Playa Hotels & Resorts (PLYA) Q4 2023 earnings summary

Executive summary

• Record FY2023 performance; Q4 results exceeded expectations as demand accelerated and ADR gains supported higher-than-expected Adjusted EBITDA.

• Portfolio comprised 24 all-inclusive resorts and 9,027 rooms across Mexico, the Dominican Republic and Jamaica as of December 2023.

• Brand relationships included Hyatt and Hilton partnerships and a Wyndham alliance; two resorts were converted under the Wyndham alliance, and three management contracts were entered into in 2021.

Financial highlights

• FY2023 total revenue was $977.5M vs. $856.3M; Total Net Revenue increased 13.1% to $934.4M.

• FY2023 Adjusted EBITDA increased 12.1% to $271.9M; Owned Resort EBITDA increased 10.1% to $318.9M.

• FY2023 net income was $53.9M vs. $56.7M; Adjusted Net Income was $66.3M vs. $83.2M.

• Q4 net income was $1.0M vs. a $14.3M loss; Adjusted EBITDA rose 2.9% to $60.8M and Owned Resort EBITDA rose 2.3% to $73.6M.

• FY2023 non-package revenue, excluding upgrades, was $122.270M; upgrade revenue totaled $10.992M.

Segment performance

• Yucatán FY2023 Owned Net Revenue rose 9.3%; ADR increased 6.4% and Occupancy gained 3.2 pts, while Owned Resort EBITDA declined 0.5%.

• Pacific Coast FY2023 Owned Net Revenue increased 10.4% and Owned Resort EBITDA rose 4.6%; renovations contributed to a 1.7-pt Occupancy decline.

• Dominican Republic FY2023 Owned Resort EBITDA rose 47.1%, with results boosted by recovery from 2022 Hurricane Fiona closures; comparability is affected by those closures.

• Jamaica FY2023 Owned Net Revenue increased 22.0% and Owned Resort EBITDA increased 43.0%; Occupancy gained 5.8 pts and ADR rose 16.6%.

• Q4 Yucatán led portfolio Occupancy; margins expanded ~100 bps YoY on a currency-neutral basis, while legacy Dominican Republic resorts delivered double-digit underlying EBITDA growth excluding hurricane effects.