Ryman's Q3 2025: Contradictions Emerge on Group Bookings, Out-of-Room Spend, Tariffs' Impact, Nashville Entertainment Outlook, and Renovation Impacts on 2025 Financials

Guidance:

• Narrowed full-year 2025 consolidated adjusted EBITDAre to $772M–$802M.
• Entertainment adjusted EBITDAre midpoint now ~$112M (~6% YOY; ~12% annualized since 2019).
• AFFO narrowed to $509.5M–$538M; AFFO per diluted share $8.00–$8.38.
• 2025 capex narrowed to $375M–$425M; unrestricted cash $483M and total liquidity ~ $1.3B.
• Category 10 Las Vegas expected to open Q4 2026 (est. project cost ~$35M; target mid‑teens unlevered IRR); full contribution in 2027.
• Formal 2026 guidance expected with Q4 results in February; same‑store group rooms on the books for 2026 pacing ~+8% and 2027 ~+7%.

Business Commentary:

* Hotel Segment Performance: - Ryman Hospitality Properties' same-store hospitality segment delivered results towards the high end of their expectations, with corporate group pickup contributing significantly to the quarter's performance. - - The year-over-year group mix shift showed that corporate group room nights were down by only about 20,000 room nights, representing half the magnitude of the previous quarter's decline. - This improvement was driven by better-than-anticipated corporate group volumes and increased spending levels by groups.

• Entertainment Business Challenges:
• The entertainment business reported revenue of approximately $92 million and adjusted EBITDAre of $25 million for Q3.
• Growth from Category 10 and Block 21 investments was partially offset by softer volumes at downtown Nashville venues due to new supply impacting local live entertainment.

• The overall adjusted EBITDAre guidance was narrowed due to softer volumes in these venues, with a new midpoint of $112 million, reflecting approximately 6% year-over-year growth.

• Group Demand and Bookings Outlook:

• The company's group rooms revenue on the books for 2026 is pacing approximately 8% ahead compared to the same time last year, with corporate group bookings pacing ahead of association group bookings.
• This rebound in demand is expected to benefit from lower interest rates and a more favorable business and regulatory environment.

• The group's solid demand and bookings are positioned to outperform the broader group industry, despite ongoing macroeconomic uncertainties.

• Capital Investments and Financial Position:

• The company's capital expenditures in 2025 are expected to range from $375 million to $425 million, including investments in JW Marriott Desert Ridge and Category 10 Las Vegas development.
• Ryman ended the third quarter with $483 million of unrestricted cash on hand and a pro forma net leverage ratio of 4.4x.
• The narrowing of capital expenditure expectations reflects refined construction timelines and strategic investments to enhance property value and future revenue growth.

Sentiment Analysis:

Overall Tone: Positive

• Management said Q3 results were "in line with expectations," highlighted outperformance in same‑store hospitality (RevPAR/index commentary) and healthy group bookings (on the books: 2026 ~+8%, 2027 ~+7%), while noting a narrowed entertainment outlook due to local supply — overall language was bullish on Nashville's long‑term demand and company positioning.

Q&A:

• Question from Cooper Clark (Wells Fargo Securities, LLC, Research Division): Curious if you could provide us with updated thoughts on the entertainment market in Nashville, acknowledge that drove the guidance reduction in the quarter. Just curious how you're thinking about that business over the next couple of years, as it seems like supply headwinds are persistent.
  Response: Short‑term downtown Nashville volumes softened due to new local supply and cautious consumers, but management expects long‑term demand to accelerate (airport capacity, stadium, East Bank development) and is bullish on multi‑year growth.

• Question from Cooper Clark (Wells Fargo Securities, LLC, Research Division): How should we be thinking about a potential spin of OEG? Are there more bolt‑on acquisitions within the entertainment business or leadership additions you want to make first?
  Response: Management expects to expand Opry Entertainment into additional country‑music‑centric markets (domestic and selective international opportunities) and signaled likely further activity/acquisitions over the next 12–24 months while monitoring value creation before any monetization decision.

• Question from Aryeh Klein (BMO Capital Markets Equity Research): Can you provide a little bit more color on cancellations (which ticked up in the quarter)? What have you seen here in October and is this still mostly government‑related or other sectors?
  Response: Cancellations rose, primarily government and some corporate layoffs, but Smith Travel data indicate U.S. group occupancy troughed in August and began recovering in September/October; corporate leads and bookings remain strong, mitigating impacts.

• Question from Aryeh Klein (BMO Capital Markets Equity Research): Curious about underlying leisure assumptions for Q4, changes to ICE programming, and bringing ICE to Hill Country—any early feedback on bookings or expectations?
  Response: Management is cautiously optimistic for improved Q4 leisure versus last year: ICE ticket sales up (~300k booked to date, ~6 points ahead of last year at comparable pacing) and leisure room nights booked are ahead, projecting roughly a 5% improvement.

• Question from Bennett Rose (Citigroup Inc., Research Division): Can you explain the relationship between gross definite room nights and net definite room nights, given gross improved YOY but net declined sequentially?
  Response: Gross reflects strong sales production and corporate bookings; net is lower when cancellations and re‑evaluations (revals) reduce previously contracted blocks—gross growth is strong but partially offset by cancellations/revals tied to macro uncertainty.

• Question from Daniel Politzer (JPMorgan Chase & Co, Research Division): How have conversations with group and meeting planners evolved—have they meaningfully improved versus 3–6 months ago and does that underpin confidence for 2026?
  Response: Planners paused during the tariff overreaction but activity improved in Q3; management sees durable rate premium and continued strong booking momentum, supporting a constructive outlook for 2026 while withholding formal guidance until February.

• Question from Duane Pfennigwerth (Evercore ISI Institutional Equities, Research Division): Within corporate group bookings, are there any specific industries driving recovery?
  Response: Recovery is broad‑based across corporate sectors with no single standout; fintech has been an area of focus, but overall corporate demand is healthy across multiple industries.

• Question from Jay Kornnerbreg (Cantor Fitzgerald): Third quarter came in ahead of expectations yet annual guidance was maintained—where are you seeing potential Q4 softness? Is it government‑related or anything else?
  Response: Q4 caution stems mainly from government‑sector weakness tied to the shutdown and uncertainty about its duration; leisure and group rate momentum provide offsets, and room‑nights on the books are comparable to last year.

• Question from Chris Darling (Green Street Advisors, LLC, Research Division): How do you think about international expansion for OEG versus U.S. markets?
  Response: International interest exists (notably U.K./Europe given high country music demand and Opry exposure), but management expects primary near‑term expansion domestically while evaluating partners and opportunities overseas.

• Question from David Katz (Jefferies LLC, Research Division): What is your appetite and boundary for further acquisitions versus deploying capital internally?
  Response: Priority is high‑return capital deployment—management expects to focus more on internal investments (mid‑teen IRR projects underway) over the next 1–2 years, but remain opportunistic for acquisitions if value is clear.

Contradiction Point 1

Group Bookings and Cancellation Trends

It involves differing perspectives on the trends and impacts of group bookings and cancellations, which are critical for understanding the company's performance and growth expectations.

Are cancellations still primarily government-related, or are other sectors experiencing an increase? - [Aryeh Klein](BMO Capital Markets)

2025Q3: Corporate leads and bookings are up 41% year-on-year, and association leads and bookings are up 8% year-on-year. - [Patrick Chaffin](COO)

Lead volumes declined 16% year-over-year. Are you seeing month-over-month improvement, and what is your outlook for the remainder of the year? - [Aryeh Klein](BMO Capital Markets)

2025Q2: The only thing I would add on the lead volumes is that we're also seeing that it reflects that our lead volumes have definitely felt some pressure on in-the-year-for-the-year, and we expect that to continue as we continue to move through the rest of this year. - [Patrick Q. Moore](CEO)

Contradiction Point 2

Out-of-Room Spend and Group Behavior

It involves differing perspectives on the behavior and spending patterns of group attendees, which are critical for understanding the company's revenue streams and guest engagement.

Group is growing at 8% for 2026. Can you explain how conversations with group and meeting planners support the '27 guidance? - [Daniel Politzer](JPMorgan Chase & Co)

2025Q3: The demand for group in 2026 is pacing up 8% relative to 2025 and reflects a strong mix toward larger groups. - [Mark Fioravanti](CEO)

What is driving the strong performance of out-of-room spend despite some attendance attrition and growth softness? - [Chris Jon Woronka](Deutsche Bank)

2025Q2: Groups continue to react to some of the things that they're seeing in the macro environment. But when they get on property, they continue to do very, very well. - [Patrick Q. Moore](CEO)

Contradiction Point 3

Impact of Tariffs on Group Demand

It involves the impact of tariffs on group demand, which could affect the company's ability to fill its hotels and meet revenue expectations.

Are there any specific industries within corporate group bookings showing recovery? - [Duane Pfennigwerth](Evercore ISI Institutional Equities)

2025Q3: We've seen strength across the board in corporate bookings. - [Mark Fioravanti](CEO)

What is the impact of tariffs on project budgets? - [Aryeh Klein](BMO Capital Markets)

2025Q1: We've seen some tariff impact on group demand. - [Mark Fioravanti](CEO)

Contradiction Point 4

Entertainment Market Outlook in Nashville

It involves differing perspectives on the outlook and impact of new supply in Nashville's entertainment market, which is crucial for strategic decision-making and investor expectations.

How should we assess the Nashville entertainment market given the recent guidance cut due to new supply? What's the outlook for this business over the next few years? - [Cooper Clark](Wells Fargo Securities)

2025Q3: We do expect some of this to abate over the next couple of years. We also expect our market share to grow over the next few years. We just had a great opening with the [Nashville] National Museum and Country Music Hall of Fame. - [Colin Reed](CEO)

Can you discuss Southern Entertainment's Q2 contribution and OEG's seasonality outlook? Also, what are your plans for further investments, the spin-off timeline, and current entertainment consumer demand? - [Cooper R. Clark](Wells Fargo Securities)

2025Q2: Before we were supposed to open in June, we delayed it 'til November, and we'll open at 30% occupancy, 70% revenues at the time of opening. Not bad in this environment. - [Colin Reed](CEO)

Contradiction Point 5

Renovation Impact on 2025 Financials

It involves differing expectations regarding the impact of renovations on the company's financial performance in 2025, which could affect investor expectations and strategic planning.

Are there plans for renovations beyond existing ones and what is the timing for these plans? Will renovation challenges reach their peak in 2025? - [Aryeh Klein](BMO Capital Markets)

2025Q3: Patrick Chaffin: From a disruption perspective, 2025 is comparable to 2024, with more volume - [Patrick Chaffin](COO)

Can you provide details on upcoming renovations beyond the current ones, including their timing? Additionally, will the renovation headwinds in 2025 represent the peak? - [Aryeh Klein](BMO Capital Markets)

2024Q4: Patrick Chaffin: 2024 was a tough year from a renovation perspective - [Patrick Chaffin](COO)