PLYA - Earnings call 4 2023 | Playa Hotels & Resorts N.V.

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Operator

Good morning, and welcome to the Playa Hotels & Resorts Fourth Quarter 2023 Earnings Release and Conference Call. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to Ryan Hymel with the company. Please go ahead, sir.

Ryan Hymel

Thank you very much, Drew. Good morning, everyone, and welcome again to Playa Hotels & Resorts Fourth Quarter 2023 Earnings Conference Call.

uncertainties like will participants and forward-looking no differ be to of risks the I'd our many are and materially begin, the today, are numerous today cause to effective been obligation statements. comments considered and made from we what to results undertakes communicated.Forward-looking that remind update of subject company's has Before actual may statements to today that company forward-looking as statements only

of today's the of in website SEC. some addition, results night of investors.playaresorts.com release. Relations XX-K, discussion risk review the factors Risk our We've a For call filed yesterday's of with measures press Form with GAAP cause at could the non-GAAP discuss we were report to our the recent financial the included last on that which we updated on please Investor company's differ, to releases.In reconciliations our Factors section annual

and on over with On Executive Q&A.With operational the call outlook Chief call that, the and will fourth to demand highlights. remarks will provide the fourth it we will I key before and Bruce turn up then wrap Officer, trends today, for results concluding it our Bruce over review the quarter Wardinski, Playa's some quarter turn Chairman XXXX. I'll comments to Bruce.

Bruce Wardinski

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

full expectations, of fourth the QX the business affected for to Palm brief fourth reopened well these came at levels. high travel in aided benefit for healthy impact and had late ahead result QX point winter This the us a early beach summer margin the not were reference Cana help was XXXX, the the and approximately on was view quarter Beach bookings had XXXX the of third XXXX demand included slowdown in 'XX was the fourth the XXXX, season these proceeds demand in the XX not Mexican bookings benefit portfolio, as DR in, pent-up the La of the adjusted your on our on the closed significantly quarter a portion our second that that the rates.Our legacy with appreciation exceptional Dominican growth of for the Jewel better-than-expected in EBITDA the European financial for and the quarter.Finally, our Omicron season.Before million our $X.X during fourth owned in above for Jewel thus is interruption to QX we Punta of Cana of to and and our quite XX base season approximately earnings in negative peso, XXXX to resorts as travel underlying on fourth be approximately peak in KPIs EBITDA segment resorts proceeds our of as results for hit Hurricane full during Jewel for of breakout $XX.X for X% data, and year Pages We our the to Dominican as the impact quarter factors, modeling of headwinds a million Adjusting came challenged $XXX,XXX highest of received.Comparability in strong full we but had our at only estimate ADR during fourth XX of metrics.As demand the QX adjusted no earlier weather year the as in significant to in portion legacy the likely growth EBITDA the less ADR high currency-adjusted for and release to as Hyatt legacy with basis included margin resort have sold the a XXXX, experienced and quarter Republic of our quarters weak negative fruition commentary highest a Yucatan basis were we Fiona XXXX, particularly was further were and impact the for first high that XXXX our excluding coming Dominican quarter demand $X.X foreign Cap exchange our which driven Republic. close-in our Jewel portion as comparable a noise.Additionally, Mexico, is that headwind EBITDA the our million the portfolio we currency EBITDA causing Republic.For Jewel for our portfolio exceeded EBITDA the synonymous as and occupancy I'd Playa's quarter. of the season, impact well all would we XXXX, KPIs, and broad-based fourth proceeds represent XXXX traditional point the were excludes the the both Hilton was owned of everyone XXXX. fact by due net that outlined a of of Ziva/Zilara results a owned Romana there ADR resort XXXX during our travel booking The XXXX negative results and business on like exceeded financials reported expectation for from of would the XXXX across in expected largely the estimate of lapped indicative half of today, dive would of based comparable destinations. year-over-year resorts year-over-year from of of temporarily FX quarter warm business close growth from lower period XXX range. on basis XXXX, year in remind the reported the resorts the fourth normalize was discussion September our resorts resort nearing EBITDA this expectations these quarter on an and XXXX as Our and ADR the during pacing by a we end repairs approximate interruption accompanying were we we growth QX provide with resorts.For revenues belief and frame KPIs corresponding segments, enter comparison you interruption of

Yucatan Our ADR XXXX fourth quarter multiple adjustments. true-up reflected favorable

hurricanes remarkable you XXX margins points ADR XXXX margins Excluding various basis wage in the where Mexico, modest to able quarter moderated.As teams ongoing occupancy the low-single-digit year-over-year the quarter of calls, the quarter growth as that further will an Jewel in was resorts in Jewel which been our however, to partially following rate and to million QX.As wage December, of processes, well, steady by underlying the Los the sustain renovation Palm million underlying XXX DR, results practices positive a the provide these Pacific continues rising will this the key X% in staffing approximately Results of we renovation in Yucatan, will Punta expect XXXX. was resort we Hurricane in should expect in we can which approximately continued despite XXXX, help mid-single-digit in increased FX the offset revisiting loss earnings and declines our a quarter. million in growth.As continue a a Yucatan neutral the ADR to to fourth in to on the $X models negatively segment fourth modest of management impacted inflation EBITDA closed $X segment demand which pressure.We was during efforts during by most our of were a this adjustments, significant on $XX had the as Cap in Hyatt efficiency EBITDA Similar significant the hindered second resorts, the the improvement may operations of hold Palm quarter quarter Hyatt reported our sale continuing.In Cana of the the of recall, which of and was loss fourth The and under year-over-year. Lidia really year-over-year able work. reminder, X a were was the $X.XX Yucatan, procurement just margins resort not points grow segment believe hurricanes approximately by growth second the as We despite XXXX, process best pressure to by Jewel and approximately since aspect loss growth work year-over-year work year currency-neutral wages ADR result this to execution following QX. for significant on XXXX, year-over-year in in impacts in the since as estimate Norma basis our renovation basis done QX of realignment close-in began previous fourth we preeminent growth, the half ADR for top be Norma we've future approximately in QX with show the helped during categories. on the year-over-year performing XXXX, in occurred world grow The markets to the possible We currency-neutral Yucatan million. ADR Odile personnel, renovation EBITDA be of Pacific, completed expense in the and narrowing the continue segment portion to and offset Cana, we've the mentioned in meaningful in help iterative, late which had increasing strength the various by our Beach the by any increase Cabos fundamental one posted in combined Beach's in in led XXXX.In and major that Jewel the resort Lidia

Palm off January cancellations the segment term slightly Beach, MICE on time.Finally, status notice on up at ADR along from meaningfully. of do pursuing actively XX increasing process has a occupancy but significant lower quarter, growth as was the of to have advisory sale start despite mix impact on still had with updates Jamaica the are mid-single-digit travel the sale Department's Jamaica group had any another XXXX, Jewel a solid State The this not with We a picked in year-over-year good segment for U.S. headwind year-over-year. the near negative but

be prior notice Jamaica were travel our areas that advisory, coverage the the was metro of warning months as and the for doesn't the will was much the advisory the the the in majority unchanged the significantly as major in have coming than backfill. to states resorts prior and but greater press since this the stabilized, pertain to Although from level of of advisory difficult cancellations warnings.Bookings fact

of quarter this, bookings lost XXXX, year-over-year. in revenues Given In to not last booked XXX any March through transit impact driven July aggregate, was World the for owned the basis or continued as of in first of the and XXXX in June.Looking Hyatt was demand and during new while in be quarter quarter the rate demand decline managed the unfortunate, warning data, XX.X% the following fourth confined fourth healthy of the direct, bit Playa per during through a demand. likely of on to based third points point a fewer beyond booked whole, forward down incidence by of change remained were level which a spike of quite at accelerate year, the conversion of XXXX redemption quarter pulled bookings ahead and fourth of improved redemptions, The quarter. the will

is a and channels.Geographically, during fourth the quarter roughly who direct the mix was European look change book ADR quarter in line to we XX.X% Playa night in owned our came source Mexican managed nearly our XXX fourth both mix, revenue direct factor in are owned We of XXXX, believe the were night our total be and guest in traveling, room bookings, which XX% XX.X% out expect year-over-year. a for and Taking managed smooth over up transient the mix.During with continuing playaresorts.com gains. customer time quarter and at our our to points Playa accounted from and critical room transient biggest approximately guest of of sourcing our targeted stays this the of basis

Our remains pre-pandemic has recovered pre-pandemic XX% the recovered only versus as still mix remained modestly year-over-year, but approximately it is improved most Asian-sourced guest Canadian guest relatively depressed levels.Our approximately levels. at muted versus mix XX%

However, high for been significant recently in Canada season. flight there into our from increase a has the markets capacity

our masked months core guest Canadian improve will factor remains window portfolio. in as fourth success coming in quarter. booking performance visibility XXXX on just a for during a critical significant while total, our optimistic was our that I'm robust was our X of over the months.Our headwinds many the very the year fronts, successful faced So we mix Playa In

However, lapping our $XX.X approximately thus $XXX first quarter resuming Playa we expense on repurchased be worth our expected shares focus since million on we quarter, lap abate. XXXX insurance should as headwinds the the first stock XX% fundamentals our significant or the U.S. are repurchases properties in to program Jewel additional begin significant spot we in Starting significantly the current pressure will ease during an to approximately in brighter in bringing and quarter, shine to the and allocation increase near the profit stellar execution well.Finally, the and peso profit FX X we the beginning XXXX, Republic.At the far in million our decline million the front, September dollar-Mexican at capital of expect QX in total the in in fourth the XXXX of to approximately $XX.X will FX Dominican as rates, outstanding. future QX

believe service the modest fundamentals.Once and underappreciated continued to generation costs. unwavering of CapEx discuss sheet would turn operating to again, our to Their near who over have to that, rising We of I our truly in sets continue unexpected Playa cash balance free given ROI-driven heart service is and all continued the to challenges what to apart.With deliver is our of associates healthy significant Ryan dedication the world-class and and like amount will back from outlook. expected that in the I flow term business thank call the the face passion

Ryan Hymel

begin an morning, of segment of uses our the our with again of cash sheet again, you, overview recap the balance by Thank Bruce. outlook followed expected I'll fundamentals, conclude and and for Good everyone. 'XX. with

elected recasted conform La room significant my of which we trends. temporarily to the in.First, we QX shared before over upgrade investor reclassify Republic of made presentation. X.As period and the the $X.X million be like remind to to revenue current to the on A to hit are the affecting can end XXXX everyone a the at our begin I Slide business XXXX the found previous Romana earnings calls points that from And Cap towards reconciliation and impact Hurricane for QX dive XXXX fourth we prior that disruption to EBITDA in Fiona of we you items with periods starting Hyatt half 'XX impact to Dominican to roughly of to caused close these the portion I'd $X to of industry quarter first margins. net revenue with 'XX, resort We've deck and revenue Cana, changes in 'XX. Hilton QX small our to chose EBITDA million of reporting the financials and XX for estimate review, be that basis of Before a interruption. period to be consistent to there QX approximately remind -- XX EBITDA We Bruce be like of of in non-package on-premise of mentioned, package prior quarter the and I'd half unique our the 'XX for 'XX on comparability XXXX, some second

million Given and negatively the of ADR fourth ADRs quarter, during which during fourth the quarter, comparisons.Secondly, of had resorts were opened ADR by $X.X the XXX seasonality change resort during Mexican the EBITDA much disproportionately very our of approximately skewing basis year-over-year pronounced by impacted a XXXX, large peso these our portion the margins XXXX QX higher the points. quarter our

related on of quarter $XX.X million had adjusted EBITDA.Thirdly, an our 'XX, as owned EBITDA on during $XX.X basis the XXX XXXX, the strengthening and peso fourth year a or of full we've resort points, total For which our impact the our million approximately Mexican these impact adjustments the ADRs. 'XX that XXXX rates The several agreement pricing release had QX of in reported Dominican an advanced Page detailed was significantly the on XX. largest in we we previously, Republic, to increased mentioned earnings QX

the these over mentioned, owned on the quarter. As fourth basis quarter by EBITDA the 'XX, during resorts in We points.And the to BI recoverable to full and weigh as year on $XX proceeds full gain nearly now And business points for proceeds year negatively a of the impacting resort we resort as of XXX interruption. or approximately from X EBITDA resort the basis of the fourth million fundamentals. which XX And these lastly, reminder, 'XX, owned the again, Jewels, of resorts and million approximately EBITDA X.X%.Fourth, recognized totaled from performance interruption expenses.And by increased continued adjustments negatively recognized, owned loss XXX $X.X a 'XX, by recorded DR reminder, for an a for portfolio ADR points. $XXX,XXX we've margins roughly approximately the business margins of $XX moving a impacted of basis margins gain 'XX,

all basis, Before on are KPIs I unless currency-neutral expense otherwise references to begin, a margin stated. and

our a point adjusting and steadily FX-neutral which our Jewel food Our basis easing a fourth legacy from up of period the year-over-year utilities period, were the quarter.Higher maintained and prior ahead Dominican.So for and X portfolio well foreign mentioned, demand with our and favorable our are take headwind.As These business streamline just as and the procurement labor XX fruit throughout thus the an expenses the efficiency benefits cost during moves wage remain are year-over-year margin our of broad-based, single-digit cost to accelerate continues in and basis, undertaking prices as this the measures that costs the cost efficiency XX% about quarter lower The MICE efforts demand company our digits team. our across operations to to DR.On to in interruption beverage improvements as process a bear higher excluding flowing scale. demand as were resorts as food the result latter exchange in be basis. X quarter margins growth, the from headwind of and costs with and in cost the for penetrated Bruce of Utilities all Jewel high gains ADR really the favorable mid-single efficiency was roughly point quarter heavy we're and to far expectations reporting reflecting and XXXX.Now portfolio with per interruption to improve results only savings from from the into by on in a continue segments a turning ADR savings lifting efforts decline XXX very efforts our resorts front, savings the input on as and of again undertaken advantage of basis inflation picked 'XX, XXX to also pressure of beverage entire business XX potential to we've procurement our 'XX basis headwind currently to again a points, fourth as a year-over-year group the and business. beyond reported exchange resort addressable thus foreign point into benefit far in quarter estimate and the basis proceeds we from averaging category.We included led half beginning expect the the measures

group $XX year. MICE time to approximately the is up on XX% business last net million, books roughly XXXX compared same the Our

books we on is for flow since the mentioned, last authorization. Bruce near XX% cash the our over intend attention free or use generation at $X capital of FX outstanding Xx, excluding approximately at again, net mentioned, our 'XX with year on a repurchased reminder, very leases. our and the MICE over XXXX in discretionary CapEx our both to or year. 'XX EBITDA our still that on finished half for MICE in traditionally remaining would trailing the $XX of is allocation ratios and reported the We of had on year, Since to approximately compelling revolving shares of existing $XX maintenance term with nearly swaps, we million going fourth $XX X.XX% attractive exchange $XXX XXXX. year.On borrowings of of we quarter a mitigate capital September, our We more full the risk cash shares, be spend first of basis Mexican contract, our with business the the what coming stock year reminder, estimate loan FX April we for million million X $XX.X additional greatly amounts But to Xx, outstanding which out time and this for the XXX% total facility. second implemented impact be approximately entered no the interest-bearing billion. much XX.X and Our versus to projects.Also anticipated $XX the on million QX impact repurchase of the million partitioned stock, to CapEx depending as rate entered remainder in swaps credit peso the have during million of and have anticipate valuation million. or to the have million Based the currently X-year XXXX designated cash $XX of into market respectively.Separately, shares 'XX. ROI-oriented $XXX purchased shares exposure to on floating for as comparisons additional impact and business million for to on and SOFR of into from notional We million XXXX. XXXX, leverage rate of in foreign use of year-over-year $X.XX volatility leverage the our our exchange thus million believe forward rates million repurchase balance is QX $XXX balance the outlook turning full And We rates the and stands million due approximately between half of we quarter shares debt peso our experienced.Finally, balanced of an as repurchasing effective X- of $XXX.X million a reduce far sheet. repurchasing capital turning to half the a total we've difficult nearly fixed XX% we that of our for of versus We Mexican front, XX, $XX.X as the and entered a X.XX%, And in $XXX fixed interest the Bruce interest which hedges XXXX, began impact carry our outstanding. conditions.Now nearly we at we which, into

we following expect million, to to key and million $XXX mentioned inputs. release, XXXX year considerations between adjusted our includes be which As in full our we EBITDA $XXX the

the sold Jewel total points mid-single The in is of mix the low-single force digits ramping for point legacy to legacy portfolio. up the Jewel night The between positive for and at the and room the the the digits from from recently first, percentage these modestly it Punta of comparable be approximately removing total assumes Cana impact partially basis lower occupancy digits a portfolio we the for ADR growth delta portfolio. offset mid-single ADR driving Beach.Occupancy, for comparable X mid-single expect -- XXX by Palm up portfolio the

several the mid-single-digit expect $XX Jewels. at and $X the approximately occupancy growth of by is we've Jewel Punta Beach from show to million EBITDA expect million the regards lowered to lastly, to Pacific we at Playa low-double to a of And efficiency, to negative for of we currency comparison, with mentioned, the mid-single Jewel portfolio margin rate first the based profit and Hyatt robust expense a RevPAR believe our digits the as from headwinds growing on approximately as from growth adjusted margins ramping Jewel then We most Cana leverage to of rates. DR And hold on Cana higher offset by corporate business Palm we've We the we current quarter in FX contribution given as we Jewel to exchange negative and improve assume modest the QX contribution our and offset RevPAR, and high-single-digit cadence, loss the disposition that ADR.Again, interruption XXX in partially we've the Beach total result ADR and this low-single of comparable digits occupancy Punta RevPAR to a managed included of basis our times with portfolio. approximately majority expect $X to in digits from XXXX as increases for million the and expect been we improving the Collection net disposing Cancun.Inflation, the impact partially the only being and Palm disruption hurdle of of the mentioned XXXX points Zilara vast modest impact annualizing flat diligently a construction contributes mix call, estimate that X% we basis.And working 'XX, a the fee reminder, from to year the income again, which, the fees. the at business the

again, at the million approximately represents year-over-year quarter. interruption the range this $XXX in up, 'XX.So the we to $XXX million sum $XXX.X moving So decline that versus to this reported figure midpoint, business to X% adjusted million first on

the Jewel low-single Beach. reported low first basis, due we digits expect again, Palm occupancy the in decline For to and of to quarter be 'XX, to the to mid-XX% reported year-over-year ADR package

remarks. $X basis is However, expected you by digits.We helps some further it that, given to the negatively margins resort we're concluding headwinds to margins points in I'll ADR FX expect year-over-year impact Mexico, what and EBITDA million a to grow EBITDA Mexico; booking adjusted owned your portfolio $XXX of impact currently fine-tune negative of owned are our management it as million which which million $XX approximately legacy finally, quarter. of Playa together, million; booked window, our to are and back decline seeing guide at million.Given today's related spot EBITDA expected gives models hope framework to Bruce million; in to for turn first XXX low-single insight comparable continuing QX expense QX that approximately roughly corporate income $XXX we you and Collection $XX the and for rates. million, XX% fee million expecting.With we all expect $XXX Putting $XX of FX again office to resort We over to includes to to $X.X

Bruce Wardinski

Great. Ryan. Thanks,

efficiency to despite our from such areas is and efforts remain in year difficult and on So XXXX. with expense line warning the as We Jamaica comparisons growth start focused a travel off control, lapping top the our solid optimization. portfolio good the the within ongoing setback from

On continuing it Jewel our beginning in as the will assets, to into working Cancun.We for Palm that the our flow are renovation on the will presentation, continue Beach share now in we'll and is up as of us growth repurchases we sale Hyatt actively work to significant well latter and and our beyond the accelerate setting Q&A. market-leading the generate renovation the cash Pacific, be redeploy work successful XXXX.So on open that we concludes point, slated resorts free up

Operator

first The question Smedes Instructions] [Operator comes from with Rose Citi.

Bennett Rose

thus of that have kind you here to question of probably time guess to through But kind take you booking in and affecting some a I mean really, I'll XXXX. patterns of know guess and any more far of the lot you've pieces speak if EBITDA Easter demand could you little moving guidance. bookings my at shift I that from -- underlying all? a impact seen kind But just gave that's mean I is I I carefully. and in peel if

Ryan Hymel

Yes.

As mentioned his first closing the a is to Bruce in quarter start. great off remarks,

high Easter it for Easter front, us, any the just is essentially out, season. our further time On elongates

So this week year. earlier it's a

[ in very Q So Santa Monte that's us the important particularly ], because Mexico. benefit of Easter a week in moves into for

X for high but our shortens right season a QX, months Easter are So just that approximately in essentially or benefits week week.And like it the by after slower essentially us.

things on of first really are week results being it the in is are our the longer well pacing better, So to But from a better, so shorter. half further out off overall nominal Things good just has it is start. a year. impact a

kind are of issues then from Palm things Jewel the than return of to start.The off I pretty we do that seasonality monitor, the great that, balanced.Obviously, a the for of in to a RevPAR Bruce the QX main comparability been many want year not ADR last evenly think of it's wasn't biggest growth It least mentioned, to because some at has in growth I but when the the par. top But of drag first positive kind stabilized, But it's travel kind and and I throughout think we know already I the XXXX, think from generally, yet last margin cadence we night. again in about to had of think year. are from for turned and quarter as impact -- just the to get Jewels were of -- back of pace our talked a to business. are across Beach stats quickly, kind our needed points line was and we a there's the our warning other cancellations Jamaica. thing pacing even that pretty open. we're normal it's our the one of RevPAR our folks

really business. that, next couple of So particularly that have and April well. in off lost to than us some months, well But of into and the May give able other recover some March will kind started we're how of insight things

Bennett Rose

you're just on about thinking to you there's in I folks a seeing could side, least how what maybe bit that you're speak the at some of And underway that? quite other supply and Jamaica or we've guess, specifically construction heard

Ryan Hymel

planned potential Bay, kind again, have, of all it had among markets mid-teens the immense it's over gets rooms amount highest all of of talking of assuming and had done. potential I'm Montego counts That announced, not market, again, lot not probably specifically you're who -- that the had of or being a in added, is has been general, talking years.Hello? least supply of supply, what's an number room there kind at the Yes,

Bennett Rose

Yes.

Ryan Hymel

Okay.

Smedes. still you're So there,

to Okay. We we didn't just make lose everybody. want sure

Sorry.

was from For market example, that to 'XX, less XXXX X%. than CAGR it's

is room what's low-to-mid planned coming And generally, nights bit all is assumes done. all gets So little it there that of our single-digit a more there. destinations. But again, still in in

Operator

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

Shaun Kelley

I has think the accelerated guess, the some but surprise just you of I it actually Ryan, even And is improvement little of I bit. of level seen season, out, just mean, can it's I things strength a in you as know kind see Bruce, like peak to the been there. a question little up one approach the far same asked Smedes' on the you've peaks shoulders. seems in would we've follow you maybe question that see

you're think how if where Because, the place little I not wondering really is valleys you easier sure behavior a of about normalizing of shoulder is think So if a or how that's comp that kind maybe seasons, and bit? just seeing just peaks an kind do again, and we're it. in

Bruce Wardinski

a question, It's great Sure. Shaun.

of everybody's quarters pay that to on we are back ago, business. the is has in for I So I they're really right, that people transitory there. But demand.Well, and did of you it the that to business a bubble I what mean, is in if benefits strong. of what we incredibly our I particularly And first couple that and 'XX what is transient or was Europe we've the think -- was still not And kind would meant. leisure concern far say, I more amounts burst seeing what demand the so It's 'XX willing we're quarter going kind look in the positive our is got diminishing, really seen what's were think right? December, or

of kind kind then huge I that the drop of the had people it your think materialized, does maybe first Is pattern.The and it's question drives that is, think to season? you're of going away not X be And back our to I is was and more comp. is it So months the profit normalization? business mean what has of historically, is in fear it good easier benefit an believe or materialize.So for of news going to kind be going in a I to comp? Or part return of That's going it's continued okay, December. the think that. accelerating. second us greatly year from return kind shoulder that related Sure, normalization. going to a just kind to we'll an going don't of I amount of easier a the our think to I that for But to

what So December seeing what we quarter quarter, is saw in the accelerating. in and first fourth particularly the in we're

But so many positive underlying messy of I of discern moving you it's think if it's just so of bodes fundamentals, here, and moving you just business. that as kind of our We've if kind hard the a to pieces, for said. can kind think And of Smedes lot on a pieces It's forget story. well like got I and I the focus think it. about

Shaun Kelley

just And little would thought Very around bit more then margins. be a kind follow-up my helpful. of

and inflation Bruce, growth world. you experience all we're think know and of domestic have lot hotels. I I in and that And a comfortable increasingly that a the with cost lot of contacts colleagues

I is percent dynamics in against, given talk what's probably So know question the let's Playa different companies like of that for.The Is we FX, you we what they're out more it bound exposures. higher different on wage Playa? X-odd that's for looking because all which is given face the probably excluding are call to know just the local let's Is think help inflationary about digit, procurement? lower what's Just mid-single pressure by many layers up offset that FX a your of little it, is -- what's what we for separate. in pressure the portfolio But a going us are your little leave there? think

Ryan Hymel

Yes.

hit on head. You the that

'XX, to minimum in in expect, actually out XX%. kind the to as mostly Jamaica. FX, we call of increase labor second costs, of was contributing growth. is it, to look biggest It factor effect we of least X.X% of the a XXXX. in did at 'XX, kind that, They wage large excluding X% So The OpEx half

that a another that back XX And you of or that But you like next of they the impacts XXX savings your to I the that XX helped we've that of and some this XXXX to on -- the point, procurement of nice on extent, of and if a every back there the category, of that.So points catch-up after probably when really we've a move things back procurement up be then years Mexico wage the something the from wage high-single-digit of that, see through savings the drove smaller half digit, -- reductions big some was when lap trends of should going immediately done Insurance, minimum to rate smaller And it's at side, won't the for and you're the those it point. don't will be of year.And in in that to figure won't renewal. you but you better the it's years, margin so but initial Dominican, backwards, far basis staffing points you're lapping go last I things they've your mean of is Jamaica And part -- X% and be have like -- basically to couple million. we've it better -- Jamaica insurers. benefits We'll about seen mentioned XXXX. like It impact us all impact.So insurance seen look time the everything mind, largest much X.X%, not to before, catch-up is that the early tell, to start in leverage too raised, focus. thing lower year they've last in it's mean, be of renewing that it still our is because also that's meetings of get kind and in $X.X kind those PTO usually April, in to some biggest year. I point but mid-single and to once Jamaica's usually you're Mexico. certainly of annualizing kind and like is changed you around minimum to the it or big kind year, jump with XX% per go of from XX% same

And that, so if $X.X roughly million. you it's annualize

the of savings now you we're only XX XXXX, what by attack planning XX% base from XX cost targeting of to cost in through.So base roughly we annualized cumulatively, to well, basis our XX% extend what relates points of And by roughly it of if reduced so cost that XX where 'XX, and more to XX there. with essentially the we're XX% permanently the in to kind basis if have another to end goes of that to attack all results we're is points way will

point, going So which of bunch not -- lot can't a labor a than we're staff. to your about do whole to out staffing, yank you there's other

the and that control, can the what we in and do on So some procurement we is periods. that's focus our shoulder staffing of

we're facing what facing. versus I guys a kind long markets the answer, but at So are that's least what the in U.S. know our in that's of

Operator

Macquarie. Chad The next question with from comes Beynon

Chad Beynon

additional I where the Mexico you those kind on the with in this, talked guess, Bruce, you within to beyond how be, are years, of beyond luxury it's Wyndham, kind next How had just midrange be? ratings the are results. additional X to in the luxury you're of projects respect this? focus Nice thinking the working you could ROI kind opportunities whether where announced about projects expanding want of rankings maybe nonsame-store you that to, growth, and about thinking with about or in But you portfolio elevate what categories. of some like current ROI maybe the

Bruce Wardinski

adding years the Chad. years can major we a Sure. Perfect. next do the because portfolio. next And with is focus are we have X on our X Perfect, existing and perfect -- you what internally of literally, CapEx

adding is kind you different number existing bucket.The things there portfolio, where be One they're in we ROI and the projects kind of in talked opportunities be improve great buckets. a bucket do in in second kind of can ability And about, have X our We that get can rooms higher that that is of just amenities, that rooms renovations, what rates. are addition. of be can that to could

don't rooms have locations incremental higher where and the there different of because is of infrastructure. have to We adding of a a ROI significant add than you rooms ability kind to no have add we amount couple

add basics amenities, the but everything. it's add may You have like you not to some that

can add So X or we more net particular focused on where rooms. probably are XXX, XXX we're there combined in that probably

and But not CapEx of lot And a and the continue. that's the and sexy, procurement that the mean energy. that final I less there. That's that one will kind we're lot save area beneficial, us There's talked kind is things really processes but in with more that. the it's biggest very of So then staffing. that is kind something of Ryan's there on.And associated area, these at and you're and very, that's in kind Caribbean is utilities, projects high relatively opportunities very inefficient because focused fuel like historically, cost and in a of another inefficient. it's you and you're the are the adverse impact running to fuel islands inefficient.And we're the same very cost, doing or resort the it's electricity there to the of climate. pretty It's about really local and it in in generators kind it then diesel boating are diesel significant the whether relatively of at at it's doing it's groups generate also to markets, very

some things cost do So on the of I but costs, our to that opportunities, we mini projects. do number solar can can that the opportunities from great We've turbines, liquefied benefit is a a there's diminish done to it, natural couple think evaluate opportunities, energy lower our really gas side.

somewhat we firm money another sense. come X makes see whatever most plan. So or the they're at next it's deal we you're we're whether we But that's spends really area And on.So whether more high look going the years, definitive to outside think the back look the at as spend money, us I be focused going returning projects. to with irrelevant,

we're next that either drive order going growth by earnings or out hopefully, will on So it's laying things be focused us after see you to the because to one that, call the critical. in

interested existing incredibly properties, brands to that's very very, ours. improve was During in to world focus lot is and is be. robust. penetrate to improving now And a need and competition so we be projects The shelf on their deals. so the to where put do our our going got that uncertain. more the the trying is pandemic, continue clear of And pretty back it's The business

Chad Beynon

to just near your the guys for hold from for situation some this maybe then previous Jamaica, in there looking and more happens? yourself and Or discounting the items on occupancy? then Is sacrifice like price low maybe of discounted the of And like a than hope the patterns period recover? others? booking is you happened, kind periods there warning for travel when Great. at have pricing luxury a would I term, players point, generally what to of pricing guess, kind longer mid-end And

Ryan Hymel

Yes.

for example something XXXX. short real adjusting of revenue back discount I the taken books, got to what have about our building.And was but way normally, books negative although the life. in for team, only in that. so we've a And somebody the usually occupancy flat disciplined up those just going picking get positive, not start they're week. had our just essentially we they to would again, These pricing management door. right? turned had out where prior slowly was a bookings very much as to periods was it's turn we They're as rates quickly not at to shelf on were to on We the and think where potential essentially, But remains rate they're

and term, have that's on our a So stabilized this earnings to more we we'll to next the information by lot we time shorter so expect be get call. how

Bruce Wardinski

team which, there's life change. Republic, and I the was group put said, like no to the But I not discount reached Department the tends try a to Ryan it's sell to them that Level have to different And this. And on mean there's we done, Mexico these it's and commercial X, overreact I to X a people don't be has they and some really kind to kind nothing the then in idea. Jamaica, is market. out, changed, of business, you things the of that and think who mitigating our again, because of It Jamaican short-lived. out second from a that ridiculous no focused we're business, which One need viewpoint. of discounting things X. felt Why have Level the business.And is of Absolutely State But success they to we've still have rates relatively for obviously, going canceled to shelf been didn't them for Dominican local there. group kind and thing had some positive. pretty

Ryan Hymel

were that, market was we really January. doing were building That where pacing Yes. well just and we to prior how

And so aid we ] potential just upside from the as that market. view this [ into

information more May. And in so we're lot a back when

Operator

Deutsche Bank. comes from The Chris with Woronka question next

Chris Woronka

slightly in direction. go I different So a

the business. reviewed of mix guys You

of remind us you you some the and locally know and I Mexican maybe more kind of options. there's you remind of RevPAR been to a would -- us get be contributors you lot up kind non-package if think source. recovery? that focus picked geographies which European Can you upgrade premium more I some of and said best on the Can

Ryan Hymel

customers, on first comes it's incidental are who additional the paying pay in low a remember they non-package. Americans. money, introduced generally more items, think highest to to they the have rates, I pay level cheaper somebody which our I when generally people highest get all-inclusive, is season lot rate opposite. The of likely highest the And paying the at who's high that a people and the a package the for it's spend assume

Chris Woronka

double the over 'XX. million you 'XX, look a And the enough. took Fair year which of when Sure. about you management think at I Okay. guys Collection Playa think Bruce, I then fees, about -- and in $XX I was in full

other from little question you venture focus of, guess, joint is there? -- the external little But I any have? guess, to also also, bit you're of know growth? of are. how contract more, just that I are kind a Playa of with you lot out And the don't any so forms what I -- kind there there Are much doing a more ownership top are things possibilities opportunities a EBITDA get you bit I line but Collection. know do management really

Bruce Wardinski

that's right? be it's just X-year more Chad said, side, be growth, great move else, a focused doesn't it to okay? so Like needle than is but I will it going the portfolio that Chris, On to to And won't the Sure. it I plan, lot be definitely it the a we're the from Playa owned No, because factor. to And the going more the responded needle that's when question. a on be factor, come management Collection realistic, on significant of is, anything determined. driving contract to much. move Where a

business going portfolio.But on, surprise.We today, incremental to those of the the what be center opportunities. we've focused kind okay, to than fully kind we every ventures the literally be said. of done And because sales to quickest incredibly you opportunities, that of joint Playa solid always So so be it's I'm be more to out within some probably interesting core like growth institutional characters ramp resorts entire we see be of or there growth in I the will next our really Playa we'll one Collection near those to a the again, good within few like of think the across should we'll weeks, kind a future, of how now portfolio, announcements. of rolled to where our be at going unexpected kind hopeful not in but our think, here's EBITDA more okay? simplest I up, that's absolutely, okay? get And are opportunities. able nice but bump other think Collection, have or we can kind will nice said, they'll nice sales not is we're in traditional are be that things, massive that some markets, space, that open things are And it's our positive.With make as I to and looking regards in It's --

Now EBITDA we growth, our just continue our how improve revenues, to our margins. of kind improve improve do

going that's to is think be. where I the focus

If as last the at in been well. us a that, And that we to it's the optimistic. our significant price XX, time, and it's the you'll repurchase see same XX range enhancer continue think in we're to stays pretty I stock. do the will months, kind of So stock value continue

areas that are focused those the on. So we're

Operator

comes Oppenheimer. final Tyler Batory from the with And question today

Tyler Batory

Big first. picture question

years for things I we're normal this normal. several were to a post-COVID out after figure where trying think what's lot world not companies, in of

the So growth longer that that would growth this mid-single thoughts digits, what low-single term? you your is sounds be balancing limited are of year, and range?And mostly RevPAR rate-driven, normal? terms commentary there in ADR to then to expect What occupancy, upside is it on Is this going this latest ADR of forward? Could comp digit occupancy. on that balance like occupancy and

Ryan Hymel

protecting changed, rate, our level. protecting experience, seeking that guest minimum, on occupancy of to continue management yield scores, in maintain drive rates, still hasn't the if a on you ultimately strategy focusing not thoughts a the satisfaction at to, allows some at essentially which in it. We're guest high favor Our

year, Palm Beach from we some see don't we're in be last do reversion the occupancy don't pretty then expect, would our of a it's ADR. yield. reason of so And the but where reconsider this or ADR.There occupancy And happy mean, ramping to few me Punta if heard so. our say our driven Cana be it's mid-single-digit there yes, not was today, we as I legacy the propensity with mostly which seeing change the portfolio you sit to of times, will or the and and low like something change which course, you consumer's to removal or maybe growth RevPAR said, normal. increases as feels and a but as dramatically because we're Bruce occupancy But should versus If things ability from mostly the by up, change, world year, modestly far think because of

Tyler Batory

how mid-single digits, to mean, And longer-term RevPAR, normal? you you single think this that consider to I just do about -- perspective, comp Okay. low that's is what just

Bruce Wardinski

Yes, the investing. of I And question to think to where that's going back normal. going then we're be

resorts, at add like we can rooms. we're XXX to going have land one of where about the one of our -- So projects we

really rooms. to will a And a going premium be hotel, so within be those hotel And it's right?

if these that back the so that's rapidly the now to some XXXX, add projects that I hoping lot had. even are higher a and which is mid-single-digit And increases low-single-digit think will of more we kind XXX normal, rates. revenue premium then some so kind many you that other XXX, you of the with that, XXXX, of we're those the of basis burner the recently, of see you'll was add things EBITDA and take in to more get do growth, kind think projects, on of Again, things. and but all, we've start category uncertain. whole the And XXXX success create more healthy ability on opportunities. of and put going But very normal, looking drive had we're are resorts to so focus that non-package I growth.So individual execute it's we've that to that else, rate going than And not just growth importantly rooms, world through. we're points looking opportunities to And XXX, these right, to portfolio, in some maybe and at, anything flow do attractive

Tyler Batory

I'm that's place. Okay. you you some And multipart topic. had on It like then assuming have FX a past. in the something not the sounds hedges that question in

So XX, about here. help just then And might I the think about lot for in or mean of the a story that forum. helpful investors XX if address this be us us mean public peso to sensitivity from think might that the guide? another the I question what is help new get that, to

the If helpful. peso mechanics just talk all the drag? a the you Just could be would that appreciation is through of there, why

Ryan Hymel

being peso. -- The We're Yes. a is because USD It's our our paying Mexican currency We're people wages, obviously denominated and translation report XX% spending right? vendors in issue and beverage are from functional peso. XX%, we lot of one locally. and roughly biggest expenses in locally a food

gets it so converted. And

lower When put the on as it higher.So we to So far you hedge as -- divide number. converted USD, place. it in a by should that it's gets

just So XX% our January, Mexican hedged peso in we about of exposure.

And so essentially, we sold volatility.

and lower range forecasted, expense -- our base XX the Because not volatility there's we have that's million. $X So as to of if kind the and approximately hedged some sold anything, peso stayed we right? -- and So exactly assuming year, year-over-year. hit that, is, million upside end how for you stays that to that we $X meaning done and was hadn't the it's our ranges, some at and of the it, get exposure that that call

upper put so to sat where it our $X that. that would of thought if bring because higher million the to were $X.X So our kind paid there's curve range our we we of in base is the to than of time.The FX expense for million than some place bound hedge end that the -- is other that reason that forecast, of expenses at

is spot think, of we the end to year. expenses And as first and impact at half used of lower kind XX at that year. entirety we in closer again, of of that that of we half if rate million. So that had almost the captured the [indiscernible] of exactly million range first of moves XX, if $X to to of the The is midpoint the a stays it the $X but hedge no our are

Operator

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

Bruce Wardinski

Great. participating. for Thanks, everyone,

I think useful, is hopefully, and we interest we lot much. material, covered you Playa. appreciate very a your it in of Thank

Operator

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

You may now disconnect.

Playa Hotels & Resorts (PLYA) 23 Feb 242023 Q4 Earnings call transcript