Executive Summary / Key Takeaways

• Ryman Hospitality Properties ($RHP$) operates a differentiated REIT model focused on large, group-oriented convention hotels and a growing entertainment segment, leveraging an "all under one roof" strategy and iconic brands like the Grand Ole Opry.
• Despite facing macroeconomic uncertainty impacting near-term "in-the-year-for-the-year" group bookings and some leisure softness, the company delivered record Q1 2025 results and maintains its full-year Adjusted EBITDAre and AFFO guidance ranges, supported by proactive cost management and operational efficiencies.
• Significant capital investments exceeding $1 billion across the portfolio are enhancing assets, driving strong forward bookings for 2026 and beyond at record rates, validating the long-term strategy to capture premium group demand.
• The Entertainment segment (OEG) continues its growth trajectory, benefiting from recent investments and strategic acquisitions, expanding RHP's reach within the country lifestyle consumer market.
• A solid balance sheet, ample liquidity, and recent financing activities (equity and debt offerings) provide flexibility to fund ongoing capital programs and support the company's commitment to returning capital through dividends.

A Differentiated Model in the Hospitality Landscape

Ryman Hospitality Properties stands apart in the lodging REIT sector, not merely owning hotels, but curating integrated destination experiences centered around large-scale convention resorts and a vibrant entertainment portfolio. This unique structure, formalized with the company's election to be taxed as a REIT in 2013 following the strategic sale of its brand and management rights to Marriott International in 2012, positions RHP at the intersection of group travel and experiential leisure. Its core holdings include a network of five massive Gaylord Hotels properties managed by Marriott, renowned for their extensive meeting spaces and "all under one roof" amenities, complemented by the JW Marriott San Antonio Hill Country and ancillary hotels. Beyond traditional lodging, RHP holds a controlling interest in the Opry Entertainment Group (OEG), encompassing iconic country music brands like the Grand Ole Opry and Ryman Auditorium, alongside growing ventures like Ole Red and Category 10.

This integrated model is foundational to RHP's strategy: attract large group business with unparalleled facilities, enhance the guest experience through comprehensive on-site offerings, and leverage brand recognition to drive both hotel and entertainment demand. The company's history, marked by successfully navigating significant disruptions from natural disasters to global pandemics, underscores the resilience of its core group-focused business, which benefits from contractual bookings that provide a degree of downside protection through attrition and cancellation fees.

In the competitive landscape, RHP's model contrasts with traditional lodging REITs like Host Hotels & Resorts (HST), which own a broader portfolio of upscale hotels but lack RHP's deep integration of entertainment assets. While global operators like Marriott (MAR), Hilton (HLT), and Hyatt (H) compete across various segments and benefit from vast scale and loyalty programs, RHP's competitive edge lies in the sheer scale and self-contained nature of its convention properties and the unique draw of its entertainment brands, particularly within the country music lifestyle segment. The company's ability to drive market share gains is evidenced by the significant increase in the average Total RevPAR index for its Gaylord hotels compared to their Marriott-defined competitive sets, rising over 20 points since 2019.

Operational Edge and Strategic Investments

RHP's operational effectiveness is significantly influenced by its single manager model with Marriott. This partnership facilitates a cohesive approach to managing costs and implementing operational efficiencies across the hotel portfolio. Management commentary highlights proactive efforts in conjunction with Marriott to manage the operating model and expense structure, resulting in improved wage margins and hours per occupied room in Q1 2025 despite broader wage pressures. While competitors like Marriott and Hilton are noted for investments in digital technologies such as digital check-in or loyalty program tech, RHP's operational "technology" is perhaps best characterized by the sophisticated analytics applied to labor and revenue management within its large, complex properties, and the strategic design of its physical assets to optimize group flow and maximize high-margin out-of-room spending. The company's focus on capital investment in physical enhancements and expanded F&B capacity serves as its primary technological approach to competitive advantage, aiming to enhance the value proposition and capture a greater share of guest spend on property.

The company has embarked on a multi-year transformational capital program exceeding $1 billion to further solidify its competitive position and attract premium group customers. Key projects include a nearly $225 million multi-phase plan at Gaylord Opryland, adding approximately 108,000 sq ft of premium meeting space (expected Spring 2027) and repositioning areas for new F&B and event spaces (expected early 2026). Gaylord Rockies saw a $98 million enhancement project completed in 2024, improving its Grand Lodge and F&B outlets. Gaylord Palms completed extensive rooms and lobby renovations by Q1 2025, and a rooms renovation is planned for Gaylord Texan starting in July 2025. These investments are designed to yield at least mid-teens unlevered returns and are already influencing future bookings.

The Entertainment segment is also a focus of strategic investment and expansion. Recent additions include the opening of Ole Red Las Vegas and the Luke Combs-themed Category 10 venue in Nashville in late 2024, and the acquisition of a majority interest in Southern Entertainment, a music festival production company, in January 2025. These moves expand RHP's footprint in live entertainment and provide new avenues to reach country lifestyle consumers, complementing the core Opry and Ryman brands. The recent win of a 10-year contract to manage the Ascend Amphitheater in Nashville starting in 2026 further underscores OEG's growth trajectory.

Performance and Outlook

RHP delivered a strong start to 2025, reporting record first quarter revenue of $587.28 million and adjusted EBITDAre of $179.72 million. This performance was driven by increases in both the Hospitality and Entertainment segments. The Hospitality segment saw revenue grow 7.9% year-over-year to $497.73 million, fueled by a 3.0-point increase in occupancy to 69.7% and a 5.6% rise in ADR to $264.40, resulting in a 10.2% increase in RevPAR and a 9.1% increase in Total RevPAR. Notably, outside-the-room spending increased by 7.2%, reflecting strong banquet and technology spending by groups. The Entertainment segment's revenue surged 33.9% to $89.55 million, benefiting significantly from new venues coming online and increased attendance.

Despite the strong Q1 performance, management adopted a more cautious stance on the near-term outlook due to macroeconomic uncertainty. They observed an uptick in attrition and a modest pullback in "in-the-year-for-the-year" group bookings, particularly impacting government-related business. Consequently, the full-year 2025 guidance for Hospitality RevPAR growth was revised to a range of 1.25% to 3.75%, and Total RevPAR growth to 0.75% to 3.25%. However, leveraging strong Q1 results, proactive cost management, and the resilience of their business model, RHP reiterated its full-year consolidated Adjusted EBITDAre guidance range of $749 million to $801 million and AFFO range of $510 million to $555 million, translating to an AFFO per diluted share range of $8.24 to $8.86. This implies confidence in offsetting potential top-line softness through operational discipline.

Forward bookings remain a key strength, validating the long-term strategy. As of March 31, 2025, group room nights on the books for all future years were 5% higher than the previous year, with estimated ADR up 5.6%. This robust pipeline for 2026 and 2027, in particular, underscores the demand for RHP's enhanced assets post-renovation. The company's capital expenditure guidance for 2025 was adjusted slightly lower to $350 million to $450 million due to timing, but the overall scope of the multi-year program remains unchanged.

Financially, RHP maintains a solid position. As of March 31, 2025, the company held $413.9 million in unrestricted cash and had $763 million available under its revolving credit facilities, totaling approximately $1.2 billion in liquidity.

The net leverage ratio stood at 3.9x.

Recent financing activities, including a common stock offering raising ~$275 million net proceeds and a senior notes offering raising ~$614 million net proceeds in May/June 2025, further bolster liquidity and provide flexibility for capital deployment, including the recently announced acquisition of the JW Marriott Phoenix Desert Ridge Resort & Spa for $865 million. The company's debt profile is manageable, with no maturities until May 2027 and 85% of debt fixed-rate as of Q1 2025. The company continues its commitment to returning capital, declaring a $1.15 per share quarterly dividend in Q1 2025.

Risks and Considerations

While RHP's strategy and operational execution demonstrate resilience, investors should consider potential risks. The macroeconomic environment, particularly uncertainty surrounding trade policy and government spending, could continue to impact near-term group booking decisions and potentially lead to higher attrition. Although management believes the impact on group business is primarily a 2025 issue, a prolonged period of caution could affect performance. Inflationary pressures, while partially mitigated by strong revenues and cost management, could still impact operating expenses and potentially constrain customer spending. Labor costs and availability, particularly in markets with significant development like Orlando, remain a factor influencing operational costs and renovation timelines. The extensive capital program, while strategically vital, carries execution risk related to construction timelines and potential disruption to ongoing operations, although management is focused on minimizing this impact. Legal proceedings, such as the lawsuit related to the Gaylord Rockies HVAC incident, represent potential, albeit currently assessed as non-material, contingencies.

Conclusion

Ryman Hospitality Properties presents a compelling investment thesis centered on its unique, integrated convention and entertainment model and a clear strategy of enhancing its high-quality assets to capture premium group demand. Despite navigating a period of macroeconomic uncertainty that has introduced some caution into near-term booking patterns and impacted leisure softness in certain markets, the company's operational discipline, evidenced by strong Q1 2025 results and maintained bottom-line guidance, underscores its resilience. The significant capital investment program is already yielding strong forward bookings for future years at favorable rates, validating the long-term growth potential. With a solid balance sheet, ample liquidity bolstered by recent financing activities, and a commitment to shareholder returns, RHP is well-positioned to execute its strategy, expand its footprint (as seen with the recent Phoenix acquisition announcement), and capitalize on the eventual resolution of near-term market uncertainties. The company's differentiated approach, leveraging its operational strengths and iconic brands, offers a distinct value proposition in the hospitality sector, making it a noteworthy consideration for investors focused on long-term growth driven by strategic asset enhancement and operational excellence.