Playa Hotels & Resorts (PLYA) Q2 2024 earnings summary

Executive summary

• Q2 2024 results exceeded expectations in Yucatan and Dominican Republic, offsetting headwinds in Jamaica and Pacific Coast due to travel advisories and renovations; net income for Q2 was $13.2 million, down 36% year-over-year, while six-month net income rose 6.6% to $67.5 million.

• Operates 25 all-inclusive resorts with 9,127 rooms, primarily in Mexico, Jamaica, and the Dominican Republic, with 55% Hyatt/Hilton branded and 77% 4.5+ star owned resorts as of July 2024.

• Recognized as a leading owner, operator, and developer of all-inclusive beachfront resorts since 2006, leveraging partnerships with major brands like Hyatt, Hilton, and Wyndham.

• Resorts consistently receive high guest satisfaction ratings, with several properties ranked in the top quartile of their markets on TripAdvisor.

• Results were impacted by a U.S. travel advisory for Jamaica and renovations at key properties.

Financial highlights

• Q2 2024 Adjusted EBITDA was $63.7 million (down 11.7% YoY); Adjusted EBITDA margin declined 2.2 pts to 28.0%; Net Package ADR rose 5.8% to $450.18; Net Package RevPAR up 3.5%.

• Owned resort EBITDA reached $75.1 million, including a $1.4 million FX headwind and $1 million in business interruption insurance proceeds.

• Interest expense for Q2 2024 decreased 10.7% to $23.3 million due to refinancing.

• Cash and cash equivalents at June 30, 2024 were $233.9 million; interest-bearing debt at $1.08 billion.

• F&B costs were favorable due to lower input prices and efficiency efforts, while labor costs remained a headwind from wage inflation.

Outlook and guidance

• Full-year 2024 Adjusted EBITDA expected at the low end of the $250 million-$275 million range due to hurricane and renovation impacts.

• Occupancy for the total portfolio expected to be up low single digits, but down for the legacy portfolio; ADR growth projected at low to mid-single digits.

• Construction disruption in the Pacific Coast now expected to impact EBITDA by $15 million-$19 million for 2024.

• Hurricane Beryl estimated to negatively impact Q3 EBITDA by $6 million-$8 million across all segments.

• Liquidity is considered sufficient for obligations, with $225 million available on the revolver and $225.2 million in cash as of July 31, 2024.