Ryman Hospitality's Differentiated Business Sets Them Apart

Overview of Ryman Hospitality - Ryman Hospitality (NYSE:RHP) owns many of the largest non-gaming convention centers in the U.S., focusing on long-term conference bookings rather than transient leisure travel [1][2] - The company also owns 70% of Opry Entertainment Group, which is estimated to represent approximately 15% of RHP's enterprise value [3][4] Business Model and Revenue Characteristics - RHP's convention centers have different operating characteristics compared to traditional hotels, with a focus on conferences that are planned well in advance, leading to greater revenue visibility and higher non-lodging revenue [2][5] - The company plans to separate its entertainment business from its real estate operations, as Opry Entertainment Group does not fit within a REIT structure [5] Market Performance and Valuation - RHP's stock price increased by 11% on April 9, 2025, due to reduced tariffs, but remains down 25% over the past year [7][8] - The company is currently trading at a low FFO multiple of 10.6X trailing FFO and 9.3X forward estimated FFO, indicating it is undervalued compared to its asset value [10][12] Comparison with Industry Peers - The average AFFO multiple for hotel REITs is 7.4X, with RHP trading at a premium relative to this average, suggesting a differentiated business model that may provide resilience against industry challenges [19][22] - RHP's properties are larger and have higher meeting space per room compared to peers, contributing to its superior long-term growth performance [28][23] Advantages of RHP's Booking Process - RHP's average group booking occurs 2.9 years in advance, providing significant cash flow visibility and protection against cancellations through high fees [31][30] - This booking model allows RHP to avoid large cuts from OTAs, enhances future earnings visibility, and provides a cushion during economic downturns [32][33] Financial Resilience - RHP's clean balance sheet, with a debt to EBITDA ratio of 3.9X, has allowed the company to navigate challenging times without significant asset sales or unfavorable debt [33] - The company's differentiated business model has resulted in better long-term AFFO/share growth compared to peers, justifying its current valuation [34]