Ryman Hospitality: A Hidden Gem in the Hospitality REIT Sector?

Ryman Hospitality Properties (RHP), a lodging REIT with a focus on upscale convention hotels and the iconic Opry Entertainment Group, has quietly built a resilient business model that's weathered economic storms while delivering strong dividends. Yet, despite its robust fundamentals, the stock has been overlooked by investors. Recent data on insider buying, institutional confidence, and analyst forecasts suggest now could be the ideal time to consider RHP as a long-term income play.

### A Resilient Business Model Built for Turbulence
RHP's portfolio includes five of the top seven non-gaming convention hotels in the U.S., managed under Marriott International's brands. These properties cater to large group events—conventions, corporate retreats, and weddings—that have historically shown remarkable demand resilience. The company also owns a 70% stake in Opry Entertainment Group (OEG), which includes the Grand Ole Opry, Ryman Auditorium, and Ole Red music venues.

The first quarter of 2025 demonstrated this resilience. Revenue rose 11.2% to $587 million, with net income up 47% to $63 million. Even as near-term group bookings faced headwinds—driving revised RevPAR guidance—RHP's long-term bookings (for 2026 and beyond) surged, with average daily rates hitting a record $284. The company's strategy of reinvesting in high-margin destinations like Nashville and Las Vegas continues to pay off.

### Insider Confidence: A Top Executive's Vote of Confidence
While institutional investors dominate RHP's ownership (94.48% of shares are held by funds like Vanguard and BlackRock), recent insider activity sends a strong signal. Colin V. Reed, RHP's Executive Chairman, purchased 15,040 shares in early 2025, spending approximately $1.56 million of his own capital. This marks the largest insider buy in years and underscores his confidence in the company's long-term prospects.

Meanwhile, other insiders like Fazal Merchant and Alvin Bowles sold small stakes, but Reed's bold purchase far outweighs those transactions. Insider buying at this level is rare in the REIT sector and typically signals undervaluation.

### Institutional Ownership: A “Buy” Signal from Big Money
RHP's top institutional holders are doubling down. Vanguard increased its stake by 1.2% in the first quarter to 14.8% of the float, while BlackRock boosted its position by 60.8%, adding $381 million in shares. Even as some funds like Wellington Management trimmed holdings, the net inflow of $817 million from institutions in the past year suggests a structural bullish bias.



### Analyst Forecasts: A Bullish Consensus
Analysts are overwhelmingly optimistic. All seven covering RHP have “Buy” or “Strong Buy” ratings, with an average 12-month price target of $110.50—a 12% premium to its current price of $98.79. Truist and Evercore ISI have even set $120 targets, citing RHP's ability to grow its entertainment segment and capitalize on its prime destinations.

The dividend, currently yielding 5.75%, is a key driver. With AFFO coverage at healthy levels (despite near-term construction disruptions), the payout looks sustainable even amid macroeconomic uncertainty.

### Risks to Consider
- Near-Term Demand Volatility: In-the-year cancellations rose 74%, forcing RHP to lower RevPAR guidance. However, its group-centric model has historically rebounded strongly.
- Debt Levels: RHP's $3.37 billion in debt is manageable, but rising interest rates could pressure margins.
- Construction Disruptions: Renovations at Gaylord Opryland and Texan will temporarily dampen RevPAR by 250–350 basis points in 2025.

### Why Buy Now?
Despite these risks, RHP's valuation is unduly pessimistic. At just 10x its 2025 AFFO estimates, the stock trades at a discount to peers. Meanwhile, the dividend—among the highest in the REIT sector—provides a cushion against short-term volatility.

Investors should also note that RHP's largest institutional buyers (e.g., Vanguard and Principal Financial) have a long-term horizon, and their recent purchases suggest they see value at current levels.

### Conclusion: A Rare Opportunity for Income Investors
RHP's combination of a fortress balance sheet, resilient cash flows, and a high dividend yield makes it a compelling pick for long-term investors. While near-term disruptions and macro risks exist, the stock's valuation and insider activity suggest the market has overreacted.

Action to Take: Consider initiating a position in RHP at current prices, with a target of $110–$120 over the next 12–18 months. The dividend alone provides a 5.75% yield, while the stock's potential upside offers capital appreciation. For income-focused portfolios, RHP is a rare blend of safety and growth.