Playa Hotels & Resorts(US:PLYA)2020-02-28 18:12Financial Data and Key Metrics Changes - The fourth quarter adjusted EBITDA was $20 million, representing a 46% decrease compared to the previous year [33] - Comparable net package RevPAR decreased by 6% during the quarter, with a 130 basis point decline in occupancy and a 450 basis point decrease in rate [34] - For the full year 2019, adjusted EBITDA was $150.7 million, with comparable net package RevPAR declining by 3.4% [35] Business Line Data and Key Metrics Changes - In the Yucatán, comparable net package RevPAR declined a little over 1% in the quarter, driven by a 3.4% ADR decline [36] - The Pacific Coast saw a net package RevPAR decrease of 2.5%, with a 4.3% decrease in ADR [38] - In Jamaica, comparable net package RevPAR decreased by 5%, driven by a 6.2% decrease in ADR [39] Market Data and Key Metrics Changes - The Dominican Republic experienced a comparable net package RevPAR decrease of just under 30%, driven by a 13-point decrease in occupancy and a 14% decrease in ADR [42] - The European source business improved from 32% in Q1 to 46% in Q4, although at a lower package ADR [47] - The Asian source revenue was less than $9 million in 2019, with a 10% decline in current full-year Asian source pacing [28] Company Strategy and Development Direction - The company aims to increase direct bookings to at least 50% by 2023, with 25.4% of managed room nights being direct in Q4 2019, up 560 basis points year-over-year [11] - The company is focused on growing direct bookings and lowering customer acquisition costs through partnerships with globally recognized U.S. brands [12] - The company is investing in technology initiatives to improve customer experience and drive growth, including a new yield management system [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the recovery in the Dominican Republic and the performance of new properties, despite ongoing challenges [61] - The company is giving a wider range for 2020 EBITDA guidance due to uncertainties related to the coronavirus and the recovery in the Dominican Republic [25] - Management noted that there are no confirmed cases of the coronavirus in key markets, and they are in constant contact with health organizations [27] Other Important Information - The company repurchased approximately 442,000 shares at an average price of $7.66 per share during the fourth quarter [24] - The company expects a sizable ramp in free cash flow generation as newly renovated properties come online [26] - The company has $21 million in cash on hand and $60 million in outstanding borrowings on its revolver as of year-end [52] Q&A Session Summary Question: Have you noticed any shifts recently in booking behavior related to the virus? - Management noted that close-in bookings have remained strong and they are not seeing significant changes in bookings or cancellations [73] Question: How do you balance share repurchase versus debt reduction? - Management indicated that proceeds from asset sales will initially focus on stock buybacks, but future asset sales may shift towards deleveraging [78] Question: Can you provide color on the travel makeup of your Asia Pacific customers? - Management clarified that the majority of Asian customers are honeymooners and families, not group tours [97]