Q1 2024 Ryman Hospitality Properties Inc Earnings Call

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Operator: http://www.youtube.com or the link in the description below.

Operator: Welcome to Ryman Hospitality Properties' First Quarter 2024 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 Hutchinson, Chief Financial Officer, Mr. Patrick Chaffin, Chief Operating Officer, and Mr. Patrick Moore, Chief Executive Officer, Opry Entertainment Group. This call will be available for digital replay. The number is 800-839-7414, with no conference ID required.

Operator: During 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, Mr. Patrick Chaffin, Chief operating Officer, and Mr. Patrick Moore Chief Executive.

Operator: Opry Entertainment group this call will be available for digital replay. The number is 808 397 for one four with no conference I D required.

Operator: At this time, all participants have been placed in a listen-only mode. It is now my pleasure to turn the floor over to Ms. Jennifer Hutchinson. Ma'am, you may begin. Good morning. Thank you for joining us today.

Jennifer L. Hutcheson: At this time, all participants have been placed on a listen only mode and it's now my pleasure to turn the floor over to MS. Jennifer Hudson Ma'am you may begin.

Jennifer L. Hutcheson: 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 anything unless we make today that are not statements of historical fact.

Jennifer L. Hutcheson: 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. In fact, any statement we make today that is not a statement of historical fact may be deemed to be a forward-looking statement. Words such as believes or expects are intended to identify these statements, 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 discuss or project.

Jennifer L. Hutcheson: Maybe deemed forward looking statements words, such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release.

Jennifer L. Hutcheson: The company's actual results may differ materially from the results, we discuss or project today.

Jennifer L. Hutcheson: 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 measures. We reconcile each non-GAAP financial measure to the most comparable GAAP measure in exhibits to today's release. I'll now turn the call over to Colin.

Jennifer L. Hutcheson: We will not update any forward looking statements, whether as a result of new information future events or any other reason.

Jennifer L. Hutcheson: We will also discuss non-GAAP financial measures today, we reconciled each non-GAAP financial measure to the most comparable GAAP measure and exhibit to todays release I'll now turn the call over to Colin.

Colin V. Reed: Thank you, Jan, and good afternoon, everyone. Let me start this afternoon's discussion about our first quarter results by first reminding you what an incredible first quarter we had in 19- in 2023. Last year's first quarter was the best first quarter for same-store hospitality ADR revenue and adjusted EBITDA RE, and same-store hospitality banquet and AV revenue was the highest on record for any quarter. Production was also strong, with record first quarter gross group ADR booked for all future years.

Colin: Thank you Jen and good afternoon, everyone. Let me start this afternoons discussion about our first quarter results by first reminding you what an incredible first quarter. We had 19 in 2023 last years first quarter was the best first quarter for same store hospitality revenue and adjust.

Colin V. Reed: EBITA E and same store hospitality banquet and Navy revenue was the highest on record third quarter production was also strong with record first quarter gross group ADR booked for all future years on the entertainment business. We also achieved record first quarter revenue.

Colin V. Reed: On the entertainment side of our business, we also achieved record first quarter revenue and adjusted EBITDA RE. Now, against that strong backdrop, in the first quarter of 24, we achieved some very compelling results. Yet again, we set first quarter records for same-store hospitality ADR traveled and gross group ADR booked for all future periods. Same-store hospitality banquet and AV revenue was the second highest on record behind only last year's first quarter, and several properties set monthly catering records in February, including Gale Palms and JW Hill Country.

Colin V. Reed: And adjusted EBITDA are E against that strong backdrop in the first quarter of 'twenty four we achieved some very compelling results. Yet again, we set first quarter records for same store hospitality ADR traveled and gross group ADR booked for all future periods.

Colin V. Reed: Same store hospitality banquet Niv revenue was the second highest on record behind only last year's first quarter and several properties set monthly Patriot Records in February, including Gaylord palms, and shake out when the whole country equally impressive entertainment business set a new.

Colin V. Reed: Equally impressive, our entertainment business set a new first quarter record for adjusted EBITDA RE despite significant weather and construction disruption during the quarter. The first quarter was not without its challenges, and Mark will speak to the impact of the Easter timing shift and some transient softness we saw in our same store hospitality portfolio results in a minute. But we also have dealt with quite a lot of construction disruption across our portfolio. As an example, at the Gaylord Palms, we are reconfiguring, completely reconfiguring our lobby, and at the Rockies, we're almost finished completely transforming the Great Lodge.

Colin V. Reed: First quarter record for adjusted EBITDA, our E. Despite significant weather and construction disruption during the quarter.

Colin V. Reed: The first quarter was not without its challenges and mark will speak to the impact of Easter timing shift and SME.

Colin V. Reed: Transient softness we we.

Colin V. Reed: We saw in our same store hospitality portfolio results in a minute, but we also have dealt with quite a lot of construction disruption across that portfolio.

Colin V. Reed: As an example, the Gaylord palms, we are reconfiguring completely reconfiguring, our lobby and at the Rockies were almost finished completely transforming the great launch.

Mark Fioravanti: Our entertainment business is also under a large transformation, with the public spaces at the W Hotel completely under construction, and also, of course, the Wild Horse is closed as we transform it to Category 10. As you know from our investor day, we've been quite bold with our capital plans as we believe that the transformation of our physical assets will support the very good growth we anticipate over the next few years.

Colin V. Reed: Entertainment business is also on the large transformation with our with the public spaces at the W Hotel completely under construction and also of course, the wild horse as sharp as we transform it to a category Ted.

Mark Fioravanti: As you know from our Investor day, we've been quite bold with our capital plans as we believe that the transformation of our physical assets will support the very good growth. We anticipate over the next few years, but what will become clear as Mark and Jen speak is the fact that our primary focus the group segment.

Mark Fioravanti: But what will become clear as Mark and Jen speak is the fact that our primary focus, the group segment, remains very robust. For more than 20 years, our management team has executed a differentiated strategy that delivers long-term customer satisfaction with a particular focus on group customers. We've built and continue to enhance an industry-leading portfolio of hotels to serve that customer, and our service model continues to drive high customer loyalty, the byproduct of which is retention.

Mark Fioravanti: <unk> very robust for more than 20 years, and our management team has executed a differentiated strategy that delivers long term customer satisfaction with a particular focus on good customers, we built and continue to enhance and industry leading portfolio of hotels to serve that customer.

Mark Fioravanti: And our service model continues to drive high customer loyalty.

Mark Fioravanti: Byproduct of which being retention as a result, we have significant visibility into future bookings and meaningful recurring revenue.

Mark Fioravanti: As a result, we have significant visibility into future bookings and a meaningful recurring revenue stream, strong pricing power, and multiple high-return investment opportunities to sustain our growth trajectory. On top of all of that, we own an incredibly valuable entertainment business built on some of the most iconic brands in the music industry, which we believe will also demonstrate very strong growth over the period ahead. I've said this before, our business is not based on hope.

Mark Fioravanti: Meaningful recurring revenue stream strong pricing power and multiple high return investment opportunities to sustain our growth trajectory on top of all of that we own an incredibly valuable entertainment business built on some of the most iconic brands in the music industry, but also.

Mark Fioravanti: We believe will demonstrate very strong growth over the period ahead I've said this before our business is not based on hope as strategy is grounded on things, we know well and can control extensive knowledge of our customers and delivering what our customers want.

Mark Fioravanti: Our strategy is grounded in things we know well and can control. Extensive knowledge of our customers and delivering what our customers want, thus driving loyalty. This is evident, as ever, in our first quarter results. With that, I will turn it over to Mark to give you some color on the details.

Mark Fioravanti: It's driving faulty this is evan as ever in our first quarter results. So with that let me turn it over to Mark to give you some color on the detail.

Mark Fioravanti: Thanks, Colin. Good afternoon, everyone.

Mark Fioravanti: Thanks, Carl and good afternoon, everyone I'll start with some segment highlights from the quarter first focusing on our hospitality portfolio, which continues to see strong group performance then I'll take you through the results of our entertainment business, which benefited from growth in our Ole Red brand and finally, I'll review our guidance for handing over to Jennifer.

Mark Fioravanti: I'll start with some segment highlights from the quarter, first focusing on our hospitality portfolio, which continues to see strong group performance. Then I'll take you through the results of our entertainment business, which benefited from growth in our old red brand. And finally, I'll review our guidance before handing it over to Jennifer to discuss our balance sheet, recent financing activities, liquidity, and capital expenditures.

Jennifer: To discuss our balance sheet recent financing activities liquidity and capital expenditures outlook.

Mark Fioravanti: Our same store hospitality results reflected the impact of the Easter shift and a challenging comparison to the first quarter of 2023, as Colin detailed at the outset. Accordingly, compared to the first quarter of 2023, same-store hospitality REVPAR and total REVPAR declined 4.6% and 4.1%, respectively, and adjusted EBITDA RE margin declined 210 basis points. Despite a strong start in the first half of the quarter, the second half came in modestly below our expectations due to some transient softness in the Nashville, Orlando, and Denver markets.

Mark Fioravanti: Our same store hospitality results reflected the impact of the Easter shift and a challenging comparison to the first quarter of 2023 as Colin detailed at the outset accordingly compared to the first quarter of 'twenty three same store hospitality Revpar and total Revpar declined four 6% and four 1% respectively.

Mark Fioravanti: Adjusted EBITDA margin declined 210 basis points despite.

Mark Fioravanti: Despite a strong start in the first half of the quarter. The second half came in modestly below our expectations due to some transient softness in the Nashville, Orlando and Denver markets. In fact, all of the markets in which our Gaylord hotels operate experienced challenging year over year comparisons and for the five markets in which our Gaylord hotels operate experienced revpar.

Mark Fioravanti: In fact, all the markets in which our Gaylord Hotels operate experience challenging year-over-year comparisons, and four of the five markets in which our Gaylord Hotels operate experience DREVPAR decline. These trends reflect the normalization of transient demand. Despite the tough comp, there were plenty of bright spots in the quarter. First, our rape strategy is working.

Mark Fioravanti: Our declines.

Mark Fioravanti: These trends reflect a normalization of transient demand despite.

Mark Fioravanti: Despite the tough comp.

Mark Fioravanti: Plenty of bright spots in the quarter.

Mark Fioravanti: First our rate strategy is working.

Mark Fioravanti: The first quarter of 2024 was the best first-quarter performance ever for safe-store hospitality ADR, eclipsing the prior best-ever first-quarter performance in 2023. Both group and transient rates increased year over year. Second, the room span remains resilient.

Mark Fioravanti: The first quarter of 2024 was the best first quarter performance ever for same store hospitality ADR eclipsing the prior best ever first quarter performance and 2023, both group and transient rate increased year over year.

Mark Fioravanti: Second outside the room spend remains resilient.

Mark Fioravanti: This quarter marked the second-best quarterly performance ever for same-store hospitality banquet and AV revenue, trailing only the first quarter of last year. Bank what may be contribution per group room night travel increased year over year, a positive leading indicator that our value proposition and the capital investments we've made are compelling, and groups are continuing to spend on property. These trends continued into April, with Gaylord Aqualand achieving all-time high monthly catering revenue across the same store portfolio.

Mark Fioravanti: This quarter marked the second best quarterly performance ever for same store hospitality banquet Navy rate revenue trailing only the first quarter of last year.

Mark Fioravanti: Banquet Navy contribution per group room night travel increased year over year are positive leading indicators that our value proposition and the capital investments. We've made are compelling and groups are continuing to spend on property. These.

Mark Fioravanti: These trends continued into April with Gaylord Opryland, achieving all time high monthly catering revenue across the same store portfolio.

Mark Fioravanti: Together, our rate strategy outcomes and continually robust outside-the-room spend have translated into higher REVPAR and total REVPAR index premiums versus our competition. For example, in the first quarter of 2024, our Gaylor Hotels Portfolio REVPAR Index and Total REVPAR Index increased 9 and 13%, respectively, relative to pre-pandemic levels. Third, the results at J. W. Hill Country performed in line with our expectations, demonstrating the value of our early integration efforts. We estimate first quarter REVPAR and total REVPAR increased approximately 26 and 28% from the same period in 2023, respectively, which we believe was driven primarily by increased group occupancy and strong outside the room spend, as group catering contribution per group room night in the first quarter of 2024 improved approximately 22% from the same period in 2023 The GOP margin for the first quarter of 2024 was 45.4%, approximately 500 basis points higher than the same period in 2023.

Mark Fioravanti: Together, our rate strategy outcomes and continued robust outside the room spend has translated into higher Revpar and total Revpar index premiums versus our comp set.

Mark Fioravanti: In the first quarter of 2024, our Gaylord hotels portfolio Revpar Index, and total Revpar index increased 9% and 13% respectively relative to pre pandemic levels.

Mark Fioravanti: Third the results at J W Hill country performed in line with our expectations demonstrating the value of our early integration efforts.

Mark Fioravanti: We estimate first quarter Revpar and total Revpar increased approximately 26% and 28% from the same period in 2023, respectively, which we believe was driven primarily by increased group occupancy and strong outside the room spend as group catering contribution per group room night in the first quarter of 2024.

Mark Fioravanti: Improved approximately 22% from the same period in 2023.

Mark Fioravanti: GOP margin for the first quarter of 2024 was 45 point.

Mark Fioravanti: 4%, approximately 500 basis points higher than the same period in 2023.

Mark Fioravanti: And finally, our group focus provides visibility for our portfolio, which gives us confidence to reiterate our full-year guidance. As of March 31st, same store group room nights on the books for the rest of the year were up 2.4% compared to the same period last year for the rest of 2023, and we're projecting to set a new full year record for group room nights traveled in 2024, surpassing the prior record in 2019.

Mark Fioravanti: And finally our group.

Mark Fioravanti: Group focus provides visibility for our portfolio, which gives us confidence to reiterate our full year guidance.

Mark Fioravanti: As of March 31 same.

Mark Fioravanti: Same store group room nights on the books for the rest of the year were up two 4% compared.

Mark Fioravanti: Compared to the same period last year for the rest of 2023.

Mark Fioravanti: And we're projecting to set a new full year record for group room nights traveled in 2020 for surpassing the prior record in 2019.

Mark Fioravanti: In addition, same store group room revenue on the books for the rest of the year was up 8.4% compared to the same period last year. As a result, we're reiterating our full-year guidance ranges for same-store hospitality REVPAR and total REVPAR growth and same-store hospitality in J.W. Hill Country Adjusted EBITDA RE. Turning now to same-store production, in the first quarter of 2024, we booked nearly 288,000 gross group room nights for all future years at a first quarter record ADR of $265.

Mark Fioravanti: In addition, same store group rooms revenue on the books for the rest of the year was up eight 4% compared to the same period last year for the rest of 2023.

Mark Fioravanti: As a result, we are reiterating our full year guidance ranges for same store hospitality Revpar and total revpar growth and same store hospitality and J W Hill country adjusted EBITDA sorry.

Mark Fioravanti: Turning now to same store production in the first quarter of 2024, we booked nearly 288000 gross group room nights for all future years.

Mark Fioravanti: Our first quarter at a first quarter record ADR of $265.

Mark Fioravanti: Group room night production was down sequentially and year over year due to our record performance in the fourth quarter of 2023. Recall that in the fourth quarter of 2023, we booked a record 1.2 million gross group room nights for all future years, which was an increase of 19% compared to the fourth quarter of 2022. Therefore, having closed a large portion of the late-stage funnel in the fourth quarter, our focus in the first quarter was on replenishing the sales funnel.

Mark Fioravanti: Group room night production was down sequentially and year over an year over year due to our record performance in the fourth quarter of 2023 recall in the fourth quarter of 2023, we booked a record $1 $2 million gross group room nights for all future years, which was an increase of 19% compared to the fourth quarter of 2022.

Mark Fioravanti: <unk>.

Mark Fioravanti: Therefore, having closed a large portion of the late stage funnel in the fourth quarter, our focus in the first quarter was on replenishing the sales funnel lead.

Mark Fioravanti: Lead volumes now sit at record high levels, giving us confidence in the continued strength of the group segment and our position. We continue to be encouraged by production results at J.W. Hill Country.

Mark Fioravanti: <unk> volumes now sit at record high levels, giving us confidence in the continued strength of the group segment and our positioning.

Mark Fioravanti: We continue to be encouraged by production results at GW Hill country in the first quarter of 2024, we booked nearly 42000 gross group room nights for all future years at an ADR of $315.

Mark Fioravanti: In the first quarter of 2024, we booked nearly 42,000 gross group room nights for all future years at an ADR of $315,000. Turning to the entertainment segment, another bright spot in the quarter, this business delivered a record first quarter adjusted EBITDA RE of $15.5 million, up 8.3%, despite the impact of severe winter weather in Nashville and construction disruption at the W Austin and the Wild Horse Saloon. Our Old Red brand performed well, and our newest venue, Old Red Las Vegas, which opened in mid-January, is off to an encouraging start.

Mark Fioravanti: Turning to the entertainment segment, another bright spot in the quarter. This business delivered a record first quarter adjusted EBITDA of $15 5 million up eight 3%. Despite the impact of severe winter weather in Nashville, He construction disruption at the W. Austin.

Mark Fioravanti: And the Wellbore salute.

Mark Fioravanti: Our old Red brand performed well and our newest spanning all grade Las Vegas, which opened in mid January is off to an encouraging start.

Mark Fioravanti: Our entertainment business continues to perform in line with our expectations, and as a result, we're reiterating our entertainment adjusted EBITDA RE guide. Turning to our consolidated outlook for 2024, We're also reiterating our full year guidance range for corporate and other and consolidated adjusted EBIT.RE. We're raising our four-year guidance ranges for Adjusted Funds from Operations, or AFFO, by $7 million to $489.8 to $535.5 million and for AFFO per share by $0.11 to $7.69 to $8.33 to reflect the net interest expense savings associated with our recent refinancing transactions, which Jennifer will discuss in a moment.

Mark Fioravanti: Our entertainment business continues to perform in line with our expectations and as a result, we are reiterating our entertainment adjusted EBITDA guidance.

Mark Fioravanti: Turning to our consolidated outlook for 2024, we're also reiterating our full year guidance range for corporate and other and consolidated adjusted EBITDA R E.

Mark Fioravanti: We're raising our full year guidance ranges for.

Mark Fioravanti: Adjusted funds from operations or <unk> by $7 million to 489, 8% to $535 $5 million.

Mark Fioravanti: <unk> <unk> per share by <unk> 11 to.

Mark Fioravanti: The $7 69 to.

Mark Fioravanti: To $8 33.

Mark Fioravanti: To reflect the net interest expense savings associated with our recent refinancing transactions, which Jennifer will discuss in a moment.

Mark Fioravanti: Note that the fully diluted share count used in our AFFO per share calculation reflects the put rights held by Ateros as part of their Opry Entertainment Group investment. Although those rights are not exercisable, and we retain the option to settle any exercise of those rights in cash, any exercise of the foot rights would also result in a tariff of 30% ownership in OEG, reverting back to Ryman.

Mark Fioravanti: Note that the fully diluted share count used in our <unk> per share calculation reflects the put rights held by <unk> as part of their offering Entertainment group investment.

Mark Fioravanti: All of those rights.

Mark Fioravanti: <unk> are not exercisable and we retain the option to settle any exercise of those rights in cash.

Mark Fioravanti: The exercise of the put rights would also result in a <unk>, 30% ownership in OAG reverting back to run.

Mark Fioravanti: To provide some color on the second quarter, we now expect mid-single-digit same-store hospitality REVPAR growth year over year, which assumes continued transient normalization in the second quarter. We continue to expect high single-digit year-over-year growth in same-store hospitality total REVPAR, along with year-over-year adjusted EBITDA RE margin expansion driven by group strength and robust out-of-room spend. As Colin discussed at the outset, we remain incredibly well positioned. We have significant visibility into future bookings, a meaningful recurring revenue stream, strong pricing power, and ample high-return investment opportunities available to us.

Speaker Change: To provide some color on the second quarter. We now expect mid single digit same store hospitality revpar growth year over year.

Mark Fioravanti: Which assumes continued transient normalization in the second quarter, we continue to expect high single digit year over year growth in same store hospitality total revpar.

Mark Fioravanti: Along with year over year, adjusted EBITDA margin expansion, driven by group strength and robust out of room spend.

Mark Fioravanti: As Colin discussed at the outset, we may remain incredibly well positioned we have significant visibility into future bookings a meaningful recurring revenue stream strong pricing power and ample high return investment opportunities available to us.

Mark Fioravanti: The investments we're making, though disruptive in 2024, will sustain our long-term growth trajectory. And importantly, we can fund this growth plus our dividend from our balance sheet and free cash flow generation. And following the refinancing transactions we undertook in March, our balance sheet has never been better positioned. So to that end, I'll turn it over to Jennifer to discuss our balance sheet, liquidity, and capital. Thanks, Mark.

Mark Fioravanti: The investments, we're making though disruptive in 2024 will sustain our long term growth trajectory and.

Mark Fioravanti: And importantly, we can fund this growth plus our dividend from our balance sheet and free cash flow generation and following the refinancing transactions. We undertook in March our balance sheet has never been better positioned so to that end ill turn it over to Jennifer to discuss our balance sheet liquidity and capital.

Jennifer L. Hutcheson: Thanks Mark. We ended the first quarter with $455 million of unrestricted cash on hand, and our $700 million revolving credit facility was undrawn. OEG's $65 million revolving credit facility had a balance of $22 million outstanding. Taken together, our total available liquidity was approximately $1.2 billion, net of approximately $4.3 million of outstanding letters of credit. We retained an additional $82 million of restricted cash available for SF&E and other maintenance projects. During the quarter, we took advantage of favorable market conditions and undertook transactions to address our nearest term maturity, to lower our weighted average interest rate and further unencumber our asset base.

Jennifer: Thanks, Mark we ended the first quarter with $455 million of unrestricted cash on hand, and our $700 million revolving credit facility was undrawn.

Jennifer L. Hutcheson: $65 million revolving credit facility had a balance of $22 million outstanding.

Jennifer L. Hutcheson: Together, our total available liquidity was approximately $1 2 billion net of approximately $4 $3 million of outstanding letters of credit.

Jennifer L. Hutcheson: We retained an additional $82 million of restricted cash available for M&A and other maintenance projects.

Jennifer L. Hutcheson: During the quarter, we took advantage of favorable market conditions and undertake transactions to address our nearest term maturity.

Jennifer L. Hutcheson: Lower our weighted average interest rate and further unencumber our asset base.

Jennifer L. Hutcheson: In March, we completed the private placement of $1 billion of aggregate principal amount of 6.5% unsecured senior notes due 2032, the proceeds of which were used to repay the Gaylord Rocky secured term loan in full, along with $200 million of the corporate term loan fee. The transaction was very well received by the market and was upsized from $800 million to $1 billion in part to satisfy the strong demand for our security. In addition, in April, we repriced the remaining outstanding corporate Term 1B from SOFR plus 275 basis points to SOFR plus 225 basis points.

Jennifer L. Hutcheson: In March we completed the private placement of $1 billion in aggregate principal amount of six 5% unsecured senior notes due 2032.

Jennifer L. Hutcheson: Proceeds of which were used to repay the Gaylord Rockies secured term loan in full.

Jennifer L. Hutcheson: Along with $200 million of the corporate term loan b.

Jennifer L. Hutcheson: The transaction was very well received by the market and was Upsized from 800 million to a $1 billion in part to satisfy the strong demand for our securities.

Jennifer L. Hutcheson: In addition in April we repriced the remaining outstanding corporate term loan B from silver plus two to 75 basis points, just over plus 225 basis points. As a result, we are raising our full year guidance for <unk> and <unk> per share as mark outlined.

Jennifer L. Hutcheson: As a result, we are raising our full-year guidance for AFFO and AFFO per share, as Mark outlined. Acknowledging the actions we have taken to strengthen the balance sheet, as well as the merits of our group-focused business model, S&P Ratings upgraded our corporate credit rating from B to B+, while maintaining a positive outlook, and Fitch Ratings revised our outlook from stable to positive. Our net leverage ratio at the end of the quarter based on total consolidated net debt to adjusted EBIT.RE was 4.3 times, within our targeted four to four and a half times range. On a pro forma basis, assuming a full year contribution of adjusted EBITDA RE from the J.W. In Hill Country, our net leverage ratio was 4.1 times.

Jennifer L. Hutcheson: Acknowledging the actions we have taken to strengthen the balance sheet as well as the merits of our group focused business model S&P ratings upgraded our corporate credit rating from BBB, plus while maintaining a positive outlook and Fitch ratings revised our outlook from stable to positive.

Jennifer L. Hutcheson: Our net leverage ratio at the end of the quarter based on total consolidated net debt to adjusted EBITDA was four three times within our targeted four to four five times range on.

Jennifer L. Hutcheson: On a pro forma basis, assuming a full year contribution of adjusted EBITDA from the J W Hill country, our net leverage ratio was four one times.

Jennifer L. Hutcheson: In 2024, we continue to expect to generate free cash flow before payment of dividends and capital expenditures of $500 million to $550 million, which together with our unrestricted cash reserves and funds available in our FF&E escrow account will be more than sufficient to fund our dividend and capital investment priorities. Regarding our dividend, it remains our intention to continue to pay 100% of our retaxable income through dividends. Regarding our capital investment priorities in 2024, we continue to expect to invest approximately $290 to $360 million in our hospitality business and $70 to $80 million in our entertainment business.

Jennifer L. Hutcheson: In 2024, we continue to expect to generate free cash flow before payment of dividends and capital expenditures.

Jennifer L. Hutcheson: A 500 million to $550 million, which together with our unrestricted cash reserves and funds available and our S. S. Any escrow accounts will be more than sufficient to fund our dividend and capital investment priorities.

Jennifer L. Hutcheson: Regarding our dividend it remains our intention to continue to pay 100% of our REIT taxable income through dividends.

Jennifer L. Hutcheson: Regarding our capital investment priorities in 2024, and we continue to expect to invest approximately $290 million to $360 million in our hospitality business and $70 million to $80 million and our entertainment.

Jennifer L. Hutcheson: On our last earnings call, we detailed the major projects, so today I'll provide some highlights on our progress year to date. At the Gaylord Rockies, the first phase of the Grand Lodge repositioning, including Embers, the new lobby bar, is now open. Remaining work includes the repositioning of several additional F&B outlets in the lobby, which are scheduled to open later this year in the fourth quarter. Construction of the new group pavilion at Gaylord Rockies is also progressing quickly and is expected to open in June, with both of these projects ahead of schedule and on budget.

Jennifer L. Hutcheson: On our last earnings call, we detailed the major projects. So today I'll provide some highlights on our progress year to date.

Jennifer L. Hutcheson: Rockies the first phase of the Grand Lodge repositioning, including members the new lobby bar is now open.

Jennifer L. Hutcheson: The remaining work includes repositioning of several additional F&B outlets in the lobby, which are scheduled to open later this year in the fourth quarter.

Jennifer L. Hutcheson: Construction of the new grid resilient at Gaylord Rockies is also progressing quickly and is expected to open in June with both of these projects ahead of schedule and on budget.

Jennifer L. Hutcheson: At Gaylord Palms, renovation of the lobby and remaining 14-16 rooms is underway, and we expect this work to be completed by the end of the year. At Gaylord Opryland, the transformation of the Governor's Ballroom and Pre-Function space is set to begin in June. The construction schedule there will be managed to limit disruption. At Block 21, the W. Austin Rooms and Public Space Renovation is underway, and we expect to complete this work by the end of the year.

Jennifer L. Hutcheson: At the Gaylord palms renovation of the lobby and remaining 14 16 rooms is underway and we expect this work to be completed by the end of the year.

Jennifer L. Hutcheson: Hey, Gaylord Opryland transformation of the Governor's ballroom and pre function space is set to begin in June.

Jennifer L. Hutcheson: Construction schedule, there will be managed to limit disruption.

Jennifer L. Hutcheson: Our block 21, the W. Austin rooms, and public space renovation is underway and we expect to complete this work by the end of the year.

Jennifer L. Hutcheson: And finally, the transformation of the wild West saloon in downtown Nashville, The category <unk> continues and we expect that they need to reopen in phases, beginning in the third quarter.

Jennifer L. Hutcheson: And finally, the transformation of the Wild Horse Saloon in downtown Nashville to Category 10 continues, and we expect that venue to reopen in phases beginning in the third quarter. As our projections demonstrate, our balance sheet and liquidity position continue to be in excellent shape to support the capital deployment opportunities available to us and the continued growth of our business. And with that, we open it up to questions.

Jennifer L. Hutcheson: And our projections demonstrate our balance sheet and liquidity position continues to be in excellent shape to support the capital deployment opportunities available to us and the continued growth of our business.

Jennifer L. Hutcheson: With that let's open it up for questions.

Speaker Change: Okay shall we say.

Operator: At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may remove yourself from the queue at any time by pressing star two.

Jennifer L. Hutcheson: At this time, if you would like to ask a question. Please press the star and one on your telephone keypad, you may remove yourself from the queue at any time by pressing star two.

Operator: Once again, that is star and one, to ask a question. We'll take our first question from Chris Woronka with Deutsche Bank. Your line is open.

Operator: Once again that is star one.

Chris Jon Woronka: To ask a question.

Chris Jon Woronka: We'll take our first question from Chris will Wonka with Deutsche Bank. Your line is open.

Chris Jon Woronka: Hey, good afternoon, guys. Thanks for taking the time to answer the question. You know, maybe we can take a step back and think about the transient weakness or softness you mentioned, pockets of it. Is there any common theme to it? You know, I don't know if Colin or Mark, do you think it's related to price sensitivity or is it just really a function of tough competition or something else, just trying to see if it's thematic or just kind of temporary based on the comps and things like that? Unknown Speaker

Chris Jon Woronka: Hey, good afternoon, guys. Thanks for thanks for taking my question.

Chris Jon Woronka: Maybe we can take a step back and think about the <unk>.

Chris Jon Woronka: Transient weakness or softness you mentioned pockets is there any common theme to it.

Chris Jon Woronka: Colin or Mark I mean is it.

Chris Jon Woronka: Do you think it's related to price sensitivity or is it just.

Chris Jon Woronka: It really a function of a tough comp or something else just trying to see if there's a.

Chris Jon Woronka: The magic or just kind of temporary based on the comps and things like that.

Chris Jon Woronka: Yes.

Unknown Executive: Do you want to take it, Mark?

Speaker Change: Do you want to take it mark.

Mark Fioravanti: Yeah, I I would say if you look at if you look at how the markets have performed in terms of the top 25 Right. I mean it appears that there's a normalization That's occurring in terms of transient demand, you know those those markets that that recovered quickly From COVID like Nashville, Dallas, Orlando, etc You know They they've seen they saw a little bit of softness in the first quarter If you look at what's happening in places like Boston, Seattle Chicago, New York City, you know, they've had they've had quite strong quite quite strong performance So I don't think that it's, I don't think there's anything that's happening, you know, from an economic standpoint where we see a weakening of the consumer, those that are traveling are spending outside the room, and so we feel very good about that. I think it's just an issue of consumers making other choices and markets performing a little, to the COVID recovery.

Mark Fioravanti: I would say if you look at if you look at how the markets have performed in terms of the top 25 right. I mean, it appears that there is a normalization.

Mark Fioravanti: It's occurring in terms of transient demand those.

Mark Fioravanti: Those markets that debt.

Mark Fioravanti: Covered quickly from.

Mark Fioravanti: From Covid like Nashville, Dallas, Orlando et cetera.

Mark Fioravanti: They've seen.

Mark Fioravanti: Saw a little bit of softness in the first quarter. If you look at what's happening in places like Boston and Seattle, Chicago, New York City, they've had they've had quite strong.

Mark Fioravanti: It's quite quite strong performance.

Mark Fioravanti: So I don't think that its.

Mark Fioravanti: I don't think Theres anything that's happening.

Mark Fioravanti: From an economic standpoint, where we see weakening of the consumer those that are traveling.

Mark Fioravanti: Spending outside of the room.

Mark Fioravanti: And so we feel very good about that.

Mark Fioravanti: I think it's just it's just an issue of consumers.

Mark Fioravanti: Making other choices and end markets.

Mark Fioravanti: Performing a little bit differently than they did through through the.

Mark Fioravanti: Through the Covid recovery.

Colin V. Reed: On the pricing front, Pat, you may want to dive in on this one, but, you know, Chris, we as a business have been very focused on driving rates in our business, both on the group side and on the transit side. And you know, I was talking with Mark earlier this morning, and I was looking at the average daily rate of transient business on a same-store basis in this first quarter compared with pre-COVID-19, which was the best year we ever had.

Mark Fioravanti: On the pricing front.

Colin V. Reed:

Colin V. Reed: Pat you may want to dive in on this one but.

Colin V. Reed: Chris.

Colin V. Reed: As a as a business we've been very.

Colin V. Reed: Focused on driving rate in that business, both on the group side and on the transient side and.

Colin V. Reed: I was I was talking with Mark earlier, this morning, and I was looking at the the.

Colin V. Reed: The average daily rate of transient business on a same store basis in this first quarter to pre COVID-19, which was the best year, we ever had in our races up 90 box on transient in this period.

Colin V. Reed: And our rate is up 90 bucks on transient in this period. And so we've been very aggressive on transient pricing. And obviously, we've got this whole issue of pricing under a microscope right now to make sure that we, you know, we haven't pushed it too hard. I don't think we have. Pat, do you want to jump in on transient pricing? Absolutely.

Pat: So we've been very aggressive on trends in pricing and obviously we are we.

Pat: We've got this whole issue of pricing under a microscope right now to make sure that we we haven't pushed it too hard I don't think we have Pat you want to jump in on transient pricing absolutely as Colin already mentioned, we did $292 63 and transient ADR in the first quarter, that's a $2.

Patrick Chaffin: Absolutely. As Colin already mentioned, we did $292.63 in transient ADR in the first quarter. That's a 2.5% increase over 2023. So even with some of the softness and normalization going on, we're still driving rates in a very successful manner. To Colin's point, we're up about 41% over 2019, so we see this as purely a volume issue and really just around what Mark was talking about as far as some markets finally catching up to the lead pack that came out of COVID.

Patrick Chaffin: 5% increase over 23, so even with some of the softness of normalization going on we're still driving rate.

Patrick Chaffin: Very successful manner.

Patrick Chaffin: Collins point were about 41% over 2019, so we see this as purely a volume issue and really just around what mark was talking about as far as some markets finally catching up to the lead pack.

Patrick Chaffin: That came out of Covid.

Patrick Chaffin: What gives us a lot of encouragement is the group continues to remain very strong. We're 34,000 room nights ahead as far as what's on the books from a group perspective versus the same time last year for the remainder of the year. And our catering numbers have been very, very encouraging. And that's been a recurring theme for us for the past 24 months and is continuing into 2024. So we feel good even though there is a bit of normalization going on in the transient side.

Patrick Chaffin: It gives us a lot of encouragement is the group continues to remain very strong with 34000 room nights ahead as far as what's on the books from a group perspective versus same time last year for the remainder of the year and our catering numbers have been very very encouraging and that's been a recurring theme for us for the past 24 months and is continuing into 2024, so we feel good even though there.

Patrick Chaffin: Is a bit of normalization going on in the transient side.

Chris Jon Woronka: Well, thanks, guys. That was super helpful with all the color.

Speaker Change: Well thanks, guys.

Speaker Change: Super helpful color, if I could ask a quick follow up on.

Chris Jon Woronka: If I could ask a quick follow-up, but it's on Hill Country, and it sounds like things are off to a really good start there. Can you maybe frame for us, as you're kind of remixing the business a little bit, what's the cadence of the opportunity in terms of your original underwriting? I mean, will you get further ahead this year, or is this more of a multi-year thing?

Chris Jon Woronka: It's on hill country, and it sounds like things are.

Chris Jon Woronka: Off to a really good start there can you maybe frame for us.

Chris Jon Woronka: Youre kind of Remixing the business a little bit.

Chris Jon Woronka: What's the cadence of the opportunity in terms of your original underwriting I mean, when you get further ahead. This year or is this more of a multi year thing and just maybe a little bit of color. There on how you are remixing it because it sounds like that's pretty pretty important.

Colin V. Reed: And maybe a little bit of color on how you're remixing it, because it sounds like that's pretty important.

Colin V. Reed: Let me sort of do the 60,000 feet, and then Patrick, you may want to dive in on exactly what we've discovered and what we're doing because it is very interesting. You know, Chris, when we we've looked at this hotel at least three times over the last eight years. And the philosophical reason is, we love this San Antonio market, we love Texas, we love this southern part of Texas. When you look at the growth that's going on in this market, and you look at the growth that's going on, you know, 60 miles away in Austin, it's, it's remarkable.

Colin V. Reed: Sure.

Speaker Change: Let me let me do the 60000 foot and then Patrick you may want to dive in on exactly what we've discovered and what we're doing because it's it is very interesting.

Speaker Change: But you.

Colin V. Reed: Chris when we looked at this hotel.

Colin V. Reed: At least three times over the last eight years and the reason the philosophical reason is we love the San Antonio market, We Love, Texas, We love the southern part of Texas. When you look at the growth that's going on in this market and you look at the growth is going on 60 miles away in Austin.

Colin V. Reed: And so we look at this business with a very long-term sort of lens. And we believe over time, we can transform this asset, you know, maybe add some more rooms, more meeting space, and essentially transform this hotel into the number two convention resort in the state of Texas, second to our number one, the Gaylord Texan. But, you know, with every stone we turn over in this business, we find a little bit of gold dust. And Patrick, you want to give Chris a little bit of some examples of, you know, what we've been doing and what we've discovered.

Patrick Chaffin: It's remarkable and so we look at this business with a very long term sort of lens and we believe over time, we can transform this asset.

Colin V. Reed: Maybe add some more rooms more meeting space and essentially transform this hotel to the number two convention resort in the state of Texas number two to number one the payload the Gaylord Texan.

Patrick Chaffin: But as every stone.

Colin V. Reed: Turnover.

Patrick Chaffin: In this business.

Colin V. Reed: We find a little bit of gold dust and Patrick do you want to give Chris a little bit of some.

Patrick Chaffin: Some examples of what we've been doing and what we've discovered absolutely.

Patrick Chaffin: Absolutely. Yeah, Chris, we talked about it on investor day that we manage our portfolio as a single unit, and that's what we're starting to get some strength out of at J.W. Hill Country.

Patrick Chaffin: Yes, Chris we've talked about at Investor day that we manage our portfolio as a single unit and that's what we're starting to get some strength out of.

Patrick Chaffin: Hey, J W Hill country.

Patrick Chaffin: You know, from a contract perspective with outside vendors, both from a resort fee perspective and from a parking perspective, we're starting to drive incremental dollars into this property, and those are the short-term benefits of being part of our portfolio that you'll see in the first 12 to 24 months. To Colin's point, we are already working through the master planning of the resort to add additional rooms, space, and water amenities and have done a tremendous amount of research at the end of the fourth quarter and through the first quarter around what the J.W.

Patrick Chaffin: From a contract perspective with outside vendors both from resort fee perspective from a parking perspective, we're starting to drive some incremental dollars into this property and those of its short term benefits of being part of our portfolio that youll see in the first 12 months to 24 months to Collins point, we're already working through the master planning of the resort to add additional room.

Patrick Chaffin: customer is looking for at this property specifically. We have now actually engaged in additional research to understand what the Gaylord customer needs to see at this property to enhance and refine it for their interests of bringing pieces of business over. Accordingly, we've picked up another 12 to 15,000 room nights in the Gaylord brand from those bookings that are going into JW. So we've generated a substantial amount thus far and are looking for more and more as we refine the property through the master planning process.

Patrick Chaffin: <unk> space and water amenities and have been done a tremendous amount of research in the end of the fourth quarter and through the first quarter around what the J W. Customers looking for at this property specifically, we now are actually engaged in additional research to understand what the gaylord customer needs to see at this property to enhance and <unk>.

Patrick Chaffin: Fine it for their interests are bringing pieces of business over.

Patrick Chaffin: To that point, we've already seen some great success with bringing gaylord customers into the <unk> brand and vice versa. We booked since we took the transaction over in June of last year, we booked about 12000 room nights into the J W debt.

Patrick Chaffin: That were tied to multiyear rotational pieces of business in the Gaylord hotels and.

Patrick Chaffin: Accordingly, we picked up another 12 to 15000 room nights in the Gaylord brand from those bookings that are going into J. W. So we are we've generated a substantial amount thus far and are looking for more and more as we refine the property through the master planning process and cost efficiencies to Patrick absolutely.

Patrick Chaffin: And cost efficiencies, too, Patrick. Absolutely, yeah. Again, because we approach everything from a portfolio perspective, we can drive synergies that maybe you don't see in other portfolios where they're managed as individual assets.

Patrick Chaffin: Again, because we approach everything from a portfolio perspective, we can drive synergies and that.

Patrick Chaffin: Maybe you don't see it other portfolios, where theyre managed as individual assets.

Chris Jon Woronka: Okay, very helpful. I really appreciate all the details. Thanks, guys.

Speaker Change: Okay very helpful really appreciate all the details thanks guys.

Speaker Change: Thanks, Chris.

William Andrew Crow: Thank you. And our next question comes from Bill Crow with Raymond James. Your line is open.

Chris Jon Woronka: Thank you and our next question comes from Bill Crow with Raymond James Your line is open.

William Andrew Crow: I appreciate it. Good afternoon, guys.

Bill Crow: I appreciate it.

Bill Crow: Good afternoon guys.

William Andrew Crow: I want to focus just really on the shift from 1Q to 2Q, where you're going from almost down 3%, Rob Parker, to up, I think you said a bit, single digits. How much of that is driven simply by Easter and the holiday shift? We're now starting to hear that maybe April's not so good, that the Passover holiday is actually impacting April, so you've got both March and April impacted by holidays. How much did, I know it's a multi-part question, same subject, but how much did Hill Country benefit from the Easter shift? Any color you can give us on that, or is it just that comps get easier in the second quarter, and that really helps?

Bill Crow: I wanted to focus really on the on the the.

William Andrew Crow: A shift from <unk> to <unk>, where.

William Andrew Crow: You're going from almost 3% revpar growth to up.

William Andrew Crow: You said mid single digits, how much of that is driven simply by Easter.

William Andrew Crow: The holiday shift.

William Andrew Crow: We're now starting to hear that.

William Andrew Crow: Maybe april's that so good that the Passover holiday is actually impacting.

William Andrew Crow: April so you've got both March and April impacted by holidays.

William Andrew Crow: How much did it.

William Andrew Crow: I know, it's a multipart question on the same subject, but how much did hill country benefit from from Easter shift any color you can give us.

William Andrew Crow: Or is it just the comps get easier in the second quarter that and that really helps you.

William Andrew Crow: Patrick Yeah, absolutely so to your point, yes, the comp is a little bit easier bill.

Mark Fioravanti: Yeah, absolutely. So to your point, yeah, the comp is a little bit easier, Bill. There is the shift from Easter, which we've talked about, about 13,000 room nights that shifted between the two quarters. So there's definitely a benefit there.

Mark Fioravanti: There is the shift from Easter, which we've talked about it about 13000 room nights that shifted between the two quarters. So there's definitely a benefit there, but I would tell you. How April is going for us we're still working through the preliminary results, but we expect April to be the best April ever in the history of the portfolio.

Mark Fioravanti: But I would tell you how April is going for us. You know, we're still working through the preliminary results, but we expect April to be the best month ever in the history of the portfolio on a same store basis. We expect it to be the second best EBITDA month ever in the history of the portfolio on a same store basis. Catering looks very, very strong. And we expect Opryland to probably come in with the best catering performance in any hotel in any single month in the month of April. So the comps are easier, but we are seeing really strong group performance, especially on the catering side. And so we feel good about where we're heading.

Mark Fioravanti: On a same store basis, we expect it to be the second best EBITDA month ever in the history of the portfolio on a same store basis.

Mark Fioravanti: Catering looks very very strong and we expect opryland will probably come in with the best catering performance in any hotel in any single month in the month of April so.

Mark Fioravanti: The comps are easier, but we are seeing a really strong group performance, especially on the catering side and so we feel good about where we're heading and helped to offset some of that transient normalization that we've seen.

Mark Fioravanti: And we're seeing that change.

Speaker Change: Got it.

Mark Fioravanti: We're seeing that same catering performance in the third quarter as well, yes, as we look at and we have more group room nights on the books for the second quarter and third quarter than we did the same time last year. So we think we're really well positioned for these next two quarters and then fourth quarter is obviously heavily dependent on transient.

Mark Fioravanti: Yeah, and you know, we have more group room nights on the books for the second quarter and the third quarter than we did the same time last year. So we think we're really well positioned for these next two quarters. And then the fourth quarter is obviously heavily dependent on transient. But you know, our holiday programming allows us to do things that maybe buck the market trends that are normally in place.

Mark Fioravanti: Our holiday programming allows us to do things that maybe book the market trends that are normally in place, but we've also got good group business on the books for the fourth quarter, two which absolutely.

Mark Fioravanti: But we've also got good group business on the books for the fourth quarter too, which gives us a lot of confidence about the fourth quarter. Yeah, about three points of group business higher than we were at the same time last year. Yeah, all great colors.

Mark Fioravanti: A lot of confidence about the fourth quarter, you have about three points of group business higher than we were same time last year, yeah, Yeah, Oh, great color I appreciate it if I could just do a follow up question and.

William Andrew Crow: All in all, a great color. I appreciate it.

William Andrew Crow: If I could just do a follow-up question. And only because Marriott touted the performance of the forward bookings at the Pacific, Gaylord Pacific. I'm just curious, are you seeing rotational business exiting some of your properties to now include Pacific? I know we've talked about that in the past, but just wanted to revisit that topic.

William Andrew Crow: And only because myriad.

Speaker Change: How did the performance of the forward bookings.

William Andrew Crow: Specific to Gaylord Pacific I'm, just curious are you seeing.

William Andrew Crow: Rotational business.

William Andrew Crow: Kind of exiting some of your properties too.

William Andrew Crow: <unk> now include Pacific I know, we've talked about that in the past but.

William Andrew Crow: But just wanted to revisit that topic.

William Andrew Crow: Sure.

Patrick Chaffin: Yeah, Bill, we have seen some good production coming out of Pacific. It's driven about 82,000 room nights into the Gaylord hotels and multi-rotational pieces of business that have been booked in unison with Gaylord Pacific. But what really is going to drive the benefit is not here in the pre-sale period of time.

Speaker Change: Yes, Bill we have seen some good production coming out of Pacific, It's driven about 82000 room nights into the Gaylord hotels and multiyear rotational pieces of business that had been booked in unison with Gaylord Pacific, but what really is going to drive the benefit is not here in the presale.

Patrick Chaffin: It's going to be after some of these groups that are brand new to the Gaylord brand because Pacific is stealing a lot of share from the state of California. When those groups travel to a Gaylord for the first time and have their minds open to what a Gaylord is and how unique it is, then they will start rotating into the other Gaylords around the U.S. It's exactly what we saw at National when we opened it back in 2008. It's what we saw at Gaylord Rockies when we opened it in 2018. And so the best is really yet to come as that property gets opened and starts pushing folks through it.

Patrick Chaffin: Period of time, it's going to be after some of these groups that are brand new to the Gaylord brand because.

Patrick Chaffin: Specific stealing a lot of share from the state of California, when those groups travel to a gaylord for the first time and have their minds open to what a gaylord is and how unique. It is then they will start.

Patrick Chaffin: Rotating into the other Gaylord is around the U S. It's exactly what we saw at National when we opened it back in 2008, it's what we saw at Gaylord Rockies, We opened in 2018 and so the best is really yet to come as that property gets opened and started pushing folks through it and then opening them up to the rest of the brand and their bookings.

Patrick Chaffin: And they're booking at a high rate. Yes, those groups will rotate at a higher rate.

Patrick Chaffin: At a high rate.

Patrick Chaffin: Good for rotator at a higher rate that's correct yes.

William Andrew Crow: Okay, that's it for me. Thank you.

Speaker Change: Okay. That's it for me thank you.

Speaker Change: Thanks Bill.

Smedes Rose: Thank you. Our next question comes from Smedes Rose with Citi. Your line is open.

William Andrew Crow: Thank you. Our next question comes from Smedes Rose with Citi. Your line is open.

Smedes Rose: Hi, thank you. I wanted to just ask.

Smedes Rose: Hi, Thank you.

Smedes Rose: I wanted to just ask a little bit about the growth definite room nights and that's definitely room nights booked in the quarter. I know you noted it was a tough year over year comp and acknowledging that the breather you booked at record highs, but it was still lower than like first COVID-19, and 18 in 17 and then just wondering if you could provide.

Smedes Rose: Just a little more.

Smedes Rose: Color around how you think that will kind of trend and if it means anything.

Patrick Chaffin: Sure. Hey Smedes, Patrick.

Smedes Rose: Sure.

Smedes Rose: It's Patrick.

Smedes Rose: Yes, I can't underscore how much impact clearing up a funnel in the fourth quarter of 2023 had on the first few months of 2020 for the sales team blew it out did a great job and had been rebuilding the funnel.

Smedes Rose: We are very encouraged by what we're seeing there is two things going on that give us a lot of encouragement and we believe that.

Patrick Chaffin: Yeah, I can't emphasize how much impact clearing out the funnel in the fourth quarter of 2023 had on the first few months of 2024. The sales team blew it out, did a great job, and has been rebuilding that funnel. We are very encouraged by what we're seeing. There are two things going on that give us a lot of encouragement, and we believe that the team is going to deliver another tremendously strong performance from a sales perspective, you know, advanced gross group bookings in 2024.

Patrick Chaffin: The team is going to deliver another tremendously strong performance from our sales advanced gross group bookings in 2024 and those two things are number one you heard me talk over the past 24 months about the fact that we had really great production and lead volume in T plus one through T plus four and late last.

Patrick Chaffin: And those two things are, number one, you heard me talk over the past 24 months about the fact that we had really great production and lead volume in T plus one through T plus four. And late last year, we started seeing lead volumes increase beyond T plus four. And we've seen, just in the past few months, association leads really coming back very, very strongly. So that allows us to know that we're starting to, you know, we have more opportunities to place for future years some of those big associations that serve as the foundation for our book of business.

Patrick Chaffin: Year, we started seeing beyond T plus four lead volumes, increasing and we've seen just in the past few months Association leads really coming back very very strongly so that allows us to know that we're starting to we have more opportunities to place for future years, some of those big associations.

Patrick Chaffin: Serve as the foundation for our book of business. The second thing we saw was in April.

Patrick Chaffin: The second thing we saw was in April, a material increase in corporate room nights, which bodes very well for us as we're in the primary booking window for filling up 2025. So, we are seeing everything coming together nicely as they're rebuilding that funnel. And while, yes, you know, the first quarter was a little bit down versus previous periods, it was expected. Our rate continues to be very, very strong. The sales team is doing a great job there, and both on association and corporate lead volume, we see a lot of good things coming together for the future. And that's the key.

Patrick Chaffin: A material increase in corporate room nights, which bodes very well for us as we're in the primary booking window for filling up 2025. So we are seeing everything coming together nicely as they're rebuilding that funnel.

Patrick Chaffin: And well, yes, the first quarter was a little bit down versus previous periods. It was expected our rate continues to be very very strong. The sales team is doing a great job there and both on association and corporate lead volume, we see a lot of good things coming together for the future.

Patrick Chaffin: And that's the key to all of this, it's, you know, it's what the activity of the meeting planner is to our system, and that activity, Patrick, is as good as it's ever been right now. And as you just said, we built, what, 40,000 more room nights in April this last month than we did in April of last year, and lead volumes have jumped again to, you know, fairly very, very healthy levels. So we're very excited about what's going on in our group right now.

Patrick Chaffin: And that's the key to all of this hits.

Patrick Chaffin: What is the activity of the meeting planner into our system.

Patrick Chaffin: And that activity Patrick is as good as it's ever been right now and as you just said we've built what 40000 more room nights in April in this last month.

Patrick Chaffin: Then we did in April of last year and lead volumes have jumped again, two fairly very very healthy levels. So we're very excited about what's going on in group right now.

Smedes Rose: Okay, I will appreciate it. Thank you.

Speaker Change: Okay I appreciate it thank you.

Smedes Rose: By stage.

Shaun Clisby Kelley: Thank you. And we'll take our next question from Sean Kelley with Bank of America. Your line is open.

Smedes Rose: Thank you and we'll take our next question from Shaun Kelley with Bank of America. Your line is open.

Shaun Clisby Kelley: Hi, good afternoon, everyone. Thanks for taking my questions. Just wanted to go back to transient activity, and I know we've kind of hit this. So my question is just specifically, I think in your prepared remarks, you said that the assumption now is that it continues into Q2. Obviously, it sounds like you've already seen a piece of that perhaps continue through April. But was that correct? And then kind of what does that imply the assumption is for the balance of the year? Yes, specifically Q4, since you alluded to how important, you know, transient is for that period. So just help us think about how conservative maybe that outlook is. That'd be helpful.

Shaun Clisby Kelley: Hi, good afternoon, everyone. Thanks for taking my questions.

Shaun Clisby Kelley: Just wanted to go back to the transient activity and I know we've kind of hit. This. So my question is just specifically I think in the prepared remarks, you said that.

Shaun Clisby Kelley: The assumption now is that continues into Q2, obviously it sounds like you've already seen a piece of that perhaps continue through April but was that correct and then kind of what does that imply the assumption is for the balance of the year yes.

Shaun Clisby Kelley: Specifically Q4 since you alluded to how important transient is for that period. So just help us think about how conservative maybe that outlook that'd be helpful.

Shaun Clisby Kelley: Yes.

Patrick Chaffin: Hey Sean, it's Patrick. Good question. We actually have. We didn't just take what we saw in Q1 and roll it through April and May. We've done our best to project what we think is going on and continue some of that softness and adjust our Q2 and Q3 accordingly. Again, our Q4 has been really strong; all three remaining quarters have really strong group business. And our fourth quarter, because of the holiday programming, we're gonna continue to watch that because we do believe we can buck the macro trends in each market.

Patrick Chaffin: Hey, Shaun it's Patrick.

Shaun Clisby Kelley: Good question, we actually we didn't just take what we saw in Q1 and roll it through April and May we've done our best to project. What we think is going on and continue some of that softness.

Patrick Chaffin: And adjust our Q2 and Q3 Accordingly again, our Q4 has a really strong all three remaining quarters have really strong group business and our fourth quarter because of the holiday programming, we're going to continue to watch that because we do believe we can buck the macro trends in each market. So we've adjusted Q2 and Q3 appropriately.

Patrick Chaffin: So we've adjusted Q2 and Q3 appropriately and still feel that we're in a great position to maintain our guidance. So rate continues to be a huge upside opportunity for us, even though we are seeing some of that normalization on transient.

Patrick Chaffin: And still feel that we're in a great position to maintain our guidance. So.

Patrick Chaffin: Rate continues to be a huge upside opportunity for us even though we are seeing some of that normalization on transient.

Sean: Great. Thanks, Patrick and then my follow up here would be it's kind of a.

Shaun Clisby Kelley: that you did see it on the raid side. And you know, you're definitely not alone.

Patrick Chaffin: And to me that you did see it on the right side Youre definitely not alone we've heard effectively similar comments from a number of people in the hospitality space.

Shaun Clisby Kelley: We've heard effectively similar comments from a number of people in the hospitality space. But I'm kind of curious how you didn't see it. It doesn't feel like you saw anything on the entertainment side. So could you just talk a little bit about like, you know, customer behavior there for entertainment and really ticketing, like, any changes in how people are acting, you know, an uptake there? I'm sure it fluctuates given the event schedule that you have, and maybe even the comps. But yeah, just kind of what did you see from the consumer across entertainment? And any concerns or risk factors that we see in transient could impact that side of the house?

Shaun Clisby Kelley: Heres, how you didn't see it doesn't feel like you said you saw anything on the entertainment side could you just talk a little bit about customer behavior. There on entertainment and its really ticketing like just any changes on how people were acting and uptake there I'm sure. It moves around given the event schedule that you have and maybe even the comps.

Shaun Clisby Kelley: But can you just kind of what did you see from the consumer across entertainment and any concerns or risk factor that what you're seeing in transient could impact outside of the house too.

Patrick Chaffin: Yeah, no, thank you, Sean. What I would say is, in aggregate, we haven't seen any material change in consumer behavior across the board. In part because some of those markets are drive-to markets and don't require a room night, but we've seen fairly healthy trends across all of our major venues. We did have modest disruption for one to two weeks in the Tennessee markets for the five assets that are in Tennessee. But other than that, so far, and the first quarter is the smallest quarter of the year, but so far, we haven't seen any material changes in behavior.

Patrick Chaffin: Yeah, no, thank you, Sean. I, what would I say?

Speaker Change: Yes, no. Thank you Sean what I would say is in aggregate, we haven't seen any material change in consumer behavior for the entertainment business across the board in part because some of those markets are drive to markets that don't require a room night.

Patrick Chaffin: But we've seen fairly healthy trends across all of our major venues. We did have the modest disruption for one to two weeks in the Tennessee markets for the five assets that are in Tennessee, but other than that so far.

Patrick Chaffin: First quarter is the smallest quarter here, but so far we haven't seen any material changes in behavior.

Speaker Change: Thank you so much.

Speaker Change: Thank you.

Dori Lynn Kesten: And we'll take our next question from Dori Kesten with Wells Fargo. Your line is open. Thanks. Good afternoon.

Patrick Chaffin: And we will take our next question from Dori Kesten with Wells Fargo. Your line is open.

Patrick Chaffin: Hey Dori, as it stands at the end of March, you said T plus one, two, and three. Is that right? Yeah. Yeah, so we're in the mid to high single digits on each of those years on rate growth as far as what's on the books as it stands today. Okay.

Dori Lynn Kesten: Yeah.

Dori Lynn Kesten: Thanks. Good afternoon. Can you give us a quick update on your T plus 1, 2, 3 rate growth on the book?

Dori Lynn Kesten: Thanks, Good afternoon.

Patrick Chaffin: Give us a quick update on your T plus.

Dori Lynn Kesten: One two or three rate growth on the block.

Dori Lynn Kesten: Okay.

Dori Lynn Kesten: Hey, Dori as it stands at the end of March.

Dori Lynn Kesten: You said people us one two and three is that right.

Dori Lynn Kesten: Yes.

Dori Lynn Kesten: Yes, so we're in the mid to high single digits on each of those years on rate growth as far as what's on the books as it stands today.

Dori Lynn Kesten: Okay, and that's net that bookings.

Patrick Chaffin: And that's Nat, that bookie.

Dori Lynn Kesten: Got it. Okay. And is there anything to note about the makeup of your lead volumes as they sit today between Corporate Association and SMRF, or is it rather normalized and just kind of determine what the rate trajectory might look like when we do start to see your Q2, Q3 gross bookings Yeah.

Nat: Got it okay.

Nat: And is there anything to note about the makeup of your lead.

Dori Lynn Kesten: As they sit today between corporate hesitation tomorrow or is it rather normalized and just trying to determine.

Dori Lynn Kesten: What's the right trajectory might look like.

Dori Lynn Kesten: When we do start to see your Q2 Q3 gross bookings.

Patrick Chaffin: Yeah, like I've mentioned before, we've been watching association waiting for it to come back strong, and it's coming back very strong. And we continue to, you know, as we've done for many, many years, focus on getting the most premium, highest rated association groups and then increasing our mix of corporate. And so corporate has shown great strength here as of late, and association has been rebuilding over the past six months or so.

Dori Lynn Kesten: Yes.

Dori Lynn Kesten: I've mentioned before we've been watching association waiting for it to come back strong and it's coming back very strong and we continue to.

Patrick Chaffin: As we've done for many many years focus on getting the most premium highest rated association groups and then increasing our mix of corporate and so.

Patrick Chaffin: So it's not abnormal, as far as what we see on the books, just a higher volume than we've seen in the past. And so we think from a rate perspective, as we continue to select the highest rated groups and go after the more premium groups and put the investments in place to attract them, it bodes very well for our continued growth in group rates.

Patrick Chaffin: Corporate has shown great strength here.

Patrick Chaffin: Late and association has been rebuilding over the past six months or so so it's not abnormal as far as what we see on the books just a.

Patrick Chaffin: A higher volume than we've seen in the past and so we think from a rate perspective, as we continue to select the highest rated groups and go after the more premium groups and put the investments in place to attract them.

Patrick Chaffin: Bodes very well for our continued growth in group rate.

Speaker Change: Okay. Thank you.

Dori Lynn Kesten: Thank you. We'll take our next question from Jay Kornreich with Wedbush Securities. Your line is open.

Patrick Chaffin: Thank you well take our next question from Jay Kornreich with Wedbush Securities. Your line is open.

Jay Bradley Kornreich: Thanks very much. A little bit of a follow-up to the last question. As you think about the year ahead for the year group bookings, can you give just some perspective on how your conversations are going with meeting planners, especially on the corporate side? And are you seeing any changes in the booking window or app type to get corporate employees together within the year?

Jay Bradley Kornreich: Alright, thanks, very much a little bit of a follow up to the last question as we think about into your forward group bookings can you give just some perspective on how your conversations are going with meeting planners, especially on the corporate side and are you seeing changes in the booking window or appetite to get corporate employees together within the year.

Patrick Chaffin: Yeah, we have not seen any change in the booking window whatsoever. And I'm not sure I caught the first part of your question. Could you repeat that?

Speaker Change: Yes, we have not seen any change in the booking window whatsoever.

Patrick Chaffin: And I'm not sure I caught the first part of your question could you repeat that for the year in the year for their okay. Yes in the year for the year like I said, we are in a position for the remainder of year. We're about 34000 room nights ahead as far as what's on the books and our expectations for what we need to book two to hit our.

Jay Bradley Kornreich: In the year for the year. Okay, yeah, in the year for the year. Like I said, we are in a position for the remainder of the year where we're about 34,000 room nights ahead as far as what's on the books. And our expectations for what we need to book to hit our, you know, our internal expectations are largely in line with what we did last year. So we've seen no change in behavior, whether it's on the booking window or resistance to growing group rates.

Jay Bradley Kornreich: Our internal expectations is in line with largely in line with what we did last year. So we've seen no change in behavior, whether it's on the booking window or resistance to growing group rates and we continue to see lead volumes improving so we think all the right factors are in place for us to hit our in the year for that.

Patrick Chaffin: And we continue to see lead volumes improving. So we think all the right factors are in place for us to hit our targets this year. And thus far this year, the year for the year has been very encouraging. You know, in April alone, we outperformed the year for the year. And our t plus one was up significantly over where it was at the same time last year. So all the short-term metrics are pointing in the right direction.

Patrick Chaffin: And thus far this year in the or for the year has been very encouraging.

Patrick Chaffin: April alone, we outperformed in the or for the year.

Patrick Chaffin: Our T plus one was up significantly over where it was same time last year. So all the short term metrics are pointing in the right direction.

Jay Bradley Kornreich: Okay, great. Thank you. And then just one quick follow-up. You know, you gave some comments on the construction efforts on the hospitality and entertainment projects. Just curious, any changes at this point to your initial assumptions, either for ROI, or even displacement, or is everything starting out as initially planned?

Speaker Change: Okay, great. Thank you and then just one quick follow up.

Jay Bradley Kornreich: You gave some comments on the construction efforts.

Jay Bradley Kornreich: Hospitality and entertainment projects, just curious any changes at this point to your initial assumptions either for RLI displacement or is everything starting out as initially planned.

Mark Fioravanti: Yeah, we haven't changed the assumptions within our full-year guidance, Jay, in terms of what the disruption impact will be from those projects that we outlined. And we said that was about $10 to $11 million on the hospitality side and $8 to $10 million on the entertainment side for the full year.

Speaker Change: Yes, we haven't changed the assumptions within our full year guidance Jay in terms of what the disruption impact will be from from those projects that we outlined and we said that was up about $10 million to $11 million on the hospitality side, an $18 million on the entertainment side for the full year.

Mark Fioravanti: I will say that the opening of the Grand Lodge at Gaylord Rockies, the first couple of days were really, really encouraging as far as what we were able to capture in food and beverage. So I'm feeling optimistic about our investment there. It looks spectacular, and customers and meeting planners are responding very, very strongly in a positive manner.

Mark Fioravanti: I will say that the opening of the Grand Lodge at Gaylord Rockies. The first couple of days, we were really really encouraging as far as what we're able to capture in food and beverage. So.

Mark Fioravanti: I am feeling optimistic about our investment there it looks spectacular and customers and meeting planners are responding very very strongly in a positive manner.

Jay Bradley Kornreich: Okay, great. Thank you very much.

Speaker Change: Okay, great. Thank you very much.

Speaker Change: Thank you.

Operator: Thank you. And it appears that we have no further questions at this time. I will now turn the program back over to our presenters for any additional or closing remarks.

Speaker Change: Thank you and it appears that we have no further questions. At this time I will now turn the program back over to our presenters for any additional or closing remarks.

Unknown Executive: Now, I think we're done and appreciate everyone's time, particularly the time we've done this call, the time we've done this call. We know it's midday in Central Time and one o'clock in Eastern Time.

Speaker Change: We've done and appreciate everyones time, particularly.

Unknown Executive: Doing it the time, we've doing holding this call lead time.

Unknown Executive: We know it's mid mid day in central time, and one o'clock eastern time.

Operator: It's a little bit difficult, but there were a lot of competing calls this morning, and we wanted to make sure that we had your attention. Thanks to everyone for being on the call, and if you have any further questions, you know how to get a hold of us. Appreciate it. That concludes today's teleconference. Thank you for your participation. You may now disconnect.

Unknown Executive: A little bit difficult, but there's a there was a lot of competing calls this morning, and we wanted to make sure that we had dual retention. So thanks for everyone for being on the call and if you have any further questions you know how to get hold of this I appreciate it.

Operator: That concludes today's teleconference. Thank you for your participation you may now disconnect.

Operator: Next up we have a Grammy and CMA Award winner. She has been a member of the <unk> 2021 here's currently Pierce with what he didn't do lie.

Operator: From the Grand Ole Opry.

Operator: [music].

Operator: Okay.

unknown: Everybody's asking what the hell happened, wondering why it all went wrong And Mama always said if you can't say something nice then you don't say anything at all And I've got my side of the story and he's got his side too So I ain't gonna go and tell you what he did but I'll tell you what he didn't do Treat me right, put me first, be a man of his word, say all the good he wanted to And always tried to hold my love for a guy like it's nothing that he couldn't handle through The devil's in the deep end, I won't tell the hell that he put me through All I know is in the end it wasn't what he did to you, what he did to you And I'm already halfway over him and I think it's time to turn around So I'm gonna take the high road even though we both know I could run him out of this town And that's just dirty laundry

Operator: Everybody's asking what the Hell happened on June one.

unknown: Hum.

Speaker Change: We can say something.

Speaker Change: Don't see anything yet.

unknown:

Speaker Change: Uh huh.

Speaker Change: Uh huh.

unknown: Scott.

unknown: Yes.

unknown: I think gone girl and <unk>.

unknown: <unk>.

unknown: <unk>.

unknown: [music] alone.

unknown: Yes.

unknown: [music].

unknown: Already halfway over here.

unknown: They can come in.

unknown: [music] Dom and thanks.

unknown: No.

unknown: [music].

Speaker Change: Thank you.

unknown: John.