Ryman's $865M Phoenix Play: A Strategic Bet on Lodging Recovery and Convention Dominance

The hospitality sector is in a state of flux, but one move by Ryman Hospitality Properties (NYSE: RHP) signals confidence in its long-term growth trajectory. The $865 million acquisition of the JW Marriott Phoenix Desert Ridge Resort—despite near-term operational disruptions—presents a compelling case for investors seeking exposure to a lodging REIT positioned to capitalize on resilient demand in high-margin convention markets. Let’s dissect why this could be a generational win for RHP shareholders.

Strategic Location in a Top-10 Meetings Market

Phoenix ranks as the 5th-largest U.S. city and a top-10 North American meetings market, a fact that’s no accident. The Phoenix-Sky Harbor Airport—14th busiest in the U.S. by passenger volume—is a key gateway for both leisure and corporate travelers. With no significant competitive hotel supply on the horizon, the resort occupies a vacuum in a market where demand for group-oriented hospitality is surging post-pandemic.

The resort’s “all under one roof” design—950 guest rooms, 243,000 sq. ft. of meeting space, and amenities like an 18-hole golf course and a 28,000-sq. ft. spa—caters directly to planners seeking seamless, large-scale events. This is a $1.5 trillion global meetings industry, and RHP is doubling down on its convention-hub strategy.

Recent Renovations and Enhanced Earnings Power

The resort’s $100 million capital investment since Trinity Investments took ownership in 2019 has paid dividends. Upgrades to guest rooms, dining venues, and the AquaRidge water park have propelled it into the upper tier of Phoenix’s luxury hotels. For context, its 2024 Adjusted EBITDAre of $68.26 million justifies the 12.7x multiple, a figure that’s below RHP’s average EBITDA multiple for recent acquisitions.

This resort isn’t just a property—it’s a cash flow machine in disguise. Once renovations to its meeting spaces wrap in Q3 2025, the property’s full potential will be unlocked.

Lack of Competitive Supply = Pricing Power

The absence of new convention hotels in Phoenix is a goldmine for RHP. Competitors can’t easily undercut its offerings, allowing it to command premium rates. In a sector where over-supply often stifles returns, this resort’s insulation from competition positions it as a moated asset.

The 12.7x Multiple: A Steep Price, But Justified by 2026 Accretion

Critics may balk at the 12.7x EBITDA multiple, but here’s the math:
- 2025: Earnings take a temporary hit due to renovation disruptions.
- 2026: Full accretion to FFO per share kicks in, with synergies from RHP’s operational expertise and economies of scale.

RHP’s track record? The JW Marriott San Antonio Hill Country, acquired in 2018, delivered 20% FFO accretion within three years. Phoenix could be its next star.

Addressing the Near-Term Disruption

Yes, 2025 will be a lull. But RHP’s 4.65% dividend yield and strong balance sheet ($2.3B liquidity as of Q1 2025) provide a cushion. Meanwhile, the stock offering financing this deal—2.3 million shares—is modest compared to its market cap, dilution is minimal, and the proceeds are fully directed to value-creation.

Risks? Manageable with Ryman’s Disciplined Playbook

• Financing: Morgan Stanley and co-bankers are on board; RHP’s credit rating remains investment-grade.
• Construction Delays: Renovations are on track for Q3 2025; RHP has contingency plans.
• Economic Uncertainties: Phoenix’s dual leisure/group demand buffers against downturns.

Conclusion: A Compelling Buy for REIT Bulls

Ryman’s Phoenix play isn’t just about buying a resort—it’s about owning a high-margin, supply-constrained asset in a market primed for recovery. With a 9.48% YoY revenue growth and a dividend that’s held steady through cycles, RHP is a REIT that rewards patience.

The stock trades at a 16.8x P/FFO multiple, below its five-year average—a discount to its growth prospects. For investors focused on lodging’s rebound and convention-driven REITs, this is a buy now, enjoy later opportunity.

The desert sun may set on 2025’s disruptions, but for RHP shareholders, the Phoenix acquisition is a sunrise on years of FFO accretion and market dominance.