Q4 2022 Ryman Hospitality Properties Inc Earnings Call
[music].
Okay.
Welcome to Ryman hospitality properties fourth quarter 2022 earnings conference call.
Hosting the call today from Ryman hospitality properties are Mr. Colin Reed Executive Chairman, Mr. Mark Fioravanti, President and Chief Executive Officer.
MS, Jennifer Hudson, Chief Financial Officer, and Mr. Patrick Chaffin, Chief operating officer.
This call will be available for digital replay.
The number is 880 399881 with no conference I'd required.
At this time all participants have been placed on listen only mode. It is now my pleasure to turn the floor over to MS. Jennifer Hudson Ma'am you may begin.
Yeah.
Good morning, Thank you for joining US today. This call may contain forward looking statements as defined in the private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance.
Any statements we make today that are not statements of historical fact may be deemed to be forward looking statements words, such as believes or expects are intended to identify these days.
Which may be affected by many factors, including those listed in the company's SEC filings and in today's release.
The company's actual results may differ materially from the results, we discussed or project today, we will not update any forward looking statements whether as a result of new information future events or any other reason.
We will also discuss non-GAAP financial metrics today, we were reconciled each non-GAAP measure to the most comparable GAAP measure in exhibit to today's release I will now turn the call over to Colin.
Thank you Jan and good morning, everyone.
With the fourth quarter was an appropriate exclamation point to close out an extraordinary year for our company.
I don't think in all my years in this industry I've seen anything like the last 12 months going from just under 33 points of occupancy and a $185. A total revpar in January of 2002 during the worst of the army <unk> wave and yet ending the year in December with just over 73 points of occupancy on a whopping.
$612 of total Revpar.
I really believe the results of this past quarter and our ability to recover so quickly from the loss last stage of the pandemic highlights the exceptional nature of the assets and our strategy compared to the wider industry of course, we've always talked about these attributes since well before the pandemic about our.
<unk> to studying and understanding our core group customer and delivering the highest quality experiences to our guests about our rotational system for world class assets in top markets, which makes that customers planning decisions. So much easier by booking multi year multi site meetings all of them.
Once about our belief in investing significant capital into expanding and upgrading our assets against the backdrop with very limited new supply.
And about our strategy to reduce our own transient demand with innovative and compelling programs around the calendar by 2019, we were just starting to really reap the dividends literally and figuratively of this strategy as our newest property. The Gaylord Rockies suggest opened that year.
With an unheard of one 2 million room nights on the books and generated over $85 million of adjusted EBITDA and is full first full year of operation and the other cylinders of our hotels will firing as well with the opening of Soundwaves and the expansion of the Texan and groundbreaking underway at the palms.
And of course, our entertainment business was riding high on the back of National Nashville's exponential growth.
We found ourselves at the end of 19 sitting on a then record performances across so many metrics and we felt like we were just getting started as we gave.
In February for walk by all signs, we're going to be a barn burner or the year on the heels of these investments but within weeks. It all came to a halt in the last three years. Since then have been a whirlwind, but now here. We are three years and three COVID-19 waves later at loss prepared to give you all are complete.
Set of annual guidance once again.
What we are planning for 2023 is already well beyond those figures, we would anticipate it back in early 2020, our lower group customers are back in droves and spending healthy healthily on property. Thanks greatly to our emphasis on re booking over fee collection. During these dark days.
Assets themselves are transformed compared to this time in 2020, thanks to our commitment to invest capital. This includes the 300 new rooms at the palms, the beautifully renovated rooms at the national and a host of new ballrooms meeting spaces event loans pavilions in atriums.
Either complete or now underway across the portfolio and not to mention the entirely re concept at food and beverage outlets with innovative new socialization and gathering opportunities for groups New technologies in place new staffing models in many areas of our hotel the list goes on.
In our entertainment business is equally transformed we have.
Opened already in Orlando brokered ground on already in Las Vegas closed the acquisition of block 21, which brings austin's iconic ACL live at the Moody theater into the fold and to capital off in June we sold 30% of the entertainment business to the impressive team at a tear us bringing.
NBC Universal and the <unk> valuing the business at over $1 4 billion.
It's not a stretch by any means to say that our entire company has not simply recovered from the pandemic, but has undergone a complete transformation armed with a new understandings of our customers both group and leisure.
And all of the levers available to us now and in the future through our ongoing investments and looking at the tremendous book of business. We have on the books for all future years I believe we're capable of delivering exceptional results what into the post pandemic era as Mark and Jen will report notwithstanding the.
Significant impact of <unk> in the first quarter, but almost all measurements 2022 was a record for us and as you'll see from our guidance in 2003 more records are likely to follow Needless to say I'm truly excited for this next chapter of our company.
And it is a perfect moment for mark to take over for me.
Take over for me in the CEO role as I move to executive Chairman. So I'll, let you now I'll turn it over to Mark to let him give you more details of the quarter.
Our results and how we're thinking about the coming year Marcus.
Yes.
Thanks, Colin good morning, everyone.
The fourth quarter was a terrific quarter for us.
As most as are most leisure focused quarter, we were really looking forward to having our signature ice show back after a two year hiatus due to COVID-19 and travel restrictions on our Mastercard <unk> from China, and we're happy to report this year's ice show surpassed our expectations selling $1 2 million tickets or 115000.
More than the last time, we presented ice in December of 2019.
The renewed attraction of ice helped increase transient room nights above the fourth quarter of 2019 and transient ADR in the quarter was $317, a 43% increase over the fourth quarter of 2019.
That's a record for the Gaylord brand, surpassing the third quarter of 2022 by $29.
On top of this holiday strength group performed well with group room nights traveling only two 5% below the fourth quarter of 2019 levels more than offset by group ADR up almost 10% over the same period.
While our reported total occupancy was three points below the fourth quarter of 2019, when you consider the new 300 rooms at the palms. We added in 2020, our total room nights traveled were only 1% less in the fourth quarter of 2019.
Hospitality margin in the fourth quarter was 31, 1% was 30 basis points less than our fourth quarter of 2019, but was flat to that period when excluding the decline in interest income on the Gaylord national bonds.
This is despite the inflationary pressures, we're all aware of in the broader economy and in average wage rate increase of 24% across the portfolio compared to 2019.
At the bottom line, our hospitality segment delivered $151 million of adjusted EBITDA, sorry, which puts our full year profitability of the segment $12 $7 million above the high end of our last upwardly revised guidance range for 2022.
The quarter was an all time record for both total revenue and total adjusted EBITDA for our hotel segment in the month of December at the single month record for both metrics as well.
And what should be the last earnings call in which we use 2019 as a full year comparison 2022 finished up seven 8% in hospitality revenue and six 3% in hospitality adjusted EBITDA, sorry, compared to that last pre pandemic year, even with the material impact of omicron in the first quarter.
So just a tremendous holiday season to closeout, what proved to be a great recovery year throughout 2022.
In terms of production, we booked over $1 million gross group room nights in the quarter, a four 4% increase over the fourth quarter of 2021, and the average ADR of $254 on new bookings was 11% higher than the fourth quarter of 'twenty, one and 13, 3% higher than the fourth quarter of 2019.
New group rooms revenue booked in the quarter and in the month of December alone, where both new quarterly and monthly sales records for the Gaylord brand. This level of production sets us up well for 2023 and beyond.
On December 31, we entered this year with $49 eight net group occupancy points on the books for 2023 four points more than we entered 2022, and an ADR of $222 or 5% higher than the start of 2022.
This equates to over $53 million or 14, 5% more net group rooms revenue on our books to start this year than we had 12 months ago to start 2022.
You will see in our guidance, which we are bringing back in full according to our past practice that we translate this into an expectation for revpar growth. This year of 9% to 12% and total revpar growth of six five to nine 5% over full year 2022.
In terms of profitability, while we expect inflation will remain elevated and higher margin attrition and cancellation fees, we will return to more normalized run rates.
Transformation of our business, which Colin described including efficiencies across management ranks staffing models technology, and food and beverage outlet strategy. Among others is expected to deliver stable to modestly improve margins compared to 2022 or in an adjusted EBITDA range for the year of $550 to 580 million.
And our hospitality segment.
At the midpoint of $565 million this represents over 10% growth from 2022.
I'll remind you that the first quarter of this year will be by far the strongest in terms of percentage growth in Revpar and total revpar simply due to the omicron impact in the first quarter of 2022, creating materially lower comp in the remaining three quarters.
From an adjusted EBITDA perspective, we anticipate quarterly contributions similar to 2019 on a percentage basis.
Looking further beyond 2023, we see a similar favorable setup for our hospitality business for the foreseeable future.
As of December 31, once again, we had nine we have nine 6% six 8% and 3% more net group rooms revenue on our books for T plus two through T plus four respectively or 2024 25 and 26, then we did one year ago.
And as we continue to add new production at increasingly healthy ADR as such as we did in the fourth quarter, we expect to see our rooms revenue pace for future years pull further ahead.
We believe our 2023 guidance and are on the books position for our hospice hospitality segment for future years plainly evidenced as Collins opening remarks about the transformation of our business from Pete pre to post pandemic and the relative performance capability of our assets against the broader industry.
But to emphasize it we believe these levels of operating and sales performance were made possible by our unique strategy and it.
And its attributes are strong customer loyalty broad customer exposure with very little concentration in any one industry high quality purpose built assets.
To five by high return recent capital investments and all of this in some of the most attractive rapidly growing markets in the U S.
Note that three of our five markets Orlando Nashville, and Dallas were in the top seven large metro areas for population growth over the last five years and also in the top five for job growth in 2022, Denver was not far behind them as well in the top 25 for both metrics.
No surprise, then that all four of these markets Dallas, Orlando Nashville, and Denver were in the top nine for hotel occupancy recovery in 2022 compared to 2019 According to star.
Against this backdrop of limited new supply growth and rapidly expanding markets, we see ample opportunities for our capital deployment strategy ahead of us. This.
This includes over $69 million being spent right now to create an expansive indoor outdoor group pavilion entering a completely re imagine the Grand Lodge atrium at the Gaylord Rockies incur.
Increasing the volume of premiums Sellable group space, and expanding food and beverage outlet selection capacity.
And we see many more opportunities at the Rockies and elsewhere in the portfolio for additional rooms expansions soundwaves style water experiences and more to continue differentiating our hotels drive return group business and attract high spending leisure guests.
Turning to our entertainment segment, the fourth quarter performance of our same store assets compared to <unk> 19 was equally impressive as our hotels same store revenue for this segment was up 35% and same store adjusted EBITDA was up 62% compared to the fourth quarter of 2019 on a consolidated basis, including block <unk>.
One, which we acquired midyear adjusted EBITDA <unk> of $26 1 million placed the full year results for entertainment just above the midpoint of our most recent guidance guidance range.
For 2023, we're looking forward to a full year contribution from the ACL live at the Moody Theater and other block 21 assets and we have a slate of evaluate enhancing investments lined up in Austin for both the theater and the W. Austin Hotel.
We expect the acquisition plus steady growth in Nashville across and across the Ole Red brand to help drive 2023, adjusted EBITDA for this business to a range of 87% to $97 million for 2023.
At the midpoint of $92 million. This is a full $30 million more than this business generated in 2019 is truly a significant transformation on par with our hotel segment.
Now, let me turn it over to Jennifer to update you on our balance sheet liquidity dividend in our consolidated guidance range. Thank.
Thank you Mark in the fourth quarter the company generated total revenue of $568 9 million.
And net income to common shareholders was $58 1 million or $1 <unk> per fully diluted share and once again that our fully diluted share count in the quarter and going forward. We will continue to reflect the put rights held by accounts as part of their Opry Entertainment group investment even though these rights are not yet exercisable and we will also have the option to settle any rights exercised in cash.
Cash.
Any exercise of the put rights would also result in a tariffs 30% ownership in OAG reverting back to Ryan could you just keep this in mind when estimating future per share amount.
Total consolidated adjusted EBITDA for the fourth quarter of $168 1 million put our consolidated full year result over $17 million above the high end of our most recent guidance.
For 2023 in addition to the operating segment guidance provided by Mark we are estimating for our corporate segment and adjusted EBITDA or a loss of $29 million to $32 million, which should be just slightly better than 2022 at the midpoint.
This yields a total fully consolidated adjusted EBITDA guidance range for the year of $605 million to $648 million.
At 12, 7% increase at the midpoint over 2022, and a 22, 7% increase over 2019.
We're estimating that adjusted funds from operations or <unk> for 2023 will be in the range of $392 5 million to $424 million.
At the mid point this represents a growth of 12, 3% over 2022, and 14, 5% over 2019 and reflects the increased interest cost of our current debt portfolio compared to 2019 as well as the pro rata reduction in asset trades that are all <unk> minority interest in <unk>.
Turning to the balance sheet, we ended the quarter with $334 $2 million of unrestricted cash on hand, and our $700 million revolving credit facility remained undrawn.
Together with the Undrawn $65 million revolving credit facility operating Entertainment group. This yields almost $1 1 billion of available liquidity after deducting $10 million of outstanding letters of credit.
We retained an additional $119 million of restricted cash available for certain projects and other designated usage.
Our trailing 12 month basis, our net leverage ratio of total consolidated net debt to adjusted EBITDA stood at four six times and based on the midpoint of our guidance. We anticipate we will end the year at approximately four one times, which is below our year end 2019 leverage and comfortably within our target range.
We are pleased to declare a quarterly dividend. This month of 75 cents per share, which is a substantial increase from our December declaration of 25 paid in January .
December declaration with targeted to achieve our goal of paying a minimum of a 100% of re taxable income attributable to 2022.
And our intention with the current declaration of 75 and subsequent dividends. We may declare this year will remain to pay a minimum of 100% of REIT taxable income.
Finally in terms of interest rate exposure as of quarter end, approximately 90% of our outstanding debt was at fixed rates either directly or with the benefit of swaps.
Although we do have two swaps expiring in 2023 about the Gaylord Rockies term loan and our corporate term loan b.
We will address the Rockies maturity this year, our only maturity in 2023, which carry three one year extension options that are fully available to us.
We were pleased to officially exited the cash sweep status of that loan based on the strong performance of the Gaylord Rockies property post pandemic.
So our balance sheet and liquidity are in excellent shape to support all of our investment activity that mark outlined while also sustaining a meaningful dividend once again.
With that I will turn it back over to Colin Thanks, Ken.
Chelsea.
Let's open up the lines for questions. Please.
Yes, Sir.
At this time, if you would like to ask a question. Please press star and one Keith on your Touchtone phone.
If at any time you have found that your question has been addressed you may remove yourself from the queue by pressing star.
Once again that is star one to ask a question.
And our first question will come from Dori Kesten with Wells Fargo. Your line is open.
Thanks, Good morning can you walk through your expectations for cancellation and attrition fees this year.
And just how it relates to your guidance I'm just looking at the difference between Revpar total Revpar and then the 25 basis points.
Margin expansion.
Okay. Thank you.
Patrick you've been ahead on that sure Hey, George Good morning last year as you probably are aware, we generated about $57 million in.
<unk> cancellation and attrition fees, we would expect this year to be in the I don't know $20 to $25 million range. So substantial reduction we still have a few COVID-19 cancellations that we're clearing out through the pipeline but.
But for the most part we will be returning back to a more normal level of attrition and cancellation as we move through this year.
Okay.
And what's your current view on an eventual expansion of the Rockies.
Are we able to get some guidance on potential timing or the cost of that.
If you want to take that one.
Dori.
Thats an opportunity thats on our radar.
As I mentioned in the prepared remarks, we're currently making.
A significant number of enhancements there both adding incremental.
Meeting space as well as <unk>.
<unk>.
We're going to completely re imagine.
At Grand Lodge.
Significant amount of buy.
Buyout space for groups as well as incremental food and beverage and once were once we're done with that.
That project.
We will then be.
We will have the capacity that if we do do a rooms expansion and when we go into rooms expansion, we will have the food and beverage as well as the meeting space necessary.
To handle those incremental rooms.
Yes.
<unk>.
The other thing I would say <unk>.
The last six months.
Been with our finger on the pulse looking at lead volumes.
By these by each hotel and.
I would tell you that.
We as a company has been pretty excited about what we're seeing on lead volumes.
And particularly at the Rockies.
<unk>.
I suspect.
Suspect that sometime during 2023.
We should be talking more positively about rooms expansion this simply because.
This is this is one hell of a market.
Bye have by far the best Convention hotel sitting in the middle of the country next to that airport.
We're very excited about the prospects for that hotel so.
We're just going to monitor the next few months.
And then more communication on this subject.
Okay, great. Thanks.
Okay.
Okay.
Thank you our.
Our next question will come from Bill Crow with Raymond James Your line is open.
Hey, good morning, congratulations on the quarter and the year.
I want to follow up a little bit.
<unk> question on cancellation and attrition fees the.
The guidance for 20% to $25 million in two.
<unk> 2023 should we anticipate that's largely front end loaded.
Given that Youre still trying to.
Deal with cancellations from a year ago or year, and a half ago, and then as part of that.
As we look at your guidance for the year, we understand that first quarters really easy based on arbuckle than last year.
Are you implying.
Second half of the year is going to be flattish.
Our perspective, maybe even down a little bit.
Compared to last year.
You want to take it that yes. So on the first question you were asking about how we expect attrition cancellation of flow across the year honestly given the length of time that it takes to communicate on these issues I would expect it to be pretty evenly laid out across the year. So if we said $25 million.
It should be $5 million, a quarter roughly $24 million a quarter.
The second question was around the second half of the year Mark did you want to pick that.
Bill generally as you work your way through the year.
Comps get tougher and tougher in 2019.
The fourth quarter of 2002, we essentially travel the same number of room nights as we did in 2019, so we're really back to more normalized.
Normalized levels so to your point as you as you work your way through the year.
You got with the guidance indicates is is that that comp gets tighter and tighter.
Alright, Thanks, and then if I could just one more caller you talked about how your policy.
The demand side of things I'm, just curious whether youre seeing anything in <unk>.
Booking activity that.
Mike.
Some of the macro concerns and the layoffs, we've seen over the past month or two or is at least as it has.
As it concerns corporate meetings.
Yes.
Really haven't seen that.
In our in our lead volumes, Patrick we just yes.
I would say that.
The tech sector started to see some challenges I think everyone kind of took a pause and got a little nervous, but I think they've realized that what's going on in Texas.
Not necessarily the macro situation as much as some hangover from Covid and some of the actions taken by tech during that period of time and I would say that just even in the past four or five weeks, we've seen meeting planners start to relax a little bit and.
There is still a little gun shy, but the lead volumes are very promising in the or for the year looks very good and so we feel that risk.
Recessionary fears are abating, a bit among meeting planners.
Great.
I'll yield the floor. Thank you.
Thanks Bill.
Thank you.
Our next question will come from Patrick <unk> with <unk> Securities. Your line is open.
Great Good morning, everyone.
Good morning, how are you thinking about good morning, how are you thinking about wage and benefit cost increases.
This year end.
To that.
Just overall operating cost increases year over year. Thank you.
Yes, I mean, we are expecting to.
Pull up to make sure I got the exact number.
But we are expecting there continue to be.
Headwinds as it relates to average weight average wage rate increases.
Say that we're expecting somewhere in the 5% to 6% increase as we move through 2023, so not quite to the level that we've seen.
In the past two years, but continued headwinds there and we're planning for that if it's less than we're currently planning for then that will help us, but we're trying to be realistic and make sure that we take into account that it has been a challenging couple of years from a wage rate perspective.
Patrick the one thing I'd say on margins as Youll note from our guidance that we're.
We are projecting some modest improvements in margin this year.
<unk>.
Wage rates, obviously inflation.
Maryann IMF being back in full force all of those put pressure on margins, but on the other side of the ledger, we have really nice ADR growth, particularly on the transient side, we've been able to move F&B pricing.
Made some productivity gains if you look at wage rates have increased if you. If you look at the wage margin is flat compared to 19 and then.
As we've talked about on previous calls.
Patrick and his team have worked diligently with Marriott in terms of kind of rethinking how these hotels, our staff, particularly from a management perspective, and when you look at management head count, we're running about 12% fewer supervisors and above in our in our hotels.
Post COVID-19 than we were prior to pandemic so.
There are a number of things that are on the plus side of the ledger to help offset that wage rate increase and I would only add that longer term. We're spending a lot of time looking at technology and understanding how we can deploy additional technology opportunities in the hotels to further increase our productivity as well as guest satisfaction and bring our overall costs down.
Okay.
Okay. Thank you.
Just two follow up questions.
Number one.
How is the national bookings for this year given that D. C has been.
Throwing a slower market to recover and then number two any any further thoughts.
Becoming.
Stay involved or would be.
The Vista.
Project. Thank you.
Patrick National we are pleased with the.
The renovation what we've done there.
The reengineering of the food and beverage.
Facilities that has allowed us to eliminate.
Costs in that hotel and.
We're generally very happy with the.
With the trajectory of that of that hotel and we're actually seeing good lead volume to Fort Washington.
What have I missed on that you haven't missed anything I would agree completely gaylord national not quite back to the level of room nights on the books that it saw in 2019, but moving back to that level quickly.
The DC market has been a little more challenged I think we've been a bright spot in that market and to Collins comments, a moment ago, we've taken the opportunity over the past few years to address some structural cost issues that are really yielding themselves nicely. If you look at food and beverage performance and how it compares to prior year in 2019.
You can see that there's definitely some bottom line margin improvements that are occurring at that hotel, especially in food and beverage and so continuing moving it up from an occupancy perspective, but rate has been a bright spot there and we feel actually very good about where national was heading.
The last part of your question is regarding Chula Vista and.
Mark I I think our answer to your question is there is nothing nothing has changed since the last time, we got asked that question back in back in December which is that we.
We at this stage have no desire to be an investor in that business.
Okay.
Thank you for the update.
Thank you Patrick.
Thank you. Our next question will come from Smedes Rose with Citi. Your line is open.
Hi, Thanks I.
I wanted to just go back a little bit to the group bookings that you have.
On deck for this year and maybe you can just talk a little bit more about the competition of the groups are you seeing more corporate versus.
Association type business and is there any kind of piece of the business, that's lagging or any kind of thesis like fully recovered in your view.
Yes, I would say that.
What we've seen as far as recovery has been most pronounced in technology.
Medical.
And areas like that corporate has come back Roaring and we're very pleased with what we see.
From a mixed perspective, I'm actually pulling up the actual.
<unk> right now so give me just a second but as we look at this.
This next year.
Or a little bit more heavily weighted towards our corporate but it's pretty consistent with what we saw in 2023.
We do think that from a consistent what we saw in 2003, you said I'm sorry, it's consistent with what we saw in 2022. Thank you for correcting me.
But I would say that in the year for the year is very promising from a corporate perspective, so while we have a little bit more on corporate on the books as of right. Now we would expect that to continue to improve as we move through 2023.
Smedes that one of the thing that keeping the one thing to keep in mind.
When you look at the business on the books for 'twenty three of about three quarters of that business was booked.
Pre 2022.
So as we roll forward 'twenty three 'twenty four 'twenty five youre going to see those older room nights burn off and newer room nights that are at these higher rates come on and so.
That will be a nice tailwind for our business from a rate perspective in the group segment.
Okay. Thank you.
And then I'm sorry, if you said this.
What do you see capital spending for the year on the matrix and maybe could you just lineup of major projects that you're working on you mentioned the Rockies you got that Jen yes.
As Mark mentioned, one of the bigger projects, we have going on right now is at the Rocky couple of projects going on there with a new pavilion and.
Lee.
Imagining of the Grand Lodge, and creating more usable.
Sellable space, there along with food and beverage I think our estimate for capital is about 100.
And $30 million this year, all in including our growth and maintenance and that would include.
The contribution to assess any reserves that are obviously linked to revenue growth will continue to grow as well.
Yes, the only thing I would add to that is we're doing a lot of we've talked about this in our prepared comments a few minutes ago. We're doing a lot of work around food and beverage we continue to see a food and beverage is a massive opportunity for our brand going forward.
And so we're investing in our old Hickory steakhouses at Gaylord National and Gaylord Palms, we're renovating spaces Gaylord palms like our Osceola Ballroom, which is 50000 square feet and then from an ESG perspective, we've got a pretty sizable investment going into solar panels that will be putting on top of the convention center Gaylord national being one of them.
The largest projects in the nation, and we think a really.
Bold statement as far as our priority on ESG and doing things that help the environment long term.
Let me clarify that number it was off a 100 million in its 230 million when including growth.
Okay.
On the energy on the entertainment side.
Smedes.
<unk> Las Vegas is under construction.
And then we are we're renovating the W as well as making some enhancements at the theater in Austin, Texas. So those two projects combined are probably going to be in.
$50 million $60 million range this year.
Okay and then one last question on the <unk> Las Vegas is that the kind of revenue when you can start with.
Pre selling events at this point.
I guess for corporations or or social tariff or is that not how about that piece of business.
It's both.
In Las Vegas.
Building sits right on the strip in front of in front of it.
Right across the Bellagio fountains.
There's 120000 people a day won't buy it so that it is going to be a lot of what we call transient business in there, but this facility is also.
We do a lot of corporate buyouts.
All right. So as an example here in Nashville, we do walk that $4 5 million in revenue and corporate buyouts.
Las Vegas. This is this is going to be a I think a big part of that business.
And but.
Well you got to step back we're doing this corporate buyout as sort of the icing on the cake, but we're doing this because we want to capture those country lifestyle consumers that are in that market and that's why we've put it in that market and I think it's going to be extraordinary.
Generally successful.
<unk> to your to your question.
Targeting a November opening in time for the Grand Prix, we already have interest in buyouts as it relates to that event.
Of course, that's followed quickly by National Rodeo, which isn't.
In Las Vegas every December in the Super Bowl there in February next year. So.
We're already fielding.
Calls about about those types of opportunities from corporations in Oregon as other organizations.
Great well thank you.
Thanks James.
Our next question will come from Chris <unk> with Deutsche Bank. Your line is open.
Hey, good morning, guys and congratulations on the quarter and also the year.
Yeah.
I had a question as to in the year for the year ticked up mostly on the group side kind.
Kind of what's implied in the guidance and maybe you could give us.
Refresher on.
How in the year for the year track in 'twenty, two and should we assume that that's generally going to be the higher rated.
Smaller corporate group meetings.
Yes.
As far as how much.
Chris the specific figures there we can follow up with you on that as far as what we booked last year, but.
Yes, most of your in the year before the year is going to be corporate focused type business. Every now and then we get a larger piece of business that is.
Obviously, welcome, but usually there's not pattern availability for it but.
But we are very encouraged based on what we saw in 'twenty two and then our in the year for the year volumes.
For lead volumes are very very encouraging.
Got them right here.
They're up.
At the end of the year they were up 56% so.
On on 'twenty one.
Yes.
56% over 22.
Yes, so as we look at in the year for the year lead volumes, we're very encouraged by what we see and yes that will usually be smaller groups, but we'll follow up with you with the specific figures around exactly how much we booked last year.
We've built into our guidance for this year.
Okay. Thanks, Patrick and then.
Might be a question for Colin.
Is this entertainment business continues to grow and evolve.
I remember the days of just a few assets in Nashville, and Nashville is still very important but.
How do we think about the key drivers of the business. Colin I know you are involved there is also the circle PV piece that I think a lot of us sometimes struggled.
To bottle. It frankly, so can you give us any any thoughts on this.
What are the key drivers outside of some of the.
It is purely leisure assets. Thanks.
Hi.
Im going to sort of.
Fly up to 65000 feet on this.
The.
The growth opportunities in this business.
Almost on budget, we've got so many different things that we're looking at.
And frankly, just getting to it.
With our friends from.
<unk> Comcast NBC so.
We're going to work hard during the course of this year identify new new avenues of growth.
We probably will look.
<unk>.
The physical venue side of the business growth through additional physical venue size of the side of the business.
But also on the E.
The digital distribution of content, we create.
And and.
I would say.
I don't think youre going to see any sort of major changes to the structure of that business. This year.
But we.
We're very excited about the growth growth Avenue here, So I would say I would say to our investors that love this part of the business.
Yes.
We're going to we're going to have some fun with this business over the next one two years.
Hey, Chris It's Patrick let me follow up with you I was able to kind of pull some numbers quickly.
Our expectation is that we'll book around 14% to 15% of our group room night total for the year in the year for the year and how that compares to prior year is tough because of <unk> because that's a net number and if you remember omicron was creating so many cancellations at.
Followed back up with you as far as once you.
Take out the impact of omicron in the first quarter of last year, what are in the year for the your business actually look like so I will follow up with you on that but roughly 14% to 15% of what we expect to do for the total year in group should be booked in the year for the year.
Okay, all very helpful. Thanks, guys.
Thanks, Chris.
Thank you.
Our next question will come from Jay Kornreich with <unk>. Your line is open.
Hey, Thanks, Good morning, I guess first just to follow up on the entertainment piece and you talked about all the possibilities of growth.
The year over year growth seems to be.
More potential in that segment could maybe that would tell currently.
So I'm just curious do you outline.
Potential a percent of the overall portfolio you see the entertainment piece getting to or wanted to get it to versus the roughly 10% pre pandemic.
We really don't think of it.
That way Jay in terms of its growth in relationship to hotels.
<unk>.
We really think about it as a separate as a separate opportunity.
With the with a very different set of.
Demand drivers.
And capital opportunities.
The longer term aspiration for this businesses is to create a standalone.
No.
Live Entertainment and media business that really focuses on on the country lifestyle consumer helps helps promote.
Country music and engages with those consumers both.
Both.
In location based entertainment opportunities as well as virtually.
So we don't we don't think about it.
The only really the only way we think about it in relationship to the hotels is.
How we think about capital deployment from our perspective and then how.
Frankly, how it fits within.
Within the REIT structure.
Because we do have some limitations there but.
From a growth perspective, we're nowhere near those limitations at this stage.
Okay. Thanks for that perspective, and then just.
Another question on the Gaylord Rockies.
I guess, if you look at the run rate.
Q3, this year was our top performing asset at 87% occupancy.
<unk> dropped down to 70% I'm sure. It's more of a group oriented asset just curious if you can kind of run through kind of how you see that.
That run rate in 2023.
The year over year growth at that time.
You won't take that Patrick yeah, absolutely so.
We think that Rockies is going to continue to mature into its.
It's stabilized level.
I would expect that we will see.
Occupancies at that hotel in the mid seventies, which is consistent with what we would expect at Gaylord Opryland, Gaylord palms, and Gaylord Texan. So I would say 2023 is a great.
Indication of what that hotels should be looking like from a stabilized performance level.
And then from a margin perspective, we continue to it as a newer hotel that really kind of cut its teeth in the midst of the pandemic. So we've identified additional opportunities to continue strengthening and its margin performance and then Colin and Mark both alluded to some of the investments that are going in there. So.
While I think it will truly be at a stabilized level consistent with what palms Texan in opryland perform at in 2023.
Still additional upside given the investments, we're making into the property and as we went into this year Patrick.
Room nights on the books, we will we will.
We were pretty happy with where we sit for the Rockies.
And that should.
Manifest itself into the translate into the.
The performance for 2023, Yes, Thats correct Collins point in 2023 had more room nights on the books than we did at this time in 2019 so.
The hotel is built very well for a solid performance.
<unk> in 2023.
Okay. Thanks, very much for all that I appreciate it.
Okay, one more.
More.
One more call and.
Chelsea So if we have another question we'll take it.
Okay.
Last question will come from Danny Assad with Bank of America. Your line is open.
Okay.
Danny Please make sure that you're on mute on urine.
Hi, guys, sorry about that.
Good morning, and thank you for sneaking me in.
So just a two parter. My first question is in your Revpar outlook of 9% to 12% can you help us parse out how much of it is occupancy growth and how much youre underwriting for to come from rate and then.
Just at a higher level, how do you guys feel about your ability to push rate on group not just for this upcoming year, but if we kind of look out further out to $24 25 and beyond thank.
Thank you.
As Mark pointed out.
Is.
Remarks.
That so much of the rate for this year. It was predetermined last year the year before and the year before that.
But one thing that we have been able to do.
Last year and the year before is for the business that we booked last year, we saw really good rate growth and that should translate into.
Excuse me.
Of course.
That should translate into.
Positive rate growth this year and we are actually very excited about what happens in 'twenty four 'twenty five 'twenty six but we have been really.
Pushing rate like no tomorrow with our friends at Merit to the sales organization and Pat do you want to give a little bit more color on that sure I mean, just a very simple level most of our revpar growth in 2023 is based off of occupancy growth versus 2022.
To <unk> point.
The great growth that we've seen and what we've been able to book and grew on the group side will really start to materialize in manifest for us in larger quantities as you get into $2425 26. So we've built in some continued transient rate growth honestly every time, we build that in it comes back and surprises us in.
Terms of what we're able to actually achieve and I would expect the same on the end of the year for the year on the group side, but at a very basic level. The majority of our Revpar growth in 2023, it's based off of occupancy recovery and Danny as we as we mentioned earlier a lot of that is going to happen in the first quarter off of.
Amit.
Comp because we were only about 47 points.
In the first quarter of last year.
Any.
Any other questions from you Danny.
Yeah.
Okay.
There are no other questions.
I'd like to thank everyone for being on the call. This morning.
We're very proud of the results that we accomplished as a company last year and we are very excited about the prospects for 'twenty three and future year. So if you have any follow up questions.
You know how to get hold of us. Thank you very much indeed.
Yes.
Operator, we're going to close the lines. Thank you.
Yes, Sir.
Ladies and gentlemen, this does conclude today's call and we appreciate your participation. Please enjoy the rest of your day.
Yeah.
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