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

So, you’re dropping a lot of money to go out. Now go to a resort destination, go to Miami, go to Los Angeles, go to Las Vegas, how much you’re going to spend to go out at night? People say, “Yes, okay, fine. The room rate is kind of reasonable, or high, but reasonable.” But then by the time you finish your four or five days or you’re a week with your family, the cost has just grown exorbitantly. So, you get our experience. And what happened during the pandemic is when people couldn’t travel to other places. They couldn’t go to Europe or they couldn’t go to other destinations. They experienced our resorts for the very first time. And those people are coming back. And then word of mouth is spreading. And then you see the ratings on TripAdvisor and others, and those are spreading and more people are coming.

So, I don’t see this as a fear of not being able to deliver it or our guest scores going down, I see it as an opportunity for our guest scores to go up and to kind of deliver this extremely positive experience to a whole new group of customers, and that’s what we’re focused on.

Dany Asad: Got it. Thank you very much.

Ryan Hymel: Thanks, Dany.

Operator: Our next question comes from Chad Beynon from Macquarie. Please go ahead with your question.

Chad Beynon: Thanks for taking my question. Bruce, I wanted to — and first off, thanks for all the guidance commentary, really helpful, Ryan. Bruce, your comment on the summer kind of becoming a regular season instead of an off-season. I wanted to drill into that a little bit. What gives you the confidence that, that’s kind of changed for the future? Is it just the pacing that you’re seeing or kind of what you saw in ’22? Obviously, you can’t change the weather, the air capacity, et cetera, kind of in those hot or summer months, but it really seems like that’s been a nice change for the business model. So, just any more color in terms of why you think this is sustainable going forward? Thanks.

Bruce Wardinski: Sure, Chad. Great question. First of all, you hit the nail on the head on the first one is pacing, right? So, we see it. So, the first thing is we see it. Second, we had it last year. So, I have no reason to think it’s not going to continue again. And then, kind of you mentioned you can’t change the weather or the airlift. Well, the airlift is really good, okay. And the airlines really have been flying into our markets pretty strongly since — the pandemic was still going on through this recovery period. And why are they flying into our markets? Because the customers want to go there. And so, I think what you’re seeing now is people who maybe would have gone to our resorts in the high season. But quite honestly, are priced out of it a little bit.

And so, now they’re trading off. And I can tell you that because anecdotally, I have people who I know friends and family who are like, “Wow, I can’t believe how high your rates are in January and February. Is that for real?” And I’m like, “Oh, it’s completely for real.” And they go, “Well, what you recommend?” And I said, “Well, you can either trade down to a slightly lower price point resort, or guess what? You can go in May. You can go in June. Great times of the year to go.” And risk of hurricanes isn’t that high. And quite honestly, the weather is better than in many of the beach destinations you’ll have in the United States. So, I think people are now seeing how good an experience they can get at our resorts and they want to go there.