Ryman Hospitality Properties: A Strategic Crossroads as Lock-Up Expiration Approaches

Ryman Hospitality Properties (NYSE: RHP) stands at a pivotal moment. With its lock-up expiration on July 4, 2025, the company's shares will soon lose a key stabilizing force, potentially unlocking buying opportunities for investors. Meanwhile, its Q1 2025 results reveal a blend of robust execution and strategic challenges, creating a compelling case for scrutiny. Let's dissect the landscape.

The Lock-Up Expiration: A Near-Term Catalyst

The lock-up agreement tied to Ryman's May 21, 2025, public offering of 2.99 million shares expires in 15 days. This period—designed to prevent destabilizing insider selling—has shielded the stock from dilution pressure during the $275 million acquisition of the JW Marriott Phoenix Desert Ridge Resort. Historically, lock-up expirations can create volatility as restricted shares become tradable. However, the proximity of this event to strong Q1 results and strategic investments may position RHP as a contrarian buy if the market overreacts to near-term selling.

Financial Fortitude Amid Headwinds

Ryman's Q1 2025 earnings underscore resilience:
- Revenue rose 11.2% to $587.3 million, driven by both hospitality (+7.9%) and entertainment (+33.9%) segments.
- Adjusted FFO per share hit $2.08, a 27.6% year-over-year jump, reflecting cost discipline and higher occupancy (69.7% in hospitality).
- Entertainment'sAdjusted EBITDAre surged 34.8%, fueled by venues like the W Austin and Block 21, signaling diversification success.

Yet, challenges loom. Renovations at Gaylord Opryland, Texan, and Palms are projected to reduce RevPAR by 250–350 basis points in 2025, while macroeconomic uncertainty has dampened group demand. Ryman tempered its full-year RevPAR guidance to 1.25%–3.75%, down from earlier expectations.

Strategic Leverage: Betting on High-Margin Growth

Ryman is doubling down on its group-centric model, a high-margin strategy that accounted for 72% of its 2024 revenue. Key moves include:
1. Southern Entertainment Acquisition: A strategic bet on live events and festivals to bolster its entertainment footprint.
2. Ascend Amphitheater Contract: A 10-year operational deal for a Nashville venue adds recurring revenue streams.
3. Debt Refinancing: OEG's $130 million Term Loan B addition provides liquidity without increasing interest costs.

These moves align with Ryman's long-term vision: leveraging its destination resorts and entertainment assets to minimize reliance on volatile transient demand. The company's $414 million in unrestricted cash and stable dividend ($1.15/share) further underscore financial flexibility.

Risk Factors: Renovations and Demand Uncertainty

• Construction Disruptions: Ongoing renovations could pressure RevPAR through mid-2027, testing guest satisfaction.
• Attrition Surge: Cancellations rose 74.6%, signaling caution from corporate clients.
• Debt Overhang: At $3.375 billion, net debt remains elevated, though refinancing efforts have stabilized interest costs.

Investment Thesis: Timing the Dip

The confluence of the lock-up expiration and Q1 results creates a nuanced opportunity. Buyers should consider:
- Post-Lock-Up Buying: If insider selling doesn't materialize or is absorbed by demand, RHP could rebound.
- Valuation: At ~14.5x 2025E FFO estimates, the stock trades below its 5-year average multiple, offering a margin of safety.
- Long-Term Catalysts: Renovation completions (e.g., Gaylord Palms) and the Ascend Amphitheater's 2026 launch could drive upside.

Final Take: A Hold with Upside Potential

Ryman's fundamentals justify cautious optimism. While near-term headwinds exist, its strategic investments and fortress-like balance sheet position it to capitalize on post-renovation demand. Investors should consider accumulating RHP shares ahead of July 4, particularly if the lock-up expiration triggers a temporary dip. However, patience is key—waiting for post-renovation RevPAR trends and entertainment revenue scaling could offer clearer entry points.

For the risk-tolerant, Ryman's blend of dividend stability and growth catalysts makes it a compelling play in the hospitality sector's recovery narrative.

Disclosure: The author holds no positions in RHP at the time of writing.