PLYA - Earnings call transcript Q3 2021 | Playa Hotels & Resorts N.V.

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Operator

Good day, and welcome to the Playa Hotels’ Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Ryan Hymel. Please go ahead.

Ryan Hymel

Matt. much, very you Thank Good morning, Resorts’ Playa & again and quarter XXXX welcome third to earnings Hotels everyone, conference call.

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

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

could that section factors our the report recent of SEC. some of our Relations review filed Factors discussion to We've results Risk on we Investor Company's please releases. the website of cause differ, night which For actual annual with at last updated the Form investors.playaresorts.com the XX-Q, our with

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

Bruce Wardinski

for us. joining Good you Great. thank Ryan. and Thanks, everyone, morning,

you are quarter of night. chance season. health a appreciate interest holiday reported you our hope good your all in in we review third had always, of spirits and to have As most near last as Playa and sure I'm the results we that

So, let's discussion. with get going the

gains broad-based quarter. occupancies and the XX to fall again markets across not as XXXX Again, once up our The like-for-like sequential capacity the during isn't much of as the package our standout was this levels. fundamentals ADR quarter was second past increases. all real markets Playa ADR flight the months, net picking substantial posted improvement months. been increased and our third typical typical sequentially, compared resorts resorts into accelerated with for over versus our but But our portfolio summer managed has geographic The

mentioned I the as position, has into we maintain but of book to the allowed front sure demand, earnings what the on opposed cutting to call, to As our the on substantial we pricing to back quite pent-up fill moved expect combined weren't half last rooms. us pricing as year, rates with revenue

that approaching high revenue trend will amount and continue. With on this healthy the of I'm already books, a optimistic season the

typical the variant a toward seasonality. seasonal booking was is in slowdown end the to to versus would related experience normal did to we of what the see out delta the cases from we expect in of much difficult bookings increases While parse result COVID summer, how it

Just period as as year. Thanksgiving Labor accelerated the the slowest our into of typically time year period slowdown is quarter far so a and In Day fairly of bookings case, QX short-lived reminder, the was and the the well. end toward slowest of to – any

have weeks past achieved prior revenue reached spring. In fact, we few weekly gains the this peaks

the results as the geographic profit other international airlift. pandemic. Cancun the arrivals The beginning for XXXX quarter, indication for into in time excellent way with standout, Mexico the Cancun the once were for ADRs the of during resulting far occupancies Looking nicely potential normalize airport for and passenger are September are particularly exceeding an with into the third third XXs the has up through. thus quarter, segments, as locations at Mexico first flow an the during Flight encouraging in quarter they ramped and on in our levels they there recovery, since results again basis the absolute led of the our the increased highest capacity

segment's rate QX. resorts’ way XX% occupancy on beyond. EBITDA and quarter, the resorts weighed in Republic, only as our there. The where the that posted branded and the flight improvement established the our lagged margins XXs. by was out yield increasing increase Cap sequentially as Cana in it performance further the behind our on occupancy the the has international to managed each Similar depressed. percentage and the resorts. and stabilized us properties, managed significantly resorts’ of fourth and third investment ADR market, XX% absolute to have cash-on-cash Moving in throughout ADR goal as the But led versus month. itself though, Hyatt our Zilara overall Amplia a our the a DR, The to nearing compared segment healthy as remain with also our for in we in progress point externally give didn't leader again, look ramp high Dominican globally in approximate additions build globally occupancy in which XX% Jamaica returns continues sequential achieving XX arrivals as to the down also our lower our we with experienced build quarter drove here Once two regions a of significantly passenger capacity confidence to flagship pace to Ziva much other Demand branded quarter

with with the increase in improving capacity the books, Our increase quarter. in commensurate on fourth expected in-flight lead the time the revenue is

are structurally last to anticipate in encouraged We we competitive by Jamaica, not after footing and our very despite do the or the on being slower best-performing prior market pandemic, which weaker demand its the impaired reopening segment was year. increased start

aggregate, were we the percentage pay relative to on increase consumer continues source acceleration third third-party the with XXXX, a quarter XX.X% but least room also reflecting X.X down direct significant in nights to of group Playa booked, of of well points plan In channels year-over-year, strength our five-year are booked at direct channels, business. confident business and XX% by during to direct XXXX. on off, our target that is and focus Our direct,

room percentage points X.X down night our playaresorts.com year-over-year. quarter, third the XX.X% During accounted bookings, for of total

as business to the for Looking whole, aspect of at XXXX million for our This has comparable apply playaresorts.com for as of many, period. generated current a critical that direct in-house, believe million advantage resorts our is overlook. October $XXX XX, approximately significant $XX major of revenue competitive a future. We a XXXX is and now potential portion and portfolio a which of bookings our XXXX compared the I drive in managed

offerings. mix an higher dollar dollars, driven anticipated absolute believe immediately modest managers feeling to leaving recovery, pandemic current resorts, revenue surprise the business level Again, an that prior margin is but the a but slowly direct gauge seen customers it returned normal, the non-package more higher of Finally, another improved an resort Though if the likely focus the as given this to on pleasant fall than would for it in short-lived, execution the area our and profile. demand below as to of basis. still of very our difficult attractive comfortable has of XX%, reminder, levels when non-package been remain we start will on spend to continues by and pent-up significantly world general be particularly are our

the our in Wyndham proposition we accelerate awareness we Wyndham’s Finally, the exposure and of sizable portfolio with will of model. which midscale by announced partnership all-inclusive segment relationships of Hotels, a both midscale of leveraging to database growth value customer recently and upper strategic increase believe

I two fourth our on gains be look we discuss to you that strategic As deliver setting would newly Ryan Alltra part over superior the high sharing offer brand of resorts like in I of agreement, as and in turn our again, Once our outlook. with our and customers We will alliance the realize coming recognize the to sheet that world-class for we to just-in-time call all a converting thank from more continued created forward truly the rate have competition associates the Mexico With back to to balance Wyndham the of during quarter, us here tremendous to CLIA the potential season. the product. to allowing that, service, quarters. will apart

Ryan Hymel

we sheet Bruce. quarter trends. $XX liquidity the first million. then approximately $XXX policies. And with sale of on [ph] and highlighted off balance last cash. forward I cash Good totaled of bookings the it and our payment VAT on review finish our began I of the Thank then again, you, the payment million our as insurance market an unique some discussion morning, on quarter the outflows that you call, $X.X of had million Hotel, and the earnings $X.X unrestricted with Namely down give third will third everyone. We quarter fundamentals the and to and million update Capri related a during

cash third restricted generated the Also, the additional balance quarter. cash our from our June, core Given as activities reminder, XXXX fundamentals, million just a during total $XXX with $XX a unrestricted under the the in sheet September cash we finished of quarter our balance million the We financing. once improvement have of XX. as on of again operating

spend we be debt for interest-bearing billion. no $X fourth side of revolving anticipate the $X.XX the other year On outstanding year the have quarter. roughly outstanding full million for facility borrowings to implying total on million credit the currently XXXX for and of our We approximately ledger, CapEx $XX

the the into XXXX some than less related million $X roughly quarter remainder the Hilton be spent our PIP CapEx the quarter. of year project of As spent payments the our will spend fourth with slipped Rose or full maintenance, intended to third little half A being at on Hall. on

attention this Now has strong. segment remained demand turning incredibly in MICE business, our to Group

meeting our stay and to half and second With $X has our the the scarcity our of meeting to MICE space, continue quarter. gains. greatest business further XXXX, and MICE demand anticipate to further million in The of book we for resorts fourth during planners rebounded is nicely the we beyond business see of XXXX currently out, where at about forcing

demand look far meeting desire of travel years with year, planners’ next ahead the two to ability our as expectations. loss into meetings, we With confidence, exceeded has improving combined and

the Our of puts $XX last of is XXXX in year, on of which which well time books many this $XX Group that slated in and in the last the full on stay our MICE the than for is of to we XXXX our $XX business final, the given balanced the MICE approximately pandemic. call, of and at the the also had compares and books million incremental $XX books, of space. more first prior earnings of MICE as year XXXX limited come our pacing of Nearly at increasing, second to is half on early of our million time XXXX, just the business the under current onset have half of the revenue MICE call, revenue ahead slightly ahead million bookings XX% our MICE our to year for million

million deposits, of XXXX $XX under with With history just versus our a help related XXXX Cana. XX% also and with advanced related $XX manage particularly on for stays is October MICE return year-over-year, to over to to this call, at million Los resorts at stays of our our XX% Cabos, base time drive any profitability versus provide had improved as pacing to X, comparable in of QX in in sitting ahead The of should in respect yields the of last with business us we Our books. roughly million and and Hall last Cap that far quarter roughly of Rose XXXX. already $XX.X period the the nice fourth

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

close remained Bruce inventory in ADR fundamentals, the the again, rising to a momentum slower solid a in as country. versus extremely quarter to QX normally growth by the we seasonally price rising is June demand. on despite fundamentals QX, seen the despite period. moving important strong demand quarter and progressed, improved in starting continued being COVID allocate the as Yucatan, maintain environment. believe cases sequentially in Once The integrity Now it accordingly mentioned, in aided

XXXX ADR same gains of XXXX. in revenue. We higher for other respective fourth at is XXXX. quarter the to the our MICE QX revenue versus also over up time this XX% in segment, up our on third gain XX% Pacific, roughly quarter, ADR The for quarter, our the reported time the slightly in the to a at XXXX occupancy expect to Yucatan improve for compared significantly XXXX the versus over were that a is and modest Cabos, pacing sequentially relative our XX% more the segment the as experiencing Los the year. occupancy third as representing absolute books reported QX is in to ADRs Hyatt locations particularly In in highest same still point that depressed

improve mid-teens to books in on XXXX. occupancy is we the quarter. for at also up to our expect third XXXX with QX ahead, Looking reported ADRs ADR sequentially that a QX up mid-teens, similar Revenue absolute versus the

the and the both Ziva the pacing XXXX two quarters. both Turning the externally addition Ziva Playa-owned same revenue are of of the the is and resorts XXXX to segment the the revenue Romana. renovated results. The on led resorts weighing segment for and in the ahead this while and on mentioned, in managed two for of at Cap segment QX DR by XXXX driven Cana as resorts way is books Dominican, third-party significantly Zilara and Bruce levels managed are on books segment Hilton XXXX levels. books managed obviously the on year, Cap our La of at also this Zilara of ADR the nicely the ahead ADR The Cana behind time

occupancy as at ADR QX expect improve a the to well. sequentially similar, absolute We DR in

Jamaica destination and ramped the other segments. but quarter, the lag significantly continued nicely into in geographic international fundamentals our XXXX to during arrivals Finally, levels

happy Revenue for The We revenue net the segments books last see for up the the flights the COVID-related very in ahead stabilize, in Currently, mid-teens books drop primary and restrictions. rates December on Jamaica time XXXX expect the but of period. month to digits. for every but pacing versus call. be where of visibility for and quarter on November are here for to modestly since improve, to the single almost the driver October, with at was cancellations the to the is the of lagging our continuing of continue that December in pacing given XXXX, continuously XXXX, we earnings on week begin first choppy recovery high to travel of were with with adding is revenue continued ADRs up quarter fourth same XXXX these

meaningfully be quarter, XXXX. hopefully ramping of before occupancy fourth expect up QX in a at we the For to more to ADR higher similar slightly QX

taking points is a group room Geographically, and came our sourcing to improved increased direct from while look XXX night quarter OTA traveling, U.S. significantly mix Playa-managed basis points. stays nearly increased at remained room Now source managed the XX% who nights, mix our business as XX of XX% in our the South sequentially American depressed. channels of

in to XXXX. of XX% essentially Canadian zero Given and Asian the mix current QX to restrictions, travel as of customer state compared our of be nearly continues our mix

the narrowed Our improved XXXX gap bookings. rely stay expected on and to in the trend XXXX to of improved Also, versus booking penalty despite our free window quarter, QX returning and is this as close during shorter less levels versus continue to nearly a quarter. cancellation we window the returning length during levels,

time, up increase. were XXXX the So, Playa-owned the bulk XXs the for in aggregate, pacing revenue same resorts books our and quarter high fourth on managed where of the for is currently the XXXX we at versus ADRs in driving with revenue the the in

also XX% is QX ADRs were QX the for in gain. with of around of XXXX roughly ahead XXXX, XXXX of of quarter half first up pacing we driving The where

these As both manage earlier, exclude Dominican managed stats in assets Also, of pacing pacing owners. for we QX and on third-party obviously a XXXX I Republic, the resorts for which externally two reminder, mentioned QX. behind as these are figures execute behalf that the

slightly at we continue higher in we together, to third all saw quarter. the QX ADRs expect to improve occupancy sequentially to similar Taken our than

seasonally and of and margin QX our the third we for pre-pandemic a a as compared be need deliver highest inflationary quarters last on much and to as to result levels to aware want more seasonal goods, staffing tougher differently, quarters mentioned of we or fact be rates the XXXX, rate front, what the cost slower of to to both difficult are will third of as our well Also, cost upcoming during achieving on experience on quarter. extraordinary expect labor, in traditionally the while normal of utilities On be that will currently margin the margin premium we increasing as those it absolute quarter ADR Said margins you periods quarters, historical is we were saw resorts in quarter. to meet first occupancy higher productivity as our given lap our still the for demand pressures pressure, the incremental yielding. levels in we cost premium call, the compared just like higher the historical

margins our ADR for is as the cost that, largest call, OTA back margin impacting difficult Yucatan basis pressures and point in on quarter remarks. of billing levels we last total segment change previously Pacific it fourth achieve in approximately Finally, it to point that the drag over than I'll quarter. historical margins, we'll methodology more basis mentioned mentioned at our Bruce drag comparisons, third on and drag on a make with Mexico in XXX margins the harder point closing will for this some and on be XX-basis our XXXX. partner XX company was Combining With it turn to the cost

Bruce Wardinski

Ryan. Thanks,

So, the successful in penetration a season position, vaccine resurgence are coming have increased in of a namely all summary, healthy the flight together, MICE normalizing pieces business. believe to globally capacity, necessary we high book

on focus of the us our and the has markets to in at execution way lead placed uniquely pricing. top service Our

growth Our Wyndham has new partnership the yet for COVID exciting beyond with another recovery. avenue

the our the create We questions. open to to will for look ways shareholder segment experience and any I'll expertise, value. continue in leadership up for that, to all-inclusive leverage With line

Operator

[Operator begin Woronka with Instructions] Bank. come Deutsche now will Chris Our the from session will question-and-answer We question first

Chris Woronka

afternoon, data and far, points helpful. for all good very Hey, thus thanks guys,

big like higher I about little normal? pretty bit for business around for of a business can pent-up out-of-room maybe driver color spend, a wedding the year. talked and You've if than compression terms that in back of if you of the next being it a that wonder lot the get what about add and wedding as of also things rate like of a non-wedding you just economics kind mix thinking to looks you

Ryan Hymel

talking incentive a we saw next readily back more in actually actually meetings XXXX. drop-off come and it The that groups year. We've more XXXX. for Yes. business wedding about We in saw

of comfortable people this more you fact continuing people outdoors, usually beach our wedding, given from little the lot a that the be of letting. spend or of a on heck a that of not all of or receptions If renting and a there our at spots held that they're good kind destination lot resorts for the typically having it rates size ceremonies comfortable the the It's of heck wedding because more couple made And also on the about spaces out a can think roof, even feel property. business year. celebration depending in outdoor one a business, the pretty non-package but on the they're XXX up

So, good us. combination non-packaged to business a of appealing wedding and it's that both so ADRs spend makes

Chris Woronka

Okay. And direct got Thanks to rates even you that's OC. so bookings because number get was though the able mentioned think, Ryan, higher for the and little you your the nicely fell a helpful. year-over-year XX%, still were you bookings, then quarter, I on bit the direct higher

of back target, of else? going to can to when something you rates the or think and do of you from expand go forward, talking there like-for-like XX% continue Hilton these And the of of these those from that kind is kind today, So, rates maintain where Or you longer-range channels. I'm are direct rates? Should get kind just Hyatt and kinds really Playa? some you higher about

Ryan Hymel

Yes.

about the value in compare just is were and we we've – when sentiment you just XX%, been for when spend the and that if inelastic this it we're what's scenes, stay, our rates XX%, third should One, so. the eventually that relative of talking we given I quarter, U.S. believe keep of our about given like even can properties allow the to changes. $XX. consumer almost run to up of think $XXX that more that's to toward anywhere direct portion think over continued also, said, you behind But done instance, happened should has gains in the easier think our because think given hotel these to I if a talking or to all any rate gains question XX% the on kind consumer things kind a with. $XX us we're rate little a is, relative push like we when demand during broader leisure We're and relatively intact big not too rate $XX, increase, you of period get those begin long-term, permanently about think it's we to So, right? probably direct, from keep domestically, cheap far to generally

Bruce Wardinski

say, Chris, Yes. it's confusing. a And just little let me

we parse actually so, XX%, negative. that's the not in. we and looks were down a data, negative. it like And this nothing went we're complicated always through is and It's XX% When it's period, all consistent a to because in you

because you great, If so drop rate, business part is look the reason about the went direct Typically, absolute rates on get business? absolute business. our right, the what out group the we we was in Well, great, highest doing our group actually of and up. group like our do it's of for our dollars, the

the seeing them increases think in group and Ryan are when all numbers we're our the of rates, pointing direct higher of of our look then So, mentioned, for business, the you upward. both all MICE business, as at potential business, I the

the the it turned you're on. is have channels other turn super once the on. group And we're anticipated I I is calls We turned that, just channel It's like channels don't the going to it's negative. see other the So, now last go the happy right? couple, that seeing And on. said, to we blend, just any three all down on kept numbers kind and way saying of

on. hotels hotels group's for to well is to mentioned the months, has And groups, turned group last back us that basically as get As so, most, do and zero, right? as those XX will spigot the you gets basically the for remember, been will that incredibly Ryan benefit

just is I that XX% clarify negative. not want a to So, that,

and at the look percentage. not just absolute to have the You

Chris Woronka

question Got in That's the bit Is of little is And last to Thanks, most of Hilton well, branded Wyndham brand. on then hotels. Bruce. than there any a you. the than way just market your all Right. announcement – Alltra the I TAM that it think that for a buckets. guys that's terms probably all-inclusive the we into about seems just for mean, end contracts? if look – in management hotels like there's you the than worldwide of that in bucket obviously more Understood. your markets, higher with different Hyatt your or segment at Caribbean fit

So for just more contracts that thoughts management potential forward? on are going

Bruce Wardinski

great Sure. Wyndham. analyze it and with XXX% you Chris, excited so the to correctly, partnered Alltra. name we're love okay? It's a question, be So, Wyndham We

and has I is name and think brand to all the good kind now of them on things. with some segment, very with segment. cool our of we three us an all-inclusive, favorable connotations then It arrangement And any that the a really do. ability segment. exclusivity But to with partnership that it's is all-inclusive. right, that biggest And rights And that we all years those huge based milestones like the kind we have hit. said, it's a Alltra, you relationship penetrate that, really to for didn't extend

occupied Hilton kind of to goal, Zilara Hyatt have by Ziva to different our very Our just able really highlighted the goal with segment is a to successfully other with be brands. is that's grow our Wyndham, right? partners than the brand like what you and thrive in that is and correctly So we

and excited I of this, be think you're just going And a be lot strategy to branded. what just more not we could XXX% highlight to to about is our see growth. So,

well have properties some opportunities our We are, there. you're all as Not of aware.

partners, branded add all lot. We a two player be space, to and future. really one partnerships to the Windham those of with want in brand brand one Alltra when that eventually, the it or going accomplish we're the to this comes us may and additional relationships is excited to allow So all-inclusive in our really going be we brand are dominant to

Chris Woronka

Thanks helpful. Very terrific. Okay, guys.

Ryan Hymel

Chris. Thanks,

Operator

Shaun Please Kelley come will Our America. of with next ahead. from question Bank go

Shaun Kelley

levels just obviously or phenomenal. or Hey morning are remarks. for about afternoon, the Ryan, a which pretty good good Thanks wanted prepared ask ADR Bruce all I bit of everyone. you're seeing, little to sort the that

So, our I if the Ryan, I in commentary about pacing if we we heading around into that exceeding commentary I may go tick like XXXX number conference, first levels I XX%. then by it at and up a as And called of correctly, September, it you back think, – talked got could been for some number. exceeding right before think, up, But think I XX%. ADRs that that early to the sorry, be then, quarter, have time, the that

in you XXXX maybe could help let's think So, here us point – that importantly, moving what's just of and about kind and then as of us versus remaining XXXX to mix? trajectory more for, sorry, into the we're for XXXX And remaining occupancy rate break what's down it, kind call here, in XXXX?

Ryan Hymel

Sure. Yes.

up perspective, as of with moving sequentially. you'll So, in same QX compared roughly up the move kind see step from rates QX various our think you together, into be taken occupancy segments slightly as we just QX, all a QX to are

at are XX% we this point where any of year, you've XX% time to your given got roughly book. in QX Just given of

this pretty a feel about we was good that QX where sit things So, number. you point. for pacing at correctly. QX, caught That

you're so, right. And

of we last QX QX levels the time booking for gave So, was XXXX the significantly numbers we ahead that spoke, XXXX.

that, revenue reference we've the would that expect contract the forward, period, so As to as some. demand seen you the you of phenomenon that imagine, pulled we've on books this you approach much so and

can book that on books revenue they not “Hey, any what my could Now if we've year rate, the and is from where look, That's given are build anybody then do seeing. a perspective.” revenue in and a they put been out low say, position

books by So, has but we've revenue position done but on increasing rates, while that not it. just compressed, maintaining the so

giving short yet, So, of when pre-COVID continue back step but to out expect continued to not rate continue guidance any gains. levels up at I healthy point, I would look at to to this up, XXXX, step occupancy to

Shaun Kelley

deeper, How typically to later very – XX I this you Helpful. one And have and QX we think days be seasonally should then now of important closer. that just you. quarter, would last but is obviously much going I tried sort the

much have how on give ballpark would of for a you us that? quarter sense the books typically a you So right or the now? first Can

Ryan Hymel

right point. right XX%. Right mid-XXs, at it's in Yes, the this or around

Shaun Kelley

take Okay. of trends Can you. comeback to I are that bit and the talk what's but then timing get a mean, or bigger have last you in might a market would around slower fully little question recover as to going supportive about obviously, Thank sequential Jamaica, for there just what that maybe be, Jamaica? to bit well. a in you visibility of improvement And a kind

Bruce Wardinski

I mean, it's going Jamaican week, ball But pick and of up to don't I I a Shaun, when lot. can, say, to Minister just they're and the Yes. coincidentally, kind again. doing with pivot was a I last is this crystal of have Tourism

So, I in They're in the the and very to country.” than right aware that, your home direction. get will a initiatives working Dominican I going Mexico, way are better doing situation, on things in of hammered the say, we number they're him to we're “Hey, back of

trend positive I see you're rather sooner to a than think later. there going

pointing But all indicators the of worlds with months us the of the shown thing is, certainty. you at my it's – nice can't predict where best never anything in in right? of And kind because We're XX kind look lot of prediction. have sit if say we the are Okay, right the of last a direction. today, I'll the kind that you XX,

going good into best about for it what's time is our year. So, of the we're us

year, of together going be well, the first So, I November, for things high really couldn't next of and our quarter happier. kind be into all gelling into coming season to and in here

I just the be to build business pushed let's our derails but they that groups, it to with the going that's lot like is the the balloon, And fill pace, get Mexico going fill keep Nothing you Jamaica up going in and water its becomes and Dominican, is it slower places other up with right? off. of fill fingers So, things up just that, demand, think crossed. just when the case. highlighted numbers, as Ryan the a As to in

So, about I'm Jamaica. optimistic

said segment no to no the well It was future. we've – there's continue best reason pre-pandemic, perform As the was it not the performing the it doing reason fundamental for before, for in and there's best to us.

Shaun Kelley

very you Thank much.

Bruce Wardinski

Shaun. Thanks,

Operator

next will Beynon Macquarie. come with Our question from Chad

Chad Beynon

Wanted for side non-package. we the this just a Thanks. questions. sequentially, you the quarter. focus are assume things. non-package this kind $X anything to it there million even this? or in about of accelerate staying positive of think year, noted how certain and should grew $X a next you Is customers noted on of pacing Ryan, in see Thanks given the should you talk that longer. we But Hi, positive continue believe for good afternoon. I taking as that to ramping? type million. And about a Can that for further how terms should I'd that's customer? the MICE of

Ryan Hymel

a on point It's great the MICE.

spouse, partner, free companies, help with potentially and at brought those is typically a because them. So, properties that essentially for their paid the these all a for big are incentive a it's by vacation MICE properties, meetings groups so being for

one, that, there beach banquets Spa. the doing big events money three So, then or in or spend like but then on the already times things is that's people the large and group have go

net those I Cabo positive Cap space, think that meeting Cana. to it's namely have large a Hall, Rose and resorts So,

bit expect more particularly people, they'll spend during Riviera around, properties, quite resorts Bruce learned that The a of acceleration a That and things leaving up cabanas as last like charging it Maya, comfortable slow calls, at and Cancun, of properties. sell mentioned, wandering but the other that a just resort pandemic. little way bit preferences. this less learned to lot in the downtown, in because, of and that there's noting in about I like that, those the people the would feel just kind bit little a and we've way and We've couple talked said, we we people's to the

lot I of to think stay. a that's here

but it think I quite be little a expect to slow some those gains, able I learned and to So, we a we'll bit. of bit, maintain

Chad Beynon

Great. and integrity And talked But the market? open you when think terms quarter. Ziva set you the fourth what how to Are seeing you even ADR able are DR to Ryan, that Zilara, of the just first about in Thanks. quarter to then, then as same we achieve the charge already with you And more leaders specifically are the the of in about in portfolio, property? other kind out you across into should there? some of you able what price

Ryan Hymel

Yes. And – The very accordingly. said, it like I you've rate what same say. make it so, integrity inventory the made not fact is been rate the show to allocate internally able to up which proven is to sure exciting and that since – been single is that has do and the it's position beginning quarter this. we of clear booked the pretty Bruce rates that we've giving to with every out we're

for the the but brand-new is the and other we far Zilara, care other expectation are competitors Ziva have Obviously, what as do. resorts, the our to right the and market. we about is, I I particularly days don't on like be to should thing data the properties, outperforming which about willing more properties, As less these consumer the doing what the pay is these higher end think,

Bruce Wardinski

Yes, said. was Europe Caribbean. look down, had, customers, go to to vocations, customers who those Ryan what lot to really Chad, or travelers. I of a Guess over time. Mexico what? mix lot I'll right, Europe for it echo When available it one we've what Europe vacations we to the winter Well, people of and the the alternatives. for It that the And pandemic what vacations due the and or They American right? shut would Europe I'm the changed, of a summer, to go fall mean, spring go of learn the had all for to right? and the is and was

And so, newly of And we Zilara new Cana and because opened like because our that Ziva and renovated of had and we Hyatt some got constructed Hilton, and Cap people. and and really to great on get and the focus for you the kept and us online people. up had up, reviews And allowed and the reviews online up, offerings going then service.

product the on So, focused we have service. the

Now we delivering so, we're the customer. new on customer, this And have right? new

more kind Because spending customer of non-package money. right? customer, the used is an So, is product to that end of that spend

is well, very customer. As discerning a this

they're focused the on not much rate. what as getting they're for They're focused rate. So, on

We're And the said, we not this, plan Ryan our so And do. Right? will, looking at that's not competitors pricing have That's anymore. unlike, it's lower. salespeople them. true. no, and Or to And as always are price we've okay? our yes, that's – what match we decided to game and really have to

to are we're price. charge product superior Our superior a offering a game we and plan going is,

Okay? And game. the that's

going price. And of kind forward, as this the everybody going is so we would things of not We're that in Why world going other inflation, in to world and discount? scarcity everything of up in labor impact as discount. well

importantly, a Let's let's we and I to going bring first have markets, that's there, we're before. deliver are high is Europe, to one of So, and quarter. exceptional It's the for not travel are in didn't but to to rate. pay not there, heck people can show more what pricing, get and easy. level, recently time And Europe, a they premium objective and product service right? going just okay? our and an a to to into keep going to go great you very to still have they the this, it's was We're easy go going continue going it's customers You let's to easy

Chad Beynon

it. Thanks, Appreciate Bruce. Thanks Ryan.

Bruce Wardinski

bet. You

Operator

go line Smedes Rose be Pardon muted. with Please question Our come will ahead. might from next Smedes your Citi.

Please question will from Batory next come Janney. go ahead. Tyler with Our

Tyler Batory

you. afternoon. Hi Thank good

So, mandates full properties your as are are occupancy either and resorts a cap the on commentary limits quick follow-up government fourth the question putting for perhaps how now, or there much in a quarter, that place self-imposed on or right your how could be?

Bruce Wardinski

no sell group limits. There limits government-mandated do business call. last outs the stuff from that, have change we'll still like We a that. for more are look, and That's self-imposed No.

So, rates to the the guest the has still leave using preview appropriately. experience. that to of sure that for do consumer the back importantly United positivity of nice everyone ramping our we those and more that limits we're we sure Because But States, we still making so get self-imposed and and we we're the safely kind resorts. make business a smartly CDC testing into come the test requirements

extremely And the our low percentages to is so, it's change. positivity do want nice last for guest tested COVID continued the thing that of we for to and see to overall extremely,

going to if So time of hotel year, depending the we again, and sell-out a group, short not there. XX%. But the ourselves for have we've on big the generally, a self-imposed around we're

Tyler Batory

Cana overall how quite at side actually sense higher could group that. just booking you do even Okay, those strong. a of the point, And on the numbers mean, just loop And get you've if to I'm I is that driving provided here. trying mean contributing also, much to XXXX, of just I for how numbers could things get? you well? talk number to much higher I The how available? space appreciate as about then Cap this have tie

Bruce Wardinski

it's a just the depending It's Yes. brand-new Cap generally the is of at quarter about spectacular. overall that overall, sells the time, numbers XX% property. Cana on itself. business, It essentially

it's there, us. for really done really, well and You've been

I a far half I earlier, to the of meetings think year I half, There's probably first more little back perspective. alluded half think, think, as it in from fairly the incentive room the obviously, business. first I as year, in the were that the of booked

Tyler Batory

Okay.

revenue. on And Great. Cana Okay. question my Cap then is last follow-up actually a

You talked margin about there.

you said to think XX%, I occupancy but close XX%. only

where EBITDA that's for versus expectations of in at property? stabilize returns quite So that there of pre-COVID change in terms your property? your Any good. to could Any that on expectations could Where really stabilized change there? terms margin now

Bruce Wardinski

it even around our or range. all year open comfortable just upper the of think in as full mean, the us that us a of makes No, we've end like of but And of still just had XX% hasn't it it today, of midpoint communicated. confident Like yet. what makes range, range to It a we ready post-COVID, not provided our Yes. move invested XX% capital. I more I kind more was with

Tyler Batory

all That’s Thank from you. Great. Okay. me.

Bruce Wardinski

Thanks Tyler.

Operator

Our next with question Patrick Please ahead. will Scholes Truist go Securities. come from

Patrick Scholes

Hi everyone. good afternoon,

Ryan Hymel

Pat. Hi,

Bruce Wardinski

Pat. Hi,

Patrick Scholes

you converting growth properties well? be the earlier up. Wyndham converting have. possibly I building possible in buying the existing from be follow-up ground product. also would question, a those you strategy the and/or that managing properties But just be the some in that it or as strategy, have would and question had you Would on your Alltra indicated, In

Bruce Wardinski

question. Good Sure.

go So, let's of through them. kind

management The first absolutely, contracts, one, XXX%.

I think you're going some movement to see there.

guys. with Our guys Wyndham really development are the working well development

to I see think going there. progress you're

So two, price of yes, that's properties our of are properties, existing some you level. mid at of kind our right that some Number existing that of number one. conversion at look

to do great properties think I the great at but convert. We Hyatt that properties, super they're weren't with didn't it have well really Beach. candidates really those would they're option right, be those level, brands, positioned, to Hilton because or

And on had to see some ground up. then two, And of so, going the third, think kind right, I you there. conversions and you're acquisitions

Let ground me to hit in up, real price today's the easy one, up okay? that need especially point. ground do unlikely, world, at No

said, the means existing this out segment as and properties that there's is we think, of all-inclusive, that lot I and a biggest there. whole

to an Wyndham from that's we is or property so, for for think really Wyndham see conversion And existing growth their opportunity and brands. under-branded the where I new biggest with the us unbranded Alltra opportunity

announcement, and in properties do industry. was the of the well Playa, there's received work now, that think, a excitement. who at again, people have discussions there and to we're really people. actively we in price it have ways point, When lot out I didn't they with And So, with made

so, your able that. that I be in question. to hope announcements the about hopeful more future, answers we'll I'm near And make

Patrick Scholes

much. certainly does. very you It Thank

Bruce Wardinski

Patrick. thanks Okay,

Operator

next Our come Citi. will question from Rose with Smedes

Smedes Rose

Hi, thanks.

that on about but at challenges. your of but circle dead sorry some fourth margin Sorry that the Ryan, quarter to you improvement wanted remarks, horse numbers, to here, have earlier. end you revenue back gave you some said a then your remarks, I beat

the revenue guess in ahead would XQ you is, some question fourth of expect margin in Or did offset come resort EBITDA of So, to XXXX XXXX? concerns quarter improvement? my I your

Bruce Wardinski

Yes.

to a point mean, as perspective. were ours, a our is business QX and a that make lowest in I just the margin trying think such productivity we rate is of it be I from should close. very seasonal kind general,

perspective. easier it's traditionally better from to So a margin beat and QX ADR just is from just levels. differently, an XXXX said better

a put did be And would up, to that and margins it kind I get similar subsequently, of much me, that imply there. XXXX across those bit could same excuse beat manner all. expect to higher was XXXX to be occupancy the a fact rates higher we said, and the slightly because little in sequentially to of that, therefore, that assume So imply that we kind I all improve point would harder QX is difficult the to that QX. to I becomes with XXXX together The it's is more – main a that productivity I around was trying of QX quarter. just That's same

Smedes Rose

you And Cap include would is think, versus of number, for I Okay. or on Cana? that ADR same-store first a tracking first mentioned XXXX of that And that at the quarter XX%, quarter XXXX. is

Ryan Hymel

That Cana. includes Cap

Smedes Rose

Okay.

number, versus? what is at ADR have same-store tracking the a on So, do you

Ryan Hymel

still We're points Cana. doing lower. pretty well percentage with two Yes, Cap

Smedes Rose

Okay.

absolute So, it's by your driven really that number? property, overall being

Ryan Hymel

so Cana. no. Cap with I'm – No, around saying XXXX it's No,

you take it renovation of points. couple the down If only a properties, drops out percentage

but helping, it's stretch. it's not by the share So, lion any

Smedes Rose

Okay.

Sorry.

last you. to just understood thing I inflationary Fair talked labor costs. The you Okay. about ask, wanted

your of local bid what is higher of are markets, labor kind kind are of we're seeing in in hourly a here? So, what Or labor U.S. or skilled getting in shortages lower seeing this like you the you these and of terms in basically kind of seeing markets?

Ryan Hymel

same see not the cost pressures, the shortages labor but like inflationary seeing world, We're in seeing the for reason. we're rest of you of

touched in vaccine COVID spoke of a were and little XXs harder. all difference at our bit a Jamaica, three properties. was where we're Mexico, we last ago, last spoke, destinations the rising months like like the we for the XXs DR almost last today, mean, were now, the our I when little quarter little harder cases we lower availability in I But both bit XX And associates some in or think we in the and particularly saw a vaccination rates. we from that and XXs, now big on time saw were it bit to of penetration our XX% time we

it to a you But similar little pressures a nothing makes that And you or back being the seen not nice so, U.S. bring It associates do the we're see inflation – with and with worried. to and see easier like some in extended immune anything more cost of something has that. salary wage some benefits to we've lot elsewhere. unemployment

Smedes Rose

guys. Thank you,

Ryan Hymel

Thanks, Smedes.

Bruce Wardinski

Smedes. Thanks,

Operator

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

Bruce Wardinski

going everyone's next with We're optimistic. results. And quick. we're we've participation appreciate super quarter We the quarter our importantly, very Great. on call what Thanks. went I'll fourth excited as first today, into quarter, in be third of year, more about said really our today.

book So, And because lot. we're I Thanks hope now at up. a better safe. playaresorts.com everyone filling stays Bye- you

Operator

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

disconnect. now may You

Playa Hotels & Resorts (PLYA) 7 Nov 212021 Q3 Earnings call transcript