2021
Hyatt Ziva Rose Hall
VALUED SHAREHOLDERS:
e second year of the pandemic can best be described as a tale of two halves for Playa. e first half of the year was fraught with uncertainty regarding the sustainability of demand and the uncertainty of continued, and new, travel restrictions. To enhance our liquidity position and protect the financial stability of the Company, we took several measures to drastically reduce our operational expenses and raised capital through the capital markets and the sale of non-core assets. e uncertainty of the first half of 2021 quickly transitioned to an environment defined by surging pent-up demand and record Average Daily Rates (ADR) and resort margins. Our focus throughout 2021 continued to be on our guests and delivering the safest guest experience possible at our resorts, while executing on our strategic objectives to drive growth in 2022 and beyond.
2021 Financial performance highlights
Despite the on-going disruption from the COVID-19 pandemic, the fundamentals of our business improved through the year as vaccination rates increased and flight capacity into our markets climbed. Following a temporary set-back at the start of the year from the implementation of the CDC's testing requirements for all international travelers to enter the United States, we saw a staggering increase in demand, leading to our on-the-books revenue pacing position for the second half of 2021, and beyond, far exceeding levels seen in any prior year. Given the continued pace of bookings from historic pent-up demand and recent capital investments in our resorts, we made a strategic decision to focus on maximizing ADR and establishing our competitive positioning at the high end of the market which was the key driver of our profit performance during the second half of the year. is was particularly evident in our ADR gains, which led to exceptional Owned Resort EBITDA Margin performance despite occupancy rates remaining well below pre-pandemic levels.
Putting this all together, Playa went from generating a $2.5 million adjusted EBITDA loss during the first quarter on occupancy of just 31.6%, to a strong fourth quarter finish with positive adjusted EBITDA of $47 million and occupancy of 66.3%.
At the segment level, Mexico led the way throughout the year as its consistent travel policies led to a quicker recovery in consumer demand and flight capacity. As the year progressed, the Dominican Republic also experienced a sharp recovery in occupancy and international visitor arrivals, particularly as travel restrictions for several European countries began easing in the second half of the year. While Jamaica was a strong segment for us pre-pandemic, it has lagged our other segments during the recovery due to more stringent travel restrictions. We are confident however that there are no major structural challenges for any of our segments to achieving a healthy recovery, but are braced for the recovery to remain uneven.
Significantly improved liquidity profile
We entered 2021 generating negative free cash flow on a monthly basis with limited visibility to sustained cash generation. With that in mind, in early January we raised approximately $138 million of capital through an equity offering and paid off the outstanding balance on our Revolving Credit Facility, while obtaining a favorable amendment with respect to our financial covenants. We also sold two resorts in Mexico during the first half of the year for a total gross consideration of nearly $90 million to help enhance our liquidity position and make further progress on increasing our percentage of branded hotels.
Our business fundamentals sustainably turned the corner during the third quarter of the year as occupancy rates improved and ADR gains drove substantial margin increases. We exited 2021 with approximately $270 million of cash and a fully undrawn balance on our Revolving Credit Facility.
Continued progress on strategic imperatives
Although the pandemic continued to present challenges during 2021, we did not lose sight of our strategic goals and continued to make significant progress on them during 2021. Our focus on brand partnerships with globally recognized brands with robust loyalty databases, combined with investments in our own direct-booking capabilities in recent years, continued to be a significant competitive advantage as third-party channels lagged during the recovery of 2021. We expected our mix of direct sourced business to decline in 2021 as compared to 2020 as the severely depressed third-party channels improved and MICE groups began to return but our direct mix exceeded our expectations,
with FY 2021 direct booked revenues representing over 49% of the Company's managed revenues. is, of course, supported our decision to focus on ADR gains during 2021. With respect to our progress on expanding brand relationships, we were pleased to announce a new strategic partnership with Wyndham Hotels & Resorts, resulting in the conversion of two of our existing resorts in Mexico to the newly created Wyndham Alltra brand during the fourth quarter of 2021. With a database of over 92 million loyalty members, Wyndham is a leader in the mid-scale segment and an ideal partner to assist us with accelerating growth for the Company in that segment. Finally, our previous major capital projects, the Hyatt Ziva & Zilara Cap Cana and our Hilton All-Inclusive resorts, are now meaningful profit drivers and we are confident in our investment return targets as these resorts continue to mature and resonate with guests. e Hyatt Ziva & Zilara Cap Cana has established itself as a top resort in the Caribbean, leading to premium ADR performance and Adjusted Property EBITDA Margin of over 40% during the fourth quarter of 2021.
I have said this many times during the past two years, but the passion, adaptability, and determination of our associates has been the key to our success, particularly during the recovery. I am very proud of our entire team and look forward to growing our business together in 2022.
As we look ahead to 2022, we began the year with strong momentum from a successful holiday period carrying over on the bookings front into the new year. Our revenue on-the-books for each quarter of 2022 exceeds the elevated levels we experienced in 2021. As travel restrictions continue to ease, we are optimistic about our ability to capture our fair share of the market. With ample liquidity and several global brand partnerships, we will be looking to opportunistically expand our portfolio of managed rooms to drive shareholder returns. We made great progress over the past year on the corporate responsibility front, culminating in the recent publishing of our Task Force on Climate-Related Financial Disclosure and other ESG performance data, which can be found on our investor site. Finally, we recently announced a new growth initiative: e Playa Collection, which will provide members certain benefits and amenities at designated Playa owned and/or managed resorts. We look forward to sharing news on our progress on our growth drivers in the future.
ank you for your confidence and support as we continue to transform the all-inclusive industry.
Sincerely,
Bruce D. Wardinski Chairman and CEO
OUR RESORTS
MEXICO
HYATT ZILARA CANCUN
310 Rooms | Adults-Only
Cancun, Mexico
HYATT ZIVA CANCUN
547 Rooms | All-Ages
Cancun, Mexico
HYATT ZIVA LOS CABOS
591 Rooms | All-Ages
Los Cabos, Mexico
HYATT ZIVA PUERTO
VALLARTA
335 Rooms | All-Ages Puerto Vallarta, Mexico
HYATT ZIVA RIVIERA
CANCUN*
438 Rooms | All-Ages
Cancun, Mexico
WYNDHAM ALLTRA RESORTS CANCUN
458 Rooms | All-Ages
Cancun, Mexico
WYNDHAM ALLTRA RESORTS
PLAYA DEL CARMEN
287 Rooms | Adults-Only Playa Del Carmen, Mexico
HILTON PLAYA DEL CARMEN
524 Rooms | Adults-Only Playa Del Carmen, Mexico
THE YUCATAN RESORT*
60 Rooms | Adults-Only Playa del Carmen, Mexico
JAMAICA
HYATT ZILARA ROSE HALL | HYATT ZIVA ROSE HALL | JEWEL GRANDE MONTEGO |
BAY RESORT & SPA* | ||
344 Rooms | Adults-Only | 276 Rooms | All-Ages | |
Montego Bay, Jamaica | Montego Bay, Jamaica | 217 Rooms | All-Ages |
Montego Bay, Jamaica |
*Managed by Playa Hotels & Resorts, owned by a third party
HILTON ROSE HALL
RESORT & SPA
495 Rooms | All-Ages Montego Bay, Jamaica
JEWEL PARADISE COVE BEACH RESORT & SPA
310 Rooms | Adults-Only Runaway Bay, Jamaica
DOMINICAN REPUBLIC
HYATT ZILARA
CAP CANA
375 Rooms | Adults-Only Cap Cana, Dominican Republic
HYATT ZIVA CAP CANA
375 Rooms | All-Ages Cap Cana, Dominican Republic
HILTON LA ROMANA
RESORT
418 Rooms | All-Ages
La Romana, Dominican Republic
SANCTUARY CAP CANA*
324 Rooms | Adults-Only Cap Cana, Dominican Republic
HILTON LA ROMANA
ADULT RESORT
356 Rooms | Adults-Only
La Romana, Dominican Republic
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Playa Hotels & Resorts NV published this content on 18 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 April 2022 20:23:09 UTC.