Playa Hotels & Resorts N.V. (NASDAQ:PLYA) Q4 2022 Earnings Call Transcript

And then more importantly, the absolute dollar that we charge someone more than they were spending in 2019. As Bruce mentioned earlier, at least on the last half of this year was roughly $100, and it ranges anywhere from kind of $50 to $60 to maybe up to $200 at some of our higher-end properties. But again, that includes food and beverage, it includes great service, it includes alcohol. And again, you layer that against everything else in everyone else’s life, that’s more expensive these days, the value proposition just jumps off the page. And so that’s been our focus while making sure that we are still maintaining the great customer satisfaction while still pushing rates as much as we possibly can. And at the same time, to your point on occupancy, I think we’ve found a proper sweet spot with occupancy right now.

When you think about kind of — depending on the season, obviously, the kind of high 70%-s into the low 80%-s versus mid- to upper-80%- that we ran pre-pandemic, it just makes everyone’s life easier. First of all, it makes the customers’ experience better. It makes operating these hotels in a rising inflationary environment easier, it’s easier on cost. And so, for us — and if there’s little things that we need to do from a CapEx perspective or maintenance, it just makes it far easier to do when the properties aren’t 100% full. Don’t get me wrong, during Christmas, we’re still 90%-plus full, but on a year-round basis and high season, this is how we’ve decided to balance maximum profitability while maintaining that guest experience.

Bruce Wardinski: Yes. And let me just add in. I mean, I agree completely with everything Ryan said. And when you think about it, what drives the satisfaction of the guest at an all-inclusive resort or any resort is particularly at an all-inclusive resort, and I’d say there’s two main factors. Number one, it’s food and beverage; and number two, it’s service from our staff. So, if you go back at the beginning of the pandemic, we made a conscious decision to focus on rate and not to kind of dilute the food and beverage experience nor the staff experience. So, from early on, we had very high levels of staff and that comes out with what the guests are experiencing. And as Ryan said, we’ve consciously focused on sacrificing a little bit of occupancy for a much higher amount of rate.

And what that does is that allows us to serve the guest even better. So, you don’t have the crowding at the restaurant or the crowding at chairs around the pool where you have to get up at six in the morning and put a book or your sunglasses or sunscreen on there and fight with people to get a good location on the beach or the pool. And all of those things, they may sound silly or small, but they really do make the experience. The one that we’ve really, really focused on is food and beverage, and especially at the higher rated resorts. And if you look at going out wherever people are in the United States, if they go out to a nice restaurant, and I’m not even talking super expensive, just a nice restaurant, the cost is so much higher than it was before the pandemic.