PLYA - Earnings call transcript Q1 2021 | Playa Hotels & Resorts N.V.

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Operator

Good day, and welcome to the Playa Hotels First Quarter 2021 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Ryan Hymel, Executive Vice President. ahead. go Please

Ryan Hymel

Good & Haley. and to welcome Thank first morning, quarter Hotels Resorts call. XXXX Playa you, everyone, earnings conference

begin, to what communicated. company’s numerous actual remind has to and uncertainties comments been considered I’d to cause many risks statements we the may forward-looking subject our be today differ participants are and results that of will Before that like materially from

as statements. of obligation Forward-looking today, the effective statements made no forward-looking today company to only update are undertakes and

For some to could please and the with section Relations of and we a our review cause releases. Commission. recent Securities Annual company’s the which our Exchange Factors Investor that website discussion filed We’ve factors at the of with our last Risk actual investors.playaresorts.com Report differ, results XX-Q, of night Form the updated

over to On we measures in In remarks quarter we will will first wrap key over the first outlook. concluding address on with the GAAP our addition, discuss Bruce yesterday’s call, quarter liquidity were and and Bruce. some a comments Executive today’s press Chairman Q&A. Bruce call on reconciliation to non-GAAP up I’ll with our Playa’s that, turn highlights. Chief included I the financial the some and operational will situation it then then turn With to results, call release. our provide U.S. before this call Officer, Wardinski,

Bruce Wardinski

Thanks morning, joining Good Thanks everyone. for a Ryan. lot, Great. us.

provide the our on and during hopeful, over turn discuss picking was to first the improvement by predominantly others in and that focused segment, up industry of health more to wave on XXXX We level a spirits. with the results for into as and always, insights travel of our a experiencing as today came momentum booking environment. we interest likely more good quarter call in and current guidelines enthusiastic January and geographic were the impacted as portfolio. As during February volatility a in cancellations you balance I’ll we in with then are many and Playa’s close-in results to your by of steam, Playa period it business our significant XXXX travel quarter, outlook. our our caused holiday booking reliant all CDC difference the recovery, attributable appreciate while saw followed detail into Ryan change the our sparked significantly volatile The leisure in became demand. from begin results, of extremely the hope on review some more even I’ll first sheet,

into restriction-related very disruption a the was pent-up again. demand March volume Spring in travelers’ safety guests, combined resorts We reopening quick on Our operations by of team since robust testing This measures hard and hotel year. with team’s life COVID get our demand booking rose seamless change enjoy helped guest with associates resorts, offering antigen many by world acceleration Playa, holidays. highly signified market you The last at an providing impact all our to leadership dedication have it rebound rapidly in activity. the Break to in to of the encouraging, the for driven the The thought to out stabilization our the to us we the shared and was earnings behind our that process on testing cancellation largely as a worst and last and our on-site once protect led call requirements. based experience maintain given work, implemented of again our occasion new bounce-back also adapted and at back began

a pause post-pandemic in the segment new occupancy monthly from March, momentum QX, February. reaching with on continued first the in Yucatan our following build a During quarter, our business high to in

passenger we absolute on not on March. through have the also we sacrifice recovery. particularly the month continue to did International is counts, basis progress into in encouraging, of the high as a to Importantly, an post-pandemic guest build arrivals ADR which to market reached

for Mexico in phase. less place destinations have restrictions to in policies. and not the has country the during we and with season. or COVID the arrival reopening entered any to into tourists its sustain our compared notably respect remained for pre-flight As confusion testing led improved other Airport has you Republic Punta the international respect Similarly, quarantines business recall, arrivals with September has confidence travel as consistent passenger high upon did requirements testing and to This mandatory to these removed entry Dominican Cana meaningfully helped into consumer

first Ziva Our reopened in continued November, resort our and in The of the Cap in the has market. impressive Zilara resort Romana Hyatt reopen, Hilton to and has be properties was to most Cana shown La the a segment’s one managed also our segment ADR by flagship performance externally way and overall two nice segment, down a which absolute yield hotels first the lower occupancy the But to significantly properties. our have branded properties the was our in through also trajectory compared lagged branded quarter. and

best continue this March constraining very basis other Moving began, and absolute to in January a month compared arrivals entry country’s and and month passenger recovery since had will encouraging on Jamaica, was for and Ziva The segment. factor requirements destinations, for Hyatt this meaningful Zilara Rose Resort visitation weigh the on flagship be step-up Hall to the had versus on international February. an the a segment, to as its pandemic a

arrivals March. and performance Finally, an the Pacific a a the absolute international basis high in also quarter high on March new in Coast on finished strong post-pandemic passenger a hitting with note,

has Republic. decline the the in Jamaica the fared than arrivals’ decline Yucatan, occupancy and better Dominican our passenger Importantly,

motion maintaining we remains already on to the for us and our prior capture demand leadership believe to focus that minimizing channels. notable Our the pent-up were the experience, booking guest a safe, continues trends return maximum providing I being throughout direct many positioning and profit with shift Playa as enjoyable anticipate cash affecting to for pandemic, great XXXX in the that beyond. onset consumer pandemic of the most accelerated behavior burn,

faster channels channels enabled and to shift naturally us third-party than to booking gains. bookings occupancy ramp competitors focus rebound, restrictions on We of move share mix lower as reliant percentage many and has other direct direct loosened. current are is leading the will Our our realize many of pandemic

our five-year XX% are quarter of the our accounted our were for on XXXX, versus to direct least strength year-over-year. up room up total during company XX.X confident XXXX. we XX.X reflecting XX.X% of However, business aggregate, booked is our target quarter, our of channels with percentage as first most business well our XX.X% consumer competition. bookings, at percentage playaresorts.com to of of points relative model In direct nights the increase and a by direct, year-over-year, points whole, plan

the to million a XXXX as at for for ahead XXXX XXXX year, bookings almost versus period. of time Looking the and as April whole, comparable XX, XXXX of for versus $XX $XX million last has playaresorts.com $XX same generated million

Our direct much segment. faster extremely than particularly recover channels a the channels, rate other challenged to at continue tour operator

increased this strategic paying markets remain. the and travel On in our front, time, significantly during difficult marketing believe we the local restrictions where in-country particularly off move is efforts marketing have

the measure recovery, driver QR contactless one safety to by implemented and the guest We facilitate an Non-package non-package a selection. our of and revenue a as be of as demand pleasant continues improved code experience. access resorts, of both ease surprises to offering the have and revenue throughout the driven of overall pent-up

Hopefully, to fundamental want and truly February deliver how that performance return not business me and ramp offer the many glimpse to demand up for remained focus our and expect recovery on our as continue our we a the and to a since final given on We reiterate to meaningful drivers. experience, the this guidelines so further was that resorts safety, impacted a view the well eagerness second able for from a also level pace the the we footprint but and large on bring behavior, pick of macro our booking be performance guest our CDC Demand was vacation a of about humbled Their guidelines into to been the to helpful safely in you With QX respect revised significantly the market progresses. second of be bookings has has began our to impact to following and ADR back week believe has fantastic that associates. as service travel February very up demand staffing resulted during has think CDC’s outdoor the and personal robust. it as half and of to March, resort feedback XXXX. reinforced leader change meaningful I heart quarter environment the for have our as did the world-class for in me.

turn Playa contribution So challenging With to again, seeing balance to call and sheet during these thank discuss I the are I Ryan to your in each would we every will operating back the for the very over what like and times. employee environment. that,

Ryan Hymel

took of improve roughly cash an and that $XX million you first everyone. We net capital with help with our a burning March X of the review credit and the just We our Thank monthly $X including detailed liquidity each finish a then used of bookings first first the $X Starting bridge quarter quarter, guide for balance balance million month of our to first cash update on unique discussion. sheet under repay will we’ve quarter, we like equity give $X.X outstanding the earnings totaling sheet, our our our $XX discussion million, which in our market quarter, items Bruce. million, revolving and million an facility. the morning you, the balance Page with $XXX much significant Good during approximately and rate our improved included release liquidity forward namely we’ve of actions liquidity, million trends. of to unrestricted release. again, on on burn and during raise then of off I quarter proceeds quarter, fundamentals to the began during last with $XXX and million

sheet Dreams proceeds XX. the from for cash net reminder, $XX completed the sale have unrestricted as balance a We All Also, roughly balance million on June the aforementioned approximately cash financing. restricted total our $XX we a the at million to additional XXXX efforts also of of as bring million. still of March $XXX Aventuras cash us of Puerto

line limited we current previous the say were Much On on should the billion. our to bearing want borrowings only burn debt extended until And debt the our been $X.XX that on total revolving visibility maturities have make balance. few in rate be I a any EBITDA do draw that will line, arise. revolver loan I XX% tested has term and side period interest quarters, arise not no the our credit XXXX. additional the other our the fundamentals. does the than relief One, business future aside with of credit have draw on Two, credit $XX our ledger, we facility covenant January the like need need of our given now our the But I’m providing are highlight three, given outstanding facility portion and will is matures we not mature the of XXXX, of more revolving not March in outstanding from to until liquidity our XXXX, business, April and if matures do profile, we guidance. points. of improvement XXXX, XX, into able million in to of or of we draws pleased credit very April to until

recoveries impact $X burn, spend anticipated We we an with expect Also, of anticipate of the in deposit $X for making million million. QX lump million CapEx to $XX premiums for roughly cash the for during which EBITDA. our second sum but our will quarter, planners spend in impacted CapEx $XX in our approximately now is not I appears quite would this insurance ballpark of year, the payment approximately XXXX lock a million our to different high to COVID, now business. like appreciate space turn past be after meeting our recovery business off. your need and that’s to been to the in the to as We’ve taking from by one group been years that two to efforts our group quite attention typical successful retain

experienced to we quite XXXX business last same has in group compared half at more where we’re but first And the skewed half pacing Our heavily time to behind Playa well been currently, the second year, were the XXXX. concentration fluid.

the our demand, we at you with mentioned call, $XX pleased our group MICE on in sales our we MICE healthy for expected As on of day have share have biggest to business the of majority now, I half. bookings with the see XXXX, books particularly for approximately end single to of the second continued last February, of again, to million had it XXXX. and I’m that come

this pace business of varied volatility to movement expect and we of group by the between Given access and for the see but to periods, continue base nature business of build. to vaccine our country, overall

business to million and The group $XX the $XX MICE the $XX is This base year-over-year. and nice a help prior compares on XXXX provide Our this increasing. XXXX. manage over to should XXXX for business million profitability return for and million of pandemic yields books drive improved to

very be Playa. a great should are optimistic that for We XXXX year

as us $XX our to on the we earnings deposits, QX X% $XX during tied nicely that at roughly stays books the continued With books the last advanced QX. side of in on of stays for of business for million XX, $XX On had leisure well. the quarter call, internal sitting ahead and XX% the time stays and in quarter, million versus XXXX, our in business with sales million the XX% April to to XXXX second as wedding of with XXXX of related to improve for first revenues our building with of respect group, forecast

leisure a As of business not reminder, of our majority booking. at pay the time the does

mentioned, the the QX on as CDC QX the in alongside Yucatan, Bruce market. change to airlift ramped as improved into occupancies moving versus fundamentals, sequentially Now despite guidelines the starting the in fundamentals

growth change the solid in restrictions quarter travel step then and solid available of got off most As strong and March. the a remained far thus aided ADR brief despite with very finished following a backward remained Yucatan a start, we break rooms our progressed, mentioned, pricing. a spring the rational reopened in the believe We took competitors Easter but quarter pricing have to has and ramping the by as strong and occupancies.

channels better decline clear our belief occupancy that Our competitive a fared direct has further decline reinforcing in arrivals advantage. our the than into Cancun, providing are

timing Although on ADR inventory respective the the time similar ADR to XXXX relative for books reaching and the XXXX our is for QX figures build time dollars indicative demand expectation around of to our quarter, well the on a the of fourth uncertainty guests’ quarter accordingly. remained also is year, books there’s while the robust. periods, pacing up are also believe shape of and confidence versus of the ahead the the the growth I of the the are Yucatan demand the have up fourth pacing compared fear in ahead near about third planning point us second both to also We away, a integrity we way levels out of quarter like Also, ability QX low-double fourth recovery. at revenue QX later of it out digits today. availability relative absolute and is XXXX, our bookings in allocate XXXX has in missing the travel of and pacing data made lower quarter as lot books XXXX. same both occupancy to travel the still reflection these price utmost term. as The QX the the has the what XXXX build volatile to Revenue likely when that the believe nicely relative not still for for is for at would or in maintain of and XXXX the XXXX the to said importance to helped others more years. ahead travelers’ that half and the quarter for third the second half Yucatan has XXXX of for quite for XXXX. for versus for for is Revenue to as levels, suggests XXXX is a same their the on vaccination respective

of we’re the make Los business demand. other of the far very nearby to as have the In on our want slope our Cabos to and decided more by clear on Pacific, seeing doesn’t resort current second we this is resorts phase that the any openings, cluster demand we’re usually group Ziva thus the and part recovery it I However, reliant of encouraged as open books. to

the leading Puerto Los Cabos. demand. as on which into Vallarta, in recovery Ziva the opened fourth of restrictions progressed, of travel segment degradation the in, began to with second geographically uneven, as out versus January in demand been less is reflecting the although operate of Yucatan, California. Los Pacific demand Pacific. the in demand airlift October XXXX as Similar of a deteriorate up which Given in on the the Cabos all XXXX have a Unfortunately, revenue books diverse Hyatt half The the very Yucatan, markets market, high similar the of to gates concentration out followed is the a XXXX guests we weighing to experienced X, near-term Cabos came Los remain on larger quarter a the mix likely for coming strong. also versus pattern customer began and of both

on in new XXXX, DR in Zilara began opening Resort. Cap Cap with to resorts Cana Dominican, and July Hyatt Sanctuary our of Cana our Ziva the managed the Moving and starting we the

that the Cana in Cap the to what to were extremely in removed Zilara seeing become market. however, The fourth in in and traffic period for the are mid-September season. the pricing. in as quarter Hyatt tumultuous the the we property in targeted but materially leadership sourcing meaningfully the during Ziva outperforming a As away. momentum into moved We reminder, as belief XXXX, has and in has Dominican right strategy still highly picked is Yucatan, The high we stabilized our requirement into government of seeing depressed maintain bookings intact. remained country, and EBITDA picked this the our the enabling and requirements captured much this of and take resorts late very Similar enter excellent DR December the up this these destination to share us market COVID Airlift third up believe our government, our throughout exclusive immediately region. COVID reinforces the impeding of is the July, imposed market the destination testing testing performance we’re direct we most

but business destination has of demand Hyatts of capacity requirements or relative rooms to relative mix Jamaica. in other the removed it locations. market. additional you back and may in outside see XXXX early shaping ahead, to Looking the recall, to resorts DR approached stalled relaxed increase ADR as modest Playa this the occupancies XXXX has July, ahead on to see for weighed market started And but the beginning books potential to up out XXXX, on Bay managed in Jamaica well COVID time would helped sourced our half some the was is of owned market, year. airlift for revenue into QX the locally testing Montego the We last of the been of second requirements or our as at half levels in and our momentum Jamaica to international the this disadvantaging entry increases both have once additional our COVID October, be place put Though our in XXXX, severely in sold. We like were testing we and strongest entirely again same

the the the revenue is far, return attractiveness line lagging versus for books and for XXXX versus the as any of the meaningful quarter. the fourth And international in quarter positive we’ve down XXXX. not change for haven’t in the leveled quarter the on demand is versus on so fourth seen for restrictions Revenue Currently, XXXX Jamaica XXXX destination. third on books side,

the While pacing is to on segment given relative aforementioned QX cautious still QX for improved encouraging, the the restrictions. we’re

is traveling, Now channels is a came operator XX% days saw U.S. increased the taking tour our from believe in room and quarter sourcing to the XX% a basis while Playa direct roughly X% business weakness who being XX%, in QX managed nearly we the Geographically, XXX versus while XX% increased room channels function points only channel revenue sourced a down American XXXX, is which our drop. our roughly of down managed South look in basis points. X,XXX OTA of at direct of night the nights, XX%

our current versus XXXX. European dramatically Canadian, travel all the fell and mix Given state customer Asian of restrictions QX globally,

year, the continues Our a mix ahead percentage still mixing total. XX-to-XX-year-old demographic is behind but the last absolute over-XX-year-old while has improved of of XX-to-XX crowd still up the now as in is numbers, and to but mix year, lower last

points of cancellation in reopening during to to leading cancellation detail And we activity booked mix to Hyatt nights line cancellations, booked our of increased portfolio. for generally. challenges I quarter. was nights Hilton room we with the down the of our that basis been were XX during year-over-year Hyatt our basis were a and our first We’ve reopening positive which across room redemptions January. percentage contraction our for World period points, XX into bookings redemption point a then outpace modestly the go to for redemption properties of the the see process in low across resorts reasons, Honors internal XX persisted see our the in net portfolio Our and Hilton did leading we at QX nights mid-single-digit to the face down up and hours Hyatt competitive were roughly times properties and both decreased began much one double-digit won’t night industry Hilton of board, into of October, room the but versus due lodging too our our industry accounted Hotels. across mix projections. biggest mentioned has which several pickup,

in by half in States. travelers levels to positive as and once to XXXX. changes for of guidelines improve yet continued continued United we into second The cancellation pickup the net imposed to the the up, international able vaccination demand month the levels normalized were logistical see Following still restrictions February the change as for new entry cancellations digest U.S., picked the CDC the of again persisted through

window would into quality As books the as point, activity you was time of the period result may QX likely similar books to and time during a cancellation modestly that In high on we XXXX fourth second recall bookings any change more holiday managed thanks quarter for advanced the our considerably happened XXXX the on The our despite increase booking the quarter, of post-pandemic the time length we quarter business same and defined what subsided time change, the as compared post-vaccination Case believe as in time. there. business far. not guidelines guests the for pacing the ADRs. in for the to lead visibility the on owned for by revenue during ahead the travel has of CDC our has in was on point the once Playa shortened has has which improved, on books pre-vaccine XXXX XXXX heading our the third has time during and lead to experienced season. is than improved lead activity QX the again have been thus resorts of the CDC we our ability aggregate, in still where But in behind cancellation favorable were our of average

to on from bill also of versus levels, both requires up others basis the these gross purposes, slightly, nor with and both ahead of hope resorts positive our gross The well largest with at which behind pace pacing is our third in ahead of quarter our item, and we’re for XXXX. cash. worst same to in has quarter, a ADR cash pandemic no and and focused some GAAP, this but XXXX. XX%, XX%, together, all The tightly U.S. one change is tax to preserving revenue flows. us, but under of Mexico, for fourth offset however, commissions EBITDA SG&A sources ADRs elected housekeeping XXXX OTA still on Playa us One up up final managing This the quarter Taking planning increase change for is P&L, but up XXXX consolidated expected of XXXX versus in the then beginning this expenses on OTA XXXX. of increase revenue we is second by expense the to up XXXX

starting purposes, for this some closing QX, quarter Bruce we it over back incremental to each comparability quantify turn will With remarks. change in you. that, For I’ll for

Bruce Wardinski

Thanks, Ryan. Great.

the move competitors. demand we to earnest into direct we recovery this capabilities as enabling as year through outperform pick booking So in has up in for are to to summary, XXXX, our continued build optimistic are and us our very and meaningfully

pandemic the in will are we effects you, lag segments But For linear with potential nor many as meaningfully behind world able we near-term. the uniform, month-to-month experience shared Based sure, Ryan still the once the on with will other the volatility not access our potentially of the recovery to anticipate the travel of the market subside. are expect Jamaica we be confident ease. or as not in trends around intermediate to long-term vaccine booking to

owned competitive over As you of been The the to resorts quite resort increased required conserved portfolio. of have cash may significantly have on actions mix the management branded of operating owners contract becoming seen, our properties resorts. quality we a value are we’re looking preferred Resort portfolio, to convert del our for the branded partner and But maintain announcements the The for all-inclusive additions positioning our of the high-quality our active otherwise their have we three of taken also Playa to-be-converted the asset improved also management Resort Riviera have the as Capri Hyatt management the to and Ziva brand, year Carmen portfolio. Playa a Tapestry managed strategic these recent overall past our have under contracts Cancun Yucatan to resorts.

front. particularly Additionally, these new sales the synergies, additions on and marketing provide

for to am As the post-COVID time. present your themselves management hopeful opportunities our continue demonstrate in abilities, more Thank all era. we you will third-party I

up open questions. the now your will We for line

Operator

session. Chris the Deutsche begin We’ll first comes Woronka Bank. from Our [Operator question-and-answer today question Instructions] now with

Chris Woronka

they book comes would and Hey, or and have playa.com to someone guess good to that there? maybe maybe brand a branded about the morning, you from either on a rates? someone when website can very guys. gave the customer little Thanks else, talk helpful. out, details that generic maybe channel bit it you the for all or I how business Is rates website compare that rates gone the where

Bruce Wardinski

booking, great on we’re Chris, to When is you at whole net. grow look Sure, a do focus trying question. direct what wider our

people had branded gravitated started ours, got historically little operator to as there. OTAs, all-inclusive But channels. resorts a like like sites they they no through direct of went through site or all-inclusive learn Then really So they to ability about exposure tour kind and through playaresorts.com. bit book more booking to a

that we been had in what focus but and to. We we are we’ve accelerated pandemic had shut what them, had lot more highlighting So while we of booking, you do going earnings through is this Because get do direct the volume they on had amount the channels really had underway, things that a down we these calls, our have diminish historical right. done, really of to to them. or the

world, everybody in selling, digital out we’re So just like okay. is selling there a

that longer States could leisure They United or are any the question? lot Hilton those not other are the to or with Hyatt who of or programs all-inclusive. your There of at Honors looking of trip cruises would affinity States. people who people considered them be United They brands. in could outside other – members World anywhere past members, cruise customers. could be the in be a there. No customers, people are They So are have

So of them. getting our looking. people. the done we’ve out what properties our they’re all And at name, better really brands, we’ve really is gotten is. just front our of those out in all that’s what And there push They’re

younger went Ryan right. of do when Those some one group more, through people can Why? are some you people. are the the lot big a demographics, who this see So of

be the a results going are their or other okay. you And because say, of going, that to used who do people net. or be three can them but on it’s thing And I are they’ll are properties. clear. access book, we trying very, is me positive. advice And this, I XX-plus- think I to constantly are what we’re seeing think The who they’re is And very will you we need better continue need super our to guys, sons And pass throw how on our to giving I on just being you positive. get to let’s I forward, broader this phones. year-old my helpful, sales

with branded. goal do they people and the to we right? brands is our brands. you look I view be then the belief and the that our we player goal. at all-inclusive, have confidence dominant want mean XXX% when And that’s And too. a positive, to not And accident, brands. brands is the in be by it’s Our all-inclusive to as go They

Hyatt so now, that Ziva you right see continue Zilaras, and our And there. with as grow we

just We’re goal. to the growing our you’ll we accessing and continue see that’s every in our But future. Hilton want new customer portfolio, announcements potential and

your the Maybe answer question. wanted, for we’re you to long what more Sorry than but after. going that’s

Chris Woronka

are business Bruce, your going helpful, it. yesterday heard think pretty I policies on some especially to the for point brands, summer. you Very talk or that this recently really helps back for the at some little think maybe appreciate we leisure half. are, revert build And the of cancellation maybe And understanding? then then about business Is your how back to a that that bit pre-COVID

Bruce Wardinski

hotel absolutely this, I Yes, with a hope It’s you reason I’ll is airlines be you discussions cancellation they so been so. tell with seen more those going get hope I back, policies crazy, the of months. that And I that But COVID my right? and particularly and back the when no and adjust. hit, have mean rolled disciplined. has shouldn’t in those Chris. to partners, look brand back, to get when And more Sure, at you’ve leisure a I we had to policies. implore lot continue normal into well I policies. there historically rolled when companies travel-related in a properties demand of lot everybody business just these things laggard other high

of the this which about talking year. talking for then in I’m I’m in us Okay? summer November beginning and really high the season, begins

I reason loose goal. we should really our no tighter think that kind need that be that’s is there to having We of be policies. really and So

Chris Woronka

great. that’s Right,

be is one might out much Not you Just there? more talk maybe you bit side go just it little doesn’t you And opportunities. the is does you how of last this but leverage? guys management specific on a own management getting markets more the the I guys since much encouraging deals, allow hotels, contract for is me operating really of seeing. about what just a you to it on well where course, see of of mean same Can have management to outside kind net far-reaching more contracts.

Bruce Wardinski

for it. us, synergies in I comments, there great for I growth a And we think are it’s okay? said Yes, opportunity our as mean

importantly, us, have Let’s spread just face that’s But partners, for spend resorts them more our branded really our any cost. and right. it. brand we more we for all-inclusive good If good we can dollars, of really with more and can

going after So question. How positive big customer us. You to first the you really can your dollars it’s do a access Who these more people? are them? for spend just

right? we the big owners one three If you – very you of look them, of at it joint wider actually we are if straight But could large, group. ventures. what contracts. be we’ll one going net The us, want throw really all institutional, forward. partners family announced. to at our with a management could a what And sophisticated, we ideal announced for number just These look properties are those grow. market? that’s be existing could It be of than things Absolutely. It And

our done theirs and brand a than they take and management I think a when in the and happening fact unbranded of is what are fantastic. look an our with Why that with can it lot is – we they conversions, the COVID at better public, direct, doing. with our and the selling others, wow. what And when our in with with people’s experience ours? and reposition numbers, doing success, the you what’s looked decimated we property segment they see at we’re particularly we’ve resorts Playa success us results as said, are And properties

to came they so us. And

that will continue. And so I’m momentum that hopeful

Chris Woronka

Bruce. perfect, Thanks. detail, Okay, that all appreciate

Bruce Wardinski

Thanks, Chris.

Operator

with Shaun America. comes Kelley question Bank from next of Our

Shaun Kelley

everybody. afternoon, good Hi,

at Bruce, So of one point, a I can you that at of least like just in this remind right? in normal appreciate us now. haven’t a of season, those had we years couple –

we have just sense to see start books help when booking so the typically talk what of fourth are quarter? on of? or base a base of for – mean, we of much we have numbers, kind would what us Just the about off get will kind I how Ryan’s numbers those

Ryan Hymel

have not as would we today. We as Yes. do much

to back be their in They’re able points of to year. to that the house. that the are people the think to of the availability get I looking half to travel wanting out fact

the this So of quarter, would XX% for XX% from on typically, the the year, have time. kind we of overall maybe to half the business fourth books at back anywhere our of

They internally books so land that’s we’ve book why such to propensity. a the now. almost And because talked out get on you’re kind larger now numbers grab. seeing And and like about of want people’s it

think I and people particularly occupancy more land they that pricing building go importantly, in where if rates these destinations, realize higher. will is the they later, rebook then be grab don’t building now, to

Bruce Wardinski

saying, point, the are or that’s is, booking for week, really I in book book January. Whatever people you see. need early to expanding, mean, Christmas in right? I Yes. historically, That’s Because what high Easter that. to right? weeks, it seen a need for earlier I Ryan’s now two is December what And you’ve adjusting they’re Shaun, week,

there. I again, positive. demonstrates that’s just so it that pent-up big think And And a demand out

Shaun Kelley

pacing mentioned the I ADR ahead. think And Yucatan, for Ryan, also you at least is

of or fast. quarter much were numbers third you overall? quarter, Sorry, is either off rattling How just for fourth very ADR up a lot

Ryan Hymel

in The ADRs from and what’s single third quarter digits the fourth today. on low up the are books

Shaun Kelley

of that’s low XXXX, single-digit And off correct? Great.

Ryan Hymel

Yes.

Shaun Kelley

bit I of rate? than a it’s are mix competitive specifically? then normally closer on have, would to And occupancy your there more rate just kind kind you’re of as what’s know But we or the books arrival to of other the little and broader you going of dependent in of from out get your a day expectation seeing environment. ability And what with healthier on on push operators front, you the

Bruce Wardinski

very Sure. I’m Shaun. Well, the potential. I’ll you, bullish rate tell on

is sales – that I the told going demand is be a and Just out weeks, we’re months, discount, right? not more coming back build difficult don’t a may And you kind of do now of confident going So times, discounting, downturn. historically and base mean there, team to this like our need not we in to do I’m I that okay?

lower a try later. typically, build then and So base rates you you at to yield would

point, Ryan’s that. doing ahead. not To already we’re We’re

downturn hotel than downturn this. a years, this. I’ve and at Obviously, good and closer never metrics. business going kind is as about XX been like month drive being I’ve confident I in okay? drive then like month few of the of it, few those not I’ve get building the seen to driven this continue We’re by downturns. And week, seen lower financial our at I’m ability rates. anything years, different base a I’ve been a think rates, base through We’re a never we by highly week building was to cause to very a to of that. by

the out going for desire, okay. money, and traveling. And people all there the so have for they have the reasons And individual they’re is waiting

be So a demand to going issue. I it’s don’t think

I in at programs, last drive management other we the so if in Duetto fully with place Then all revenue a it. over you and rolling out those we things to time. can look really some at this think of that And have put continue couple implemented are point year,

tools static have the those there or that months. way business you have to past we like didn’t XX rates we operators, in the in the to all-inclusive distribution Also, worked give rates it historically, So be XX tour would was channels could the for yield. and

okay? have them, even are XXX% Now ability we change didn’t dynamic. to the You

just didn’t rates. can the adjust So we if we we the And have see flexibility. business that grow,

well-positioned we’re up as the rates think demand to continue materializes. I drive to the So

Shaun Kelley

at the think risk the were on? DR going conversations do very do season? you do based you But maybe going got guess turn like are I question in And Or of everyone. is, when my are to Where curving? final they’ll Mexico. going or around on And things for? in the lines Jamaica, you tone with back and be question the play this good Do missing think think on Thanks, get miss It What’s how the to we tell coming be to is those on looking right? direct think conversations? that we just seems to holiday Jamaica? would of in thought what holiday? be sight we we’re you

Bruce Wardinski

I season is just an communication for I COVID it I is in holiday look about et as for recently the miss no And Bahamas is entry cetera, the focus Jamaica quarantine, testing XX:XX it made at that the longer short was them, the way quarantine, with going just vaccinated Bahamas the the do announcement answer. Bahamas, with the not So PM. think night this to on government last – are okay? into we’re travelers. in did, mandatory requiring really the what they as

Okay, that’s huge.

and And really so I’m done government been have almost the what they’ve the push look, the Bahamas with saying, kind I with mean, lockstep making testing requirements, exactly. with is Jamaican of

do. And This so did. is just guys I’m saying, hey, the look, Bahamas what to you need what

that, But hey, sense. perception. no say, were or risk only restrictions able and vaccinated for in in our if of at pretty to systems we’re these countries lot and the you’re will releasing to small low, these Jamaica country and travelers to make incredibly I’m political is kind that easing much so is hopeful this, infection the very of political And issue. the there’s medical about A the going look They concerned it countries. are

get I by you’re later, Bahamas lifted. too. think all restrictions than sooner the to doing that And a minimum. we see to Hopefully, matching happen what at going are where the think I could necessity, rather So Jamaica, point are

don’t think is miss out. I to So Jamaica going

changed a business the be with pointing policies, as went up. out going Once the soon think was they’re our I their like to increase. as released, there’s Dominican Ryan Dominican, big

same. does that see think the to we’re Jamaica rapidly pretty going as soon I as

Shaun Kelley

Helpful. Thanks Shaun. everyone. Thanks,

Ryan Hymel

Thanks, Shaun.

Operator

with next Rose question from Smedes Citi. Our comes

Smedes Rose

on I just thanks. follow-up a Hi, little question. wanted to bit Shaun’s

XX%, quarter that quarter you are the well books on revenues the in in said up So in fourth revenues XXXX? you as just XX,XXX clarify, – the to and XX% as third

Ryan Hymel

That’s right.

Smedes Rose

of there, Ryan. Okay, lead the kind you buried

ahead rates I of is, single the only then where to up would my are you that, think question the so in that are – said. XX% well guess, range, digit, I imply be occupancies XX% modest if normally you would

if what kind is business the all share can of occupancy books So kind you through? flows on of now, that just

Ryan Hymel

right. further a back they’re bit looking, just what now so later booking out you’re a been little year. folks saying or are goes in vacation try the lock No, to they we’ve And in it Yes. that and

books with for XX% the quarter, we’ll fourth I So to ahead revenue prepared I travel. the on at to we’ve be what’s we’re seen get quarter XX% people further we’re over seeing XXXX, more on trying the fourth what and time right? books, if the still their by third than ever on it And the in out the that’s booking make fourth is for absolute desire obviously, smaller fact was to seeing clear the books is get don’t the than that, before. higher you’re the occupancies quarter, in But believe ahead that the remarks we this out that quarter point.

right, So that certainly are implies you’re ahead. occupancies that

Smedes Rose

sign coming to And the the some Okay. that that also the that and starting or the a Or through groups is channels? components is booking, coming look travel – business? direct you it in of mostly through when still same at tour are there rate see at pickup

Ryan Hymel

You’re come of seeing but what through channels still seeing strongly. we’re it’s most the slight pickup, direct

You’re absolutely right.

Smedes Rose

Okay, thank you.

Ryan Hymel

Thanks, Smedes.

Bruce Wardinski

Thanks, Smedes.

Operator

with from Our next Truist Scholes Patrick question comes Securities.

Patrick Scholes

good morning. Hi,

Bruce Wardinski

Patrick. morning, Good

Patrick Scholes

seeing the labor moment? and you. seeing you are are Thank properties, at your pressures U.S. wage availability at – seeing you are Question, any the hotels that of

Bruce Wardinski

question. for Thank your you

if or companies, on are jobs, labor? had they on. with moved in they what different happened the in they’ve you at a many groups. if I there’s in right? to new Because Okay, So is look on. they’ve they U.S. the others, the you it’s and So we right? look One their opportunities, Amazon than difference people, us situation jobs lodging got lost big moved completely at are are, two in a opportunities. whether moved U.S. with all segments, owners They you situation other of the between and big So the dynamics, think kind

they’re that is like, hey, getting because the motivated had big you unemployment – And to benefits. I’m back thing a go unemployment group there’s other not really of strong who The benefits. high government had people I’m very

the up, that’s and in I ease those until you September, pressure. So see believe

So are at be bribe going going hotels to to to back the margins. it’s the be and a rates, come it’s to and for going to have higher challenge people

Our in game Los in Puerta There jobs, no different, the travel Cabos, travel-dominated are right? the Vallarta; game Tourism town, jobs, even in the in Dominican, in okay? that’s Jamaica, jobs are town. country, is situation destinations, completely other the Yucatan, our is right? resort, okay? The

done be. an So as attractive hasn’t the as effective it the has it people, would beneficial job, or been while government

So to get back. they eager are

our the back did our we as bring is on reopening started – started what soon of to we process, to people. was back bring So early XXX% as we goal

days. mean of We’d or we’d Now people. one back then bring another person days, two bring two for doesn’t XXX% for or back our people and XXX% full-time one

back So only we may bringing XX% be the people. or XX% of

number we it’s knew that wanted them people. wanted So back. they’re intentional, of at reduced That to okay? hours, but the sure people We make higher was our

markets, we the of able we’ve and our in very still desirable want to all to the So been work. to retain we employer people okay. But people wanted remain retain, a

U.S. in in not And that the U.S., you’re not so seeing you’re the the that seeing pressure issue we’re the rate seeing supply seeing and you’re

negative it’s I And others. a positive going to it’s position. a we’re think a for think I think be So in I us good going really where for be to

Patrick Scholes

then Okay. on for that. you one Thank the just modeling color And question.

SG&A earnings, SG&A How the our trajectory of rest quarters certainly the about year? the below the your for XQ On of expectations. for you. think we was should the Thank

Ryan Hymel

Yes.

– in starting in and that. in, And and the a things some else last company layering have kind we on salary just and the Everybody salary on QX we year, like QX like moratorium travel and wages. certainly, of everybody costs back T&E in start So we cuts. did industry, wage mostly took and

FTEs. are in start currently ramping to back position a And not so we up new

probably assuming good kind of of business ramping not that more things the see start these planning SG&A see intention on the third-party it’s from think online. today. little year, we back in trajectory management portion out FTE us there’s of what But some properties are now, remain other do you’ll start this and this our to a we’re significantly might up of you the a shape our spending T&E permanent. cuts what I continues, positions I now, half filling that will think new for coming need is we would they ramp where that right up right too with as

Patrick Scholes

everyone. you, Thank Okay.

Ryan Hymel

Thanks.

You bet.

Operator

with comes from Janney. next question Tyler Batory Our

Jonathan Jenkins

Good questions. morning. This is for Thanks Jonathan on Tyler. for taking our

year. Bruce, gets kind on First you one if bookings. the a in think provided excellent from an as CDC me, really you incremental of a I’m forward? in that half going the over later still lifted And the the that, year. further demand, is curious positive in there’s if or nonfactor of some of have summer that not Or so half having guys you restrictions on impact the of bookings the highlighted pace color remarks, the And the some back back prepared far

Bruce Wardinski

factor. a definitely it’s No,

So us. clarify because on focus for I I an think issue your I let’s this just think important appreciate it’s issue because really

We It have quickly. it negative okay? while ended. it longer made, was to surprise was kind expected, really much diminished it of announcement I when impact, expected worse an pretty of and it What the our positive blocks, ended that the was, was we of duration quickly. really much out a say right of shouldn’t kind

impact big and still the on is having of masks. to all of year, people year, lot I you to of to having the have They’re of points used right. obviously used our that they it’s factors. it to been low as social testing And so the used that was, while and about? to numbers big Well, getting impact. that see at as half okay, positive results, impact? really kinds an they they’re at what travel. what not second the to things, a it’s that easy our care any it They’re fact focus of They and resorts, second is, not worst Why have I is the not what incredibly can about resorts. they’re do wearing do and testing so given do, easy there, are distancing. we’re because very was this going half Getting you really is to think case, probability trying Likewise, issues, testing So putting to about, the to get there’s care there’s before I’ll They’re the going big it’s to get back, And of restrictions, right? back. used And see two possible. low, airport have that’s results the the an really, do it’s make to things. people the low. airplane are tested we’ve of that One a like, it them all

are Now mind. still vaccinated, in a cetera, But people everyone’s okay? lot of et it’s

that right? The people with they media the property all tested, and fact kind happy into So done they U.S., well Jamaica doing we’re really the in and to want that the so back fact that it it’s Jamaica, they’re of get on tested social you look to that because the is to see be is that at people, don’t to and who of while is of of easy, get and maybe it, have Jamaica, of the getting to hassle to be right? don’t going They’re deal want below accepting not big or don’t posts, et I If take don’t whatever to of that a restriction is cetera, going to hassle, want risk, they’re because remains travel hugely the will lifted, – place. okay. want positive is, and right? in the take group it risk I But they is big, going that let’s be like, clear. there

that a I going bookings result that. directly think in we’re big have lifted, So gets the to as a of day increase

Jonathan Jenkins

then, which And respect to on all you hearing touched could provide Ryan, on factor if and of Okay, additional the in lift? great. if any or this you’re remarks, markets you How in a wondering the are in much remains, what Thanks growth some outsized for seeing markets. and there’s markets but detail. the with airlift color prepared your that the seeing

Ryan Hymel

Yes.

with portfolio. So would suit our as follows you just imagine, of the it performance

the Jamaica. seen you’ve certainly has slightly outpaced what is Mexico which DR, in outpacing So

our March forecasted Obviously, So same that our load requirements. we into improved data of all because January. the also encouraging. CDC But a markets, with which in in then What look we versus seats improved you for March factors February at, all about look and didn’t of markets. is the it at international passenger pretty take versus January cancellations arrivals, see

your that markets from internationally, amounts only seats specifically larger up coming United right the is you as the now. still U.S. the States is the a quarter they’re set as or into good, of still it’s seeing wildcard Bay, bit by is we’re but the watch pretty of in from but scheduling is would to Now U.S., to Montego Punta more the are But certainly still imagine, in little Cana. in fourth particularly destinations, else everyone what seats Cancun, the they’re harder slightly flat, change. because a from specifically much into subject actually QX forecasting not a bit

little earlier recovery. the bit it touched talked we think I about a on we when

with that think has I U.S. just assumption in be meaning in back person. will be in consumer’s to be a do that I may the somewhat life of lot particularly may office, population and to the my back the normal, back the general, school kids in

more and our QX. seen positively just versus not what bookings generally in seeing volatility, with we’ve forecasted, so And QX we’re QX seats into airline but with

Jonathan Jenkins

the Okay, helpful. great. guys. all for Very Thank color you

Ryan Hymel

Thanks, Jon.

Operator

today from Beynon Our comes final Macquarie. Chad with question

Chad Beynon

good for question. my and taking afternoon. Bruce Hi, Ryan, thanks

Bruce Wardinski

Thanks, Chad.

Chad Beynon

cetera, in general meaningful Across et a group portfolio back least with group we business or to should your MICE, change to more at the of versus wanted go I your wedding, expect your offerings, ones the business. given terms that leisure versus or trends season directional XXXX, the the some other does expect you. percentage to if the in the so, Thank see? And change? margins mix impact we of what’s of if this and high one of revenues general segments,

Ryan Hymel

Yes.

because want the warm – I a in the So people let’s year-round properties think shift when married, get you’ll think I from see our talk from weddings. to – are and about don’t agnostic, that business group seeing more business, smaller than are because people our It’s come rapidly outside. more are usually And group. they’re a groups. back the familial we’re little weddings outside. It’s

mind, anything return including worried could of vaccinations So anything that. less top like the on about or that be they’re

is channel. really even one, back. the On XX,XXX-plus the Zilara margin comes but group too than rates side, of historically fantastic. and higher at now because, from commissions properties are you’re we really just and Los where pretty three those Cabos, that much talking not direct have being planners square you talking The see pay about in the business Jamaica when Ziva Namely our what feet you’re you meeting convention larger helps Cap meetings group, properties Los That that the Cana. significantly Zilara the space, Jamaica incentive Cabos, even

how X%, through incentive X% the right? to meeting direct our it’s is paid of our if obviously that, Presidents group is of OTA vast depending like double to it, property, company. customer still planners business So like it’s digits, incentive in the their top anywhere came much Club, is because the for our operator on Club, stuff our on from, So meaning or kind low salesman, call cheaper by majority then business, of And usually business. that; than Gold top

coming are revenue group margins events doing large is additional high a upgrades. and items non-package wine that us. like a lot upsells, a spending trips, more on the then And or itself on they’re is lot with So of for friend spa spouse, and beach a the or people profitable

So that as it back, don’t any the year margins. those the shows of comes at it see I normally shifting group help should different properties, But up. in time

Chad Beynon

versus that deployment, about Thank talk you Thanks. ways nothing are cash past? then about period, great. are And XXXX, about some in and flow Obviously, this how years? in prior how these like Okay, you about more other of you. that through get expansions thinking conversions, but in you a once the talked we’re in normal to opportunities of you’ve thinking capital those share done repurchases free we

Bruce Wardinski

are Sure. hugely said, like I mean, conversions obviously, the I to profitable us.

Okay.

and we if properties, branded well They very highly for you Now what those CapEx we’ve we got which sold dollars, properties candidates ones our at conversion, some fit large required weren’t really left. right, strategy. did, look the didn’t sold, are okay? that So attractive with ones the we

that say, I you Not much, done much be of look ones at of been kind that portfolios What as shouldn’t left branded not be our converted. to say so need okay, – not And can the haven’t done. much you needs and just list are to here’s there?

have in seen that the or significant the of So we level you’ve don’t past. disruption CapEx

at that’s most we be And whatever when and makes opportunities will your flow, cash flows, we and normal XXXX we convert, are analyze beyond And hey, to willing as face look So the there that. for and we’ll get the do there properties, that, let’s our take point non-branded the let’s to back about, sense beyond, those world. to world the cash it, to do wait get the back for best can to our really things stock that a are it free drive And And can’t I generating focusing and is we’re world, our normal on we cash normal shareholders. most really with Playa’s value And start high to company. flow what that cash. right? does where for

Ryan Hymel

a Obviously, And be the we that on getting given and pandemic. you burning Obviously, certainly but we’re progressed rate through conservation reopening kind the further further, Obviously, is mode. little get we’d still to EBITDA. your that pretty closer would cash, EBITDA imply directly we that could question where to which consider, our once get we we’re go, off to closer in something along that’s want particularly just cash bit is think stock great. run of buybacks, stopping would of open to answer cheaply trading course,

have to board. that. would to would So We we with discuss certainly our open be

Chad Beynon

Thanks. of luck. Great. Best guys. Appreciate it

Ryan Hymel

Thanks, Chad.

Bruce Wardinski

Chad. Thanks,

Operator

to question-and-answer Wardinski This to for I’d our turn any back Bruce call session. like over concludes the remarks. closing

Bruce Wardinski

Great. Thank you.

I So emphasize and beyond. rest am close, XXXX just and about the just I much for XXXX optimistic optimistic cautiously of to that want to

people to to. to to incredibly will accelerate Playa be should As vaccines continue attractive demand Resorts and grow, go leisure

for future. We expect to continue the results reporting positive foreseeable

day. looks has in the think time for interest I really, good. I us Thanks your today, thanks everyone looks So the taking great to for Again, join horizon a and good. Everything Playa. hope

Operator

for The conference you concluded. now has Thank presentation. today’s attending

disconnect. now may You

Playa Hotels & Resorts (PLYA) 9 May 212021 Q1 Earnings call transcript