Playa Hotels & Resorts N.V. (NASDAQ:PLYA) Q1 2024 Earnings Call Transcript

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Chris Woronka: Good morning guys. Thanks for all the detail so far. Bruce, I wanted to revisit Jamaica a little bit, and I appreciate you mentioned your work with Adam and hopefully maybe get the messaging from the Jamaican government up a little bit or the marketing, but is it part of the issue here the US State Department, I’m just curious as to whether you know is there some kind of formula they’re using to determine this risk level, it seems a little not very scientific effect to be diplomatic. Is there anything you can do on this side of the fence?

Bruce Wardinski: That’s a great question Chris. And so I have volunteered and we will do this with the Jamaican government. But I have volunteered to go with the Jamaican Ambassador here in the United States to go meet with the State Department, and actually spend that question, because it’s pretty nonsensical that you would come out with an updated travel advisory when nothing has changed. I mean, it would be like saying, okay, in the middle of a storm it’s going to rain. Well, it is raining. And why or why you’re now telling us? It’s raining? So I live in the DC area, I actually have a friends who work at the State Department, and I can tell you it’s going to be an interesting meeting, I’m sure to find out exactly why they do that but it doesn’t make any sense to me.

Chris Woronka: Okay. That’s great. Appreciate that that Bruce. And then question I know, you guys recently wrapped up renovation and in PVR, are you seeing expected rate lift there? Or would you say that’s a little bit more like Cabo where it’s somewhat defensive just to bring the bring the property up?

Bruce Wardinski: It’s more akin to Cabo. We’re not done. They’re still doing rooms right now that’s what Bruce mentioned earlier. That property, and then like what we had been doing in Cabo before we decided to accelerate the work at one of the towers, what’s the kind of do it on a little bit and piecemeal and kind of do a third of the rooms at a time that property just like Cabo, last major renovation was 2015 that would do in a time. So there’s potential for uplift in rate. That property again does really, really well on a private kind of really one of the only real kind of private beaches and part of air to close at the airport. It’s kind of protected on both sides by the mountains. And so, it’s a excellent asset that needs to be maintained. And so for us, a little more defensive in nature and maintaining the EBITDA base that we’ve got there today. It’s not a big group house or anything like that. It does pretty well with weddings but that’s about it.

Chris Woronka: Okay. Fair enough. And just last one is, we think about what you might do on a renovation slash upgrade of Zilara and think about what you’ve got down the street with Ziva. Is there any thought to — I hear you on this preface by saying, I think your rates in the market are terrific, but is there any thought to possibly trying to maybe tap into the Andaz piece of Hyatt. I know that you have these Ziva’s larger brands are created kind of for you guys when you launched the concept that over 10 years ago. But with Andaz, you kind of rate premium they get? Is there any way to almost co-brand or take of turquoise tower and put it Andaz on that and create even further rate separations or anything like that is possible?

Bruce Wardinski: I mean we’ll look at that. I mean it’s a good comment. We’ve always looked at whenever we reposition the hotel, we look at how do we optimize it from a brand perspective. And so that’s an important part of the equation. But I’ll tell you the opportunity here really, from my perspective is to take it take a fantastic located resort with 100% oceanfront busy and try to create a product that maximizes ADR. And I think, hi, it’s Laura. I mean look at what we get. Look and what we get in the Topkhana, look we get in Rose Hall. So I think a Hyatt, Zilara, Cancun can drive a very significant rate and premium if we have the appropriate product. And that’s our goal is to get the appropriate product. But having said that, will we consider options? Absolutely.

Ryan Hymel: Just to give you some context, some round figures, because we don’t disclose individual resort ADRs. But for Q1, there’s a Zilara in its existing state, did very high $500 of package revenue — a package ADR $500. Our Ziva Cancun up the street did US$150 more than that for night and our Ziva given for our Topkhana, again a different market but a much newer property is almost $200 more per night in package ADR. So the gap exists and the opportunity exists. And so to that property’s credit, it’s doing really, really well for what it is. And I know you’ve been there and many others have and you go and you’re like, wow, this is just a very different product than you’ve got up the street. So, if we can kind of decrease that gap and bring that property up that’s very, very high profitability on the Hyatt.

Bruce Wardinski: And I do want to emphasize we really think this is a huge opportunity. Again, as we talked about some of the others are more defensive and protective nature. This is a huge opportunity and I’m expecting big success coming out of this repositioning.

Chris Woronka: Okay. Understood. Super helpful. Thanks guys.

Operator: Thank you. This concludes our question-and-answer session. I would now like to turn the conference back over to Bruce Wardinski for closing remarks.

Bruce Wardinski: Great. Well, thank you everyone for participating. It was a great quarter and we’re looking forward to a lot more going on in the rest of this year. Well, thank you very much.

Operator: Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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