		(18,671)		Accumulated other comprehensive loss	(4,308)		(6,985)
Accumulated deficit	Accumulated deficit	(458,653)		(529,696)		Accumulated deficit	(430,271)		(472,990)
Total shareholders' equity		713,730		630,834
Total liabilities and shareholders' equity		$	2,149,246	$	2,057,576
Total shareholders’ equity						Total shareholders’ equity	672,534		664,862
Total liabilities and shareholders’ equity						Total liabilities and shareholders’ equity	$	2,051,761	$	2,069,820

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Table of Contents

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Operations

($ in thousands, except share data)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021				2023		2022
Revenue	Revenue									Revenue
Package	Package	$	171,126	$	124,331	$	535,917	$	293,005	Package		$	233,568	$	186,815
Non-package	Non-package	29,874		25,211		99,492		60,808		Non-package		34,045		29,454
The Playa Collection										The Playa Collection		726		296
Management fees	Management fees	786		673		3,186		1,469		Management fees		1,929		1,057
Cost reimbursements	Cost reimbursements	2,836		1,072		6,868		2,554		Cost reimbursements		3,534		1,952
Total revenue	Total revenue	204,622		151,287		645,463		357,836		Total revenue		273,802		219,574
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses									Direct and selling, general and administrative expenses
Direct	Direct	117,333		90,788		343,298		230,543		Direct		128,968		106,840
Selling, general and administrative	Selling, general and administrative	51,686		32,055		130,403		85,273		Selling, general and administrative		45,127		37,239
Depreciation and amortization	Depreciation and amortization	19,502		19,927		58,630		60,827		Depreciation and amortization		19,191		19,500
Reimbursed costs	Reimbursed costs	2,836		1,072		6,868		2,554		Reimbursed costs		3,534		1,952
Impairment loss		—		—		—		24,011
Loss (gain) on sale of assets		2		(4)		11		644
Loss on sale of assets										Loss on sale of assets		13		—

Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses	191,359		143,838		539,210		403,852		Direct and selling, general and administrative expenses		196,833		165,531
Operating income (loss)		13,263		7,449		106,253		(46,016)
Operating income										Operating income		76,969		54,043
Interest expense	Interest expense	(17,832)		(19,047)		(39,892)		(56,164)		Interest expense		(29,666)		(9,168)
Other income (expense)	Other income (expense)	2,608		587		7,850		(747)		Other income (expense)		232		(514)
Net (loss) income before tax		(1,961)		(11,011)		74,211		(102,927)
Income tax (provision) benefit		(268)		(1,360)		(3,168)		13,043
Net (loss) income		$	(2,229)	$	(12,371)	$	71,043	$	(89,884)
Net income before tax										Net income before tax		47,535		44,361
Income tax provision										Income tax provision		(4,816)		(1,614)
Net income										Net income		$	42,719	$	42,747

(Loss) earnings per share
Earnings per share										Earnings per share
Basic	Basic	$	(0.01)	$	(0.08)	$	0.43	$	(0.55)	Basic		$	0.27	$	0.26
Diluted	Diluted	$	(0.01)	$	(0.08)	$	0.43	$	(0.55)	Diluted		$	0.27	$	0.26
Weighted average number of shares outstanding during the period - Basic	Weighted average number of shares outstanding during the period - Basic	165,979,839		164,218,262		165,873,539		163,067,561		Weighted average number of shares outstanding during the period - Basic		157,314,177		165,743,382
Weighted average number of shares outstanding during the period - Diluted	Weighted average number of shares outstanding during the period - Diluted	165,979,839		164,218,262		167,124,242		163,067,561		Weighted average number of shares outstanding during the period - Diluted		158,772,453		166,888,129

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Table of Contents

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~

($ in thousands)

(unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Net (loss) income $ (2,229) $ (12,371) $ 71,043 $ (89,884)
Other comprehensive income, net of taxes
Gain on interest rate swaps 2,958 2,958 8,778 8,778
Release of foreign currency translation reserve related to sale of Capri Resort — — — 140
Pension obligation gain (loss) 155 38 (195) (55)
Total other comprehensive income 3,113 2,996 8,583 8,863
Comprehensive income (loss) $ 884 $ (9,375) $ 79,626 $ (81,021)


	Three Months Ended March 31,
		2023		2022
Net income		$	42,719	$	42,747
Other comprehensive income, net of taxes
Gain on interest rate swaps		2,895		2,894
Pension obligation loss		(218)		(234)
Total other comprehensive income		2,677		2,660
Comprehensive income		$	45,396	$	45,407

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Table of Contents

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity

($ in thousands, except share data)

(unaudited)
Ordinary Shares Treasury Shares Paid-In Capital Accumulated Other
Comprehensive Loss Accumulated Deficit Total
Shares Amount Shares Amount
Balance at December 31, 2020 134,571,290 $ 14,871 2,198,796 $ (16,642) $ 1,030,148 $ (30,949) $ (436,606) $ 560,822
Cumulative effect of accounting changes, net of tax — — — — — — (3,408) (3,408)
Balance at January 1, 2021 134,571,290 $ 14,871 2,198,796 $ (16,642) $ 1,030,148 $ (30,949) $ (440,014) $ 557,414
Net loss — — — — — — (69,745) (69,745)
Other comprehensive income — — — — — 2,883 — 2,883
Share-based compensation, net of tax withholdings 708,285 87 9,208 (55) 3,092 — — 3,124
Equity issuance, net 28,750,000 3,512 — — 134,204 — — 137,716
Balance at March 31, 2021 164,029,575 $ 18,470 2,208,004 $ (16,697) $ 1,167,444 $ (28,066) $ (509,759) $ 631,392
Net loss — — — — — — (7,768) (7,768)
Other comprehensive income — — — — — 2,984 — 2,984
Share-based compensation 180,300 22 — — 3,428 — — 3,450
Balance at June 30, 2021 164,209,875 $ 18,492 2,208,004 $ (16,697) $ 1,170,872 $ (25,082) $ (517,527) $ 630,058
Net loss — — — — — — (12,371) (12,371)
Other comprehensive income — — — — — 2,996 — 2,996
Share-based compensation 10,864 1 — — 3,269 — — 3,270
Balance at September 30, 2021 164,220,739 $ 18,493 2,208,004 $ (16,697) $ 1,174,141 $ (22,086) $ (529,898) $ 623,953


	Ordinary Shares			Treasury Shares			Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2021	164,438,280	$	18,518	2,208,004	$	(16,697)	$	1,177,380	$	(18,671)	$	(529,696)	$	630,834
Net income	—	—		—	—		—		—		42,747		42,747
Other comprehensive income	—	—		—	—		—		2,660		—		2,660
Share-based compensation	1,339,787	152		—	—		3,204		—		—		3,356
Balance at March 31, 2022	165,778,067	$	18,670	2,208,004	$	(16,697)	$	1,180,584	$	(16,011)	$	(486,949)	$	679,597

~~Table of Contents~~

~~Playa Hotels & Resorts N.V.~~

~~Condensed Consolidated Statements of Shareholders' Equity (continued)~~

~~($ in thousands, except share data)~~

~~(unaudited)~~


		Ordinary Shares			Treasury Shares			Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total			Ordinary Shares			Treasury Shares			Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
		Shares	Amount		Shares	Amount											Shares	Amount		Shares	Amount
Balance at December 31, 2021		164,438,280	$	18,518	2,208,004	$	(16,697)	$	1,177,380	$	(18,671)	$	(529,696)	$	630,834
Balance at December 31, 2022																Balance at December 31, 2022	158,228,508	$	18,700	10,046,996	$	(62,953)	$	1,189,090	$	(6,985)	$	(472,990)	$	664,862
Net income	Net income	—	—		—	—		—		—		42,747		42,747		Net income	—	—		—	—		—		—		42,719		42,719
Other comprehensive income	Other comprehensive income	—	—		—	—		—		2,660		—		2,660		Other comprehensive income	—	—		—	—		—		2,677		—		2,677
Share-based compensation	Share-based compensation	1,339,787	152		—	—		3,204		—		—		3,356		Share-based compensation	1,148,476	122		—	—		3,044		—		—		3,166
Balance at March 31, 2022		165,778,067	$	18,670	2,208,004	$	(16,697)	$	1,180,584	$	(16,011)	$	(486,949)	$	679,597
Net income		—	—		—	—		—		—		30,525		30,525
Other comprehensive income		—	—		—	—		—		2,810		—		2,810
Share-based compensation		251,784	26		—	—		2,884		—		—		2,910
Balance at June 30, 2022		166,029,851	$	18,696	2,208,004	$	(16,697)	$	1,183,468	$	(13,201)	$	(456,424)	$	715,842
Net loss		—	—		—	—		—		—		(2,229)		(2,229)
Other comprehensive income		—	—		—	—		—		3,113		—		3,113
Share-based compensation		2,398	—		—	—		2,777		—		—		2,777
Repurchase of ordinary shares	Repurchase of ordinary shares	(973,931)	—		973,931	(5,773)		—		—		—		(5,773)		Repurchase of ordinary shares	(4,974,132)	—		4,974,132	(40,890)		—		—		—		(40,890)
Balance at September 30, 2022		165,058,318	$	18,696	3,181,935	$	(22,470)	$	1,186,245	$	(10,088)	$	(458,653)	$	713,730
Balance at March 31, 2023																Balance at March 31, 2023	154,402,852	$	18,822	15,021,128	$	(103,843)	$	1,192,134	$	(4,308)	$	(430,271)	$	672,534

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Table of Contents

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Cash Flows

($ in thousands)

(unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)		$	71,043	$	(89,884)
Adjustments to reconcile net income (loss) to net cash from operating activities
Net income						Net income	$	42,719	$	42,747
Adjustments to reconcile net income to net cash from operating activities						Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization	Depreciation and amortization	58,630		60,827		Depreciation and amortization	19,191		19,500
Amortization of debt discount and issuance costs	Amortization of debt discount and issuance costs	3,097		3,078		Amortization of debt discount and issuance costs	1,795		1,019
Share-based compensation	Share-based compensation	9,043		9,899		Share-based compensation	3,166		3,356
Gain on derivative financial instruments		(18,744)		(6,425)
Impairment loss		—		24,011
Loss (gain) on derivative financial instruments						Loss (gain) on derivative financial instruments	6,405		(11,134)
Deferred income taxes	Deferred income taxes	2,794		(14,123)		Deferred income taxes	3,826		1,572
Loss on sale of assets	Loss on sale of assets	11		644		Loss on sale of assets	13		—
Amortization of key money	Amortization of key money	(1,031)		(404)		Amortization of key money	(193)		(238)
Recovery of doubtful accounts		(1,152)		(210)
Provision for (recovery of) doubtful accounts						Provision for (recovery of) doubtful accounts	81		(483)
Other	Other	445		641		Other	198		(69)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Trade and other receivables, net	Trade and other receivables, net	(1,149)		(14,337)		Trade and other receivables, net	(11,403)		(15,735)
Insurance recoverable	Insurance recoverable	(41,315)		—		Insurance recoverable	5,626		—
Accounts receivable from related parties	Accounts receivable from related parties	2,817		(593)		Accounts receivable from related parties	(2,602)		(4,946)
Inventories	Inventories	(1,013)		(1,741)		Inventories	(569)		(725)
Prepayments and other assets	Prepayments and other assets	(4,430)		8,578		Prepayments and other assets	3,159		(223)
Trade and other payables	Trade and other payables	56,225		10,320		Trade and other payables	(28,743)		281
Payables to related parties	Payables to related parties	367		(3,556)		Payables to related parties	2,292		2,262
Income tax payable	Income tax payable	(483)		(226)		Income tax payable	(205)		152
Other liabilities	Other liabilities	1,587		(533)		Other liabilities	531		312
Net cash provided by (used in) operating activities		136,742		(14,034)
Net cash provided by operating activities						Net cash provided by operating activities	45,287		37,648
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Capital expenditures	Capital expenditures	(21,566)		(11,727)		Capital expenditures	(10,257)		(4,430)
Purchase of intangibles	Purchase of intangibles	(209)		(212)		Purchase of intangibles	(77)		(30)
Proceeds from the sale of assets, net	Proceeds from the sale of assets, net	32		88,904		Proceeds from the sale of assets, net	3		24
Net cash (used in) provided by investing activities		(21,743)		76,965
Property damage insurance proceeds						Property damage insurance proceeds	7,979		—
Net cash used in investing activities						Net cash used in investing activities	(2,352)		(4,436)
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Proceeds from ordinary shares, net of issuance costs		—		137,716

Repayments of debt	Repayments of debt	(32,438)		(31,954)		Repayments of debt	(2,750)		(2,525)
Repayments of debt from related parties		—		(681)
Repayments of borrowings on revolving credit facility		—		(84,667)

Repurchase of ordinary shares	Repurchase of ordinary shares	(4,152)		—		Repurchase of ordinary shares	(42,558)		—
Repurchase of ordinary shares for tax withholdings		—		(55)
Principal payments on finance lease obligations	Principal payments on finance lease obligations	(298)		(67)		Principal payments on finance lease obligations	(107)		(99)
Net cash (used in) provided by financing activities		(36,888)		20,292
INCREASE IN CASH AND CASH EQUIVALENTS		78,111		83,223
Net cash used in financing activities						Net cash used in financing activities	(45,415)		(2,624)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS						(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(2,480)		30,588
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE PERIOD	CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE PERIOD	$	293,577	$	172,860	CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE PERIOD	$	283,945	$	293,577
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF THE PERIOD	CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF THE PERIOD	$	371,688	$	256,083	CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF THE PERIOD	$	281,465	$	324,165
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH	RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH					RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	Cash and cash equivalents	$	371,688	$	231,460	Cash and cash equivalents	$	281,465	$	299,802
Restricted cash	Restricted cash	—		24,623		Restricted cash	—		24,363
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH	TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH	$	371,688	$	256,083	TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH	$	281,465	$	324,165

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

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Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Cash Flows (continued)

($ in thousands)

(unaudited)


	Three Months Ended March 31,
	2023		2022
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	21,406	$	18,221
Cash paid for income taxes, net	$	1,427	$	32
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES
Capital expenditures incurred but not yet paid	$	873	$	696

Intangible assets capitalized but not yet paid	$	—	$	45

Par value of vested restricted share awards	$	122	$	152

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

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Playa Hotels & Resorts N.V.

~~Condensed Consolidated Statements of Cash Flows (continued)~~

~~($ in thousands)~~

~~(unaudited)~~

Nine Months Ended September 30,
2022 2021
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest $ 55,049 $ 58,485
Cash paid for income taxes, net $ 1,106 $ 2,042
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES
Capital expenditures incurred but not yet paid $ 824 $ 1,575
Repurchase of ordinary shares not yet settled $ 1,621 $ —
Intangible assets capitalized but not yet paid $ 114 $ 109
Right-of-use assets obtained in exchange for new operating lease liabilities $ — $ 262
Par value of vested restricted share awards $ 178 $ 110

~~The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.~~

~~Table of Contents~~

~~Playa Hotels & Resorts N.V.~~

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Note 1. Organization, operations and basis of presentation

Background

Playa Hotels & Resorts N.V. (“Playa” or the “Company”) is a leading owner, operator and developer of all-inclusive resorts in prime beachfront locations in popular vacation destinations. We own and/or manage a portfolio of 2526 resorts located in Mexico, the Dominican Republic and Jamaica. Unless otherwise indicated or the context requires otherwise, references in our condensed consolidated financial statements (our “Condensed Consolidated Financial Statements”) to “we,” “our,” “us” and similar expressions refer to Playa and its subsidiaries.

Basis of preparation, presentation and measurement

Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements as of and for the year ended December 31, ~~2021,~~2022, included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on February ~~24, 2022~~23, 2023 (the “Annual Report”).

In our opinion, the unaudited interim Condensed Consolidated Financial Statements have been prepared on the same basis as the annual Consolidated Financial Statements and include all adjustments, consisting of only normal recurring adjustments, necessary for fair presentation. Results for the comparative prior periods have been reclassified to conform to the current period presentation.

The results of operations for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 are not necessarily indicative of the results of operations to be expected for the full year ending December 31, ~~2022.~~2023. All dollar amounts (other than per share amounts) in the following disclosures are in thousands of United States dollars, unless otherwise indicated.

Note 2. Significant accounting policies

~~Share repurchase program and treasury shares~~

~~From time~~New accounting pronouncements recently issued or effective were not applicable to ~~time, our Board of Directors (the “Board”) may authorize repurchases of our outstanding ordinary shares. Shares repurchased under Board-authorized repurchase programs~~the Company or are ~~currently held in treasury for general corporate purposes. Treasury shares are accounted for on the trade date under the cost method and recorded as treasury shares~~not expected to have a material impact on the Condensed Consolidated ~~Balance Sheet as a reduction to shareholders' equity.~~Financial Statements.

~~Standards adopted~~

~~Standard~~

~~Description~~

~~Date of Adoption~~

~~Effect on the Financial Statements or Other Significant Matters~~

~~Accounting Standards Update (“ASU”) No. 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~

~~ASU No. 2021-01,~~ ~~Reference Rate Reform (Topic 848): Scope~~

The amendments in this update provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

~~January 2022~~

The adoption of ASU No. 2020-04 and ASU 2021-01 in January 2022 had no impact on our Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2022, as we have not modified our variable rate debt that is priced using a spread over one-month London Interbank Offered Rate (“LIBOR”).

Additionally, our interest rate swaps mature on March 31, 2023, prior to the anticipated discontinuation of the one-month LIBOR rate on June 30, 2023. We do not expect to modify our interest rate swap contracts prior to their maturity date.

~~Table of Contents~~

Note 3. Revenue

The following tables present our revenues disaggregated by geographic segment (refer to discussion of our reportable segments in Note 15) ($ in thousands):


		Three Months Ended September 30, 2022													Three Months Ended March 31, 2023
		Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total			Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	Package revenue	$	58,588	$	27,891	$	45,953	$	38,696	$	(2)	$	171,126	Package revenue	$	81,287	$	36,803	$	59,602	$	55,876	$	—	$	233,568
Non-package revenue~~(1)~~	Non-package revenue~~(1)~~	9,078		3,309		9,277		7,493		717		29,874		Non-package revenue~~(1)~~	9,700		4,747		9,167		9,867		564		34,045
The Playa Collection														The Playa Collection	—		—		—		—		726		726
Management fees	Management fees	35		—		—		—		751		786		Management fees	38		—		—		—		1,891		1,929
Cost reimbursements	Cost reimbursements	—		—		—		1,256		1,580		2,836		Cost reimbursements	—		—		—		1,337		2,197		3,534
Total revenue	Total revenue	$	67,701	$	31,200	$	55,230	$	47,445	$	3,046	$	204,622	Total revenue	$	91,025	$	41,550	$	68,769	$	67,080	$	5,378	$	273,802

Three Months Ended September 30, 2021
Yucatán
Peninsula Pacific
Coast Dominican
Republic Jamaica Other Total
Package revenue $ 43,993 $ 19,874 $ 35,131 $ 25,333 $ — $ 124,331
Non-package revenue 8,813 2,794 7,701 5,671 232 25,211
Management fees — — — — 673 673
Cost reimbursements — — — 789 283 1,072
Total revenue $ 52,806 $ 22,668 $ 42,832 $ 31,793 $ 1,188 $ 151,287
Nine Months Ended September 30, 2022
Yucatán
Peninsula Pacific
Coast Dominican
Republic Jamaica Other Total
Package revenue $ 180,114 $ 83,559 $ 158,050 $ 114,196 $ (2) $ 535,917
Non-package revenue(1)
29,856 11,889 31,796 24,071 1,880 99,492
Management fees 97 — — — 3,089 3,186
Cost reimbursements — — — 3,386 3,482 6,868
Total revenue $ 210,067 $ 95,448 $ 189,846 $ 141,653 $ 8,449 $ 645,463
Nine Months Ended September 30, 2021
Yucatán
Peninsula Pacific
Coast Dominican
Republic Jamaica Other Total
Package revenue $ 111,378 $ 45,167 $ 80,512 $ 55,948 $ — $ 293,005
Non-package revenue 22,637 7,603 17,137 12,705 726 60,808
Management fees — — — — 1,469 1,469
Cost reimbursements — — — 1,970 584 2,554
Total revenue $ 134,015 $ 52,770 $ 97,649 $ 70,623 $ 2,779 $ 357,836

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	Three Months Ended March 31, 2022
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue(1)	$	61,537	$	26,223	$	60,863	$	38,192	$	—	$	186,815
Non-package revenue(1)(2)	8,841		3,621		8,846		7,934		212		29,454
The Playa Collection(2)	—		—		—		—		296		296
Management fees	30		—		—		—		1,027		1,057
Cost reimbursements	—		—		—		998		954		1,952
Total revenue	$	70,408	$	29,844	$	69,709	$	47,124	$	2,489	$	219,574

________

(1) ~~Non-package~~Includes $2.7 million of on-property room upgrade revenue ~~within Other includes licensing, marketing and other support fees earned~~that was reclassified from non-package revenue to package revenue to conform with current period presentation.

(2)Includes $0.3 million that was reclassified from non-package revenue to The Playa Collection which is a third-party owned and operated membership program. Our revenues from The Playa Collection were $0.6 million and $1.3 million for the three and nine months ended September 30, 2022, respectively.to confirm with current period presentation.

Contract assets and liabilities

We do not have any material contract assets as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 other than trade and other receivables on our Condensed Consolidated Balance Sheet. Our receivables are primarily the result of contracts with customers, which are reduced by an allowance for doubtful accounts that reflects our estimate of amounts that will not be collected.

We record contract liabilities when cash payments are received or due in advance of guests staying at our resorts, which are presented as advance deposits (see Note 14) within trade and other payables on our Condensed Consolidated Balance Sheet. Our advanced deposits are generally recognized as revenue within one year.

~~Table of Contents~~

Note 4. Property and equipment

The balance of property and equipment, net is as follows ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2022		2021			2023		2022
Property and equipment, gross	Property and equipment, gross					Property and equipment, gross
Land, buildings and improvements	Land, buildings and improvements	$	1,762,849	$	1,759,837	Land, buildings and improvements	$	1,766,926	$	1,765,130
Fixtures and machinery (1)	Fixtures and machinery (1)	85,165		84,264		Fixtures and machinery (1)	88,824		88,333
Furniture and other fixed assets	Furniture and other fixed assets	209,630		205,141		Furniture and other fixed assets	215,876		213,005
Construction in progress	Construction in progress	12,092		3,781		Construction in progress	14,315		10,293
Total property and equipment, gross	Total property and equipment, gross	2,069,736		2,053,023		Total property and equipment, gross	2,085,941		2,076,761
Accumulated depreciation	Accumulated depreciation	(522,141)		(468,449)		Accumulated depreciation	(558,753)		(540,194)
Total property and equipment, net	Total property and equipment, net	$	1,547,595	$	1,584,574	Total property and equipment, net	$	1,527,188	$	1,536,567

________

(1) Includes the gross balance of our ~~financing~~finance lease right-of-use assets, which was $6.3 million as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022.

Depreciation expense for property and equipment was ~~$19.1~~$18.8 million and ~~$19.6~~$19.1 million for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $57.5 million and $59.8 million for the nine months ended September 30, 2022 and 2021,~~ respectively.

Hurricane Fiona

On September 19, 2022, Hurricane Fiona, a Category 1 hurricane, made landfall on the eastern coast of the Dominican Republic and caused non-structural damage to ~~the Hyatt Ziva and Hyatt Zilara Cap Cana, Hilton La Romana All-Inclusive Resort, Dreams Punta Cana and Dreams Palm Beach~~several of our resorts. The Hyatt Ziva and Hyatt Zilara Cap Cana and Hilton La Romana All-Inclusive Resort were temporarily closed in late September for necessary clean-up and repairs and are expected to reopen in the fourth quarter of 2022. Our insurance policies provide coverage for business interruption, including lost profits, and reimbursement for costs related to the property damages and losses we have incurred.

As a result of Hurricane Fiona, we expect to incur $50.2 million of clean-up and repair expenses and losses on the write off of property and equipment and inventory, which were offset with our expectedWe received property damage insurance ~~recoveries~~proceeds of ~~$41.3 million. The net expense due~~$8.0 million and business interruption proceeds of $5.6 million related to ~~property damage is recorded within selling, general and administrative expense in the Condensed Consolidated Statements of Operations for~~Hurricane Fiona during the three ~~and nine~~ months ended ~~September 30, 2022.~~March 31, 2023. We ~~expect to receive our insurance proceeds for our~~received an additional $2.2 million of property damage and business interruption ~~claims~~proceeds in ~~late 2022 and early~~April 2023. We expect to receive the remaining proceeds in 2023.

~~Our managed~~The property we manage in the Dominican Republic, Sanctuary Cap Cana, also sustained damage from Hurricane Fiona and was temporarily closed in late September for necessary clean-up and repairs. ~~We expect the~~The resort ~~to reopen in the first quarter of 2023.~~

~~Sale of Capri Resort~~

On March 31, 2021, we entered into an agreement to sell our equity interest in the Capri Resort, which was reported within our Yucatán Peninsula reportable segment, for $55.0 million in cash consideration. Upon entering into the agreement, we classified the resort and related deferred tax liabilities as held for sale and recorded an impairment loss of $24.0 million basedreopened on ~~the sale price.~~

On June 24, 2021, we completed the sale, received total cash consideration of $55.2 million, after customary closing costs, and recognized a loss of $0.5 million within loss (gain) on sale of assets in the Condensed Consolidated Statements of Operations. We utilized 50% of the Capri Resort's net proceeds of $24.4 million, after deducting incremental expenses, to repay a portion of our Term Loan on June 29, 2021. Any remaining net proceeds, after deducting capital expenditures incurred across our portfolio for up to 18 months following the sale, are required to be used to repay our Term Loan and Term A3 Loan in December 2022.

~~Sale of Dreams Puerto Aventuras~~

On February 5, 2021, we completed the sale of the Dreams Puerto Aventuras. Upon closing, we received total cash consideration of $34.3 million, after customary closing costs. The net proceeds from the sale, after deducting incremental expenses and capital expenditures incurred across our portfolio for up to 24 months following the sale, will be used to repay our Term Loan and Term A3 Loan in FebruaryJanuary 20, 2023.

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Lessor contracts

We rent certain real estate to third parties for office and retail space within our resorts. Our lessor contracts are considered operating leases and generally have a contractual term of one to three years. The following table presents our rental income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Leases	Leases	2022		2021		2022		2021		Leases	2023		2022
Operating lease income (1)	Operating lease income (1)	$	1,045	$	796	$	3,347	$	2,189	Operating lease income (1)	$	950	$	1,226

________

(1) Our operating lease income, which is recorded within non-package revenue in the Condensed Consolidated Statements of Operations, includes variable lease revenue which is typically calculated as a percentage of our ~~tenant's~~tenant’s net sales.

Note 5. Income taxes

We file tax returns for our entities in key jurisdictions including Mexico, the Dominican Republic, Jamaica, the United States, and the Netherlands. We are domiciled in the Netherlands and our Dutch subsidiaries are subject to a Dutch general tax rate of 25.8%. Our other operating subsidiaries are subject to tax rates up to 30% in the jurisdictions in which they are domiciled.

All of our outstanding ~~Advanced~~Advance Pricing Agreements (“APAs”) for our Dominican Republic entities expired as of December 31, 2021. We are currently in the process of ~~renegotiating~~finalizing the terms of our APAs, ~~and~~which we expect ~~that the terms will be finalized~~to complete before the end of ~~2022. This is reflected in our~~2023. Our estimated annual effective tax rate ~~calculation.~~calculation reflects the terms of the APAs that are expected to apply for the year ending December 31, 2023.

We had no uncertain tax positions or unrecognized tax benefits as of ~~September 30, 2022.~~March 31, 2023. We expect no significant changes in unrecognized tax benefits over the next twelve months.

We regularly assess the realizability of our deferred tax assets by evaluating historical and projected future operating results, the reversal of existing temporary differences, taxable income in permitted carry back years, and the availability of tax planning strategies. As of ~~September 30, 2022,~~March 31, 2023, a valuation allowance has been maintained as a reserve on ~~substantially all~~a portion of our net deferred tax assets due to the uncertainty of realization of our loss carry forwards and other deferred tax assets. If our operating results continue to improve and our projections show continued utilization of tax attributes, we may consider that as significant positive evidence and our future reassessment may result in the determination that all or a portion of the valuation allowance is no longer required. The exact timing and amount of the valuation allowance releases are ultimately contingent upon the level of profitability achieved in future periods.

Note 6. Related party transactions

Relationship with Hyatt and AMResorts

Hyatt Hotels Corporation (“Hyatt”) is considered a related party due to its ownership of our ordinary shares by its affiliated entities. ~~Hyatt also had representation on our Board of Directors until August 18, 2021.~~ We pay Hyatt fees associated with the franchise agreements of our resorts operating under the all-ages Hyatt Ziva and adults-only Hyatt Zilara brands and receive reimbursements for guests that pay for their stay using the World of Hyatt® guest loyalty program.

Hyatt also owns Apple Leisure Group (“ALG”), the brand management platform AMResorts, and various tour operators and travel agencies. We ~~pay~~previously paid AMResorts and its affiliates, as operators of ~~two of our resorts,~~the Jewel Punta Cana and Jewel Palm Beach through December 20, 2022 and January 6, 2023, respectively, management and marketing fees, and ~~sell~~sold all-inclusive packages through ALG’s tour operators and travel agencies.

Relationship with Sagicor

Sagicor Financial Corporation Limited and its affiliated entities (collectively “Sagicor”) is considered a related party due to its ownership of our ordinary shares and representation on our Board of Directors. We pay Sagicor for employee insurance coverage at one of our Jamaica properties. Sagicor is also a part owner of the Jewel Grande Montego Bay Resort & Spa and compensates us as manager of the property.

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Relationship with Davidson Kempner Capital Management L.P.

Davidson Kempner Capital Management L.P. (“DKCM”) is the investment manager of multiple affiliated funds and is considered a related party due to the DKCM funds’ ownership of our ordinary shares. ~~The affiliated funds managed by~~An affiliate of DKCM ~~are~~was also ~~the lenders to our Property Loan and Additional Credit Facility, which consists~~a lender of $25.0 million in aggregate principal of our 2022 Term ~~A1, Term A2 and Term A3 loans (see~~Loan (as defined in Note 11)~~. We pay DKCM periodic interest payments~~ as of December 31, 2022.

Relationship with HG Vora Capital Management, LLC

HG Vora Capital Management, LLC is considered a related party due to its ownership of our ordinary shares and was a lender of $13.5 million and $42.5 million in aggregate principal of the ~~outstanding debt.~~2022 Term Loan as of March 31, 2023 and December 31, 2022, respectively.

Lease with our Chief Executive Officer

One of our offices is owned by our Chief Executive Officer and we sublease the space at that location from a third party.

Transactions with related parties

Transactions between us and related parties during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ were as follows ($ in thousands):


			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended March 31,
Related Party	Related Party	Transaction	2022		2021		2022		2021		Related Party	Transaction	2023		2022
Revenues	Revenues										Revenues
ALG	ALG	Package revenue	$	3,899	$	—	$	14,724	$	—	ALG	Package revenue	$	—	$	5,874
Sagicor	Sagicor	Cost reimbursements(1)	$	1,355	$	926	$	3,775	$	2,214	Sagicor	Cost reimbursements(1)	$	1,477	$	1,103
Expenses	Expenses										Expenses
Hyatt	Hyatt	Franchise fees(2)	$	7,205	$	5,310	$	22,420	$	13,285	Hyatt	Franchise fees(2)	$	9,954	$	7,413
Sagicor	Sagicor	Insurance premiums(2)	$	264	$	213	$	798	$	571	Sagicor	Insurance premiums(2)	$	320	$	279
Chief Executive Officer	Chief Executive Officer	Lease expense(3)	$	192	$	189	$	572	$	605	Chief Executive Officer	Lease expense(3)	$	196	$	188
DKCM	DKCM	Interest expense(4)	$	5,613	$	5,563	$	16,490	$	16,434	DKCM	Interest expense(4)	$	—	$	5,405
AMResorts	AMResorts	Management fees(2)	$	779	$	—	$	2,763	$	—	AMResorts	Management fees(2)	$	41	$	1,112
AMResorts	AMResorts	Marketing fees(3)	$	909	$	—	$	2,964	$	—	AMResorts	Marketing fees(3)	$	37	$	1,083

________

(1)Equivalent amount included as reimbursed costs in the Condensed Consolidated Statements of Operations.

(2)Included in direct expense in the Condensed Consolidated Statements of Operations with the exception of certain immaterial fees associated with the Hyatt franchise agreements, which are included in selling, general, and administrative expense.

(3)Included in selling, general, and administrative expense in the Condensed Consolidated Statements of Operations.

(4)Includes interest expense and amortization of deferred financing costs and discounts.

Note 7. Commitments and contingencies

We are involved in various claims and lawsuits arising in the normal course of business, including proceedings involving tort and other general liability claims, and workers’ compensation and other employee claims. Most occurrences involving liability and claims of negligence are covered by insurance with solvent insurance carriers. We recognize a liability when we believe the loss is probable and reasonably estimable. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material effect on our Condensed Consolidated Financial Statements.

The Dutch corporate income tax act provides the option of a fiscal unity, which is a consolidated tax regime wherein the profits and losses of group companies can be offset against each other. With the exception of Playa ~~Dominican Resort B.V., Playa Romana B.V., Playa Romana Mar B.V. and Playa~~ Hotels & Resorts N.V., our Dutch companies file as a fiscal unity. Playa Resorts Holding B.V. is the head of our Dutch fiscal unity and is jointly and severally liable for the tax liabilities of the fiscal unity as a whole.

In 2015, the local taxing authorities in Mexico challenged $3.4 million of value added tax (“VAT”) receivable that was recognized in connection with the renovation of the Hyatt Ziva Cancún. During the second quarter of 2022, the tax authorities ruled in our favor resulting in receipt of the VAT and an additional $6.2 million for interest and inflation since the date the VAT refund was requested. The gain of $6.2 million is reported within other income (expense) in the Condensed Consolidated Statements of Operations for the nine months ended September 30, 2022.

In 2019, an appeal was filed by the Mexican Energy Regulatory Commission against the electricity rates that were charged to certain of our resorts in Mexico. During the third quarter of 2022, we received a favorable outcome resulting in the receipt of $4.3 million, of which $0.6 million related to VAT. The gain of $3.7 million is reported within other income (expense) in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022.

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Note 8. Ordinary shares

~~In December 2018,~~On February 9, 2023, our Board ~~established~~of Directors authorized a ~~$100.0~~$200.0 million share repurchase program, pursuant to which we may repurchase our outstanding ordinary shares as market conditions and our liquidity warrant. ~~Our Board reauthorized and renewed the~~The new program replaced our $100.0 million repurchase ~~authorization~~program announced in September ~~2022 so that there was again $100.0 million available under the program.~~2022. The repurchase program is subject to certain limitations under Dutch law, including the existing repurchase authorization granted by our shareholders. Repurchases may be made from time to time in the open market, in privately negotiated transactions or by other means (including Rule 10b5-1 trading plans). Depending on market conditions and other factors, these repurchases may be commenced or suspended from time to time without prior notice. During the three months ended ~~September 30, 2022,~~March 31, 2023, we repurchased ~~973,931~~4,974,132 ordinary shares under the ~~program~~programs at an average price of ~~$5.93~~$8.17 per share. As of ~~September 30, 2022,~~March 31, 2023, we had approximately ~~$94.2~~$169.2 million remaining under our $200.0 million share repurchase program.

As of ~~September 30, 2022,~~March 31, 2023, our ordinary share capital consisted of ~~165,058,318~~154,402,852 ordinary shares outstanding, which have a par value of €0.10 per share. In addition, ~~3,630,917~~4,893,900 restricted shares and performance share awards and ~~25,326~~32,658 restricted share units were outstanding under the 2017 Plan (as defined in Note 9). The holders of restricted shares and performance share awards are entitled to vote, but not dispose of, such shares until they vest. The holders of restricted share units are neither entitled to vote nor dispose of such shares until they vest.

Note 9. Share-based compensation

We adopted our 2017 Omnibus Incentive Plan (the “2017 Plan”) to attract and retain independent directors, executive officers and other key employees and service providers. As of ~~September 30, 2022,~~March 31, 2023, there were ~~3,541,789~~907,941 shares available for future grants under the 2017 Plan.

Restricted share awards consist of restricted shares and restricted share units that are granted to eligible employees, executives, and board members and consist of ordinary shares (or the right to receive ordinary shares).

A summary of our restricted share awards from January 1, ~~2022~~2023 to ~~September 30, 2022~~March 31, 2023 is as follows:


		Number of Shares	Weighted-Average Grant Date Fair Value			Number of Shares	Weighted-Average Grant Date Fair Value
Unvested balance at January 1, 2022		3,006,791	$	6.50
Unvested balance at January 1, 2023					Unvested balance at January 1, 2023	2,288,821	$	6.94
Granted	Granted	1,034,850	8.20		Granted	1,744,579	6.77
Vested	Vested	(1,577,548)	6.88		Vested	(1,148,476)	6.91
Forfeited	Forfeited	(136,973)	7.54		Forfeited	(6,716)	6.95
Unvested balance at September 30, 2022		2,327,120	$	6.94
Unvested balance at March 31, 2023					Unvested balance at March 31, 2023	2,878,208	$	6.85

Performance share awards consist of ordinary shares that may become earned and vested at the end of a ~~three~~ ~~year~~three-year performance period based on the achievement of performance targets adopted by our Compensation Committee. Our performance shares have market conditions where 50% of the performance share awards will vest based on the total shareholder return (“TSR”) of our ordinary shares relative to those of our peer group and 50% will vest based on the compound annual growth rate of the price of our ordinary shares. The peer shareholder return component may vest between 0% and 150% of target, with the award capped at 100% of target should ~~Playa's~~Playa’s TSR be negative. The growth rate component may vest up to 100% of target.

The table below summarizes the key inputs used in the Monte-Carlo simulation to determine the grant date fair value of our performance share awards ($ in thousands):


Performance Award Grant Date	Performance Award Grant Date	Percentage of Total Award		Grant Date Fair Value by Component		Volatility (1)		Interest Rate (2)		Dividend Yield		Performance Award Grant Date	Percentage of Total Award		Grant Date Fair Value by Component		Volatility (1)		Interest Rate (2)		Dividend Yield
January 4, 2022
January 18, 2023												January 18, 2023
Peer Shareholder Return	Peer Shareholder Return	50	%	$	1,689	67.79	%	1.01	%	—	%	Peer Shareholder Return	50	%	$	2,751	71.82	%	3.70	%	—	%
Growth Rate	Growth Rate	50	%	$	1,346	67.79	%	1.01	%	—	%	Growth Rate	50	%	$	2,194	71.82	%	3.70	%	—	%

________

(1) Expected volatility was determined based on our historical share prices.

(2) The risk-free rate was based on U.S. Treasury zero coupon issues with a remaining term equal to the remaining term of the measurement period.

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A summary of our performance share awards from January 1, ~~2022~~2023 to ~~September 30, 2022~~March 31, 2023 is as follows:

Number of Shares Weighted-Average Grant Date Fair Value
Unvested balance at January 1, 2022 1,027,519 $ 5.18
Granted 374,998 8.10
Vested (16,421) 4.34
Forfeited (56,973) 4.34
Unvested balance at September 30, 2022 1,329,123 $ 6.05


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested balance at January 1, 2023	1,329,123	$	6.05
Granted	719,227	6.88
Unvested balance at March 31, 2023	2,048,350	$	6.34

Note 10. Earnings per share

Basic and diluted earnings or loss per share (“EPS”) are as follows ($ in thousands, except share data):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Numerator	Numerator									Numerator
Net (loss) income		$	(2,229)	$	(12,371)	$	71,043	$	(89,884)
Net income										Net income	$	42,719	$	42,747
Denominator	Denominator									Denominator
Denominator for basic EPS - weighted-average number of shares outstanding	Denominator for basic EPS - weighted-average number of shares outstanding	165,979,839		164,218,262		165,873,539		163,067,561		Denominator for basic EPS - weighted-average number of shares outstanding	157,314,177		165,743,382
Effect of dilutive securities	Effect of dilutive securities									Effect of dilutive securities
Unvested performance share awards	Unvested performance share awards	—		—		500,859		—		Unvested performance share awards	952,494		401,903
Unvested restricted share awards	Unvested restricted share awards	—		—		749,844		—		Unvested restricted share awards	505,782		742,844
Denominator for diluted EPS - adjusted weighted-average number of shares outstanding	Denominator for diluted EPS - adjusted weighted-average number of shares outstanding	165,979,839		164,218,262		167,124,242		163,067,561		Denominator for diluted EPS - adjusted weighted-average number of shares outstanding	158,772,453		166,888,129

EPS - Basic	EPS - Basic	$	(0.01)	$	(0.08)	$	0.43	$	(0.55)	EPS - Basic	$	0.27	$	0.26
EPS - Diluted	EPS - Diluted	$	(0.01)	$	(0.08)	$	0.43	$	(0.55)	EPS - Diluted	$	0.27	$	0.26

We had no anti-dilutive unvested performance share awards for the three months ended March 31, 2023. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022, unvested performance share awards in the ~~amounts~~amount of ~~1,329,123 and~~ 187,500 shares respectively, were not included in the computation of diluted EPS as their effect would have been anti-dilutive. For the three and nine months ended September 30, 2021, unvested performance share awards of 1,027,519 were not included in the computation of diluted EPS as their effect would have been anti-dilutive. The performance targets of our unvested performance share awards were partially achieved as of ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

For the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~unvested restricted share awards of 2,327,120 were not included in the computation of diluted EPS as their effect would have been anti-dilutive. We~~we had no anti-dilutive unvested restricted share ~~awards~~awards.

On March 12, 2022, all of our outstanding warrants expired and had no impact on diluted EPS for ~~the nine~~three months ended ~~September 30,~~March 31, 2022. ~~For the three and nine months ended September 30, 2021, unvested restricted share awards of 3,225,332 were not included in the computation of diluted EPS as their effect would have been anti-dilutive.~~

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Note 11. Debt

Our debt consists of the following ($ in thousands):


				Outstanding Balance as of							Outstanding Balance as of
		Interest Rate	Maturity Date	September 30, 2022		December 31, 2021			Interest Rate	Maturity Date	March 31, 2023		December 31, 2022
Senior Secured Credit Facilities	Senior Secured Credit Facilities							Senior Secured Credit Facilities
Revolving Credit Facility (1)	Revolving Credit Facility (1)	LIBOR + 4.00%	January 27, 2024	$	—	$	—	Revolving Credit Facility (1)	SOFR + 3.50% (1)	January 5, 2028	$	—	$	—
Term Loan (2)		LIBOR + 2.75%	April 27, 2024	909,430		941,868
Term A1 Loan		11.4777%	April 27, 2024	35,000		35,000
Term A2 Loan		11.4777%	April 27, 2024	31,000		31,000
Term A3 Loan (3)		LIBOR + 3.00%	April 27, 2024	27,319		27,319
2022 Term Loan (2)								2022 Term Loan (2)	SOFR + 4.25%	January 5, 2029	1,097,250		1,100,000
Total Senior Secured Credit Facilities (at stated value)	Total Senior Secured Credit Facilities (at stated value)			1,002,749		1,035,187		Total Senior Secured Credit Facilities (at stated value)			1,097,250		1,100,000
Unamortized discount	Unamortized discount			(778)		(1,153)		Unamortized discount			(30,955)		(32,428)
Unamortized debt issuance costs	Unamortized debt issuance costs			(2,853)		(4,207)		Unamortized debt issuance costs			(7,454)		(7,776)
Total Senior Secured Credit Facilities, net	Total Senior Secured Credit Facilities, net			$	999,118	$	1,029,827	Total Senior Secured Credit Facilities, net			$	1,058,841	$	1,059,796

Property Loan
Property Loan (at stated value)		9.25%	July 1, 2025	$	110,000	$	110,000
Unamortized discount				(2,459)		(3,107)
Unamortized debt issuance costs				(2,738)		(3,459)
Total Property Loan, net				$	104,803	$	103,434

Financing lease obligations	Financing lease obligations			$	5,759	$	6,058	Financing lease obligations			$	5,550	$	5,657

Total debt, net	Total debt, net			$	1,109,680	$	1,139,319	Total debt, net			$	1,064,391	$	1,065,453

________

(1)Undrawn balances bear interest between 0.25% to ~~0.5%~~0.50% depending on certain leverage ratios. We had an available balance of ~~$68.0 million and $85.0~~$225.0 million as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021, respectively.~~2022. Interest is incurred on any outstanding balance based on the Secured Overnight Financing Rate (“SOFR”) plus a margin ranging from 3.25% to 3.75%, depending on our consolidated secured net leverage ratio.

(2)~~One-month LIBOR is subject to a 1.0% floor.~~ The effective interest rate for the 2022 Term Loan was ~~5.87%~~8.99% and ~~3.75%~~8.58% as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. ~~Our two~~

Second Restatement Agreement

On December 16, 2022, we entered into the Second Restatement Agreement to amend and restate our Senior Secured Credit Facility to consist of (i) a $225.0 million revolving line of credit with a maturity date of January 5, 2028 (the “Revolving Credit Facility”) and (ii) a $1.1 billion term loan with a maturity of January 5, 2029 (the “2022 Term Loan” and collectively with the Revolving Credit Facility, the “2022 Senior Secured Credit Facility”).

The 2022 Term Loan bears interest at SOFR plus a margin of 4.25% (where the applicable SOFR rate ~~swaps fix LIBOR~~has a 0.50% floor). The Revolving Credit Facility bears interest at ~~2.85%~~SOFR plus a margin ranging from 3.25% to 3.75%, in each case, depending on ~~$800.0 million~~the level of our ~~Term Loan (see Note 12).~~

~~(3)One-month LIBOR is subject~~consolidated secured net leverage ratio in effect from time to ~~a 1.0% floor. The effective interest rate was 5.50% and 4.00% as of September 30, 2022 and December 31, 2021, respectively.~~

On May 20, 2022, we repaid $24.9 million of the outstanding balance on our Term Loan in addition to our quarterly principal payments as a result of the sale of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark in May 2020. The repayment represented 100% of the net proceeds from the sale, after deducting incremental expenses and capital expenditures incurred across our portfolio for 24 months following the sale.time.

Financial maintenance covenants

We were in compliance with all applicable covenants as of ~~September 30, 2022.~~March 31, 2023. A summary of our applicable covenants and restrictions is as follows:


Debt						Covenant Terms
2022 Senior Secured Credit Facility						We are subject to a total net leverage ratio of ~~4.75x~~5.20x if we have more than 35% drawn on the Revolving Credit Facility.
~~Term A1 Loan~~						~~Same terms as the Senior Secured Credit Facility.~~
~~Term A2 Loan~~						~~No applicable debt covenants.~~
~~Term A3 Loan~~						~~No applicable debt covenants.~~
~~Property Loan~~						~~No applicable debt covenants other than the requirement to maintain a cash reserve until the Properties achieve a debt service coverage ratio of 1.50x for two consecutive quarters.~~

~~Table of Contents~~

During the second quarter of 2022, our restricted cash balance related to our Property Loan was released into unrestricted cash as the Hyatt Ziva and Hyatt Zilara Cap Cana and Hilton Rose Hall Resort & Spa properties achieved the required debt service coverage ratio for two consecutive quarters. We had no restricted cash as of September 30, 2022.

Note 12. Derivative financial instruments

Our two interest rate swaps ~~mitigate~~previously mitigated the interest rate risk inherent to our floating rate debt ~~including~~that was tied to the ~~Revolving Credit Facility and Term Loan.~~London Interbank Offered Rate (“LIBOR”). The interest rate swaps ~~are~~were not for trading purposes and ~~have~~had fixed notional values of $200.0 million and ~~$600.00~~$600.0 million. The fixed rate paid by us iswas 2.85% and the variable rate received ~~resets~~reset monthly to the one-month LIBOR ~~rate, which results in us fixing LIBOR at 2.85% on $800.0 million of our Term Loan.~~rate. The interest rate swaps ~~mature~~matured on March 31, 2023.

Our interest rate swaps ~~are~~were designated as cash flow hedges, but were deemed ineffective due to the decrease in interest rates. All changes in fair value ~~are~~were recognized through interest expense in the Condensed Consolidated Statements of ~~Operations.~~Operations through maturity.

Table of Contents

The following tables present the effect of our interest rate swaps, net of tax, in the Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ and Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ ($ in thousands):


		2022		2021			2023		2022
AOCI from our cash flow hedges as of January 1	AOCI from our cash flow hedges as of January 1	$	14,632	$	26,369	AOCI from our cash flow hedges as of January 1	$	2,895	$	14,632
Change in fair value	Change in fair value	—		—		Change in fair value	—		—
Reclassification from AOCI to interest expense	Reclassification from AOCI to interest expense	(2,894)		(2,894)		Reclassification from AOCI to interest expense	(2,895)		(2,894)
OCI related to our cash flow hedges for the three months ended March 31	OCI related to our cash flow hedges for the three months ended March 31	(2,894)		(2,894)		OCI related to our cash flow hedges for the three months ended March 31	(2,895)		(2,894)
Change in fair value		—		—
Reclassification from AOCI to interest expense		(2,926)		(2,926)
OCI related to our cash flow hedges for the three months ended June 30		(2,926)		(2,926)
Change in fair value		—		—
Reclassification from AOCI to interest expense		(2,958)		(2,958)
OCI related to our cash flow hedges for the three months ended September 30		(2,958)		(2,958)
AOCI from our cash flow hedges as of September 30 (1)		$	5,854	$	17,591

AOCI from our cash flow hedges as of March 31						AOCI from our cash flow hedges as of March 31	$	—	$	11,738

~~________~~

~~(1)~~ As of September 30, 2022, the total amount expected to be reclassified from AOCI to interest expense during the remaining six month term is $5.9 million, which represents prior losses recognized in AOCI when our interest rate swaps were deemed effective hedges.


Derivative Instruments for Ineffective Hedges	Derivative Instruments for Ineffective Hedges	Financial Statement Classification		Three Months Ended September 30,					Nine Months Ended September 30,			Derivative Instruments for Ineffective Hedges			Financial Statement Classification		Three Months Ended March 31,
			2022		2021		2022			2021				2023			2022
Interest rate swaps (1)	Interest rate swaps (1)		Interest expense		$	16	$	3,807		$	(7,776)		$	10,209		Interest rate swaps (1)	Interest expense	$	3,013	$	(5,715)

________

(1) Includes the loss or (gain) from the change in fair value of our interest rate swaps and the cash interest paid or received for the monthly settlements of the derivative.

The following tables present the effect of our interest rate swaps in the Condensed Consolidated Balance Sheet as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 ($ in thousands):

Derivative Assets for Ineffective Hedges Financial Statement Classification As of September 30, As of December 31,
2022 2021
Interest rate swaps Derivative financial instruments $ 4,979 $ —


Derivative Liabilities for Ineffective Hedges		Financial Statement Classification		As of September 30,			As of December 31,
			2022		2021
Derivative Assets for Ineffective Hedges								Derivative Assets for Ineffective Hedges			Financial Statement Classification		As of March 31,		As of December 31,
												2023		2022
Interest rate swaps	Interest rate swaps		Derivative financial instruments		$	—		$	22,543	Interest rate swaps			Derivative financial instruments		$	—	$	3,510

Derivative financial instruments expose us to credit risk in the event of non-performance by the counterparty under the terms of the interest rate swaps. We incorporate these counterparty credit risks in our fair value measurements (see Note 13) and believe we minimize this credit risk by transacting with major creditworthy financial institutions.

~~Table of Contents~~

Note 13. Fair value of financial instruments

The objective of a fair value measurement is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. U.S. GAAP establishes a hierarchical disclosure framework, which prioritizes and ranks the level of observability of inputs used in measuring fair value as follows:

•Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2: Unadjusted quoted prices for similar assets or liabilities in active markets, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

•Level 3: Inputs are unobservable and reflect our judgments about assumptions that market participants would use in pricing an asset or liability.

We believe the carrying value of our financial instruments, excluding our debt, approximate their fair values as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. We did not have any Level 3 instruments during any of the periods presented in our Condensed Consolidated Financial Statements.

We did not have any financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2023. The following ~~tables present~~table presents our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis as of ~~September 30, 2022~~ and December 31, ~~2021~~2022 ($ in thousands):


Financial Assets	Financial Assets	September 30, 2022		Level 1		Level 2		Level 3		Financial Assets	December 31, 2022		Level 1		Level 2		Level 3
Fair value measurements on a recurring basis	Fair value measurements on a recurring basis									Fair value measurements on a recurring basis
Interest rate swaps		$	4,979	$	—	$	4,979	$	—
Interest rate swap										Interest rate swap	$	3,510	$	—	$	3,510	$	—

Financial Liabilities December 31, 2021 Level 1 Level 2 Level 3
Fair value measurements on a recurring basis
Interest rate swap $ 22,543 $ — $ 22,543 $ —

Table of Contents

The following tables present our fair value hierarchy for our financial liabilities not measured at fair value as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 ($ in thousands):

Carrying Value Fair Value
As of September 30, 2022 Level 1 Level 2 Level 3
Financial liabilities not recorded at fair value
Term Loan $ 907,351 $ — $ — $ 876,294
Term A1 Loan 34,422 — — 35,400
Term A2 Loan 30,488 — — 31,355
Term A3 Loan 26,857 — — 26,424
Property Loan 104,803 — — 110,829
Total liabilities $ 1,103,921 $ — $ — $ 1,080,302


	Carrying Value		Fair Value
	As of March 31, 2023		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value
2022 Term Loan	$	1,058,841	$	—	$	—	$	1,110,079

Carrying Value Fair Value
As of December 31, 2021 Level 1 Level 2 Level 3
Financial liabilities not recorded at fair value
Term Loan $ 938,788 $ — $ — $ 924,917
Term A1 Loan 34,151 — — 35,598
Term A2 Loan 30,248 — — 31,530
Term A3 Loan 26,640 — — 27,006
Property Loan 103,434 — — 111,593
Total liabilities $ 1,133,261 $ — $ — $ 1,130,644

~~Table of Contents~~


	Carrying Value		Fair Value
	As of December 31, 2022		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value
2022 Term Loan	$	1,059,796	$	—	$	—	$	1,114,860

The following table summarizes the valuation techniques used to estimate the fair value of our financial instruments measured at fair value on a recurring basis and our financial instruments not measured at fair value:


						Valuation Technique
Financial instruments recorded at fair value
Interest rate swaps						The fair value of the interest rate swaps is estimated based on the expected future cash flows by incorporating the notional amount of the swaps, the contractual period to maturity, and observable market-based inputs, including interest rate curves. The fair value also incorporates credit valuation adjustments to appropriately reflect nonperformance risk. The fair value of our interest rate swaps is largely dependent on forecasted LIBOR as of the measurement date. If, in subsequent periods, forecasted LIBOR exceeds 2.85% we will recognize a gain and future cash inflows. Conversely, if forecasted LIBOR falls below 2.85% in subsequent periods we will recognize a loss and future cash outflows.
Financial instruments not recorded at fair value
2022 Term ~~Loans and Property~~ Loan						The fair value of our 2022 Term ~~Loans and Property~~ Loan ~~are~~is estimated using cash flow projections over the remaining contractual period by applying market forward rates and discounting back at the appropriate discount rate.
Revolving Credit Facility						The valuation technique of our Revolving Credit Facility is consistent with our 2022 Term ~~Loans.~~Loan. The fair value of the Revolving Credit Facility generally approximates its carrying value as the expected term is significantly shorter in duration.

Note 14. Other balance sheet items

Trade and other receivables, net

The following summarizes the balances of trade and other receivables, net as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2022		2021			2023		2022
Gross trade and other receivables (1)	Gross trade and other receivables (1)	$	48,118	$	47,382	Gross trade and other receivables (1)	$	74,620	$	63,396
Allowance for doubtful accounts	Allowance for doubtful accounts	(326)		(1,940)		Allowance for doubtful accounts	(352)		(450)
Total trade and other receivables, net	Total trade and other receivables, net	$	47,792	$	45,442	Total trade and other receivables, net	$	74,268	$	62,946

________

(1) The opening balance as of January 1, ~~2021~~2022 was ~~$28.3~~$47.4 million.

We have not experienced any significant write-offs to our accounts receivable during the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

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Prepayments and other assets

The following summarizes the balances of prepayments and other assets as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2022		2021			2023		2022
Advances to suppliers	Advances to suppliers	$	16,300	$	8,327	Advances to suppliers	$	10,237	$	12,683
Prepaid income taxes	Prepaid income taxes	11,559		11,101		Prepaid income taxes	10,735		11,809
Prepaid other taxes (1)	Prepaid other taxes (1)	4,568		7,995		Prepaid other taxes (1)	4,465		4,539
Operating lease right-of-use assets	Operating lease right-of-use assets	3,170		3,766		Operating lease right-of-use assets	2,791		2,968
Key money	Key money	2,295		2,376		Key money	6,670		6,735
Other assets	Other assets	5,317		5,075		Other assets	6,060		5,443
Total prepayments and other assets	Total prepayments and other assets	$	43,209	$	38,640	Total prepayments and other assets	$	40,958	$	44,177

________

(1) Includes recoverable value-added tax, general consumption tax, and other sales tax accumulated by our Mexico, Jamaica, Dutch and Dominican Republic entities.

Goodwill

We recognized no goodwill impairment losses on our reporting units nor any additions to goodwill during the three ~~and nine~~ months ended ~~September 30, 2022.~~March 31, 2023. The gross carrying values and accumulated impairment losses of goodwill by reportable segment (refer to discussion of our reportable segments in Note 15) as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 are as follows ($ in thousands):


	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Total
Gross carrying value	$	51,731	$	—	$	—	$	35,879	$	87,610
Accumulated impairment losses	(6,168)		—		—		(19,788)		(25,956)
Net carrying value	$	45,563	$	—	$	—	$	16,091	$	61,654

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Other intangible assets

Other intangible assets as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 consisted of the following ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2022		2021			2023		2022
Gross carrying value	Gross carrying value					Gross carrying value
Casino and other licenses (1)	Casino and other licenses (1)	$	875	$	875	Casino and other licenses (1)	$	875	$	875
Management contract	Management contract	1,900		1,900		Management contract	1,900		1,900
Enterprise resource planning system	Enterprise resource planning system	6,520		6,402		Enterprise resource planning system	6,375		6,375
Other	Other	4,273		4,073		Other	4,602		4,499
Total gross carrying value	Total gross carrying value	13,568		13,250		Total gross carrying value	13,752		13,649

Accumulated amortization	Accumulated amortization					Accumulated amortization
Management contract	Management contract	(404)		(333)		Management contract	(451)		(428)
Enterprise resource planning system	Enterprise resource planning system	(2,548)		(1,895)		Enterprise resource planning system	(2,997)		(2,771)
Other	Other	(3,773)		(3,390)		Other	(4,011)		(3,894)
Total accumulated amortization	Total accumulated amortization	(6,725)		(5,618)		Total accumulated amortization	(7,459)		(7,093)

Net carrying value	Net carrying value					Net carrying value
Casino and other licenses (1)	Casino and other licenses (1)	875		875		Casino and other licenses (1)	875		875
Management contract	Management contract	1,496		1,567		Management contract	1,449		1,472
Enterprise resource planning system	Enterprise resource planning system	3,972		4,507		Enterprise resource planning system	3,378		3,604
Other	Other	500		683		Other	591		605
Total net carrying value	Total net carrying value	$	6,843	$	7,632	Total net carrying value	$	6,293	$	6,556

________

(1) Our casino and other licenses have indefinite lives. Accordingly, there is no associated amortization expense or accumulated amortization.

Amortization expense for intangible assets was $0.4 million ~~and $0.3 million~~ for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021, respectively, and $1.1 million and $1.0 million for the nine months ended September 30, 2022 and 2021, respectively.~~2022.

Trade and other payables

The following summarizes the balances of trade and other payables as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2022		2021			2023		2022
Trade payables	Trade payables	$	17,986	$	23,843	Trade payables	$	27,743	$	28,422
Advance deposits (1)	Advance deposits (1)	68,089		62,644		Advance deposits (1)	74,953		83,262
Withholding and other taxes payable	Withholding and other taxes payable	34,715		32,655		Withholding and other taxes payable	23,115		31,111
Interest payable	Interest payable	148		99		Interest payable	4,112		3,996
Payroll and related accruals	Payroll and related accruals	25,642		23,998		Payroll and related accruals	20,771		29,273
Accrued expenses and other payables(2)	Accrued expenses and other payables(2)	71,331		16,983		Accrued expenses and other payables (2)	50,000		55,588
Total trade and other payables	Total trade and other payables	$	217,911	$	160,222	Total trade and other payables	$	200,694	$	231,652

________

(1) The opening balance as of January 1, ~~2021~~2022 was ~~$29.7~~$62.6 million.

(2) As of ~~September 30, 2022,~~March 31, 2023, accrued expenses and other payables ~~includes approximately $1.6 million related to share repurchases not yet settled and $49.6~~include $25.3 million of unpaid clean up and repair expenses related to Hurricane Fiona.

2017

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Other liabilities

The following summarizes the balances of other liabilities as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2022		2021			2023		2022
Pension obligation ~~(2)~~(1)	Pension obligation ~~(2)~~(1)	$	7,138	$	5,990	Pension obligation ~~(2)~~(1)	$	9,043	$	7,777
Operating lease liabilities	Operating lease liabilities	3,683		4,298		Operating lease liabilities	3,286		3,472
Unfavorable ground lease liability	Unfavorable ground lease liability	1,885		1,967		Unfavorable ground lease liability	1,830		1,857
Key money	Key money	15,619		16,731		Key money	15,104		15,362
Other	Other	2,146		896		Other	1,886		2,217
Total other liabilities	Total other liabilities	$	30,471	$	29,882	Total other liabilities	$	31,149	$	30,685

________

(1) ~~The~~For the three months ended March 31, 2023 and 2022, the service cost component of net periodic pension cost was $0.3 million and $0.2 million, ~~for the three months ended September 30, 2022~~respectively, and 2021. The service cost component of net periodic pension cost was $0.6 million for the nine months ended September 30, 2022 and 2021. The costs are recorded within direct expense in the Condensed Consolidated Statements of Operations.

~~(2)~~ For the three months ended September 30, 2022 and 2021, the non-service cost components of net periodic pension cost were $0.2 million and nominal, respectively. For the nine months ended September 30, 2022 and 2021, the non-service cost components were ~~$0.7~~$0.9 million and ~~$0.5~~$0.4 million, respectively. ~~The costs are recorded within other income (expense) in the Condensed Consolidated Statements of Operations.~~

Note 15. Business segments

We consider each one of our owned resorts to be an operating segment, none of which meets the threshold for a reportable segment. We also allocate resources and assess operating performance based on individual resorts. Our operating segments meet the aggregation criteria and thus, we ~~present~~report four separate reportable segments by geography: (i) Yucatán Peninsula, (ii) Pacific Coast, (iii) Dominican Republic and (iv) Jamaica. ~~For the three and nine months ended September 30, 2022 and 2021, we have excluded the immaterial amounts of management fees, cost reimbursements and other from our segment reporting.~~

Our operating segments are components of the business ~~which~~that are managed discretely and for which discrete financial information is reviewed regularly by our Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, all of whom represent our chief operating decision maker (“CODM”). Financial information for each reportable segment is reviewed by the CODM to assess performance and make decisions regarding the allocation of resources. For the three months ended March 31, 2023 and 2022, we have excluded the immaterial amounts of management fees, cost reimbursements, The Playa Collection and other from our segment reporting.

The performance of our business is evaluated primarily on adjusted earnings before interest expense, income tax ~~(provision) benefit,~~provision, and depreciation and amortization expense (“Adjusted EBITDA”) and the performance of our segments is evaluated on Adjusted EBITDA before corporate expenses and management fee ~~income~~revenue (“Owned Resort EBITDA”). Adjusted EBITDA and Owned Resort EBITDA should not be considered alternatives to net ~~(loss)~~ income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP.

We define Adjusted EBITDA as net ~~(loss)~~ income, determined in accordance with U.S. GAAP, for the periods presented, before interest expense, income tax ~~(provision) benefit,~~provision, and depreciation and amortization expense, further adjusted to exclude the following items: (a) ~~impairment loss; (b)~~ loss ~~(gain)~~ on sale of assets; ~~(c)~~(b) other income (expense); ~~(d)~~(c) repairs from hurricanes and tropical storms; ~~(e)~~(d) share-based compensation; ~~(f)~~(e) other tax expense; ~~(g)~~and (f) transaction ~~expenses; (h) contract termination costs and (i) severance~~ expenses. Adjusted EBITDA includes corporate expenses, which are overhead costs that are essential to support the operation of the Company, including the operations and development of our resorts.

There are limitations to using financial measures such as Adjusted EBITDA and Owned Resort EBITDA. For example, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named financial measures that other companies publish to compare the performance of those companies to our performance. Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income or loss generated by our business or discretionary cash available for investment in our business and investors should carefully consider our U.S. GAAP results presented in our Condensed Consolidated Financial Statements.

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The following table presents segment ~~owned net revenue and a reconciliation to total revenue for the three and nine months ended September 30, 2022 and 2021 ($ in thousands~~):

Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Owned net revenue
Yucatán Peninsula $ 65,594 $ 51,209 $ 204,200 $ 129,879
Pacific Coast 30,301 21,982 92,901 51,117
Dominican Republic 55,190 42,794 189,714 97,563
Jamaica 43,759 29,502 131,781 65,358
Segment owned net revenue (1)
194,844 145,487 618,596 343,917
Other 716 232 1,878 726
Management fees 786 673 3,186 1,469
Cost reimbursements 2,836 1,072 6,868 2,554
Compulsory tips 5,440 3,823 14,935 9,170
Total revenue $ 204,622 $ 151,287 $ 645,463 $ 357,836

~~________~~

~~(1)~~ ~~Segment owned net revenue represents~~Owned Net Revenue, defined as total revenue less compulsory tips paid to employees, cost reimbursements, management fees and other miscellaneous revenue not derived from segment ~~operations.~~operations, and a reconciliation to total revenue for the three months ended March 31, 2023 and 2022 ($ in thousands):

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	Three Months Ended March 31,
	2023		2022
Owned net revenue
Yucatán Peninsula	$	88,748	$	68,629
Pacific Coast	40,515		29,104
Dominican Republic	68,769		69,664
Jamaica	62,977		44,264
Segment owned net revenue	261,009		211,661
Other	564		211
Management fees	1,929		1,057
The Playa Collection	726		296
Cost reimbursements	3,534		1,952
Compulsory tips	6,040		4,397
Total revenue	$	273,802	$	219,574

The following table presents segment Owned Resort EBITDA, Adjusted EBITDA and a reconciliation to net ~~(loss)~~ income for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Owned Resort EBITDA	Owned Resort EBITDA									Owned Resort EBITDA
Yucatán Peninsula	Yucatán Peninsula	$	21,617	$	17,518	$	77,049	$	37,714	Yucatán Peninsula	$	37,936	$	29,458
Pacific Coast	Pacific Coast	10,512		6,429		36,966		13,992		Pacific Coast	17,523		12,544
Dominican Republic	Dominican Republic	14,014		11,267		63,138		20,859		Dominican Republic	26,849		28,377
Jamaica	Jamaica	11,267		5,632		40,567		6,924		Jamaica	27,081		17,158
Segment Owned Resort EBITDA	Segment Owned Resort EBITDA	57,410		40,846		217,720		79,489		Segment Owned Resort EBITDA	109,389		87,537
Other corporate ~~(1)~~	Other corporate ~~(1)~~	(13,322)		(9,749)		(37,385)		(28,778)		Other corporate ~~(1)~~	(13,555)		(11,947)
The Playa Collection										The Playa Collection	726		296
Management fees	Management fees	786		673		3,186		1,469		Management fees	1,929		1,057
Adjusted EBITDA	Adjusted EBITDA	44,874		31,770		183,521		52,180		Adjusted EBITDA	98,489		76,943
Interest expense	Interest expense	(17,832)		(19,047)		(39,892)		(56,164)		Interest expense	(29,666)		(9,168)
Depreciation and amortization	Depreciation and amortization	(19,502)		(19,927)		(58,630)		(60,827)		Depreciation and amortization	(19,191)		(19,500)
Impairment loss		—		—		—		(24,011)
(Loss) gain on sale of assets		(2)		4		(11)		(644)

Loss on sale of assets										Loss on sale of assets	(13)		—
Other income (expense)	Other income (expense)	2,608		587		7,850		(747)		Other income (expense)	232		(514)
Repairs from hurricanes and tropical storms	Repairs from hurricanes and tropical storms	(8,850)		(435)		(8,850)		(435)		Repairs from hurricanes and tropical storms	861		—
Share-based compensation	Share-based compensation	(2,777)		(3,270)		(9,043)		(9,899)		Share-based compensation	(3,166)		(3,356)
Other tax expense	Other tax expense	—		(67)		—		(228)		Other tax expense	—		(240)
Transaction expenses	Transaction expenses	(582)		(210)		(1,384)		(928)		Transaction expenses	(863)		(191)
Contract termination costs		—		(400)		—		(400)
Severance expense		—		—		—		(1,287)
Non-service cost components of net periodic pension cost (benefit) (2)		102		(16)		650		463
Net (loss) income before tax		(1,961)		(11,011)		74,211		(102,927)
Income tax (provision) benefit		(268)		(1,360)		(3,168)		13,043
Net (loss) income		$	(2,229)	$	(12,371)	$	71,043	$	(89,884)

Non-service cost components of net periodic pension cost (1)										Non-service cost components of net periodic pension cost (1)	852		387
Net income before tax										Net income before tax	47,535		44,361
Income tax provision										Income tax provision	(4,816)		(1,614)
Net income										Net income	$	42,719	$	42,747

________

(1)~~Other corporate includes revenue generated by The Playa Collection of $0.6 million and $1.3 million for the three and nine months ended September 30, 2022, respectively.~~

~~(2)~~ Represents the non-service cost components of net periodic pension cost or benefit recorded within other income (expense) in the Condensed Consolidated Statements of Operations. We include these costs in calculating Adjusted EBITDA as they are considered part of our ongoing resort operations.

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The following table presents segment property and equipment, gross and a reconciliation to total property and equipment, net as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2022		2021			2023		2022
Segment property and equipment, gross	Segment property and equipment, gross					Segment property and equipment, gross
Yucatán Peninsula	Yucatán Peninsula	$	673,447	$	667,618	Yucatán Peninsula	$	678,578	$	676,218
Pacific Coast	Pacific Coast	290,570		288,309		Pacific Coast	292,316		291,372
Dominican Republic	Dominican Republic	688,664		684,187		Dominican Republic	694,314		690,181
Jamaica	Jamaica	411,700		408,107		Jamaica	415,180		413,563
Total segment property and equipment, gross	Total segment property and equipment, gross	2,064,381		2,048,221		Total segment property and equipment, gross	2,080,388		2,071,334
Corporate property and equipment, gross	Corporate property and equipment, gross	5,355		4,802		Corporate property and equipment, gross	5,553		5,427
Accumulated depreciation	Accumulated depreciation	(522,141)		(468,449)		Accumulated depreciation	(558,753)		(540,194)
Total property and equipment, net	Total property and equipment, net	$	1,547,595	$	1,584,574	Total property and equipment, net	$	1,527,188	$	1,536,567

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The following table presents segment capital expenditures and a reconciliation to total capital expenditures for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ ($ in thousands):


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Segment capital expenditures	Segment capital expenditures					Segment capital expenditures
Yucatán Peninsula	Yucatán Peninsula	$	6,870	$	2,709	Yucatán Peninsula	$	2,741	$	1,265
Pacific Coast	Pacific Coast	3,817		536		Pacific Coast	946		1,152
Dominican Republic	Dominican Republic	6,249		1,874		Dominican Republic	3,895		946
Jamaica	Jamaica	3,999		3,288		Jamaica	1,806		985
Total segment capital expenditures (1)	Total segment capital expenditures (1)	20,935		8,407		Total segment capital expenditures (1)	9,388		4,348
Corporate	Corporate	570		256		Corporate	126		52
Total capital expenditures (1)	Total capital expenditures (1)	$	21,505	$	8,663	Total capital expenditures (1)	$	9,514	$	4,400

________

(1) Represents gross additions to property and equipment.

Note 16. Subsequent events

In preparing the interim Condensed Consolidated Financial Statements, we have evaluated subsequent events through ~~November 3, 2022,~~May 4, 2023, which is the date the financial statements were issued.

~~On October 12, 2022, we paid $4.5 million of key money to the owner of one of our managed resorts.~~

During the period from ~~October~~April 1, ~~2022~~2023 through ~~October 31, 2022,~~April 30, 2023, we purchased ~~2,671,010~~2,147,034 ordinary shares at an average price of ~~$5.73~~$9.29 per share. As of ~~October 31, 2022,~~April 30, 2023, we had ~~$78.9~~$149.3 million remaining under our $200.0 million share repurchase program.

Effective April 15, 2023, we entered into two interest rate swaps to mitigate the floating interest rate risk on our 2022 Term Loan, which incurs interest based on SOFR. The interest rate swaps each have a fixed notional amount of $275.0 million and are not for trading purposes. The fixed rates paid by us on the interest rate swaps are 4.05% and 3.71%, and the variable rate received resets monthly to the one-month SOFR rate. The interest rate swaps mature on April 15, 2025 and April 15, 2026, respectively.

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Item 2. ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of Playa Hotels & Resorts N.V.'s’s (“Playa”) financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements (our “Condensed Consolidated Financial Statements”) and the notes related thereto which are included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. Unless the context otherwise requires, “we,” “us,” “our” and the “Company” refer to Playa and its subsidiaries.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,” “potential,” “continue,” and the negatives of these words and other similar expressions generally identify forward looking statements. Forward-looking statements are subject to various factors that could cause actual outcomes or results to differ materially from those indicated in these statements, including the risks described under the sections entitled “Risk Factors” of our Annual Report on Form 10-K, filed with the SEC on February ~~24, 2022~~23, 2023 and in this Quarterly Report on Form 10-Q, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Currently, one of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effects of the current COVID-19 pandemic on our financial condition, results of operations and prospects, which include the airlines that service the locations where we own resorts, the short and longer-term demand for travel, the global economy and the local economies where we own resorts, and the financial markets. As a result of the COVID-19 pandemic, we experienced severely reduced occupancy levels at our resorts in 2020 and 2021 compared to historic levels, and the continued or worsening effects of the pandemic may again result in reduced occupancies. The extent to which the COVID-19 pandemic will continue to impact us and consumer behavior will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, continuing resurgences of the virus and its variants, the government actions taken to contain the pandemic or mitigate its impact, and the continuing effectiveness and uptake of vaccines and treatment therapies. Our business and profitability may also be adversely impacted to the extent high inflation and interest rates adversely impact macroeconomic conditions. The following factors, among others, could also cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

•general economic uncertainty and the effect of general economic conditions, including inflation, ~~and~~ rising interest rates and a potential economic recession, on consumer discretionary spending and the lodging industry in particular;

•the popularity of the all-inclusive resort model, particularly in the luxury segment of the resort market;

•changes in economic, social or political conditions in the regions we operate, including changes in perception of public-safety, changes in unemployment rates and labor force availability, and changes in the supply of rooms from competing resorts;

•the success and continuation of our relationships with Hyatt Hotels Corporation (“Hyatt”), Hilton Worldwide Holdings, Inc. (“Hilton”), and Wyndham Hotels & Resorts, Inc. (“Wyndham”);

•the volatility of currency exchange rates;

•~~uncertainty regarding the ongoing conflict between Russia and Ukraine and the related impacts on inflation, supply chains and macroeconomic conditions;~~

•the success of our branding or rebranding initiatives with our current portfolio and resorts that may be acquired in the future;

•our failure to successfully complete ~~acquisitions, expansions,~~acquisition, expansion, repair and renovation projects in the timeframes and at the costs and returns anticipated;

•changes we may make in timing and scope of our development and renovation projects;

•significant increases in construction and development costs;

•significant increases in utilities, labor or other resort costs;

•our ability to obtain and maintain financing arrangements on attractive terms or at all;

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•our ability to obtain and maintain ample liquidity to fund operations and service debt;

•the impact of and changes in governmental regulations or the enforcement thereof, tax laws and rates, accounting guidance and similar matters in regions in which we operate;

•the ability of our guests to reach our resorts given government mandated travel restrictions, such as those related to COVID-19, or airline service/capacity issues, as well as changes in demand for our resorts resulting from government mandated safety protocols and/or health ~~concerns;~~concerns, including those related to COVID-19;

•the effectiveness of our internal controls and our corporate policies and procedures;

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•changes in personnel and availability of qualified personnel;

•extreme weather events, such as hurricanes, floods and extreme heat waves, which may increase in frequency and severity as a result of climate change, and other natural disasters;

•public health crises, such as a resurgence of COVID-19 or the outbreak of ~~widespread~~other contagious ~~diseases other than COVID-19;~~diseases;

•dependence on third parties to provide Internet, telecommunications and network connectivity to our data centers;

•the volatility of the market price and liquidity of our ordinary shares and other of our securities; and

•the increasingly competitive environment in which we operate.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this quarterly report, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to us (or to third parties making the forward-looking statements).

Overview

Playa is a leading owner, operator and developer of all-inclusive resorts in prime beachfront locations in popular vacation destinations in Mexico and the Caribbean. As of ~~September 30, 2022,~~March 31, 2023, Playa owned and/or managed a total portfolio consisting of 2526 resorts ~~(9,352~~(9,756 rooms) located in Mexico, Jamaica, and the Dominican Republic:

•In Mexico, we own and manage the Hyatt Zilara Cancún, Hyatt Ziva Cancún, Wyndham Alltra Cancún, Wyndham Alltra Playa del Carmen, Hilton Playa del Carmen All-Inclusive Resort, Hyatt Ziva Puerto Vallarta, and Hyatt Ziva Los Cabos;

•In Jamaica, we own and manage the Hyatt Zilara Rose Hall, Hyatt Ziva Rose Hall, Hilton Rose Hall Resort & Spa, Jewel Grande Montego Bay Resort & Spa, and Jewel Paradise Cove Beach Resort & Spa;

•In the Dominican Republic, we own and manage the Hilton La Romana All-Inclusive Family Resort, the Hilton La Romana All-Inclusive Adult Resort, Hyatt Zilara Cap Cana, ~~and~~ Hyatt Ziva Cap Cana, Jewel Palm Beach, and Jewel Punta Cana; and

•We ~~own two resorts in the Dominican Republic that are managed by a third-party. We~~ also manage ~~eight~~nine resorts on behalf of third-party ~~owners, one of which is currently closed for renovations but expected to open in late 2022~~.owners.

Playa’s strategy is to leverage its globally recognized brand partnerships and proprietary in-house direct booking capabilities to capitalize on the growing popularity of the all-inclusive resort model and reach first-time all-inclusive resort consumers in a cost-effective manner. We believe that this strategy should position us to generate attractive returns for our shareholders, build lasting relationships with our guests, and enhance the lives of our associates and the communities in which we operate.

For the three months ended ~~September 30, 2022,~~March 31, 2023, we generated a net ~~loss~~income of ~~$2.2~~$42.7 million, Total Revenue of ~~$204.6~~$273.8 million, Net Package RevPAR of ~~$253.17~~$355.27 and Adjusted EBITDA of ~~$44.9~~$98.5 million. For the three months ended September 30, 2021, during which time our operations were negatively impacted by the effects of COVID-19, we generated a net loss of $12.4 million, Total Revenue of $151.3 million, Net Package RevPAR of $184.19 and Adjusted EBITDA of $31.8 million.

~~For the nine months ended September 30,~~March 31, 2022, we generated net income of ~~$71.0~~$42.7 million, Total Revenue of ~~$645.5~~$219.6 million, Net Package RevPAR of ~~$268.35~~$285.00 and Adjusted EBITDA of $183.5 million. For the nine months ended September 30, 2021, during which time our operations were negatively impacted by the effects of COVID-19, we generated a net loss of $89.9 million, Total Revenue of $357.8 million, Net Package RevPAR of $141.66 and Adjusted EBITDA of $52.2$76.9 million.

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Our Portfolio of Resorts

As of ~~September 30, 2022,~~March 31, 2023, the following table presents an overview of our resorts and is organized by our four geographic business segments: the Yucatán Peninsula, the Pacific Coast, the Dominican Republic and Jamaica.

Name of Resort

Location

Brand and Type

Operator

Year Built; Significant Renovations

Rooms

Name of Resort

Location

Brand and Type

Operator

Year Built; Significant Renovations

Rooms

Owned Resorts

Yucatán Peninsula

Hyatt Ziva Cancún

Cancún, Mexico

Hyatt Ziva (all ages)

Playa

1975; 1980; 1986; 2002; 2015

547

Hyatt Ziva Cancún

Cancún, Mexico

Hyatt Ziva (all ages)

Playa

1975; 1980; 1986; 2002; 2015

547

Hyatt Zilara Cancún

Cancún, Mexico

Hyatt Zilara (adults-only)

Playa

2006; 2009; 2013; 2017

310

Hyatt Zilara Cancún

Cancún, Mexico

Hyatt Zilara (adults-only)

Playa

2006; 2009; 2013; 2017

310

Wyndham Alltra Cancún

Cancún, Mexico

Wyndham (all ages)

Playa

1985; 2009; 2017

458

Wyndham Alltra Cancún

Cancún, Mexico

Wyndham (all ages)

Playa

1985; 2009; 2017

458

Hilton Playa del Carmen All-Inclusive Resort

Playa del Carmen, Mexico

Hilton (adults-only)

Playa

2002; 2009; 2019

524

Hilton Playa del Carmen All-Inclusive Resort

Playa del Carmen, Mexico

Hilton (adults-only)

Playa

2002; 2009; 2019

524

Wyndham Alltra Playa del Carmen

Playa del Carmen, Mexico

Wyndham (adults-only)

Playa

1996; 2006; 2012; 2017

287

Wyndham Alltra Playa del Carmen

Playa del Carmen, Mexico

Wyndham (adults-only)

Playa

1996; 2006; 2012; 2017

287

Pacific Coast

Hyatt Ziva Los Cabos

Cabo San Lucas, Mexico

Hyatt Ziva (all ages)

Playa

2007; 2009; 2015

591

Hyatt Ziva Los Cabos

Cabo San Lucas, Mexico

Hyatt Ziva (all ages)

Playa

2007; 2009; 2015

591

Hyatt Ziva Puerto Vallarta

Puerto Vallarta, Mexico

Hyatt Ziva (all ages)

Playa

1969; 1990; 2002; 2009; 2014; 2017

335

Hyatt Ziva Puerto Vallarta

Puerto Vallarta, Mexico

Hyatt Ziva (all ages)

Playa

1969; 1990; 2002; 2009; 2014; 2017

335

Dominican Republic

Hilton La Romana All-Inclusive Resort

La Romana, Dominican Republic

Hilton (adults-only)

Playa

1997; 2008; 2019

356

Hilton La Romana All-Inclusive Resort

La Romana, Dominican Republic

Hilton (adults-only)

Playa

1997; 2008; 2019

356

Hilton La Romana All-Inclusive Resort

La Romana, Dominican Republic

Hilton (all ages)

Playa

1997; 2008; 2019

418

Hilton La Romana All-Inclusive Resort

La Romana, Dominican Republic

Hilton (all ages)

Playa

1997; 2008; 2019

418

Dreams Palm Beach

Punta Cana,
Dominican Republic

Dreams (all ages)

AMResorts

1994; 2008

500

Dreams Punta Cana

Punta Cana,
Dominican Republic

Dreams (all ages)

AMResorts

2004

620

Jewel Palm Beach

Punta Cana,
Dominican Republic

Jewel (all ages)

Playa (1)

1994; 2008

500

Jewel Punta Cana

Punta Cana,
Dominican Republic

Jewel (all ages)

Playa

2004

620

Hyatt Ziva Cap Cana

Cap Cana,
Dominican Republic

Hyatt Ziva (all ages)

Playa

2019

375

Hyatt Ziva Cap Cana

Cap Cana,
Dominican Republic

Hyatt Ziva (all ages)

Playa

2019

375

Hyatt Zilara Cap Cana

Cap Cana,
Dominican Republic

Hyatt Zilara (adults-only)

Playa

2019

375

Hyatt Zilara Cap Cana

Cap Cana,
Dominican Republic

Hyatt Zilara (adults-only)

Playa

2019

375

Jamaica

Hyatt Ziva Rose Hall

Montego Bay, Jamaica

Hyatt Ziva (all ages)

Playa

2000; 2014; 2017

276

Hyatt Ziva Rose Hall

Montego Bay, Jamaica

Hyatt Ziva (all ages)

Playa

2000; 2014; 2017

276

Hyatt Zilara Rose Hall

Montego Bay, Jamaica

Hyatt Zilara (adults-only)

Playa

2000; 2014; 2017

344

Hyatt Zilara Rose Hall

Montego Bay, Jamaica

Hyatt Zilara (adults-only)

Playa

2000; 2014; 2017

344

Hilton Rose Hall Resort & Spa

Montego Bay, Jamaica

Hilton (all ages)

Playa

1974; 2008; 2017

495

Hilton Rose Hall Resort & Spa

Montego Bay, Jamaica

Hilton (all ages)

Playa

1974; 2008; 2017

495

Jewel Paradise Cove Beach Resort & Spa

Runaway Bay, Jamaica

Jewel (adults-only)

Playa

2013

225

Jewel Paradise Cove Beach Resort & Spa

Runaway Bay, Jamaica

Jewel (adults-only)

Playa

2013

225

Jewel Grande Montego Bay Resort & Spa ~~(1)~~(2)

Montego Bay, Jamaica

Jewel (all ages)

Playa

2016; 2017

Jewel Grande Montego Bay Resort & Spa ~~(1)~~(2)

Montego Bay, Jamaica

Jewel (all ages)

Playa

2016; 2017

Total Rooms Owned

7,124

Total Rooms Owned

7,124

Managed Resorts ~~(2)~~(3)

Sanctuary Cap Cana

Punta Cana,
Dominican Republic

The Luxury Collection by Marriott (adults-only)

Playa

2008; 2015; 2018

324

Sanctuary Cap Cana

Punta Cana,
Dominican Republic

The Luxury Collection by Marriott (adults-only)

Playa

2008; 2015; 2018

324

Jewel Grande Montego Bay Resort & Spa

Montego Bay, Jamaica

Jewel (condo-hotel)

Playa

2016; 2017

129

Jewel Grande Montego Bay Resort & Spa

Montego Bay, Jamaica

Jewel (condo-hotel)

Playa

2016; 2017

129

The Yucatán Playa del Carmen All-Inclusive Resort

Playa del Carmen, Mexico

Tapestry Collection by Hilton (adults-only)

Playa

2012

The Yucatán Playa del Carmen All-Inclusive Resort

Playa del Carmen, Mexico

Tapestry Collection by Hilton (adults-only)

Playa

2012

Hyatt Ziva Riviera Cancún

Riviera Maya, Mexico

Hyatt Ziva (all ages)

Playa

2008; 2021

438

Hyatt Ziva Riviera Cancún

Riviera Maya, Mexico

Hyatt Ziva (all ages)

Playa

2008; 2021

438

Hyatt Zilara Riviera Maya ~~(3)~~

Riviera Maya, Mexico

Hyatt Zilara (adults-only)

Playa

2003; 2022

291

Hyatt Zilara Riviera Maya ~~(3)~~

Riviera Maya, Mexico

Hyatt Zilara (adults-only)

Playa

2003; 2022

291

Seadust Cancún Family Resort (4)

Cancún, Mexico

Seadust (all ages)

Playa

2006; 2022

502

Seadust Cancún Family Resort (4)

Cancún, Mexico

Seadust (all ages)

Playa

2006; 2022

502

Kimpton Hacienda Tres Ríos Resort, Spa & Nature Park (5)

Playa del Carmen, Mexico

Kimpton (all ages)

Playa

2008; 2023

255

Kimpton Hacienda Tres Ríos Resort, Spa & Nature Park (5)

Playa del Carmen, Mexico

Kimpton (all ages)

Playa

2008; 2023

255

Wyndham Alltra Riviera Nayarit ~~(6)~~

Nuevo Vallarta, Mexico

Wyndham (all ages)

Playa

2009; 2022

229

Wyndham Alltra Riviera Nayarit ~~(6)~~

Nuevo Vallarta, Mexico

Wyndham (all ages)

Playa

2009; 2022

229

Wyndham Alltra Samaná (6)

Samaná, Dominican Republic

Wyndham (all ages)

Playa

1994; 1998; 2004; 2023

404

Total Rooms Operated

2,228

Total Rooms Operated

2,632

Total Rooms Owned and Operated

9,352

Total Rooms Owned and Operated

9,756

________

(1) Prior to January 6, 2023, this resort was managed by AMResorts and operated under the Dreams brand.

(2) Represents an 88-unit tower and spa owned by us. We manage the majority of the units within the remaining two condo-hotel towers owned by Sagicor that comprise the Jewel Grande Montego Bay Resort & Spa.

~~(2)~~(3) Owned by a third party.

~~(3)~~ ~~We entered into a management agreement to operate this resort during the first quarter of 2021. The resort is currently closed for renovations but is expected to open in late 2022.~~

(4) We entered into a management agreement to operate this resort during the second quarter of 2022 and ~~we expect to commence~~commenced operations in ~~the first quarter of~~February 2023.

(5) We entered into a management agreement to operate this resort during the second quarter of 2022. The resort is currently undergoing renovations and we expect to commence operations in early 2024.

(6)We entered into a management agreement to operate this resort during the first quarter of 2023. The resort is currently undergoing renovations and we expect to commence operations in the third quarter of ~~2022 and commenced operations in October 2022.~~

2023.

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Results of Operations

Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~

The following table summarizes our results of operations on a consolidated basis for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ ($ in thousands):


		Three Months Ended September 30,				Increase / Decrease					Three Months Ended March 31,				Increase / Decrease
		2022		2021		Change		% Change			2023		2022		Change		% Change
Revenue	Revenue									Revenue
Package	Package	$	171,126	$	124,331	$	46,795	37.6	%	Package	$	233,568	$	186,815	$	46,753	25.0	%
Non-package	Non-package	29,874		25,211		4,663		18.5	%	Non-package	34,045		29,454		4,591		15.6	%
The Playa Collection										The Playa Collection	726		296		430		145.3	%
Management fees	Management fees	786		673		113		16.8	%	Management fees	1,929		1,057		872		82.5	%
Cost reimbursements	Cost reimbursements	2,836		1,072		1,764		164.6	%	Cost reimbursements	3,534		1,952		1,582		81.0	%
Total revenue	Total revenue	204,622		151,287		53,335		35.3	%	Total revenue	273,802		219,574		54,228		24.7	%
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses									Direct and selling, general and administrative expenses
Direct	Direct	117,333		90,788		26,545		29.2	%	Direct	128,968		106,840		22,128		20.7	%
Selling, general and administrative	Selling, general and administrative	51,686		32,055		19,631		61.2	%	Selling, general and administrative	45,127		37,239		7,888		21.2	%
Depreciation and amortization	Depreciation and amortization	19,502		19,927		(425)		(2.1)	%	Depreciation and amortization	19,191		19,500		(309)		(1.6)	%
Reimbursed costs	Reimbursed costs	2,836		1,072		1,764		164.6	%	Reimbursed costs	3,534		1,952		1,582		81.0	%

Loss (gain) on sale of assets		2		(4)		6		150.0	%
Loss on sale of assets										Loss on sale of assets	13		—		13		100.0	%
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses	191,359		143,838		47,521		33.0	%	Direct and selling, general and administrative expenses	196,833		165,531		31,302		18.9	%
Operating income	Operating income	13,263		7,449		5,814		78.1	%	Operating income	76,969		54,043		22,926		42.4	%
Interest expense	Interest expense	(17,832)		(19,047)		1,215		6.4	%	Interest expense	(29,666)		(9,168)		(20,498)		(223.6)	%
Other income		2,608		587		2,021		344.3	%
Net loss before tax		(1,961)		(11,011)		9,050		82.2	%
Other income (expense)										Other income (expense)	232		(514)		746		145.1	%
Net income before tax										Net income before tax	47,535		44,361		3,174		7.2	%
Income tax provision	Income tax provision	(268)		(1,360)		1,092		80.3	%	Income tax provision	(4,816)		(1,614)		(3,202)		(198.4)	%
Net loss		$	(2,229)	$	(12,371)	$	10,142	82.0	%
Net income										Net income	$	42,719	$	42,747	$	(28)	(0.1)	%

The tables below set forth information for our total portfolio and comparable portfolio with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Management Fee Revenue, Total Net Revenue, Adjusted EBITDA and Adjusted EBITDA Margin. For a description of these operating metrics and non-U.S. GAAP measures, see “Key Indicators of Financial and Operating Performance” below. For discussion of Adjusted EBITDA and reconciliation to the most comparable U.S. GAAP financial measures, see “Key Indicators of Financial and Operating Performance” and “Non-U.S. GAAP Financial Measures” below.

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Total Portfolio


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2022			2021			Change			% Change			2023			2022			Change			% Change
Occupancy	Occupancy	73.8		%	59.3		%	14.5		pts	24.5	%	Occupancy	70.8		%	72.4		%	(1.6)		pts	(2.2)	%
Net Package ADR	Net Package ADR	$	343.28		$	310.65		$	32.63		10.5	%	Net Package ADR	$	501.64		$	393.90		$	107.74		27.4	%
Net Package RevPAR	Net Package RevPAR	$	253.17		$	184.19		$	68.98		37.5	%	Net Package RevPAR	$	355.27		$	285.00		$	70.27		24.7	%
		($ in thousands)												($ in thousands)
Net Package Revenue(1)	Net Package Revenue(1)	$	165,930		$	120,717		$	45,213		37.5	%	Net Package Revenue(1)	$	227,786		$	182,730		$	45,056		24.7	%
Net Non-package Revenue(1)	Net Non-package Revenue(1)	29,630			25,002			4,628			18.5	%	Net Non-package Revenue(1)	33,787			29,142			4,645			15.9	%
The Playa Collection Revenue													The Playa Collection Revenue	726			296			430			145.3	%
Management Fee Revenue	Management Fee Revenue	786			673			113			16.8	%	Management Fee Revenue	1,929			1,057			872			82.5	%
Total Net Revenue	Total Net Revenue	196,346			146,392			49,954			34.1	%	Total Net Revenue	264,228			213,225			51,003			23.9	%
Adjusted EBITDA	Adjusted EBITDA	$	44,874		$	31,770		$	13,104		41.2	%	Adjusted EBITDA	$	98,489		$	76,943		$	21,546		28.0	%
Adjusted EBITDA Margin	Adjusted EBITDA Margin	22.9		%	21.7		%	1.2		pts	5.5	%	Adjusted EBITDA Margin	37.3		%	36.1		%	1.2		pts	3.3	%

________

(1)For the three months ended March 31, 2022, includes $2.7 million of on-property room upgrade revenue that was reclassified from non-package revenue to package revenue to conform with current period presentation.

Comparable Portfolio


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2022			2021			Change			% Change			2023			2022			Change			% Change
Occupancy	Occupancy	76.6		%	60.3		%	16.3		pts	27.0	%	Occupancy	75.8		%	71.9		%	3.9		pts	5.4	%
Net Package ADR	Net Package ADR	$	335.48		$	301.60		$	33.88		11.2	%	Net Package ADR	$	502.68		$	409.48		$	93.20		22.8	%
Net Package RevPAR	Net Package RevPAR	$	257.08		$	181.80		$	75.28		41.4	%	Net Package RevPAR	$	381.06		$	294.23		$	86.83		29.5	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	132,447		$	93,665		$	38,782		41.4	%	Net Package Revenue	$	227,174		$	175,412		$	51,762		29.5	%
Net Non-package Revenue	Net Non-package Revenue	23,394			19,553			3,841			19.6	%	Net Non-package Revenue	33,715			28,102			5,613			20.0	%
The Playa Collection Revenue													The Playa Collection Revenue	726			296			430			145.3	%
Management Fee Revenue	Management Fee Revenue	786			673			113			16.8	%	Management Fee Revenue	1,929			1,057			872			82.5	%
Total Net Revenue	Total Net Revenue	156,627			113,891			42,736			37.5	%	Total Net Revenue	263,544			204,867			58,677			28.6	%
Adjusted EBITDA	Adjusted EBITDA	$	33,570		$	21,299		$	12,271		57.6	%	Adjusted EBITDA	$	100,917		$	74,653		$	26,264		35.2	%
Adjusted EBITDA Margin	Adjusted EBITDA Margin	21.4		%	18.7		%	2.7		pts	14.4	%	Adjusted EBITDA Margin	38.3		%	36.4		%	1.9		pts	5.2	%

Total Revenue and Total Net Revenue

Our Total Revenue for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$53.3~~$54.2 million, or ~~35.3%~~24.7%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022.

Our Total Net Revenue for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$50.0~~$51.0 million, or ~~34.1%~~23.9%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was due to the following:

•a ~~10.5%~~27.4% increase in Net Package ADR as a result of of:

•a higher meetings, incentives, conventions and events (“MICE”) group contribution to our guest ~~mix and the ongoing leisure travel recovery and pricing discipline to coincide with investments in guest satisfaction at our resorts;~~

•~~continued strength in Net Non-package Revenue spend per guest driven by improvements in our product offering across our resorts;~~mix; and

•~~an incremental $3.71 favorable~~a benefit from the lower mix of rooms sold at Jewel Punta Cana and the closure of Jewel Palm Beach for the majority of the three months ended March 31, 2023, as we transitioned management to us from a third-party. Excluding these resorts, Net Package ADR ~~impact~~increased 17.1%.

•Net Non-package Revenue for the three months ended March 31, 2023 increased $4.6 million, or 15.9%, compared to the three months ended ~~September 30, 2021 as~~March 31, 2022 despite a ~~result~~decrease of ~~the change in billing methodology of an online travel agency (“OTA”), which requires Playa~~$2.0 million compared to ~~present this revenue gross of commissions under U.S. GAAP. Excluding this adjustment, Net Package ADR would have been $339.57.~~

Compared to the same period in 2019, for our current comparable portfolio of resorts, which excludes the Hilton La Romana All-Inclusive Resort, Hyatt Ziva and Hyatt Zilara Cap Cana, Dreams Puerto Aventuras, Capri Resort, Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, Comparable Net Package ADR for the three months ended ~~September 30,~~March 31, 2022 ~~increased by $97.48, or 41.0%. Excluding~~due to the ~~aforementioned adjustment for the OTA billing methodology, the increase would have been $83.88, or 35.2%.~~expiration of our Extended Stay Program in late 2022 as COVID-19-related travel restrictions were no longer in effect.

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•the above increases were partially offset by a decrease in Occupancy of 1.6 percentage points as a result of reduced Occupancy at the Jewel Punta Cana and Jewel Palm Beach due to the transition of management to us from a third-party. The Jewel Palm Beach was also closed for the majority of the first quarter in 2023 as a result of this transition.

The following table shows a reconciliation of Net Package Revenue, Net Non-package Revenue and Management Fee Revenue to Total Revenue for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ ($ in thousands):


		Three Months Ended September 30,				Increase/Decrease					Three Months Ended March 31,				Increase/Decrease
		2022		2021		Change		% Change			2023		2022		Change		% Change
Net Package Revenue	Net Package Revenue									Net Package Revenue
Comparable Net Package Revenue	Comparable Net Package Revenue	$	132,447	$	93,665	$	38,782	41.4	%	Comparable Net Package Revenue	$	227,174	$	175,412	$	51,762	29.5	%
Non-comparable Net Package Revenue	Non-comparable Net Package Revenue	33,483		27,052		6,431		23.8	%	Non-comparable Net Package Revenue	612		7,318		(6,706)		(91.6)	%
Net Package Revenue	Net Package Revenue	$	165,930	$	120,717	$	45,213	37.5	%	Net Package Revenue	227,786		182,730		45,056		24.7	%

Net Non-package Revenue	Net Non-package Revenue									Net Non-package Revenue
Comparable Net Non-package Revenue	Comparable Net Non-package Revenue	23,394		19,553		3,841		19.6	%	Comparable Net Non-package Revenue	33,715		28,102		5,613		20.0	%
Non-comparable Net Non-package Revenue	Non-comparable Net Non-package Revenue	6,236		5,449		787		14.4	%	Non-comparable Net Non-package Revenue	72		1,040		(968)		(93.1)	%
Net Non-package Revenue	Net Non-package Revenue	29,630		25,002		4,628		18.5	%	Net Non-package Revenue	33,787		29,142		4,645		15.9	%

The Playa Collection Revenue										The Playa Collection Revenue
Comparable The Playa Collection Revenue										Comparable The Playa Collection Revenue	726		296		430		145.3	%
Non-comparable The Playa Collection Revenue										Non-comparable The Playa Collection Revenue	—		—		—		—	%
The Playa Collection Revenue										The Playa Collection Revenue	726		296		430		145.3	%

Management Fee Revenue	Management Fee Revenue									Management Fee Revenue
Comparable Management Fee Revenue	Comparable Management Fee Revenue	786		673		113		16.8	%	Comparable Management Fee Revenue	1,929		1,057		872		82.5	%
Non-comparable Management Fee Revenue	Non-comparable Management Fee Revenue	—		—		—		—	%	Non-comparable Management Fee Revenue	—		—		—		—	%
Management Fee Revenue	Management Fee Revenue	786		673		113		16.8	%	Management Fee Revenue	1,929		1,057		872		82.5	%

Total Net Revenue	Total Net Revenue									Total Net Revenue
Comparable Total Net Revenue	Comparable Total Net Revenue	156,627		113,891		42,736		37.5	%	Comparable Total Net Revenue	263,544		204,867		58,677		28.6	%
Non-comparable Total Net Revenue	Non-comparable Total Net Revenue	39,719		32,501		7,218		22.2	%	Non-comparable Total Net Revenue	684		8,358		(7,674)		(91.8)	%
Total Net Revenue	Total Net Revenue	196,346		146,392		49,954		34.1	%	Total Net Revenue	264,228		213,225		51,003		23.9	%
Compulsory tips	Compulsory tips	5,440		3,823		1,617		42.3	%	Compulsory tips	6,040		4,397		1,643		37.4	%
Cost Reimbursements	Cost Reimbursements	2,836		1,072		1,764		164.6	%	Cost Reimbursements	3,534		1,952		1,582		81.0	%
Total revenue	Total revenue	$	204,622	$	151,287	$	53,335	35.3	%	Total revenue	$	273,802	$	219,574	$	54,228	24.7	%

Direct Expenses

The following table shows a reconciliation of our direct expenses to Net Direct Expenses for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ ($ in thousands):


		Three Months Ended September 30,				Increase/Decrease					Three Months Ended March 31,				Increase/Decrease
		2022		2021		Change		% Change			2023		2022		Change		% Change
Direct expenses	Direct expenses	$	117,333	$	90,788	$	26,545	29.2	%	Direct expenses	$	128,968	$	106,840	$	22,128	20.7	%
Less: compulsory tips	Less: compulsory tips	5,440		3,823		1,617		42.3	%	Less: compulsory tips	6,040		4,397		1,643		37.4	%
Net Direct Expenses	Net Direct Expenses	$	111,893	$	86,965	$	24,928	28.7	%	Net Direct Expenses	$	122,928	$	102,443	$	20,485	20.0	%

Our direct expenses include resort expenses, such as food and beverage, salaries and wages, utilities and other ongoing operational expenses. Our Net Direct Expenses were ~~$111.9~~$122.9 million, or ~~57.0%~~46.5% of Total Net Revenue, for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~$87.0~~$102.4 million, or ~~59.4%~~48.0% of Total Net Revenue, for the three months ended ~~September 30, 2021.~~March 31, 2022. Direct operating expenses fluctuate based on various factors, including changes in ~~occupancy,~~Occupancy, labor costs, utilities, repair and maintenance costs and

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license and property taxes. Management fees and franchise fees, which are computed as a percentage of revenue, increase or decrease as a result of changes in revenues.

Net Direct Expenses for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$24.9~~$20.5 million, or ~~28.7%~~20.0%, compared to the three months ended ~~September 30, 2021. As a percentage of Owned Net Revenue, Net Direct Expenses decreased to 57.4%, compared to 59.8% for the three months ended September 30, 2021.~~March 31, 2022. Net Direct Expenses at our comparable properties increased ~~$19.8~~$23.3 million, or ~~28.8%~~23.9%, compared to the three months ended ~~September 30, 2021~~March 31, 2022 primarily due to the following:

•~~Increased~~increased operating expenses associated with higher ~~occupancy~~Occupancy levels for our comparable portfolio as a result of the corresponding recovery in our operations compared to the three months ended ~~September 30, 2021;~~March 31, 2022, during which time occupancies were negatively affected by the Omicron variant and COVID-19 related travel restrictions; and

~~Table of Contents~~

•~~An increase in~~appreciation of the Mexican Peso compared to the three months ended March 31, 2022, which primarily impacted labor and food and beverage expenses ~~on a per guest basis, driven by our initiative to deliver an exceptional customer experience across our portfolio and higher food and beverage prices; and~~

•~~An increase in utilities expenses driven by a global rise in energy prices.~~for the three months ended March 31, 2023.

Net Direct Expenses consists of the following ($ in thousands):

Total Portfolio

Three Months Ended September 30, Increase/Decrease
2022 2021 Change % Change
Food and beverages $ 27,268 $ 19,782 $ 7,486 37.8 %
Guest costs 6,515 7,185 (670) (9.3) %
Salaries and wages 39,117 31,053 8,064 26.0 %
Repairs and maintenance 6,534 4,545 1,989 43.8 %
Utilities and sewage 12,743 9,727 3,016 31.0 %
Licenses and property taxes 640 663 (23) (3.5) %
Incentive and management fees 779 373 406 108.8 %
Franchise / license fees 9,553 7,527 2,026 26.9 %
Transportation and travel expenses 1,417 1,132 285 25.2 %
Laundry and cleaning expenses 1,709 1,360 349 25.7 %
Property and equipment rental expense 936 699 237 33.9 %
Entertainment expenses and decoration 2,795 1,838 957 52.1 %
Office supplies 379 296 83 28.0 %
Other operational expenses 1,508 785 723 92.1 %
Total Net Direct Expenses $ 111,893 $ 86,965 $ 24,928 28.7 %

~~Comparable portfolio~~


		Three Months Ended September 30,				Increase/Decrease					Three Months Ended March 31,				Increase/Decrease
		2022		2021		Change		% Change			2023		2022		Change		% Change

Food and beverages	Food and beverages	$	21,325	$	14,971	$	6,354	42.4	%	Food and beverages	$	28,487	$	24,240	$	4,247	17.5	%
Guest costs	Guest costs	4,791		5,314		(523)		(9.8)	%	Guest costs	5,715		7,601		(1,886)		(24.8)	%
Salaries and wages	Salaries and wages	32,070		25,903		6,167		23.8	%	Salaries and wages	47,195		35,878		11,317		31.5	%
Repairs and maintenance	Repairs and maintenance	5,661		3,932		1,729		44.0	%	Repairs and maintenance	5,955		4,588		1,367		29.8	%
Utilities and sewage	Utilities and sewage	9,866		7,300		2,566		35.2	%	Utilities and sewage	10,557		10,317		240		2.3	%
Licenses and property taxes	Licenses and property taxes	452		504		(52)		(10.3)	%	Licenses and property taxes	881		795		86		10.8	%
Incentive and management fees	Incentive and management fees	779		373		406		108.8	%	Incentive and management fees	41		1,112		(1,071)		(96.3)	%
Franchise / license fees	Franchise / license fees	7,333		5,975		1,358		22.7	%	Franchise / license fees	13,518		10,139		3,379		33.3	%
Transportation and travel expenses	Transportation and travel expenses	808		684		124		18.1	%	Transportation and travel expenses	1,655		1,302		353		27.1	%
Laundry and cleaning expenses	Laundry and cleaning expenses	1,339		1,064		275		25.8	%	Laundry and cleaning expenses	1,653		1,406		247		17.6	%
Property and equipment rental expense	Property and equipment rental expense	474		351		123		35.0	%	Property and equipment rental expense	2,173		1,306		867		66.4	%
Entertainment expenses and decoration	Entertainment expenses and decoration	2,389		1,589		800		50.3	%	Entertainment expenses and decoration	3,144		2,376		768		32.3	%
Office supplies	Office supplies	303		237		66		27.8	%	Office supplies	352		299		53		17.7	%
Other operational expenses	Other operational expenses	1,028		603		425		70.5	%	Other operational expenses	1,602		1,084		518		47.8	%
Total Net Direct Expenses	Total Net Direct Expenses	$	88,618	$	68,800	$	19,818	28.8	%	Total Net Direct Expenses	$	122,928	$	102,443	$	20,485	20.0	%

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Comparable portfolio


	Three Months Ended March 31,				Increase/Decrease
	2023		2022		Change		% Change

Food and beverages	$	28,344	$	23,007	$	5,337	23.2	%
Guest costs	5,574		7,260		(1,686)		(23.2)	%
Salaries and wages	45,898		34,186		11,712		34.3	%
Repairs and maintenance	5,693		4,343		1,350		31.1	%
Utilities and sewage	10,184		9,601		583		6.1	%
Licenses and property taxes	866		690		176		25.5	%
Incentive and management fees	—		613		(613)		(100.0)	%
Franchise / license fees	13,518		10,139		3,379		33.3	%
Transportation and travel expenses	1,597		1,179		418		35.5	%
Laundry and cleaning expenses	1,634		1,353		281		20.8	%
Property and equipment rental expense	2,164		1,274		890		69.9	%
Entertainment expenses and decoration	3,137		2,309		828		35.9	%
Office supplies	349		271		78		28.8	%
Other operational expenses	1,537		992		545		54.9	%
Total Net Direct Expenses	$	120,495	$	97,217	$	23,278	23.9	%

Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$19.6~~$7.9 million, or ~~61.2%~~21.2%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was primarily driven by higher levels of ~~occupancy from the ongoing recovery at~~Occupancy for our ~~resorts during the three months ended September 30, 2022~~comparable portfolio which resulted in a ~~$2.7~~$2.0 million increase in travel agent and tour operator commissions expenses, a ~~$2.1 million increase in advertising expenses, and a $1.5~~$1.3 million increase in credit card ~~commissions. In addition, we had~~commissions, and a ~~$3.0~~$0.8 million increase in advertising expenses. We also experienced a $1.6 million increase in corporate personnel costs and a $0.8 million increase in ~~professional fees. The increase in commissions~~insurance expenses ~~includes an additional $2.5 million that was~~as a result of a change in billing methodology of an OTA, which requires Playa to present the commissions on a gross basis under U.S. GAAP. We also incurred $8.9 million of estimated clean up and repair expenses related to Hurricane Fiona in the third quarter of 2022 which are not expected to be offset by property damagehigher insurance ~~proceeds.~~premiums.

Depreciation and Amortization Expense

Our depreciation and amortization expense for the three months ended ~~September 30, 2022~~March 31, 2023 decreased ~~$0.4~~$0.3 million, or ~~2.1%~~1.6%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022 as we did not add or dispose of significant balances of property and equipment in either period.

Interest Expense

Our interest expense for the three months ended ~~September 30, 2022 decreased $1.2~~March 31, 2023 increased $20.5 million, or ~~6.4%~~223.6%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The ~~decrease~~increase in interest expense was driven primarily by a ~~$1.8~~$17.5 million ~~reduction in the interest expense on our Senior Secured Credit Facility due to the effect of our interest rate swaps, partially offset by a $0.5 million decreased benefit over the period~~increase related to ~~the~~an unfavorable change in fair value of our interest rate ~~swaps.~~swaps and a $6.8 million increase from our $1.1 billion term loan issued in the December 2022 debt refinancing (the “2022 Term Loan”), which incurs interest based on SOFR plus a margin of 4.25%. These increases were partially offset by a $4.7 million decrease in interest expense due to the repayment of the entire outstanding balance of our former additional senior secured credit facility (the “Additional Credit Facility”) and our former property loan agreement (the “Property Loan”) in December 2022 in connection with the December 2022 debt refinancing.

Cash interest paid was ~~$18.1~~$21.4 million for the three months ended ~~September 30, 2022,~~March 31, 2023, representing a ~~$1.7~~$3.2 million, or ~~8.6% decrease~~17.5% increase as compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The ~~decrease~~increase in cash interest paid was primarily driven by a ~~$1.8~~$6.6 million ~~reduction~~increase from our 2022 Term Loan. This increase was partially offset by a $3.9 million decrease in ~~the~~cash interest paid ~~on our Senior Secured Credit Facility~~ due to the ~~effect~~repayment of the entire outstanding balance of our ~~interest rate swaps, as interest rates moved closer to~~Additional Credit Facility and Property Loan in connection with our ~~1.0% LIBOR floor during the three months ended September 30, 2022.~~December 2022 debt refinancing.

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Income Tax Provision

For the three months ended ~~September 30, 2022,~~March 31, 2023, our income tax provision was ~~$0.3~~$4.8 million, compared to a ~~$1.4~~$1.6 million income tax provision for the three months ended ~~September 30, 2021.~~March 31, 2022. The ~~decrease in our income tax provision~~increase of ~~$1.1~~$3.2 million was primarily driven ~~by:~~

•by a ~~$1.4~~$0.5 million ~~decreased~~increased tax provision associated with ~~lower~~higher pre-tax book income from our taxpaying entities ~~primarily driven by valuation allowance releases associated with current year earnings; and~~

•~~a $0.8 million decreased tax provision associated with foreign exchange rate fluctuations.~~

~~These decreases were partially offset by:~~

•~~a $0.7 million decreased tax benefit due to prior year adjustments; and~~

•~~a $0.6 million decreased tax benefit related to valuation allowances recognized for our Jamaica and Mexico entities.~~

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~~Results of Operations~~

~~Nine Months Ended September 30, 2022 and 2021~~

~~The following table summarizes our results of operations on a consolidated basis for the nine months ended September 30, 2022 and 2021~~ ~~($ in thousands)~~:

Nine Months Ended September 30, Increase / Decrease
2022 2021 Change % Change
Revenue
Package $ 535,917 $ 293,005 $ 242,912 82.9 %
Non-package 99,492 60,808 38,684 63.6 %
Management fees 3,186 1,469 1,717 116.9 %
Cost reimbursements 6,868 2,554 4,314 168.9 %
Total revenue 645,463 357,836 287,627 80.4 %
Direct and selling, general and administrative expenses
Direct 343,298 230,543 112,755 48.9 %
Selling, general and administrative 130,403 85,273 45,130 52.9 %
Depreciation and amortization 58,630 60,827 (2,197) (3.6) %
Reimbursed costs 6,868 2,554 4,314 168.9 %
Impairment loss — 24,011 (24,011) (100.0) %
Loss on sale of assets 11 644 (633) (98.3) %
Direct and selling, general and administrative expenses 539,210 403,852 135,358 33.5 %
Operating income (loss) 106,253 (46,016) 152,269 330.9 %
Interest expense (39,892) (56,164) 16,272 29.0 %
Other income (expense) 7,850 (747) 8,597 1,150.9 %
Net income (loss) before tax 74,211 (102,927) 177,138 172.1 %
Income tax (provision) benefit (3,168) 13,043 (16,211) (124.3) %
Net income (loss) $ 71,043 $ (89,884) $ 160,927 179.0 %

Our comparable portfolio for the nine months ended September 30, 2022 excludes the Dreams Puerto Aventuras, which was sold in February 2021, Capri Resort, which was sold in June 2021, and Hilton La Romana All-Inclusive Resort and Hyatt Ziva and Hyatt Zilara Cap Cana which were closed the last twelve days of the third quarter 2022 to expedite necessary clean up and repair work as a result of Hurricane Fiona.

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~~Total Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2022 2021 Change % Change
Occupancy 73.7 % 46.8 % 26.9 pts 57.5 %
Net Package ADR $ 363.88 $ 302.83 $ 61.05 20.2 %
Net Package RevPAR $ 268.35 $ 141.66 $ 126.69 89.4 %
($ in thousands)
Net Package Revenue $ 521,897 $ 284,414 $ 237,483 83.5 %
Net Non-package Revenue 98,577 60,229 38,348 63.7 %
Management Fee Revenue 3,186 1,469 1,717 116.9 %
Total Net Revenue 623,660 346,112 277,548 80.2 %
Adjusted EBITDA $ 183,521 $ 52,180 $ 131,341 251.7 %
Adjusted EBITDA Margin 29.4 % 15.1 % 14.3 pts 94.7 %

~~Comparable Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2022 2021 Change % Change
Occupancy 74.6 % 48.8 % 25.8 pts 52.9 %
Net Package ADR $ 354.99 $ 294.95 $ 60.04 20.4 %
Net Package RevPAR $ 264.79 $ 144.02 $ 120.77 83.9 %
($ in thousands)
Net Package Revenue $ 404,816 $ 220,182 $ 184,634 83.9 %
Net Non-package Revenue 76,651 47,290 29,361 62.1 %
Management Fee Revenue 3,186 1,469 1,717 116.9 %
Total Net Revenue 484,653 268,941 215,712 80.2 %
Adjusted EBITDA $ 131,263 $ 32,244 $ 99,019 307.1 %
Adjusted EBITDA Margin 27.1 % 12.0 % 15.1 pts 125.8 %

~~Total Revenue and Total Net Revenue~~

~~Our Total Revenue for the nine months ended September 30, 2022 increased $287.6 million, or 80.4%, compared to the nine months ended September 30, 2021.~~

~~Our Total Net Revenue for the nine months ended September 30, 2022 increased $277.5 million, or 80.2%, compared to the nine months ended September 30, 2021. The increase was due to the following:~~

•a 20.2% increase in Net Package ADR as a result of a higher MICE group contribution to our guest mix, the ongoing leisure travel recovery, and pricing discipline to coincide with investments in guest satisfaction at our resorts;

•~~continued strength in Net Non-package Revenue driven by improvements in our product offering across our resorts; and~~

•an incremental $4.52 favorable Net Package ADR impact as a result of the change in billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP. Excluding this adjustment, Net Package ADR would have been $359.37.

Compared to the same period in 2019, for our current comparable portfolio of resorts, which excludes the Hilton La Romana All-Inclusive Resort, Hyatt Ziva and Hyatt Zilara Cap Cana, Dreams Puerto Aventuras, Capri Resort, Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, Comparable Net Package ADR for the nine months ended September 30, 2022 increased by $75.85, or 27.2%. Excluding the aforementioned adjustment for the OTA billing methodology, the increase would have been $64.87, or 23.2%.

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~~The following table shows a reconciliation of comparable Net Package Revenue, Net Non-package Revenue and Management Fee Revenue to total revenue for the nine months ended September 30, 2022 and 2021~~ ~~($ in thousands):~~

Nine Months Ended September 30, Increase/Decrease
2022 2021 Change % Change
Net Package Revenue
Comparable Net Package Revenue $ 404,816 $ 220,182 $ 184,634 83.9 %
Non-comparable Net Package Revenue 117,081 64,232 52,849 82.3 %
Net Package Revenue 521,897 284,414 237,483 83.5 %
Net Non-package Revenue
Comparable Net Non-package Revenue 76,651 47,290 29,361 62.1 %
Non-comparable Net Non-package Revenue 21,926 12,939 8,987 69.5 %
Net Non-package Revenue 98,577 60,229 38,348 63.7 %
Management Fee Revenue
Comparable Management Fee Revenue 3,186 1,469 1,717 116.9 %
Non-comparable Management Fee Revenue — — — — %
Management Fee Revenue 3,186 1,469 1,717 116.9 %
Total Net Revenue
Comparable Total Net Revenue 484,653 268,941 215,712 80.2 %
Non-comparable Total Net Revenue 139,007 77,171 61,836 80.1 %
Total Net Revenue 623,660 346,112 277,548 80.2 %
Compulsory tips 14,935 9,170 5,765 62.9 %
Cost Reimbursements 6,868 2,554 4,314 168.9 %
Total revenue $ 645,463 $ 357,836 $ 287,627 80.4 %

~~Direct Expenses~~

~~The following table shows a reconciliation of our direct expenses to Net Direct Expenses for the nine months ended September 30, 2022 and 2021~~ ~~($ in thousands)~~:

Nine Months Ended September 30, Increase/Decrease
2022 2021 Change % Change
Direct expenses $ 343,298 $ 230,543 $ 112,755 48.9 %
Less: compulsory tips 14,935 9,170 5,765 62.9 %
Net Direct Expenses $ 328,363 $ 221,373 $ 106,990 48.3 %

Our direct expenses include resort expenses, such as food and beverage, salaries and wages, utilities and other ongoing operational expenses. Our Net Direct Expenses were $328.4 million, or 52.7%, of Total Net Revenue for the nine months ended September 30, 2022 and $221.4 million, or 64.0%, of Total Net Revenue for the nine months ended September 30, 2021. Direct operating expenses fluctuate based on various factors, including changes in occupancy, labor costs, utilities, repair and maintenance costs and license and property taxes. Management fees and franchise fees, which are computed as a percentage of revenue, increase or decrease as a result of changes in revenue.

Net Direct Expenses for the nine months ended September 30, 2022 increased $107.0 million, or 48.3%, compared to the nine months ended September 30, 2021. As a percentage of Owned Net Revenue, Net Direct Expenses decreased to 53.1%, compared to 64.4% for the nine months ended September 30, 2021. Net Direct Expenses at our comparable properties increased $82.8 million, or 47.7%, compared to the nine months ended September 30, 2021 primarily due to the following:

•~~Increased operating expenses associated with higher occupancy levels~~ as a result of the corresponding recovery in our operations compared to the ~~nine~~three months ended ~~September 30, 2021;~~

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•~~An increase in food~~March 31, 2022, during which time our results were negatively affected by the Omicron variant and ~~beverage expenses on a per guest basis, driven by our initiative to deliver an exceptional customer experience across our portfolio and higher food and beverage prices; and~~

•~~An increase in utilities expenses driven by a global rise in energy prices.~~

~~Net Direct Expenses consists of the following~~ ~~($ in thousands)~~:

~~Total Portfolio~~
Nine Months Ended September 30, Increase/Decrease
2022 2021 Change % Change
Food and beverages $ 78,711 $ 46,594 $ 32,117 68.9 %
Guest costs 22,102 17,590 4,512 25.7 %
Salaries and wages 114,684 84,477 30,207 35.8 %
Repairs and maintenance 17,134 11,468 5,666 49.4 %
Utilities and sewage 35,178 25,723 9,455 36.8 %
Licenses and property taxes 1,853 2,218 (365) (16.5) %
Incentive and management fees 2,763 806 1,957 242.8 %
Franchise / license fees 29,886 17,513 12,373 70.7 %
Transportation and travel expenses 4,103 3,052 1,051 34.4 %
Laundry and cleaning expenses 4,647 3,313 1,334 40.3 %
Property and equipment rental expense 4,071 1,328 2,743 206.6 %
Entertainment expenses and decoration 8,102 4,447 3,655 82.2 %
Office supplies 1,014 703 311 44.2 %
Other operational expenses 4,115 2,141 1,974 92.2 %
Total Net Direct Expenses $ 328,363 $ 221,373 $ 106,990 48.3 %

~~Comparable Portfolio~~

Nine Months Ended September 30, Increase/Decrease
2022 2021 Change % Change
Food and beverages $ 59,902 $ 35,008 $ 24,894 71.1 %
Guest costs 16,036 12,976 3,060 23.6 %
Salaries and wages 94,124 68,930 25,194 36.6 %
Repairs and maintenance 14,682 9,757 4,925 50.5 %
Utilities and sewage 27,133 19,598 7,535 38.4 %
Licenses and property taxes 1,275 1,742 (467) (26.8) %
Incentive and management fees 2,763 764 1,999 261.6 %
Franchise / license fees 22,291 13,877 8,414 60.6 %
Transportation and travel expenses 2,315 1,825 490 26.8 %
Laundry and cleaning expenses 3,545 2,567 978 38.1 %
Property and equipment rental expense 1,961 656 1,305 198.9 %
Entertainment expenses and decoration 6,923 3,809 3,114 81.8 %
Office supplies 781 554 227 41.0 %
Other operational expenses 2,803 1,631 1,172 71.9 %
Total Net Direct Expenses $ 256,534 $ 173,694 $ 82,840 47.7 %

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~~Selling, General and Administrative Expenses~~

Our selling, general and administrative expenses for the nine months ended September 30, 2022 increased $45.1 million, or 52.9%, compared to the nine months ended September 30, 2021. The higher levels of occupancy from the ongoing recovery at our resorts during the nine months ended September 30, 2022 resulted in a $6.3 million increase in advertising expenses, a $13.0 million increase in commissions expenses, and a $5.1 million increase in credit card commissions. In addition, we had a $1.9 million increase in insurance expenses driven by higher premiums for the current year, a $7.4 million increase in corporate personnel costs, and a $2.2 million increase in professional fees. The increase in commissions expense includes an additional $8.6 million that was a result of a change in billing methodology of an OTA, which requires Playa to present the commissions on a gross basis under U.S. GAAP. We also incurred $8.9 million of estimated clean up and repair expensesCOVID-19 related ~~to Hurricane Fiona in the third quarter of 2022 which are not expected to be offset by property damage insurance proceeds.~~

~~Depreciation and Amortization Expense~~

Our depreciation and amortization expense for the nine months ended September 30, 2022 decreased $2.2 million, or 3.6%, compared to the nine months ended September 30, 2021, which was primarily due to a $0.9 million decrease from the sale of the Capri Resort in June 2021.

~~Impairment Loss~~

Our impairment loss for the nine months ended September 30, 2022 decreased $24.0 million, or 100.0%, compared to the nine months ended September 30, 2021. The decrease was driven by $24.0 million of property and equipment impairment recognized upon classification of the Capri Resort as held for sale in March 2021, as the carrying value exceeded the sale price of the assets under the sales agreement. We had no impairment loss for the nine months ended September 30, 2022.

~~Interest Expense~~

Our interest expense for the nine months ended September 30, 2022 decreased $16.3 million, or 29.0%, compared to the nine months ended September 30, 2021. The decrease in interest expense was driven primarily by a $12.3 million benefit over the period related to the change in fair value of our interest rate swaps, which was a result of the increase in forecasted interest rates, and a $4.0 million reduction in the interest paid on our Senior Secured Credit Facility due to the effect of our interest rate swaps, as interest rates moved closer to our 1.0% LIBOR floor during the nine months ended September 30, 2022.

Cash interest paid was $55.0 million for the nine months ended September 30, 2022, representing a $3.4 million, or 5.9% decrease as compared to the nine months ended September 30, 2021. The decrease in cash interest paid was primarily driven by a $3.9 million reduction in the interest paid on our Senior Secured Credit Facility due to the effect of our interest rate swaps, as interest rates moved closer to our 1.0% LIBOR floor during the nine months ended September 30, 2022. This was partially offset by an $0.8 million increase in cash interest paid on our Property Loan due to the timing of interest payments during the nine months ended September 30, 2022.

~~Income Tax Provision~~

For the nine months ended September 30, 2022, our income tax provision was $3.2 million, compared to a $13.0 million income tax benefit for the nine months ended September 30, 2021. The increase in our income tax provision of $16.2 million was primarily driven by:

•~~a $12.1 million increased tax provision due to higher pre-tax book income from our taxpaying entities;~~

•~~a $5.5 million decreased tax benefit related to the sale of the Dreams Puerto Aventuras and Capri Resort in 2021; and~~

•travel restrictions, a $1.6 million increased tax provision associated with unfavorable foreign exchange rate ~~fluctuations.~~

~~These increases were partially offset by:~~

��fluctuations, primarily at our Mexico entities, and a ~~$3.1~~$0.4 million ~~decreased~~increased tax provision ~~related to valuation allowances recognized~~associated with 2022 tax true-ups recorded for our ~~Jamaica and Mexico entities.~~Dominican Republic entities based on the expected APA tax rates.

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Key Indicators of Financial and Operating Performance

We use a variety of financial and other information to monitor the financial and operating performance of our business. Some of this is financial information prepared in accordance with U.S. GAAP, while other information, though financial in nature, is not prepared in accordance with U.S. GAAP. For reconciliations of non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measure, see “Non-U.S. GAAP Financial Measures.” Our management also uses other information that is not financial in nature, including statistical information and comparative data that are commonly used within the lodging industry to evaluate the financial and operating performance of our portfolio. Our management uses this information to measure the performance of our segments and consolidated portfolio. We use this information for planning and monitoring our business, as well as in determining management and employee compensation. These key indicators include:

•Net Package Revenue

•Net Non-package Revenue

•Owned Net Revenue

•Management Fee Revenue

•Total Net Revenue

•Occupancy

•Net Package ADR

•Net Package RevPAR

•Net Direct Expenses

•EBITDA

•Adjusted EBITDA

•Adjusted EBITDA Margin

•Owned Resort EBITDA

•Owned Resort EBITDA Margin

•Comparable Non-U.S. GAAP Measures

Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Management Fee Revenue, Cost Reimbursements, Total Net Revenue and Net Direct Expenses

“Net Package Revenue” is derived from the sale of all-inclusive packages, which include room accommodations and premium room upgrades, food and beverage services, and entertainment activities, net of compulsory tips paid to employees. Government mandated compulsory tips in the Dominican Republic are not included in this adjustment, as they are already excluded from revenue. Revenue is recognized, net of discounts and rebates, when the rooms are occupied and/or the relevant services have been rendered. Advance deposits received from guests are deferred and included in trade and other payables until the rooms are occupied and/or the relevant services have been rendered, at which point the revenue is recognized.

“Net Non-package Revenue” ~~represents all other revenues earned from the operations of our resorts, other than Net Package Revenue,~~includes revenue associated with premium services and amenities that are not included in net package revenue, such as dining experiences, wines and spirits, and spa packages, net of compulsory tips paid to employees. Government mandated compulsory tips in the Dominican Republic are not included in this adjustment, as they are already excluded from revenue. Net Non-package Revenue ~~includes~~is recognized after the completion of the sale when the product or service is transferred to the customer. Food and beverage revenue associated with guests' purchases of upgrades, premium services and amenities, such as premium rooms, dining experiences, wines and spirits and spa packages, which are not included in the all-inclusive package. Revenue not included in a ~~guest’s~~guest's all-inclusive package is recognized when the goods are consumed.

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“Owned Net Revenue” represents Net Package Revenue and Net Non-package Revenue. Owned Net Revenue represents a key indicator to assess the overall performance of our business and analyze trends, such as consumer demand, brand preference and competition. In analyzing our Owned Net Revenues, our management differentiates between Net Package Revenue and Net Non-package Revenue. Guests at our resorts purchase packages at stated rates, which include room accommodations, food and beverage services and entertainment activities, in contrast to other lodging business models, which typically only include the room accommodations in the stated rate. The amenities at all-inclusive resorts typically include a variety of buffet and á la carte restaurants, bars, activities, and shows and entertainment throughout the day.

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“Management Fee Revenue” is derived from fees earned for managing resorts owned by third-parties. The fees earned are typically composed of a base fee, which is computed as a percentage of resort revenue, and an incentive fee, which is computed as a percentage of resort profitability. Management Fee Revenue ~~had~~was a minor ~~contribution~~contributor to our operating results for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ but we expect Management Fee Revenue to be a more relevant indicator to assess the overall performance of our business in the future asto the extent we ~~enter~~are successful in entering into more management contracts.

“Total Net Revenue” represents Net Package Revenue, Net Non-package Revenue and Management Fee Revenue. “Cost Reimbursements” is excluded from Total Net Revenue as it is not considered a key indicator of financial and operating performance. Cost Reimbursements is derived from the reimbursement of certain costs incurred by Playa on behalf of resorts managed by Playa and owned by third parties. This revenue is fully offset by reimbursable costs and has no net impact on operating income ~~(loss)~~ or net ~~(loss)~~ income.

“Net Direct Expenses” represents direct expenses, net of compulsory tips paid to employees.

Occupancy

“Occupancy” represents the total number of rooms sold for a period divided by the total number of rooms available during such period. The total number of rooms available excludes any rooms considered “Out of Order” due to renovation or a temporary problem rendering them inadequate for occupancy for an extended period of time. Occupancy is a useful measure of the utilization of a resort’s total available capacity and can be used to gauge demand at a specific resort or group of properties during a given period. Occupancy levels also enable us to optimize Net Package ADR (as defined below) by increasing or decreasing the stated rate for our all-inclusive packages as demand for a resort increases or decreases.

Net Package ADR

“Net Package ADR” represents total Net Package Revenue for a period divided by the total number of rooms sold during such period. Net Package ADR trends and patterns provide useful information concerning the pricing environment and the nature of the guest base of our portfolio or comparable portfolio, as applicable. Net Package ADR is a commonly used performance measure in the all-inclusive segment of the lodging industry and is commonly used to assess the stated rates that guests are willing to pay through various distribution channels.

Net Package RevPAR

“Net Package RevPAR” is the product of Net Package ADR and the average daily occupancy percentage. Net Package RevPAR does not reflect the impact of non-package revenue. Although Net Package RevPAR does not include this additional revenue, it generally is considered the key performance ~~measure~~statistic in the all-inclusive segment of the lodging industry to identify trend information with respect to net room revenue produced by our portfolio or comparable portfolio, as applicable, and to evaluate operating performance on a consolidated basis or a regional basis, as applicable.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Owned Resort EBITDA, and Owned Resort EBITDA Margin

We define EBITDA, a non-U.S. GAAP financial measure, as net income or loss, determined in accordance with U.S. GAAP, for the period presented before interest expense, income tax and depreciation and amortization expense. EBITDA and Adjusted EBITDA (as defined below) include corporate expenses, which are overhead costs that are essential to support the operation of the Company, including the operations and development of our resorts. We define Adjusted EBITDA, a non-U.S. GAAP financial measure, as EBITDA further adjusted to exclude the following items:

•Other miscellaneous non-operating income or expense

•Pre-opening expense

•~~Transaction expenses~~

•~~Severance expense~~Share-based compensation

•Other tax expense

•~~Gain on~~Transaction expenses

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•Severance expense for employee terminations resulting from non-recurring or unusual events, such as the departure of an executive officer or the disposition of a resort

•Gains from property damage insurance proceeds (i.e., property damage insurance proceeds in excess of repair and clean up costs incurred)

•~~Share-based compensation~~Repairs from hurricanes and tropical storms (i.e., significant repair and clean up costs incurred which are not offset by property damage insurance proceeds)

•Loss on extinguishment of debt

•Other items which may include, but are not limited to the following: contract termination fees; gains or losses from legal settlements; ~~repairs from hurricanes and tropical storms~~ and impairment losses.

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We include the non-service cost components of net periodic pension cost or benefit recorded within other income or expense in the Condensed Consolidated Statements of Operations in ~~calculating~~our calculation of Adjusted EBITDA as they are considered part of our ongoing resort operations.

“Adjusted EBITDA Margin” represents Adjusted EBITDA as a percentage of Total Net Revenue.

“Owned Resort EBITDA” represents Adjusted EBITDA before corporate expenses and Management Fee Revenue.

“Owned Resort EBITDA Margin” represents Owned Resort EBITDA as a percentage of Owned Net Revenue.

Usefulness and Limitation of Non-U.S. GAAP Measures

We believe that each of Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Total Net Revenue, Net Package ADR, Net Package RevPAR and Net Direct Expenses are all useful to investors as they more accurately reflect our operating results by excluding compulsory tips. These tips have a margin of zero and do not represent our operating results.

We also believe that Adjusted EBITDA is useful to investors for two principal reasons. First, we believe Adjusted EBITDA assists investors in comparing our performance over various reporting periods on a consistent basis by removing from our operating results the impact of items that do not reflect our core operating performance. For example, changes in foreign exchange rates (which are the principal driver of changes in other income or expense), and expenses related to capital raising, strategic initiatives and other corporate initiatives, such as expansion into new markets (which are the principal drivers of changes in transaction expenses), are not indicative of the operating performance of our resorts. The other adjustments included in our definition of Adjusted EBITDA relate to items that occur infrequently and therefore would obstruct the comparability of our operating results over reporting periods. For example, revenue from insurance policies, other than business interruption insurance policies, is infrequent in nature, and we believe excluding these expense and revenue items permits investors to better evaluate the core operating performance of our resorts over time. We believe Adjusted EBITDA Margin provides our investors a useful measurement of operating profitability for the same reasons we find Adjusted EBITDA useful.

The second principal reason that we believe Adjusted EBITDA is useful to investors is that it is considered a key performance indicator by our board of directors (our “Board”) and management. In addition, the compensation committee of our Board determines a portion of the annual variable compensation for certain members of our management, including our executive officers, based, in part, on consolidated Adjusted EBITDA. We believe that Adjusted EBITDA is useful to investors because it provides investors with information utilized by our Board and management to assess our performance and may (subject to the limitations described below) enable investors to compare the performance of our portfolio to our competitors.

We believe that Owned Resort EBITDA and Owned Resort EBITDA Margin are useful to investors as they allow investors to measure resort-level performance and profitability by excluding expenses not directly tied to our resorts, such as corporate expenses, and excluding ancillary revenues not derived from our resorts, such as management fee revenue. We believe Owned Resort EBITDA is also helpful to investors that use it in estimating the value of our resort portfolio. Management uses these measures to monitor property-level performance and profitability.

Our non-U.S. GAAP financial measures are not substitutes for revenue, net income or any other measure determined in accordance with U.S. GAAP. There are limitations to the utility of non-U.S. GAAP financial measures, such as Adjusted EBITDA. For example, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-U.S. GAAP financial measures that other companies publish to compare the performance of those companies to our performance. Because of these limitations, our non-U.S. GAAP financial measures should not be considered as a measure of the income or loss generated by our business or discretionary cash available for investment in our business, and investors should carefully consider our U.S. GAAP results presented.

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For a reconciliation of EBITDA, Adjusted EBITDA and Owned Resort EBITDA to net income ~~or loss~~(loss) as computed under U.S. GAAP, see “Non-U.S. GAAP Financial Measures.”

Comparable Non-U.S. GAAP Measures

We believe that presenting Adjusted EBITDA, Owned Resort EBITDA, Total Net Revenue, Net Package Revenue, Net Non-package Revenue and Net Direct Expenses on a comparable basis is useful to investors because these measures include only the results of resorts owned and in operation for the entirety of the periods presented and thereby eliminate disparities in results due to the acquisition or disposition of resorts or the impact of resort closures or re-openings in connection with redevelopment or renovation projects. As a result, we believe these measures provide more consistent metrics for comparing the performance of our operating resorts. We calculate ~~comparable~~Comparable Adjusted EBITDA, ~~comparable~~Comparable Owned Resort EBITDA, ~~comparable~~Comparable Total Net Revenue,

~~Table of Contents~~

~~comparable~~ Comparable Net Package Revenue and ~~comparable~~Comparable Net Non-package Revenue as the total amount of each respective measure less amounts attributable to non-comparable resorts, by which we mean resorts that were not owned or in operation during some or all of the relevant reporting period.

Our comparable portfolio for the three months ended ~~September 30, 2022~~March 31, 2023 excludes the ~~Hilton La Romana All-Inclusive Resort and Hyatt Ziva and Hyatt Zilara Cap Cana,~~Jewel Palm Beach, which ~~were~~was closed ~~the last twelve days~~for a majority of the ~~third~~first quarter of ~~2022~~2023 as we transitioned the management of the resort to ~~expedite necessary clean up and repair work as~~us from a result of Hurricane Fiona. Our comparable portfolio for the nine months ended September 30, 2022 exclude the Hilton La Romana All-Inclusive Resort and Hyatt Ziva and Hyatt Zilara Cap Cana as well as the Dreams Puerto Aventuras, which was sold in February 2021 and Capri Resort, which was sold in June 2021.third-party.

A reconciliation of net income as computed under U.S. GAAP to ~~comparable~~Comparable Adjusted ~~EBITDA and comparable Owned Resort~~ EBITDA is presented in “Non-U.S. GAAP Financial Measures,” below. For a reconciliation of Comparable Net Package Revenue, Comparable Net Non-package Revenue, Comparable Management Fee Revenue and Comparable Total Net Revenue to total revenue as computed under U.S. GAAP, see “Results of Operations.”

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Segment Results

Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~

We evaluate our business segment operating performance using segment Owned Net Revenue and segment Owned Resort EBITDA. The following tables summarize segment Owned Net Revenue and segment Owned Resort EBITDA for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ ($ in thousands):


		Three Months Ended September 30,				Increase / Decrease					Three Months Ended March 31,				Increase / Decrease
		2022		2021		Change		% Change			2023		2022		Change		% Change
Owned Net Revenue	Owned Net Revenue									Owned Net Revenue
Yucatán Peninsula	Yucatán Peninsula	$	65,594	$	51,209	$	14,385	28.1	%	Yucatán Peninsula	$	88,748	$	68,629	$	20,119	29.3	%
Pacific Coast	Pacific Coast	30,301		21,982		8,319		37.8	%	Pacific Coast	40,515		29,104		11,411		39.2	%
Dominican Republic	Dominican Republic	55,190		42,794		12,396		29.0	%	Dominican Republic	68,769		69,664		(895)		(1.3)	%
Jamaica	Jamaica	43,759		29,502		14,257		48.3	%	Jamaica	62,977		44,264		18,713		42.3	%
Segment Owned Net Revenue	Segment Owned Net Revenue	194,844		145,487		49,357		33.9	%	Segment Owned Net Revenue	261,009		211,661		49,348		23.3	%
Other	Other	716		232		484		208.6	%	Other	564		211		353		167.3	%
The Playa Collection										The Playa Collection	726		296		430		145.3	%
Management fees	Management fees	786		673		113		16.8	%	Management fees	1,929		1,057		872		82.5	%
Total Net Revenue	Total Net Revenue	$	196,346	$	146,392	$	49,954	34.1	%	Total Net Revenue	$	264,228	$	213,225	$	51,003	23.9	%

Three Months Ended September 30, Increase / Decrease
2022 2021 Change % Change
Owned Resort EBITDA
Yucatán Peninsula $ 21,617 $ 17,518 $ 4,099 23.4 %
Pacific Coast 10,512 6,429 4,083 63.5 %
Dominican Republic 14,014 11,267 2,747 24.4 %
Jamaica 11,267 5,632 5,635 100.1 %
Segment Owned Resort EBITDA 57,410 40,846 16,564 40.6 %
Other corporate (1)
(13,322) (9,749) (3,573) (36.6) %
Management fees 786 673 113 16.8 %
Total Adjusted EBITDA $ 44,874 $ 31,770 $ 13,104 41.2 %

~~________~~

~~(1)~~ ~~Other corporate includes $0.6 million of revenue generated by The Playa Collection for the three months ended September 30, 2022.~~


	Three Months Ended March 31,				Increase / Decrease
	2023		2022		Change		% Change
Owned Resort EBITDA
Yucatán Peninsula	$	37,936	$	29,458	$	8,478	28.8	%
Pacific Coast	17,523		12,544		4,979		39.7	%
Dominican Republic	26,849		28,377		(1,528)		(5.4)	%
Jamaica	27,081		17,158		9,923		57.8	%
Segment Owned Resort EBITDA	109,389		87,537		21,852		25.0	%
Other corporate	(13,555)		(11,947)		(1,608)		(13.5)	%
The Playa Collection	726		296		430		145.3	%
Management fees	1,929		1,057		872		82.5	%
Total Adjusted EBITDA	$	98,489	$	76,943	$	21,546	28.0	%

For a reconciliation of segment Owned Net Revenue and segment Owned Resort EBITDA to total revenue and net income, respectively, each as computed under U.S. GAAP, see Note 15 to our Condensed Consolidated Financial Statements.

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Yucatán Peninsula

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Yucatán Peninsula segment for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ for the total segment portfolio:


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2022			2021			Change			% Change			2023			2022			Change			% Change
Occupancy	Occupancy	77.0		%	64.7		%	12.3		pts	19.0	%	Occupancy	83.8		%	71.9		%	11.9		pts	16.6	%
Net Package ADR	Net Package ADR	$	376.40		$	336.35		$	40.05		11.9	%	Net Package ADR	$	494.08		$	436.51		$	57.57		13.2	%
Net Package RevPAR	Net Package RevPAR	$	289.87		$	217.75		$	72.12		33.1	%	Net Package RevPAR	$	414.21		$	313.83		$	100.38		32.0	%
		($ in thousands)												($ in thousands)
Net Package Revenue(1)	Net Package Revenue(1)	$	56,696		$	42,589		$	14,107		33.1	%	Net Package Revenue(1)	$	79,254		$	60,048		$	19,206		32.0	%
Net Non-package Revenue(1)	Net Non-package Revenue(1)	8,898			8,620			278			3.2	%	Net Non-package Revenue(1)	9,494			8,581			913			10.6	%
Owned Net Revenue	Owned Net Revenue	65,594			51,209			14,385			28.1	%	Owned Net Revenue	88,748			68,629			20,119			29.3	%
Owned Resort EBITDA	Owned Resort EBITDA	$	21,617		$	17,518		$	4,099		23.4	%	Owned Resort EBITDA	$	37,936		$	29,458		$	8,478		28.8	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	33.0		%	34.2		%	(1.2)		pts	(3.5)	%	Owned Resort EBITDA Margin	42.7		%	42.9		%	(0.2)		pts	(0.5)	%

________

(1)For the three months ended March 31, 2022, includes $1.0 million of on-property room upgrade revenue that was reclassified from net non-package revenue to net package revenue to conform with current period presentation.

Segment Owned Net Revenue. Our Owned Net Revenue for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$14.4~~$20.1 million, or ~~28.1%~~29.3%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was due to the following:

•an increase in Occupancy ~~rate increasing 12.3~~of 11.9 percentage points compared to the three months ended ~~September 30, 2021,~~March 31, 2022, driven by an increase in demand from ~~guests~~Canadian, Mexican and United States sourced ~~across all our major geographies;~~guests;

•~~an 11.9%~~a 13.2% increase in Net Package ADR as a result of ~~the ongoing leisure travel recovery and pricing discipline~~a higher MICE group contribution to ~~coincide with investments in~~our guest ~~satisfaction at our resorts;~~

•~~continued strength in Net Non-package Revenue driven by improvements in our product offering across our resorts;~~mix; and

•an ~~incremental $9.55 favorable~~increase in Net ~~Package ADR impact~~Non-package Revenue of $0.9 million, or 10.6%, compared to the three months ended ~~September 30, 2021~~March 31, 2022. Net Non-package Revenue includes a decrease of $0.7 million due to the expiration of our Extended Stay Program in late 2022 as ~~a result of the change~~COVID-19-related travel restrictions were no longer in ~~billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP.~~effect. Excluding this ~~adjustment,~~impact, Net ~~Package ADR would have been $366.85.~~

~~Compared~~Non-package Revenue per sold room increased 2.7% compared to ~~the same period in 2019, for our current comparable portfolio of resorts in the Yucatán, which excludes the Dreams Puerto Aventuras and Capri Resort, Comparable Net Package ADR for~~ the three months ended ~~September 30, 2022 increased by $133.33, or 54.8%. Excluding the aforementioned adjustment for the OTA billing methodology, the increase would have been $107.80, or 44.3%.~~March 31, 2022.

Segment Owned Resort EBITDA. Our Owned Resort EBITDA for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$4.1~~$8.5 million, or ~~23.4%~~28.8%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was a result of leveraging a majority of our direct expenses given the ~~on-going revenue recovery, particularly the strong~~ Net Package ADR ~~increases and cost control practices~~growth, which was partially offset ~~occupancy-related~~by Occupancy-related increases in resort operating expenses, ~~including higher food costs,~~union-negotiated wage and benefit increases, and a negative impact from the appreciation of the Mexican Peso compared to the three months ended ~~September 30, 2021.~~March 31, 2022.

~~Compared to the same period in 2019, for our current comparable portfolio of resorts in the Yucatán, which excludes the Dreams Puerto Aventuras and Capri Resort, Comparable~~ •Owned Resort EBITDA Margin for the three months ended ~~September 30, 2022 increased~~March 31, 2023 was 42.7%, a decrease of 0.2 percentage points compared to the three months ended March 31, 2022. Owned Resort EBITDA Margin was negatively impacted by ~~$9.1 million, or 73.0%.~~370 basis points due to the appreciation of the Mexican Peso compared to the three months ended March 31, 2022. Excluding the impact of foreign exchange rate appreciation, Owned Resort EBITDA Margin would have been 46.4%, an increase of 3.5 percentage points compared to the three months ended March 31, 2022.

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Pacific Coast

The following table sets forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Pacific Coast segment for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ for the total segment portfolio:


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2022			2021			Change			% Change			2023			2022			Change			% Change
Occupancy	Occupancy	72.3		%	60.5		%	11.8		pts	19.5	%	Occupancy	79.3		%	66.6		%	12.7		pts	19.1	%
Net Package ADR	Net Package ADR	$	439.41		$	372.39		$	67.02		18.0	%	Net Package ADR	$	541.73		$	459.90		$	81.83		17.8	%
Net Package RevPAR	Net Package RevPAR	$	317.58		$	225.43		$	92.15		40.9	%	Net Package RevPAR	$	429.80		$	306.41		$	123.39		40.3	%
		($ in thousands)												($ in thousands)
Net Package Revenue(1)	Net Package Revenue(1)	$	27,055		$	19,205		$	7,850		40.9	%	Net Package Revenue(1)	$	35,820		$	25,535		$	10,285		40.3	%
Net Non-package Revenue(1)	Net Non-package Revenue(1)	3,246			2,777			469			16.9	%	Net Non-package Revenue(1)	4,695			3,569			1,126			31.5	%
Owned Net Revenue	Owned Net Revenue	30,301			21,982			8,319			37.8	%	Owned Net Revenue	40,515			29,104			11,411			39.2	%
Owned Resort EBITDA	Owned Resort EBITDA	$	10,512		$	6,429		$	4,083		63.5	%	Owned Resort EBITDA	$	17,523		$	12,544		$	4,979		39.7	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	34.7		%	29.2		%	5.5		pts	18.8	%	Owned Resort EBITDA Margin	43.3		%	43.1		%	0.2		pts	0.5	%

________

(1)For the three months ended March 31, 2022, includes $0.3 million of on-property room upgrade revenue that was reclassified from net non-package revenue to net package revenue to conform with current period presentation.

Segment Owned Net Revenue. Our Owned Net Revenue for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$8.3~~$11.4 million, or ~~37.8%~~39.2%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was due to the following:

•an increase in Occupancy ~~rate increasing 11.8~~of 12.7 percentage points compared to the three months ended ~~September 30, 2021,~~March 31, 2022, driven by an increase in demand from ~~United States~~Mexican and Canadian sourced guests;

•~~an 18.0%~~a 17.8% increase in Net Package ADR as a result of ~~the ongoing leisure travel recovery and pricing discipline~~a higher MICE group contribution to ~~coincide with investments in~~our guest ~~satisfaction at our resorts;~~

•~~continued strength in Net Non-package Revenue driven by improvements in our product offering across our resorts;~~mix; and

•an ~~incremental $8.22 favorable~~increase in Net ~~Package ADR impact~~Non-package Revenue of $1.1 million, or 31.5%, compared to the three months ended ~~September 30, 2021~~March 31, 2022. Net Non-package Revenue includes a decrease of $0.4 million due to the expiration of our Extended Stay Program in late 2022 as ~~a result of the change~~COVID-19-related travel restrictions were no longer in ~~billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP.~~effect. Excluding this ~~adjustment,~~impact, Net ~~Package ADR would have been $431.18.~~

~~Compared~~Non-package Revenue per sold room increased 23.2% compared to ~~the same period in 2019, Net Package ADR for~~ the three months ended ~~September 30, 2022 increased by $203.17, or 86.0%. Excluding the aforementioned adjustment for the OTA billing methodology, the increase would have been $178.44, or 75.5%.~~March 31, 2022.

Segment Owned Resort EBITDA. Our Owned Resort EBITDA for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$4.1~~$5.0 million, or ~~63.5%~~39.7%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was a result of leveraging a majority of our direct expenses given the ~~on-going revenue recovery, particularly the strong~~ Net Package ADR ~~increases and cost control practices~~growth, which was partially offset ~~occupancy-related~~by Occupancy-related increases in resort operating expenses, ~~including higher food costs,~~union-negotiated wage and benefit increases, and a negative impact from the appreciation of the Mexican Peso compared to the three months ended ~~September 30, 2021.~~March 31, 2022.

~~Compared to the same period in 2019,~~ •Owned Resort EBITDA Margin for the three months ended ~~September 30, 2022 increased~~March 31, 2023 was 43.3%, an increase of 0.2 percentage points compared to three months ended March 31, 2022. Owned Resort EBITDA Margin was negatively impacted by ~~$6.0 million, or 133.9%.~~350 basis points due to the appreciation of the Mexican Peso compared to the three months ended March 31, 2022. Excluding the impact of foreign exchange rate appreciation, Owned Resort EBITDA Margin would have been 46.8%, an increase of 3.7 percentage points compared to the three months ended March 31, 2022.

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Dominican Republic

The following table sets forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Dominican Republic segment for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ for the total segment portfolio and comparable segment portfolio:

Total Portfolio


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2022			2021			Change			% Change			2023			2022			Change			% Change
Occupancy	Occupancy	70.7		%	55.4		%	15.3		pts	27.6	%	Occupancy	51.1		%	77.3		%	(26.2)		pts	(33.9)	%
Net Package ADR	Net Package ADR	$	266.96		$	260.61		$	6.35		2.4	%	Net Package ADR	$	490.55		$	330.61		$	159.94		48.4	%
Net Package RevPAR	Net Package RevPAR	$	188.75		$	144.26		$	44.49		30.8	%	Net Package RevPAR	$	250.47		$	255.58		$	(5.11)		(2.0)	%
		($ in thousands)												($ in thousands)
Net Package Revenue(1)	Net Package Revenue(1)	$	45,913		$	35,092		$	10,821		30.8	%	Net Package Revenue(1)	$	59,602		$	60,818		$	(1,216)		(2.0)	%
Net Non-package Revenue(1)	Net Non-package Revenue(1)	9,277			7,702			1,575			20.4	%	Net Non-package Revenue(1)	9,167			8,846			321			3.6	%
Owned Net Revenue	Owned Net Revenue	55,190			42,794			12,396			29.0	%	Owned Net Revenue	68,769			69,664			(895)			(1.3)	%
Owned Resort EBITDA	Owned Resort EBITDA	$	14,014		$	11,267		$	2,747		24.4	%	Owned Resort EBITDA	$	26,849		$	28,377		$	(1,528)		(5.4)	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	25.4		%	26.3		%	(0.9)		pts	(3.4)	%	Owned Resort EBITDA Margin	39.0		%	40.7		%	(1.7)		pts	(4.2)	%

________

(1)For the three months ended March 31, 2022, includes $1.2 million of on-property room upgrade revenue that was reclassified from net non-package revenue to net package revenue to conform with current period presentation.

Comparable Portfolio


		Three Months Ended September 30,						Increase / Decrease					Three Months Ended March 31,						Increase / Decrease
		2022			2021			Change		% Change			2023			2022			Change		% Change
Occupancy	Occupancy	81.0		%	54.9		%	26.1	pts	47.5	%	Occupancy	61.8		%	76.9		%	(15.1)	pts	(19.6)	%
Net Package ADR	Net Package ADR	$	149.00		$	142.01		6.99		4.9	%	Net Package ADR	$	494.31		$	360.44		133.87		37.1	%
Net Package RevPAR	Net Package RevPAR	$	120.63		$	78.03		42.60		54.6	%	Net Package RevPAR	$	305.71		$	277.26		28.45		10.3	%
		($ in thousands)											($ in thousands)
Net Package Revenue	Net Package Revenue	$	12,430		$	8,040		4,390		54.6	%	Net Package Revenue	$	58,990		$	53,500		5,490		10.3	%
Net Non-package Revenue	Net Non-package Revenue	3,041			2,253			788		35.0	%	Net Non-package Revenue	9,095			7,806			1,289		16.5	%
Owned Net Revenue	Owned Net Revenue	15,471			10,293			5,178		50.3	%	Owned Net Revenue	68,085			61,306			6,779		11.1	%
Owned Resort EBITDA	Owned Resort EBITDA	$	2,710		$	796		1,914		240.5	%	Owned Resort EBITDA	$	29,277		$	26,087		3,190		12.2	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	17.5		%	7.7		%	9.8	pts	127.3	%	Owned Resort EBITDA Margin	43.0		%	42.6		%	0.4	pts	0.9	%

Segment Comparable Owned Net Revenue. Our Comparable Owned Net Revenue for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$5.2~~$6.8 million, or ~~50.3%~~11.1%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was due to the following:

•a 37.1% increase in Comparable Net Package ADR due to a lower mix of sold rooms at the Jewel Punta Cana during the three months ended March 31, 2023, when we transitioned management to us from a third-party. Excluding this resort, Net Package ADR increased 20.1%;

•a decrease in Occupancy ~~rate increasing 26.1~~of 15.1 percentage points compared to the three months ended ~~September 30, 2021, driven by~~ March 31, 2022 as a result of reduced Occupancy at the Jewel Punta Cana, as we transitioned the management of the resort to us from a third-party;and

•an increase in ~~demand from European and Canadian sourced guests;~~Comparable Net Non-package Revenue of $1.3 million, or 16.5%, compared to the three months ended March 31, 2022. Comparable Net Non-package Revenue includes:

•a ~~4.9% increase~~decrease of $0.5 million due to the expiration of our Extended Stay Program in late 2022 as COVID-19-related travel restrictions were no longer in effect.

•a decrease in Net ~~Package ADR~~Non-package Revenue as a result of ~~a higher MICE group contribution to our guest mix,~~reduced Occupancy at the ~~ongoing leisure travel recovery, and pricing discipline to coincide with investments in guest satisfaction at our resorts, and~~

•~~continued improvement in~~Jewel Punta Cana during the three months ended March 31, 2023. Excluding this resort, Net Non-package Revenue ~~driven by improvements in our product offering across our resorts.~~increased 39.6%.

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Segment Comparable Owned Resort EBITDA. Our Comparable Owned Resort EBITDA for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$1.9~~$3.2 million, or ~~240.5%~~12.2%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was a result of leveraging a majority of our direct expenses given the ~~on-going revenue recovery,~~ Net Package ADR ~~increases and cost control practices which partially offset occupancy-related increases in resort operating expenses, including higher food costs,~~growth as compared to the three months ended ~~September 30, 2021.~~March 31, 2022. Excluding Jewel Punta Cana, Comparable Owned Resort EBITDA for the three months ended March 31, 2023 increased 38.4% compared to the three months ended March 31, 2022.

~~Table~~•Comparable Owned Resort EBITDA Margin for the three months ended March 31, 2023 was 43.0%, an increase of ~~Contents~~0.4 percentage points compared to the three months ended March 31, 2022. Comparable Owned Resort EBITDA Margin was negatively impacted by 530 basis points due to reduced Occupancy at the Jewel Punta Cana. Excluding this resort, Comparable Owned Resort EBITDA Margin for the three months ended March 31, 2023 was 48.3%, an increase of 2.8 percentage points compared to the three months ended March 31, 2022.

Jamaica

The following table sets forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Jamaica segment for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ for the total segment portfolio:


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2022			2021			Change			% Change			2023			2022			Change			% Change
Occupancy	Occupancy	75.5		%	57.7		%	17.8		pts	30.8	%	Occupancy	82.5		%	67.6		%	14.9		pts	22.0	%
Net Package ADR	Net Package ADR	$	365.65		$	314.62		$	51.03		16.2	%	Net Package ADR	$	500.78		$	418.26		$	82.52		19.7	%
Net Package RevPAR	Net Package RevPAR	$	276.05		$	181.39		$	94.66		52.2	%	Net Package RevPAR	$	413.24		$	282.67		$	130.57		46.2	%
		($ in thousands)												($ in thousands)
Net Package Revenue(1)	Net Package Revenue(1)	$	36,266		$	23,831		$	12,435		52.2	%	Net Package Revenue(1)	$	53,110		$	36,329		$	16,781		46.2	%
Net Non-package Revenue(1)	Net Non-package Revenue(1)	7,493			5,671			1,822			32.1	%	Net Non-package Revenue(1)	9,867			7,935			1,932			24.3	%
Owned Net Revenue	Owned Net Revenue	43,759			29,502			14,257			48.3	%	Owned Net Revenue	62,977			44,264			18,713			42.3	%
Owned Resort EBITDA	Owned Resort EBITDA	$	11,267		$	5,632		$	5,635		100.1	%	Owned Resort EBITDA	$	27,081		$	17,158		$	9,923		57.8	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	25.7		%	19.1		%	6.6		pts	34.6	%	Owned Resort EBITDA Margin	43.0		%	38.8		%	4.2		pts	10.8	%

________

Segment Owned Net Revenue. Our Owned Net Revenue for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$14.3~~$18.7 million, or ~~48.3%~~42.3%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was due to the following:

•an increase in Occupancy ~~rate increasing 17.8~~of 14.9 percentage points compared to the three months ended ~~September 30, 2021,~~March 31, 2022, driven by an increase in demand from United States ~~European,~~and Canadian ~~and South American~~ sourced guests;

•a ~~16.2%~~19.7% increase in Net Package ADR as a result of a higher MICE group contribution to our guest ~~mix, the ongoing leisure travel recovery, and pricing discipline to coincide with investments in guest satisfaction at our resorts;~~mix; and

•~~continued strength~~an increase in Net Non-package Revenue ~~driven by improvements in our product offering across our resorts.~~

~~Compared~~of $1.9 million, or 24.3%, compared to the same period in 2019, for our current comparable portfolio in Jamaica, which excludes the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, Comparable Net Package ADR for the three months ended ~~September 30,~~March 31, 2022. Net Non-package Revenue includes a decrease of $0.6 million due to the expiration of our Extended Stay Program in late 2022 as COVID-19-related travel restrictions were no longer in effect. Excluding this impact, Net Non-package Revenue per sold room increased ~~by $83.20, or 29.5%.~~9.5% compared to the three months ended March 31, 2022.

Segment Owned Resort EBITDA. Our Owned Resort EBITDA for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~$5.6~~$9.9 million, or ~~100.1%~~57.8%, compared to the three months ended ~~September 30, 2021.~~March 31, 2022. The increase was a result of leveraging a majority of our direct expenses given the ~~on-going revenue recovery, particularly the strong~~ Net Package ADR ~~increases and cost control practices which~~growth, partially offset ~~occupancy-related~~by Occupancy-related increases in resort operating expenses ~~including higher food costs,~~ compared to the three months ended ~~September 30, 2021.~~March 31, 2022.

Compared to the same period in 2019, for our current comparable portfolio in Jamaica, which excludes the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, Comparable •Owned Resort EBITDA Margin for the three months ended ~~September 30, 2022~~March 31, 2023 increased ~~by $3.6 million,~~4.2 percentage points, or ~~48.8%.~~

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~~Segment Results~~

~~Nine Months Ended September 30, 2022 and 2021~~

We evaluate our business segment operating performance using segment Owned Net Revenue and segment Owned Resort EBITDA. The following tables summarize segment Owned Net Revenue and segment Owned Resort EBITDA for10.8%, compared to the ~~nine~~three months ended ~~September 30, 2022 and 2021~~ ~~($ in thousands)~~:

Nine Months Ended September 30, Increase / Decrease
2022 2021
Change
% Change
Owned Net Revenue
Yucatán Peninsula $ 204,200 $ 129,879 $ 74,321 57.2 %
Pacific Coast 92,901 51,117 41,784 81.7 %
Dominican Republic 189,714 97,563 92,151 94.5 %
Jamaica 131,781 65,358 66,423 101.6 %
Segment Owned Net Revenue 618,596 343,917 274,679 79.9 %
Other 1,878 726 1,152 158.7 %
Management Fee Revenue 3,186 1,469 1,717 116.9 %
Total Net Revenue $ 623,660 $ 346,112 $ 277,548 80.2 %

Nine Months Ended September 30, Increase / Decrease
2022 2021
Change
% Change
Owned Resort EBITDA
Yucatán Peninsula $ 77,049 $ 37,714 $ 39,335 104.3 %
Pacific Coast 36,966 13,992 22,974 164.2 %
Dominican Republic 63,138 20,859 42,279 202.7 %
Jamaica 40,567 6,924 33,643 485.9 %
Segment Owned Resort EBITDA 217,720 79,489 138,231 173.9 %
Other corporate (1)
(37,385) (28,778) (8,607) (29.9) %
Management Fee Revenue 3,186 1,469 1,717 116.9 %
Total Adjusted EBITDA $ 183,521 $ 52,180 $ 131,341 251.7 %

~~________~~

~~(1)~~ ~~Other corporate includes $1.3 million of revenue generated by The Playa Collection for the nine months ended September 30,~~March 31, 2022.

~~Table of Contents~~

~~Yucatán Peninsula~~

~~The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and~~ Owned Resort EBITDA Margin ~~for our Yucatán Peninsula segment for~~was negatively impacted by 110 basis points due to the ~~nine months ended September 30, 2022~~timing of sales and ~~2021 for the total segment portfolio~~marketing expenses and ~~comparable segment portfolio:~~

~~Total Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2022 2021
Change
% Change
Occupancy 74.6 % 52.2 % 22.4 pts 42.9 %
Net Package ADR $ 404.05 $ 320.69 $ 83.36 26.0 %
Net Package RevPAR $ 301.62 $ 167.54 $ 134.08 80.0 %
($ in thousands)
Net Package Revenue $ 175,058 $ 107,764 $ 67,294 62.4 %
Net Non-package Revenue 29,142 22,115 7,027 31.8 %
Owned Net Revenue 204,200 129,879 74,321 57.2 %
Owned Resort EBITDA $ 77,049 $ 37,714 $ 39,335 104.3 %
Owned Resort EBITDA Margin 37.7 % 29.0 % 8.7 pts 30.0 %

~~Comparable Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2022 2021
Change
% Change
Occupancy 74.6 % 57.2 % 17.4 pts 30.4 %
Net Package ADR $ 404.05 $ 322.79 $ 81.26 25.2 %
Net Package RevPAR $ 301.62 $ 184.59 $ 117.03 63.4 %
($ in thousands)
Net Package Revenue $ 175,058 $ 107,133 $ 67,925 63.4 %
Net Non-package Revenue 29,140 21,563 7,577 35.1 %
Owned Net Revenue 204,198 128,696 75,502 58.7 %
Owned Resort EBITDA $ 76,864 $ 38,956 $ 37,908 97.3 %
Owned Resort EBITDA Margin 37.6 % 30.3 % 7.3 pts 24.1 %

~~Segment Comparable Owned Net Revenue. Our Comparable Owned Net Revenue for the nine months ended September 30, 2022 increased $75.5 million, or 58.7%,~~franchise fees compared to the ~~nine~~three months ended ~~September 30, 2021. The increase was due to the following:~~

•~~Occupancy rate increasing 17.4 percentage points compared to the nine months ended September 30, 2021, driven by an increase in demand from guests sourced across all our major geographies;~~

•a 25.2% increase in Comparable Net Package ADR as a result of a higher MICE group contribution to our guest mix, the ongoing leisure travel recovery, and pricing discipline to coincide with investments in guest satisfaction at our resorts;

•~~continued strength in Net Non-package Revenue driven by improvements in our product offering across our resorts; and~~

•an incremental $12.44 favorable Net Package ADR impact compared to the nine months ended September 30, 2021 as a result of the change in billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP. Excluding this adjustment, Comparable Net Package ADR would have been $391.61.

Compared to the same period in 2019, for our current comparable portfolio of resorts in the Yucatán, which excludes the Dreams Puerto Aventuras and Capri Resort, Comparable Net Package ADR for the nine months ended September 30, 2022 increased by $122.38, or 43.5%. Excluding the aforementioned adjustment for the OTA billing methodology, the increase would have been $101.48, or 36.0%.

~~Segment Comparable Owned Resort EBITDA~~. Our Comparable Owned Resort EBITDA for the nine months ended September 30, 2022 increased $37.9 million, or 97.3%, compared to the nine months ended September 30, 2021. The increase was a result of the on-going revenue recovery, particularly the strong Comparable Net Package ADR increases and cost control practices which partiallyMarch 31, 2022.

~~Table of Contents~~

~~offset occupancy-related increases in resort operating expenses, including higher food costs, compared to the nine months ended September 30, 2021.~~

Compared to the same period in 2019, for our current comparable portfolio of resorts in the Yucatán, which excludes the Dreams Puerto Aventuras and Capri Resort, Comparable Owned Resort EBITDA for the nine months ended September 30, 2022 increased by $18.6 million, or 31.9%.

~~Pacific Coast~~

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Pacific Coast segment for the nine months ended September 30, 2022 and 2021 for the total segment portfolio:

Nine Months Ended September 30, Increase / Decrease
2022 2021 Change % Change
Occupancy 71.4 % 49.6 % 21.8 pts 44.0 %
Net Package ADR $ 449.66 $ 347.61 $ 102.05 29.4 %
Net Package RevPAR $ 321.25 $ 172.36 $ 148.89 86.4 %
($ in thousands)
Net Package Revenue $ 81,211 $ 43,572 $ 37,639 86.4 %
Net Non-package Revenue 11,690 7,545 4,145 54.9 %
Owned Net Revenue 92,901 51,117 41,784 81.7 %
Owned Resort EBITDA $ 36,966 $ 13,992 $ 22,974 164.2 %
Owned Resort EBITDA Margin 39.8 % 27.4 % 12.4 pts 45.3 %

~~Segment Owned Net Revenue. Our Owned Net Revenue for the nine months ended September 30, 2022 increased $41.8 million, or 81.7%, compared to the nine months ended September 30, 2021. The increase was due to the following:~~

•Occupancy rate increasing 21.8 percentage points compared to the nine months ended September 30, 2021, driven by an increase in demand from United States and Canadian sourced guests, and group room nights which were up 10.9% versus the same period in 2019;

•a 29.4% increase in Net Package ADR as a result of a higher MICE group contribution to our guest mix, the ongoing leisure travel recovery, and pricing discipline to coincide with investments in guest satisfaction at our resorts;

•~~continued strength in Net Non-package Revenue driven by improvements in our product offering across our resorts; and~~

•an incremental $10.02 favorable Net Package ADR impact compared to the nine months ended September 30, 2021 as a result of the change in billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP. Excluding this adjustment, Net Package ADR would have been $439.63.

Compared to the same period in 2019, Net Package ADR for the nine months ended September 30, 2022 increased by $156.93, or 53.6%. Excluding the aforementioned adjustment for the OTA billing methodology, the increase would have been $137.77, or 47.1%.

~~Segment Owned Resort EBITDA~~.Our Owned Resort EBITDA for the nine months ended September 30, 2022 increased $23.0 million, or 164.2%, compared to the nine months ended September 30, 2021. The increase was a result of the on-going revenue recovery, particularly the strong Net Package ADR increases and cost control practices which partially offset occupancy-related increases in resort operating expenses, including higher food costs, compared to the nine months ended September 30, 2021.

~~Compared to the same period in 2019, Owned Resort EBITDA for the nine months ended September 30, 2022 increased by $11.5 million, or 45.2%.~~

~~Table of Contents~~

~~Dominican Republic~~

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Dominican Republic segment for the nine months ended September 30, 2022 and 2021 for the total segment portfolio and comparable segment portfolio:

~~Total Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2022 2021 Change % Change
Occupancy 74.2 % 42.2 % 32.0 pts 75.8 %
Net Package ADR $ 295.01 $ 263.98 $ 31.03 11.8 %
Net Package RevPAR $ 218.78 $ 111.42 $ 107.36 96.4 %
($ in thousands)
Net Package Revenue $ 157,918 $ 80,426 $ 77,492 96.4 %
Net Non-package Revenue 31,796 17,137 14,659 85.5 %
Owned Net Revenue 189,714 97,563 92,151 94.5 %
Owned Resort EBITDA $ 63,138 $ 20,859 $ 42,279 202.7 %
Owned Resort EBITDA Margin 33.3 % 21.4 % 11.9 pts 55.6 %

~~Comparable Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2022 2021 Change % Change
Occupancy 79.0 % 38.0 % 41.0 pts 107.9 %
Net Package ADR $ 169.15 $ 144.88 $ 24.27 16.8 %
Net Package RevPAR $ 133.56 $ 55.03 $ 78.53 142.7 %
($ in thousands)
Net Package Revenue $ 40,837 $ 16,825 $ 24,012 142.7 %
Net Non-package Revenue 9,872 4,750 5,122 107.8 %
Owned Net Revenue 50,709 21,575 29,134 135.0 %
Owned Resort EBITDA $ 11,065 $ (319) $ 11,384 3,568.7 %
Owned Resort EBITDA Margin 21.8 % (1.5) % 23.3 pts 1,553.3 %

~~Segment Comparable Owned Net Revenue~~. Our Comparable Owned Net Revenue for the nine months ended September 30, 2022 increased $29.1 million, or 135.0%, compared to the nine months ended September 30, 2021. The increase was due to the following:

•~~Occupancy rate increasing 41.0 percentage points compared to the nine months ended September 30, 2021, driven by an increase in demand from United States, European and Canadian sourced guests;~~

•a 16.8% increase in Net Package ADR as a result of a higher MICE group contribution to our guest mix, the ongoing leisure travel recovery, and pricing discipline to coincide with investments in guest satisfaction at our resorts,

•~~continued strength in Net Non-package Revenue driven by improvements in our product offering across our resorts.~~

~~Segment Comparable Owned Resort EBITDA~~. Our Comparable Owned Resort EBITDA for the nine months ended September 30, 2022 increased $11.4 million, or 3568.7%, compared to the nine months ended September 30, 2021. The increase was a result of the on-going revenue recovery, particularly the strong Net Package ADR increases and cost control practices which partially offset occupancy-related increases in resort operating expenses, including higher food costs, compared to the nine months ended September 30, 2021.

~~Table of Contents~~

~~Jamaica~~

The following table sets forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Jamaica segment for the nine months ended September 30, 2022 and 2021 for the total segment portfolio:

Nine Months Ended September 30, Increase / Decrease
2022 2021 Change % Change
Occupancy 73.1 % 44.4 % 28.7 pts 64.6 %
Net Package ADR $ 377.83 $ 304.13 $ 73.70 24.2 %
Net Package RevPAR $ 276.29 $ 135.06 $ 141.23 104.6 %
($ in thousands)
Net Package Revenue $ 107,710 $ 52,652 $ 55,058 104.6 %
Net Non-package Revenue 24,071 12,706 11,365 89.4 %
Owned Net Revenue 131,781 65,358 66,423 101.6 %
Owned Resort EBITDA $ 40,567 $ 6,924 $ 33,643 485.9 %
Owned Resort EBITDA Margin 30.8 % 10.6 % 20.2 pts 190.6 %

~~Segment Owned Net Revenue. Our Owned Net Revenue for the nine months ended September 30, 2022 increased $66.4 million, or 101.6%, compared to the nine months ended September 30, 2021. The increase was due to the following:~~

•Occupancy rate increasing 28.7 percentage points compared to the nine months ended September 30, 2021, driven by an increase in demand from United States, European, Canadian and South American sourced guests and MICE groups, and local governments easing COVID-19 related restrictions during the second quarter of 2022. The recovery in Jamaica has continued to improve but was depressed as this segment suffered the greatest impact from the Omicron variant with disrupted bookings in January as a result of more stringent COVID-19 related travel restrictions;

•a 24.2% increase in Net Package ADR as a result of a higher MICE group contribution to our guest mix, the ongoing leisure travel recovery, and pricing discipline to coincide with investments in guest satisfaction at our resorts; and

•~~continued strength in Net Non-package Revenue driven by improvements in our product offering across our resorts.~~

Compared to the same period in 2019, for our current comparable portfolio in Jamaica, which excludes the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, Comparable Net Package ADR for the nine months ended September 30, 2022 increased by $49.87, or 15.2%.

~~Segment Owned Resort EBITDA~~. Our Owned Resort EBITDA for the nine months ended September 30, 2022 increased $33.6 million, or 485.9%, compared to the nine months ended September 30, 2021. The increase was a result of the on-going revenue recovery, particularly the strong Net Package ADR increases and cost control practices which partially offset occupancy-related increases in resort operating expenses, including higher food costs, compared to the nine months ended September 30, 2021.

Compared to the same period in 2019, for our current comparable portfolio in Jamaica, which excludes the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, Comparable Owned Resort EBITDA for the nine months ended September 30, 2022 increased by $1.0 million, or 2.6%.

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Non-U.S. GAAP Financial Measures

Reconciliation of Net Income to Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)

The following is a reconciliation of our U.S. GAAP net ~~(loss)~~ income to EBITDA, Adjusted EBITDA, Owned Resort EBITDA and Comparable Owned Resort EBITDA for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Net (loss) income		$	(2,229)	$	(12,371)	$	71,043	$	(89,884)
Net income										Net income	$	42,719	$	42,747
Interest expense	Interest expense	17,832		19,047		39,892		56,164		Interest expense	29,666		9,168
Income tax provision (benefit)		268		1,360		3,168		(13,043)
Income tax provision										Income tax provision	4,816		1,614
Depreciation and amortization	Depreciation and amortization	19,502		19,927		58,630		60,827		Depreciation and amortization	19,191		19,500
EBITDA	EBITDA	35,373		27,963		172,733		14,064		EBITDA	96,392		73,029
Other (income) expense (a)	Other (income) expense (a)	(2,608)		(587)		(7,850)		747		Other (income) expense (a)	(232)		514
Share-based compensation	Share-based compensation	2,777		3,270		9,043		9,899		Share-based compensation	3,166		3,356

Transaction expense (b)	Transaction expense (b)	582		210		1,384		928		Transaction expense (b)	863		191
Severance expense		—		—		—		1,287
Other tax expense (c)	Other tax expense (c)	—		67		—		228		Other tax expense (c)	—		240
Contract termination fees		—		400		—		400
Impairment loss		—		—		—		24,011
Loss (gain) on sale of assets		2		(4)		11		644
Repairs from hurricanes and tropical storms (d)	Repairs from hurricanes and tropical storms (d)	8,850		435		8,850		435		Repairs from hurricanes and tropical storms (d)	(861)		—
Non-service cost components of net periodic (cost) benefit		(102)		16		(650)		(463)
Loss on sale of assets										Loss on sale of assets	13		—
Non-service cost components of net periodic benefit										Non-service cost components of net periodic benefit	(852)		(387)
Adjusted EBITDA	Adjusted EBITDA	44,874		31,770		183,521		52,180		Adjusted EBITDA	98,489		76,943
Other corporate (e)(f)		13,322		9,749		37,385		28,778
Management fee income		(786)		(673)		(3,186)		(1,469)
Other corporate (e)										Other corporate (e)	13,555		11,947
The Playa Collection										The Playa Collection	(726)		(296)
Management fees										Management fees	(1,929)		(1,057)
Owned Resort EBITDA	Owned Resort EBITDA	57,410		40,846		217,720		79,489		Owned Resort EBITDA	109,389		87,537
Less: Non-comparable Owned Resort EBITDA	Less: Non-comparable Owned Resort EBITDA	11,304		10,471		52,258		19,936		Less: Non-comparable Owned Resort EBITDA	(2,428)		2,290
Comparable Owned Resort EBITDA(g)		$	46,106	$	30,375	$	165,462	$	59,553
Comparable Owned Resort EBITDA(f)										Comparable Owned Resort EBITDA(f)	$	111,817	$	85,247

________

(a) Represents changes in foreign exchange and other miscellaneous non-operating expenses or income.

(b) Represents expenses incurred in connection with corporate initiatives, such as: system implementations, debt refinancing costs; other capital raising efforts; and strategic initiatives, such as the launch of a new resort or possible expansion into new markets.

(c) Relates primarily to a Dominican Republic asset tax, which is an alternative tax to income tax in the Dominican Republic. We eliminate this expense from Adjusted EBITDA because it is substantially similar to the income tax provision or benefit we eliminate from EBITDA.

(d) ~~For the three and nine months ended September 30, 2022, represents expected~~Includes significant repair and clean-up expenses ~~and write offs of property and equipment and inventory related to Hurricane Fiona,~~incurred from natural events which are not expected to be offset by property damage insurance proceeds. It does not include repair and clean-up costs from natural events that are not considered significant. For the three months ended March 31, 2023, represents a decrease in the expected repair and clean-up expenses for the Jewel Punta Cana related to the impact of Hurricane Fiona.

(e) For the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ represents corporate salaries and benefits of ~~$8.8~~$9.7 million for 2023 and $8.3 million for 2022, ~~and $6.2 million for 2021,~~ professional fees of ~~$2.5~~$1.9 million for ~~2022~~2023 and ~~$1.8~~$1.9 million for ~~2021,~~2022, corporate rent and insurance of $1.0 million for ~~2022~~2023 and $1.0 million for ~~2021,~~2022, and corporate travel, software licenses, board fees and other miscellaneous corporate expenses of ~~$1.4~~$1.0 million for ~~2022~~2023 and $0.7 million for ~~2021, and includes $0.6 million of revenue generated by The Playa Collection in~~ 2022.

(f) For the nine months ended September 30, 2022 and 2021, represents corporate salaries and benefits of $25.9 million for 2022 and $19.2 million for 2021, professional fees of $6.7 million for 2022 and $5.4 million for 2021, corporate rent and insurance of $3.0 million for 2022 and $2.6 million for 2021, and corporate travel, software licenses, board fees and other miscellaneous corporate expenses of $2.5 million for 2022 and $1.6 million for 2021, and includes $1.3 million of revenue generated by The Playa Collection in 2022.

~~(g)~~ ~~Comparable resorts~~Our comparable portfolio for the three months ended ~~September 30, 2022 exclude~~March 31, 2023 excludes the ~~Hilton La Romana All-Inclusive Resort and Hyatt Ziva and Hyatt Zilara Cap Cana,~~Jewel Palm Beach, which ~~were~~was closed ~~the last twelve days~~for a majority of the ~~third~~first quarter of 2023 as we transitioned the management of the resort to ~~expedite necessary clean up and repair work as~~us from a result of Hurricane Fiona. Comparable resorts for the nine months ended September 30, 2022 exclude the Hilton La Romana All-Inclusive Resort and Hyatt Ziva and Hyatt Zilara Cap Cana as well as the Dreams Puerto Aventuras, which was sold in February 2021, and Capri Resort, which was sold in June 2021.third-party.

Seasonality

The seasonality of the lodging industry and the location of our resorts in Mexico, Jamaica and Dominican Republic have historically resulted in the greatest demand for our resorts occurring between mid-December and April of each year, yielding higher occupancy levels and package rates during this period. This seasonality in demand has resulted in predictable fluctuations in revenue, results of operations, and liquidity, which are consistently higher during the first quarter of each year than in successive quarters.

However, the COVID-19 pandemic altered this seasonal trend in 2021 and Net Package ADR was progressively stronger during the second, third and fourth quarters of 2021 than it was in the first quarter of 2021. We have seen a return to pre-COVID-19 seasonality trends thus far in 2022.

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Inflation

We have experienced an elevated level of inflationary pressure on our direct resort expenses ~~thus far in~~since the beginning of 2022. ~~The~~Inflation effects were experienced mostly through higher ~~expense inflation has primarily affected our~~ labor costs, food and beverage prices, and utility costs. WeAlthough we experienced some improvement during 2023, we expect ~~the elevated inflation rate~~that costs will likely ~~continue~~remain elevated at least through the ~~remainder~~first half of ~~2022 at a similar rate.~~2023, but could continue for longer. While we, like most operators of lodging properties, have the ability to adjust room rates to reflect the effects of inflation, competitive pricing pressures ~~and the continuing effects of the COVID-19 pandemic~~ may limit our ability to raise room rates to fully offset inflationary cost increases.

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Liquidity and Capital Resources

Our net cash provided by operating activities for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~$136.7~~$45.3 million, representing a significant increase over the ~~nine~~three months ended ~~September 30, 2021 as our business continues to recover from the impacts of the COVID-19 pandemic.~~March 31, 2022. We believe that our sources of cash, which consist of available cash and cash from operations, together with the available borrowing capacity under our Revolving Credit Facility and our access to the capital markets, will be adequate to meet our cash requirements, including our contractual obligations, over the next twelve months and beyond.

Sources of Cash

As of ~~September 30, 2022,~~March 31, 2023, we had ~~$371.7~~$281.5 million of available cash, ~~up from $270.1~~as compared to $283.9 million as of December 31, 2021. The increase in available cash was primarily due to improved cash flow from operations across our portfolio due to the ongoing recovery from the COVID-19 pandemic. We also benefited from increased vaccination levels, easing of government travel restrictions, and pent-up customer demand for leisure travel, as well as our strategic decision to focus on pricing discipline to coincide with investments in guest satisfaction at our resorts.

2022. Our primary short-term cash needs are paying operating expenses, maintaining our resorts, and servicing our outstanding indebtedness. We expect to meet our short-term liquidity requirements generally through our existing cash balances, net cash provided by operations, equity issuances or short-term borrowings under our Revolving Credit Facility.

Further, ~~our~~we had no restricted cash balance ~~related to our Property Loan of $23.5 million~~ as of ~~December~~March 31, ~~2021 was released into unrestricted cash~~ ~~during the second quarter of 2022 due to the strong operating performance of the Hyatt Ziva and Hyatt Zilara Cap Cana and Hilton Rose Hall Resort & Spa properties.~~2023. As of ~~October 31,~~April 30, 2022, we had approximately ~~$347.0~~$266.9 million of available cash and also had ~~$68.0~~$225.0 million available on our Revolving Credit Facility, which does not mature until January ~~2024.~~2028.

We expect to meet our long-term liquidity requirements generally through the sources of cash available for short-term needs, net cash provided by operations, as well as equity or debt issuances or proceeds from the potential disposal of assets.

Cash Requirements

Our expected material cash requirements for the remainder of ~~2022~~2023 and thereafter consist of (i) contractually obligated expenditures, including payments of principal and interest; (ii) other essential expenditures, including operating expenses and maintenance of our resorts; and (iii) opportunistic expenditures, including possible property developments, expansions, renovations, repositioning and rebranding projects, potential acquisitions, the repayment of indebtedness and discretionary repurchases of our securities.

As of ~~September 30, 2022,~~March 31, 2023, there have been no significant changes to our “Contractual Obligations” table in Item 7, “~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual ~~Report, other than the change in mandatory Term Loan repayments as a result of the sales of our resorts in 2021 and 2020.~~Report. As of September 30, 2022, we do not expect to make any additional repayments on our outstanding Term Loan during the remainder of 2022 related to the sale of the Capri Resort in June 2021, as the remaining net proceeds from the sale after deducting incremental expenses and capital expenditures are expected to be $0 million. We expect to repay $23.9 million of our outstanding Term Loan in FebruaryMarch 31, 2023, ~~as a result of the proceeds we received from the sale of the Dreams Puerto Aventuras in February 2021. As of September 30, 2022,~~ we had ~~$21.0~~$85.6 million of scheduled contractual obligations remaining in ~~2022~~2023 which we expect to pay with available cash.

We are continuing to monitor our liquidity and we may pursue additional sources of liquidity as needed. The availability of additional liquidity options will depend on the economic and financial environment, our credit, our historical and projected financial and operating performance and continued compliance with financial covenants. If operating conditions do not continue to improve, whether as a result of ~~the current pandemic or~~ a resurgence ~~thereof~~of COVID-19 or for other reasons, such as inflation, ~~or global economic impacts related to the conflict between Ukraine and Russia,~~ we may not be able to maintain our current liquidity position or access additional sources of liquidity at acceptable terms or at all.

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Financing Strategy

We intend to use other financing sources that may be available to us from time to time, including financing from banks, institutional investors or other lenders, such as bridge loans, letters of credit, joint ventures and other arrangements. Future financings may be unsecured or may be secured by mortgages or other interests in our assets. In addition, we may issue publicly or privately placed debt or equity securities. When possible and desirable, we will seek to replace short-term financing with long-term financing. We may use the proceeds from any financings to refinance existing indebtedness, to finance resort projects or acquisitions or for general working capital or other purposes.

Our indebtedness may be recourse, non-recourse or cross-collateralized and may be fixed rate or variable rate. If the indebtedness is non-recourse, the obligation to repay such indebtedness will generally be limited to the particular resort or resorts pledged to secure such indebtedness. In addition, we may invest in resorts subject to existing loans secured by mortgages or similar liens on the resorts or may refinance resorts acquired on a leveraged basis.

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Recent Transactions Affecting Our Liquidity and Capital Resources

The following table summarizes our net cash provided by or used in operating activities, investing activities and financing activities for the periods indicated and should be read in conjunction with our Condensed Consolidated Statements of Cash Flows and accompanying notes thereto ($ in thousands):

Nine Months Ended September 30,
2022 2021
Net cash provided by (used in) operating activities $ 136,742 $ (14,034)
Net cash (used in) provided by investing activities $ (21,743) $ 76,965
Net cash (used in) provided by financing activities $ (36,888) $ 20,292
Increase in cash, cash equivalents, and restricted cash $ 78,111 $ 83,223


	Three Months Ended March 31,
	2023		2022
Net cash provided by operating activities	$	45,287	$	37,648
Net cash used in investing activities	$	(2,352)	$	(4,436)
Net cash used in financing activities	$	(45,415)	$	(2,624)
(Decrease) increase in cash, cash equivalents, and restricted cash	$	(2,480)	$	30,588

Cash Flows from Operating Activities

Our net cash from operating activities is generated primarily from operating income of our resorts. For the ~~nine~~three months ended ~~September 30,~~March 31, 2023, our net cash provided by operating activities was $45.3 million. For the three months ended March 31, 2022, our net cash provided by operating activities was ~~$136.7 million. For the nine months ended September 30, 2021, our net cash used in operating activities was $14.0~~$37.6 million.

Cash Flows from Investing Activities

~~For the nine months ended September 30, 2022, our~~Our net cash used in investing activities was ~~$21.7 million. For~~$2.4 million for the ~~nine~~three months ended ~~September 30, 2021, our net cash provided by investing activities was $77.0 million.~~March 31, 2023 compared to $4.4 million for the three months ended March 31, 2022.

Activity for the ~~nine~~three months ended ~~September 30,~~March 31, 2023:

•Purchases of property and equipment of $10.3 million, primarily for maintenance related expenditures; and

•Property damage insurance proceeds related to the impacts of Hurricane Fiona of $8.0 million.

Activity for the three months ended March 31, 2022:

•Purchases of property and equipment of ~~$21.6 million, primarily for maintenance related expenditures.~~

~~Activity for the nine months ended September 30, 2021:~~

•~~Net proceeds from the sale of assets, primarily consisting of the Dreams Puerto Aventuras and Capri Resort, of $88.9 million; and~~

•~~Purchases of property and equipment of $11.7~~$4.4 million.

Capital Expenditures

We maintain each of our properties in good repair and condition and in conformity with applicable laws and regulations, franchise and license agreements and management agreements. Capital expenditures made to extend the service life or increase the capacity of our assets, including expenditures for the replacement, improvement or expansion of existing capital assets (i.e., maintenance capital expenditures), differ from ongoing repair and maintenance expense items, which do not in our judgment extend the service life or increase the capacity of assets and are charged to expense as incurred. ~~We have approval rights over capital expenditures made by our third-party manager as part of the annual budget process for each property they manage.~~ From time to time, certain of our resorts may be undergoing renovations as a result of our decision to upgrade portions of the resorts, such as guestrooms, public space, meeting space, gyms, spas and/or restaurants, in order to better compete with other resorts in our markets.

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Cash Flows from Financing Activities

Our net cash used in financing activities was ~~$36.9~~$45.4 million for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to ~~$20.3~~$2.6 million ~~of cash provided by financing activities~~ for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022.

Activity for the ~~nine~~three months ended ~~September 30, 2022:~~March 31, 2023:

•Principal payments on our 2022 Term Loan of $32.4 million, which includes a $24.9 million mandatory repayment as a result of the sale of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark in May 2020 as well as our quarterly principal payments;$2.8 million; and

•Repurchases of ordinary shares of ~~$4.2~~$42.6 million.

Activity for the ~~nine~~three months ended ~~September 30, 2021:~~

•~~Net proceeds from our January 2021 equity issuance of $137.7 million;~~March 31, 2022:

•Principal payments on our prior Term Loan of ~~$32.0 million, which includes a $24.4 million mandatory repayment as a result of the sale of Capri Resort in June 2021 as well as our quarterly principal payments; and~~

•~~Repayments on our Revolving Credit Facility of $84.7~~$2.5 million.

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Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statements included herein have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts and related disclosures. A number of our significant accounting policies are critical due to the fact that they involve higher degree of judgement and estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We believe our estimates, assumptions and judgments with respect to our such policies are reasonable based upon information presently available. However, actual results may differ significantly from these estimates under different assumptions, judgments or conditions, which could have a material effect on our financial position, results of operations and related disclosures.

We have discussed those estimates that we believe are critical and require the use of complex judgment in their application in our Consolidated Financial Statements included within our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the SEC on February ~~24, 2022.~~23, 2023. There have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them except for those disclosed in Note 2 to our Condensed Consolidated Financial Statements.

Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, restricted cash, trade and other receivables, accounts receivable from related parties, certain prepayments and other assets, trade and other payables, payables to related parties, derivative financial instruments, other liabilities including our pension obligation and debt (excluding the financing lease obligation). See Note 13, “Fair value of financial instruments,” to our Condensed Consolidated Financial Statements for more information.

Related Party Transactions

See Note 6, “Related party transactions,” to our Condensed Consolidated Financial Statements for information on these transactions.

Recent Accounting Pronouncements

See the recent accounting pronouncements in Note 2 to our Condensed Consolidated Financial Statements.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

In the normal course of operations, we are exposed to interest rate risk and foreign currency risk which may impact future income and cash flows.

Interest Rate Risk

The risk from market interest rate fluctuations mainly affects long-term debt bearing interest at a variable interest rate. ~~We currently use an interest rate swap (see Note 12 of our Condensed Consolidated Financial Statements) to manage exposure to this risk.~~ As of ~~September 30, 2022, 12%~~March 31, 2023, 100% of our outstanding indebtedness bore interest at floating rates, ~~and 88% bore~~as our 2022 Term Loan incurs interest ~~at fixed rates.~~based on SOFR plus a margin of 4.25%.

•If market rates of interest on our floating rate debt were to increase by 1.0%, the increase in interest expense on our floating rate debt would decrease our future earnings and cash flows by approximately ~~$1.5~~$11.0 million annually, assuming the balance outstanding under our Revolving Credit Facility remained at $0 million. If we included the effects of our interest rate swaps effective April 2023 (discussed below), the decrease would be approximately $5.5 million annually.

•If market rates of interest on our floating rate debt were to decrease by 1.0%, the decrease in interest expense on our floating rate debt would increase our future earnings and cash flows by approximately ~~$1.5~~$11.0 million annually, assuming the balance outstanding under our Revolving Credit Facility remained at $0 million. If we included the effects of our interest rate swaps effective April 2023 (discussed below), the increase would be approximately $5.5 million annually.

Our interest rate swaps, which previously mitigated risk related to LIBOR, matured on March 31, 2023. Effective April 15, 2023, we entered into two interest rate swaps to mitigate the floating interest rate risk on our 2022 Term Loan, which incurs interest based on SOFR. The interest rate swaps each have a fixed notional amount of $275.0 million and are not for trading purposes. The fixed rates paid by us on the ~~current LIBOR~~interest rate swaps are 4.05% and 3.71%, and the variable rate received resets monthly to the one-month SOFR rate. The interest rate swaps mature on ~~our floating rate debt could not fall below the existing 1.0% LIBOR floor.~~April 15, 2025 and April 15, 2026, respectively.

Foreign Currency Risk

We are exposed to exchange rate fluctuations because all of our resort investments are based in locations where the local currency is not the U.S. dollar, which is our reporting currency. For the ~~nine~~three months ended ~~September 30, 2022 approximately 2.4%~~March 31, 2023 less than 1% of our revenues were denominated in currencies other than the U.S. dollar. As a result, our revenues reported on our Condensed Consolidated Statements of Operations are affected by movements in exchange rates.

Approximately ~~75.2%~~75% of our resort-level operating expenses for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 were denominated in the local currencies in the countries in which we operate. As a result, our operating expenses reported on our Condensed Consolidated Statements of Operations are affected by movements in exchange rates. The foreign currencies in which our expenses are primarily denominated are the Mexican Peso, Dominican Peso and the Jamaican Dollar.

•The effect of an immediate 5% adverse change in foreign exchange rates on Mexican Peso-denominated expenses at ~~September 30, 2022~~March 31, 2023 would have impacted our Owned Resort EBITDA by approximately ~~$6.9~~$2.9 million on a year-to-date basis.

•The effect of an immediate 5% adverse change in foreign exchange rates on Dominican Peso-denominated expenses at ~~September 30, 2022~~March 31, 2023 would have impacted our Owned Resort EBITDA by approximately ~~$5.2~~$1.7 million on a year-to-date basis.

•The effect of an immediate 5% adverse change in foreign exchange rates on Jamaican Dollar-denominated expenses at ~~September 30, 2022~~March 31, 2023 would have impacted our Owned Resort EBITDA by approximately ~~$3.8~~$1.4 million on a year-to-date basis.

At this time, we do not have any outstanding derivatives or other financial instruments designed to hedge our foreign currency exchange risk.

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Item 4. Controls and Procedures.

Disclosure Controls and Procedures.

We maintain a set of disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this quarterly report, an evaluation was carried out under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Quarterly Report on Form 10-Q, were effective.

Changes in Internal Control Over Financial Reporting.

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In the ordinary course of our business, we are subject to claims and administrative proceedings, none of which we believe are material or would be expected to have, individually or in the aggregate, a material adverse effect on our financial condition, cash flows or results of operations. The outcome of claims, lawsuits and legal proceedings brought against us, however, is subject to significant uncertainties. Refer to Note 7 to our financial statements included in “Item 1. Financial Statements” of this Form 10-Q for a more detailed description of such proceedings and contingencies.

Item 1A. Risk Factors.

~~We are supplementing~~As of March 31, 2023, there have been no material changes from the risk factors ~~described under “Item 1A. Risk Factors”~~previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022, filed with the ~~additional risk factor set forth below,~~SEC on February 23, 2023, which ~~supplements, and to the extent inconsistent, supersedes such risk factors.~~

The ongoing conflict between Russia and Ukraine has and may continue to negatively impact macro-economic conditions which could affect consumer spending adversely and as a result, our business, results of operations, cash flows or financial condition.

~~The current conflict between Russia and Ukraine has not had a direct or material impact~~is accessible on the Company. However, the conflict has negatively impacted global macro-economic conditions and a prolonged conflict, the potential expansion of the conflict into other European countries, or the involvement of the United States or other countries where we source our guests could have more significant impacts on macro-economic conditions which could adversely affect consumer spending and consequently, our operations. Further, the rising price of utilities, including increases in fuel prices, have and may continue to raise the overall vacation cost to our guests and may adversely affect demand for our vacation packages.

Additional risks to our business relating to the Russia and Ukraine conflict include potential interruptions in global supply chains and the availability of items essential to our resort operations, the heightened possibility of cyberattacks, and the potential for travel restrictions affecting our guests' ability to access our resort destinations.SEC’s website at www.sec.gov.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Unregistered Sale of Securities

None.

(b) Use of Proceeds

None.

The following table sets forth information regarding our purchases of our ordinary shares during the three months ended ~~September 30, 2022:~~March 31, 2023:

Total number of shares purchased
Average price paid per share(1)
Total number of shares purchased as part of publicly announced program(2)
Maximum approximate dollar value of shares that may yet be purchased under the program
($ in thousands)(2)
July 1, 2022 to July 31, 2022 — $ — — $ 83,492
August 1, 2022 to August 31, 2022 — — — 83,492
September 1, 2022 to September 30, 2022 973,931 5.93 973,931 94,227
Total 973,931 $ 5.93 973,931 $ 94,227


	Total number of shares purchased	Average price paid per share(1)		Total number of shares purchased as part of publicly announced program(2)	Maximum approximate dollar value of shares that may yet be purchased under the program ($ in thousands)(2)
January 1, 2023 to January 31, 2023	1,541,689	$	6.57	1,541,689	$	43,609
February 1, 2023 to February 28, 2023	132,954	8.98		132,954	198,806
March 1, 2023 to March 31, 2023	3,299,489	8.96		3,299,489	169,245
Total	4,974,132	$	8.17	4,974,132	$	169,245

________

(1) The average price paid per share and maximum approximate dollar value of shares disclosed above include broker commissions.

(2) In ~~December 2018,~~February 2023, our Board established a ~~$100.0~~new $200.0 million share repurchase program, which authorization replaced our $100.0 million repurchase authorization announced in September 2022, pursuant to which we may repurchase our outstanding ordinary shares as market conditions and our liquidity warrant. ~~Our Board reauthorized and renewed the repurchase authorization in September 2022 so that there was again $100.0 million available under the program.~~ The share repurchase authorization has no expiration date. Repurchases may be made from time to time in the open market, in privately negotiated transactions or by other means (including Rule 10b5-1 trading plans). Depending on market conditions and other factors, these repurchases may be commenced or suspended from time to time without prior notice.

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Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

The following exhibits are filed as part of this Form 10-Q:


Exhibit Number						Exhibit Description
~~3.1~~						~~Board Rules for Playa Hotels & Resorts N.V.~~

31.1						Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1						Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2						Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101						The following materials from Playa Hotels & Resorts N.V.’s Quarterly Report on Form 10-Q for the period ended ~~September 30, 2022,~~March 31, 2023, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ (iv) Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to the Condensed Consolidated Financial Statements

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Playa Hotels & Resorts N.V.

Date:

~~November 3, 2022~~May 4, 2023

By:

/s/ Bruce D. Wardinski

Bruce D. Wardinski

Chairman and Chief Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the undersigned, in his capacity as the principal financial officer of the registrant.

Playa Hotels & Resorts N.V.

Date:

~~November 3, 2022~~May 4, 2023

By:

/s/ Ryan Hymel

Ryan Hymel

Chief Financial Officer

(Principal Financial Officer)


	Three Months Ended September 30, 2021
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	$	43,993	$	19,874	$	35,131	$	25,333	$	—	$	124,331
Non-package revenue	8,813		2,794		7,701		5,671		232		25,211
Management fees	—		—		—		—		673		673
Cost reimbursements	—		—		—		789		283		1,072
Total revenue	$	52,806	$	22,668	$	42,832	$	31,793	$	1,188	$	151,287


	Nine Months Ended September 30, 2022
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	$	180,114	$	83,559	$	158,050	$	114,196	$	(2)	$	535,917
Non-package revenue(1)	29,856		11,889		31,796		24,071		1,880		99,492
Management fees	97		—		—		—		3,089		3,186
Cost reimbursements	—		—		—		3,386		3,482		6,868
Total revenue	$	210,067	$	95,448	$	189,846	$	141,653	$	8,449	$	645,463


	Nine Months Ended September 30, 2021
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	$	111,378	$	45,167	$	80,512	$	55,948	$	—	$	293,005
Non-package revenue	22,637		7,603		17,137		12,705		726		60,808
Management fees	—		—		—		—		1,469		1,469
Cost reimbursements	—		—		—		1,970		584		2,554
Total revenue	$	134,015	$	52,770	$	97,649	$	70,623	$	2,779	$	357,836


Financial Liabilities	December 31, 2021		Level 1		Level 2		Level 3
Fair value measurements on a recurring basis
Interest rate swap	$	22,543	$	—	$	22,543	$	—


	Carrying Value		Fair Value
	As of September 30, 2022		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value
Term Loan	$	907,351	$	—	$	—	$	876,294
Term A1 Loan	34,422		—		—		35,400
Term A2 Loan	30,488		—		—		31,355
Term A3 Loan	26,857		—		—		26,424
Property Loan	104,803		—		—		110,829
Total liabilities	$	1,103,921	$	—	$	—	$	1,080,302


	Carrying Value		Fair Value
	As of December 31, 2021		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value
Term Loan	$	938,788	$	—	$	—	$	924,917
Term A1 Loan	34,151		—		—		35,598
Term A2 Loan	30,248		—		—		31,530
Term A3 Loan	26,640		—		—		27,006
Property Loan	103,434		—		—		111,593
Total liabilities	$	1,133,261	$	—	$	—	$	1,130,644