Q4 2024 Playa Hotels & Resorts NV Earnings Call
Speaker Change: This is a production of the Center for Autism and Related Disorders Center for Autism and Related Disorders Center for Autism and Related Disorders
Speaker Change: Good day and welcome to the Playa Hotels and Resorts 4th Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode.
Speaker Change: That we entered into an agreement with Hyatt Hotels Corporation pursuant to which a wholly owned subsidiary of Hyatt will acquire all outstanding shares supply us for $13 50 per share in cash we will not be commenting on the potential transaction aside from what was already disclosed in press releases and regulatory documents, including the SEC filing.
Speaker Change: We made this week, which our board recommended in favor of the tender offer other than to reiterate that we believe the transaction is an outstanding result for shareholders that recognizes the value creation efforts of all Playa associates over the years as we change the all inclusive landscape.
Speaker Change: Turning to the fourth quarter, our results exceeded our expectations driven by strong demand across all segments and finished with a phenomenal holiday season as demand fully normalized post hurricane Barry.
Speaker Change: Place owned resort EBITDA of $67 1 million in the fourth quarter of 2024 included a benefit from business interruption insurance proceeds of approximately $1 1 million compared.
Speaker Change: Compared to 900 Donaldson in Q4, 2023, excluding business interruption insurance the upside compared to the expectations shared on our last earnings call was driven by better than expected close in demand across the portfolio and better than expected ADR growth in the Pacific Coast, you could tan and Dominican Republic.
Speaker Change: $1 1 billion lower corporate expense and a higher than anticipated foreign currency exchange tailwind of approximately $2 million.
Speaker Change: For Q4, 2024, we estimate that FX was a 200 basis points tailwind for our reported owned resort EBITDA margin.
Speaker Change: Business interruption proceeds received in Q4 2024 favorably impacted resort margins by approximately 50 basis points, but was a 10 basis points net tailwind on a year over year basis. It was the amount of business interruption proceeds received was only slightly higher in 2024.
Speaker Change: Adjusting for all of these factors underlying owned resort EBITDA growth was down approximately 15% in the fourth quarter for the total portfolio and down approximately 17, 5% for the legacy portfolio, both improving sequentially as the bulk of the disruption from hurricane barrels with first phase in the third quarter of 2002.
Speaker Change: For the fourth quarter was still challenged by the construction disruption in the Pacific Coast. The U S State Department travel advisory on our Jamaica.
Speaker Change: You're making segment and the lingering impact of hurricane barrel.
Speaker Change: At the segment level our teams in the Yucatan did an excellent job on the cost front. Despite the challenges presented by hurricane barrel.
Speaker Change: Occupancy declined 70 basis points year over year in the fourth quarter driving currency neutral margins to decline by approximately 210 basis points year over year and underlying EBITDA growth of approximately negative 4%.
Speaker Change: The modest currency neutral EBITDA decline on flat year over year Revpar reflects our ongoing efficiency efforts, which really began gaining traction in the second half of 2023.
Speaker Change: In the Pacific our planned renovation work in this segment continued during the fourth quarter with the peak of the guests impacting construction work taking place during Q3 the year over year occupancy declines improved sequentially. The renovation work has remained on track and Asics and is expected to be completed in Q1 2025 turn.
Speaker Change: To the Dr. We completed the sale of the dual Punta Cana resort in late December 2023, and the dual Palm Beach resort was closed for a significant portion of Q1 2023 and sold in the third quarter of 2024.
Speaker Change: The remaining core resorts in this segment continued to perform well on an underlying basis with both occupancy and ADR increasing year over year in the fourth quarter driving approximately.
Speaker Change: Positive, 9% underlying profit growth after adjusting for business interruption proceeds in both periods.
Speaker Change: Finally, Jamaica as fourth quarter was largely as expected with the approximately 16% revpar decline improving compared to the negative 30% decline in the third quarter, resulting in a material 50% decline from resort EBITDA as we outlined on our last earnings call. The segment was starting to regain its foot.
Speaker Change: Especially for the fourth quarter, but the recovery was significantly disrupted by hurricane barrel in late June.
Speaker Change: Subsequent to the fourth quarter, we recently closed on the sale of the dual Paradise Cove resort on February 28, 2025, gross consideration of $28 $5 million.
Speaker Change: Fiscal year 2024, adjusted EBITDA of $258 million was in line with the forecast shared with you at the beginning of the year, but the path was quite choppy.
Speaker Change: <unk> to the guidance to start the year, we received $3 2 million of business interruption proceeds FX was a $9 million to $10 million larger than expected tailwind construction disruption on the Pacific Coast was approximately $10 million worse than expected hurricane barrel had a significant impact on the second half of the year the travel warning issued for.
Speaker Change: Jamaica had an approximate $25 million to $30 million impact on the segment excluding business interruption in FX underlying EBITDA grew three 5% in the Yucatan and eight 4% at our legacy Dominican Republic resource underlying profits in the Pacific Coast fell by 19, 6% Jamaica experienced in <unk>.
Speaker Change: 36, 2% decline.
Speaker Change: Taking a look at our guest segmentation during the fourth quarter of 2024 47, 6% apply at owned and managed transient revenues.
Speaker Change: Book to rack up 30 basis points year over year.
Speaker Change: While roughly 43, 3% of the Playa owned and managed transient room nights stayed in the quarter came from our direct channels, which was consistent with Q4 2023.
Speaker Change: Playa resorts Dot com accounted for approximately 13% of our total client owned and managed transient room night bookings continuing to be a critical factor in our customer sourcing in the ADR gains our direct sourcing mix has improved by over 20.
Speaker Change: Percentage points compared to 2018 and has been a critical competitive advantage driving <unk> success in the post pandemic era.
Speaker Change: Geographically, our South American European and Canadian gas mix, all improved meaningfully year over year as our American source guest mix continues to normalize the recovery of our Canadian guest segmentation versus pre pandemic remains near 80% and our American guests Mexicans roughly back to pre pandemic.
Levels of European and South American guest mix remained the most elevated versus pre pandemic at 175%, while our Asian gas mix was largely unchanged and remains only approximately 25% recovered.
Speaker Change: Finally on the capital allocation front, we repurchased approximately $25 million worth of Playa stock during the fourth quarter, bringing our total repurchases since resuming our program in September 2022 to approximately $376 million, representing nearly 30% of the shares outstanding at the time.
Speaker Change: Capital expenditures in 2024 came in lower than anticipated at approximately $97 million.
Speaker Change: Largely due to the timing of payments and slippage into 2025, we finished the year with a cash balance of $189 million in total.
Speaker Change: Sandy interest bearing debt of one point over $8 billion separately, we have implemented FX hedges on approximately 75% our Mexican peso exposure for 2025 at an exchange rate of approximately $19 five compared to our average incurred exchange rate of approximately $18 three.
Speaker Change: In 2024, but should result in a favorable year over year FX benefit.
Speaker Change: Once again I would like to thank all of our associates, who have continued to deliver world class service and really redefined the all inclusive experience for their unwavering passion and dedication to service from the heart. Thank.
Speaker Change: Thank you very much for participating on today's call.
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Speaker Change: The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
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