Ryman Hospitality’s Strategic Overhaul Positions for Long-Term Growth Amid Short-Term Pains

Ryman Hospitality Properties (NYSE: RYH) has emerged as a paradox in the hospitality sector: a company reporting record financials while openly acknowledging significant self-inflicted short-term pain. The firm’s 2024 results, marked by $2.3 billion in revenue and $280 million in net income, underscore its operational strength. Yet these gains came amid disruptions from a $1.4 billion capital spending blitz, which CEO Mark Fioravanti admits will drag 2025 RevPAR growth by up to 350 basis points. The question for investors is whether Ryman’s aggressive strategy—focused on asset upgrades, entertainment expansion, and strategic acquisitions—will translate into sustainable outperformance or become a costly overreach.

The Duality of 2024: Records and Renovation Woes

Ryman’s financial performance in 2024 was nothing short of stellar. Consolidated revenue hit a record high, driven by hospitality (Gaylord hotels) and entertainment (Ole Red, Wildhorse Saloon) segments. Adjusted Funds from Operations (AFFO) grew 11.6%, reflecting disciplined pricing and strong demand. However, the company’s ambitious renovation plans cast a shadow over near-term results. Labor shortages in Orlando, coupled with the phased rollout of multiyear projects, caused a $27 million hit to hospitality operating income and $12 million in entertainment losses in 2024.

The disruption is most visible at Gaylord Palms, where ongoing renovations led to a 10.6% decline in annual RevPAR despite ADR growth. Meanwhile, Gaylord Rockies—where renovations were completed earlier—delivered 5.7% RevPAR growth, illustrating the eventual payoff of these investments.

2025: The Year of Transition and Ambition

Ryman’s 2025 capital budget of $400–$500 million is a bet that patience will pay off. Key projects include:
- A $140 million room renovation at Gaylord Texan (starting May 2025).
- A $131 million expansion at Gaylord Opryland, adding 40,000 sq. ft. of meeting space.
- Completion of the Wildhorse Saloon rooftop and expansion of Ole Red Las Vegas.

The company is also doubling down on entertainment. Its January 2025 acquisition of Southern Entertainment—a live event operator—bolsters its music and festival offerings, while the Grand Ole Opry’s 100th anniversary (“Opry 100”) in 2025 promises to amplify brand visibility.

Balancing Act: Liquidity and Dividends

Ryman’s balance sheet remains a pillar of stability, with $478 million in cash and $755 million in borrowing capacity. While net debt stands at $3.378 billion, the company prioritizes flexibility. Its $1.15 per share Q1 dividend (annual minimum of $4.60) reflects confidence in cash flows, even as it funnels capital into projects.

The dividend discipline is critical. Ryman’s payout ratio, while high, is supported by its REIT structure and consistent AFFO growth. Over the past three years, dividends have averaged $4.50 per share, aligning with its “100% taxable income distribution” policy.

Risks and Opportunities

The biggest near-term risk is execution. Delays in Orlando, where labor shortages persist, could extend renovation timelines. Additionally, price sensitivity at holiday events like ICE!—which reduced overnight stays—suggests some demand fragility.

However, Ryman’s differentiation lies in its entertainment-hospitality hybrid model. Unlike pure-play hotels, its venues like Ole Red Las Vegas and the rebranded Category 10 (formerly Wildhorse Saloon) create sticky guest experiences, driving repeat visits and higher ADRs. In 2024, entertainment revenue hit $98.2 million, up sharply from prior years, and this segment is now a key profit lever.

Conclusion: A Long-Term Play on Experiential Travel

Ryman’s strategy is a calculated gamble: trading short-term RevPAR drag for long-term asset value and market share. The $757.7 million in 2024 Adjusted EBITDAre and record 2025 bookings (despite Q4 softness) suggest underlying demand is robust. While 2025’s $749–801 million EBITDAre guidance implies modest growth, the company’s projects are designed to deliver 5–7% RevPAR growth post-renovation.

Investors should focus on Ryman’s unique positioning: it’s not just a hotel operator but a destination creator blending convention spaces, live entertainment, and themed experiences. With $2.3 billion in 2024 revenue and a balance sheet that can weather near-term headwinds, Ryman appears well-positioned to capitalize on post-pandemic demand for immersive travel. The question isn’t whether the company can survive its construction phase—it’s whether it can outpace peers in capturing the evolving hospitality landscape. For those willing to endure short-term volatility, Ryman’s blend of dividends, growth, and strategic differentiation makes it a compelling contrarian bet.