Ryman Hospitality Properties, Inc. Aktie

All right, we're going to jump right into our next panel here, which is our REIT panel. And I'm very excited to have both Ryman and DiamondRock here today.

And really, I think that where I'd like to start off here is that we often hear that REITs get bucketed into a single kind of category, single macro category. But I think that each of you have a very different business in a lot of ways.

So maybe if you can just talk to what sets each of the companies apart from just the broader REIT universe. And then also maybe a little bit about some of the strategic priorities that you're pursuing that you think will continue to differentiate the businesses.

And I'll start -- we'll start closest. I was going to say any of my cynicism doesn't apply to Mark here. But I mean I would say particularly when you look at the public market for hotel REITs, and I do sort of put Ryman sort of in its own special category. But when you look at it, like the majority of the companies that are out there tend to be brand managed, and that's where we -- I think we're a little bit different. We really ascribe to have more flexibility and control in our portfolio.

So we are -- we have about 95% of our hotels unencumbered by brand management. And we also have about 1/3 of the portfolio that's just independent of brand. And again, that comes back to control, whether it's the strategic direction of your asset, control over CapEx, cash of the properties, we tend to be able to drive better margins. That, to be clear, is not the same for every asset that exists in the industry. It's for the types of assets that we go after that we think we can be more profitable. So that's how we really differentiate ourselves versus our peers.

For Ryman, we operate 2 very, very unique businesses. Our core business, the hotel business, we focus on large destination assets that really service the group customer and then also the leisure transient customer. And then we also own and operate an entertainment business that's focused on the country lifestyle consumer. So 2 businesses that are very focused on very specific consumer groups, very unique assets, really irreplaceable assets.

From a brand perspective, it's another thing that makes us unique. All of our hotels are branded with Marriott and operated by Marriott. And having that single owner and manager is an important part of what we do because about 66% of our revenue is recurring as we rotate these customers from market to market year-by-year. And so having consistent ownership where you have the economics aligned and having consistent management where you have the same service model is critically important for us.

What do you think is the most important KPI that you track? And maybe what is the most overlooked KPI that you'd want investors to think about?

I mean, for us, in terms of what we look at and think about every day is really is our booking pace as we look at -- as we look long term, what does that book of business look like when you look out over the next 4, 5, 6, 10 years, what rate is it trading at? And are we on the right demand curve to hit the beginning of the year at 50 points of occupancy that we entered the year with 50 points on the books.

In the short run, we really monitor group behavior. So lead volume, outside the room spending, those types of attrition and cancellation behavior. That really gives us the shorter-term view of what's happening in our business.

Yes. I would say it's not too dissimilar. We're not as group heavy as Ryman is, but we're about 1/3 of our portfolio is group, and we entered the year with about 70% of our business for the year on the books. It is booking pace that I think that's where you begin to see hotel folks get more confident when they feel like they're getting a little more confidence or visibility, I should say, in the future.

And it even matters unlike traditional transient hotels, a lot of our resort properties. We do not rely on group business. You can ultimately sort of yield manage to higher profitability, I think, over time. But the booking windows are different for that than it is a large group business that you folks would have.

No, I think the booking pace is a big part of that. I mean at a very macro level, it's going to be things like private fixed investment, a big one, employment tends to be a big driver of demand in the industry.

I thought you might take it a different way. We had earlier somebody brought up in our private equity panel that they're saying RevPAR sounds great, booking sounds good, but wages going up in a number of markets, cost to renovate, cost to build going up.

So ROI was something that they were trying to ask, are you seeing any improvement there? I mean how do you think about actively return on invested capital and the trajectory there and what's going to drive that?

It's a big focus for us. I mean we, in the last 2 or 3 years, have really become to the point of being accused being a bit of a broken record, really kind of a free cash flow per share driven business. And there's a lot of steps that we can take, whether it's distancing ourselves in some situations where, frankly, being branded doesn't work for that hotel or it's just trying to be much more cost effective around the capital that's required at those properties because the CapEx that's oftentimes required by a brand to be consistent with their brand standard does not make sense for every hotel.

It will make sense for some, but not all. And so we try to be diligent about where we choose to brand and where we choose not to. So from, I would say, an ROI standpoint, I think that's where you will see more variation or polarization to whether it pencils or not.

Look, I mean, to the point you made, costs are increasing, right? But if you look at our advanced bookings, we're growing rate at mid-single digits for the next several years. And that's really being driven by a couple of factors. One, in our segment, there is really no new supply. These are really tough assets to build. They take a long time and they require incentives.

The other aspect is from our capital deployment strategy, having these big platforms allows us to deploy incremental capital into these hotels to drive high-return projects. And so -- and that's what's really driving a lot of our rate growth. As we position these properties more and more up to premium scale, we can drive higher rates.

We heard from that panel too, kind of broad-based strength across a bunch of different types of portfolios. How would you characterize the health of the industry now and the sustainability of some of the trends we've perhaps seen?

I would say that I think what's surprised is maybe too strong of a word, but I think what's been beneficial this year is it feels to me that this is the first time in 5 years where we've had effectively every demand channel working in the same direction, business transient, leisure transient and group.

If you go back to the last 5 years, there was certainly that time in 2021, 2022 when it was all about leisure and it took off. And then as people came back to the office, you saw corporate transient and group follow back and then you could see markets like Florida begin to retrace a little bit. It just feels like this year, we came in with really sort of broad-based strength.

And when you think about a hotel over the course of a 7-day period, you can't sort of kill it just getting like 5 nights during the work week or 2 nights on the weekend. You really have to have all the days of the week working. And so I think that's been one of the reasons why you've had a little bit of an inflection this year in fundamentals. It feels like you're finally finding a normal that's more like the days pre-pandemic.

And look, group has continued to perform well, whether it's short term when you look at attrition rates or you look at outside the room spending, we continue to see groups turning up in spending. Lead volumes are good. We're seeing good rates in terms of future bookings outside the room spending has been terrific.

So group is healthy. We've seen good demand out of leisure. Spring break was positive. Summer seems to be shaping up. And we'll see for us, the holiday period, as you know, is an important part of our year. So we'll see how that performs in the fourth quarter.

And Mark, just to dig in there a little bit on the group side, how has -- somebody had referenced earlier, I keep going back to another panel but I'm sorry I missed -- now, it will be interesting to hear your perspective here because there was a comment about the type of group has changed.

So they were seeing actually weaker trends in smaller groups, but very, very strong trends in larger groups. I guess, are you seeing that same dynamic play out? Is there a shift in that group mix between association, large corporates or other?

I would tell you, I wouldn't call the small group demand weak. What we've seen over the last several years is that most of the growth that's occurring in group business is in large group. So there are more of them and the large groups are getting larger.

And so as you look at what -- the business that we're in with anywhere from 400,000 to 700,000 square feet of meeting space, that large group is really our core customer. And we've seen that for, gosh, the last 3 or 4 years. If you look at the STAR group data, you'll see the same thing where growth in group is in that big meeting segment.

As demand trends have strengthened, are you seeing any change in the transaction markets that comes along with it?

I'd defer to you because we do -- we have a very specific...

You're not buying one of these every day.

And no, there's definitely been an inflection. We are earlier today over at the NYU Hotel Conference, and I would say it's a pretty striking difference that if you think of the industry events that tend to bring all the brokers and owners together, it's NYU now and then it's the ALIS Conference in January out in Los Angeles.

And I would say the prior 3 conferences in early and mid-'25 and also early '26, it felt like they were recycling the same sort of book of offerings. This is the first one where there's definitely a lot more enthusiasm. One of the brokers said that their activity is up 40% year-to-date. It definitely feels like things are turning a corner. And some of that is when you think of it versus last year, call it, April to April last year, when you had Liberation Day, I feel like it had multiple impacts in our industry where we were seeing sort of peak all-time lead volume for group, but very low conversion to someone wanting to sign a contract because there was just a lot of uncertainty in the industry with tariffs that if you're planning like a big trade association event or what have you.

At the same time, interest rate spreads blew out on hotels, and it took a while. I mean I felt like the stock market recovered, and we're still watching that spread come back down. So it just really made transactions difficult. And now you're coming into this year where, yes, borrowing rates are probably 150 basis points tighter than they were this time last year, and there's a lot more visibility on booking trends and patterns this year than there was last year.

It definitely somewhat sharp sea change. I think you were talking earlier, there's probably 2 dozen sort of upper upscale luxury assets in the marketplace right now that is more than I've seen in some time, and they're probably all spoken for.

Do you want to sell into that strength? Are you more likely to be still interested in acquisitions?

It's a little bit of both. I mean, frankly, like we're -- we have more lines in the water than I think we have historically for disposing of assets. We sold one, the small one earlier this year here in New York. And we continue to look at selling assets, but we're also trying to be acquisitive in situations where we can recycle that capital into something that will grow a little faster if it's not our own shares.

On the recycling of capital front, maybe moving just to spending on the existing portfolio. What are some of the biggest ROI projects you're each working on? And how do you think about prioritizing where you are spending those dollars?

Yes. Our -- probably our biggest enhancement project right now is at Opryland. We're building about 110,000 square feet of incremental meeting space. We just finished a large food and beverage and events lawn complex. And we're in the middle of a full ballroom renovation. So we've got -- in total, that's probably $0.25 billion that we're spending across all those projects at Opryland with the intention of bringing Opryland, it's fit and finish up to the level of the rest of the portfolio.

That hotel will be 50 years old next year and to begin to remix that hotel for more premium groups, premium corporate business. That's why we're building the breakout space, but also premium across all segments. So begin to shed some of the lower-rated business that might be in that hotel in higher-rated association, higher-rated SMERF groups, et cetera.

Does that move across the portfolio? Or is that -- do you think that will end up being incremental if you can find out -- find those new kind of meeting folks?

We can find new meetings, but it's also about rotating premium groups that are in our other hotels like at the Rockies who don't rotate through Opryland, we'll now begin to do that. We're seeing that happen.

For us, I mean, we -- for example, last year around this time, we put a property under the knife, we own hotels in Sedona that we ended up upscaling and effectively consolidating them. There are 2 adjacent hotels, but at very different price points. One was sort of $1,000 to $1,200 a night and one was about $300.

And it was sort of bringing the $300 one up to the level of the higher end one. And I think publicly, we've said it would be sort of a low double-digit IRR or cash yield on that, and it's been surpassing that right out of the block. So that can be very impactful. It's funny from a dollar spend standpoint, it can be a fraction of what you guys are spending. But from an impact to our bottom line, it can be very significant. If you're kind of earning a double-digit return on that, it can add a couple of points to your EBITDA growth.

In my intro remarks this morning, I highlighted that lodging was one of the best-performing sectors within gaming, lodging, leisure broadly. It's also outperformed the S&P 500. I think that the hotel REIT space has gotten a little bit of a wrap that there's something broken as being a public REIT versus perhaps either being private or otherwise. How do you think about the pros and cons of being a public company hotel REIT? And how has that changed over time?

Well, look, I think that for the types of assets that we own, the public structure is the right structure, given the size of these assets, the concentration that you have. I think it's -- they're typically not assets that private equity want to hold.

From the perspective of being a hotel REIT, one of the things that I would love to accomplish is getting people to think about us a little bit differently than a pure hotel REIT just because of the nature of our business, some of the characteristics of it, the growth, the stability, it performs more like an infrastructure REIT, frankly, than it does of the hotel REIT.

So I think I've watched this industry for a very long time. And I think 10, 20 years ago or longer, it was sort of sufficient just to be branded. That was kind of the differentiator, if you will. And to own large assets or to own luxury assets. And I think there was this implied faith that ultimately, the owner was somewhat passive in that equation, and you're entrusting the brand to sort of do the right thing for you.

I would say that being a little facetious. But like I would say that there's many times where the brands are doing the right things for their system, but that doesn't mean that it's good for me. And at the end of the day, I always joke that I'm the capitalist, I don't have to believe in their socialism. So it just depends where you want to place your bets.

And I think that what's changed in the REIT space, there's no question. It's been a difficult performer, you guys accepted over the last few years. And I think that that's changing. I think the market has to realize that it is an active investment strategy. You need to be much more hands-on and influencing what's going on at the property level and also taking a different view on branding and management. It's all about trying to drive value there constantly as opposed to just entrusting that a third party is going to do it in your best interest.

Is bargaining power improving from an owner standpoint with the brands?

I think so. I mean we just actually had a franchise agreement at our Westin in Boston come up. It's 800-room hotel at the convention center. It's probably a top 25 convention center market, and there was extraordinarily robust demand because as you know, they're very focused on unit growth. And so I do think there's a lot more flexibility that we as owners can have.

And that's one of the things that really differentiates us versus a lot of the more conventional like full-service folks is that about 1/3 of our portfolio is unbranded and the majority are not brand managed. So to the extent that it's appealing for someone to take key money, that's an option that you have with our assets then you don't have with our peers.

Mark, how do you think about the relationship with Marriott and how that's evolved over time?

As I said earlier, the manager relationship with us is critical because we operate these as a single portfolio as really as a single almost not operating business. And so who we have and what their relationship is with the meeting planners and their reputation is critical.

And this goes all the way back to when we converted from an operating company to a REIT in 2012, where we did a significant amount of primary research with meeting planners, and Marriott was consistently ranked as the #1 manager for large meetings and part of what drove us to select them as our manager.

I think that given the uniqueness of our portfolio, the scale of it and the capital that we deploy into those assets, it does give us a lot of leverage and buying power with Marriott. But the relationship is quite good. And overall, they do a tremendous job.

And Jeff, you have a chart in your deck, I think, showing higher EBITDA per key of third-party managed properties. Now every asset is a little bit different. It seems like that's clear from the dichotomy between the 2 businesses. But are there situations where brand managed makes sense in your portfolio?

For sure, for sure. I mean we have -- I mean, the property that really kind of leaps to mind is we only have 2 that are brand managed, but our Chicago Marriott, it's 1,200 keys. It's on Michigan Avenue. It's a tremendous amount of meeting space. It's unlike the rest of the assets in our portfolio, but that's where I would call Marriott's sweet spot.

They do a very good job in that sort of big box experience. No different than the marquee next door, for example. I think that's where they're very good in sort of leaning into that. I think the reason why we would always say that it's just a choice at the end of the day is that I use the example of just because you went there for a conference doesn't mean I want to stay at a Marriott and at the end of the day, like I want something that's more authentic when I'm in those leisure destinations.

So that's why I say like for us, it's just a choice depending on what the asset is. And in a situation like our Chicago property, they do a very good job. I mean, I tell you that we've eclipsed where we were pre-pandemic, and we're one of the stronger performing group assets in that market.

And Jeff, I want to go back to something you said about the transaction market, both being interested in buying and selling and more lines out there. What markets or property types are you -- if you add your others, would you want to be seeing more of?

I mean if price is no object, I would buy independent resorts. I say price is no object because it's probably where the gap is widest. I mean some of the assets that we were talking about earlier today, they're sort of 5% and 6% cap rates. So think of that as almost 20x EBITDA. We trade at probably 8.5% to 9% cap right now.

So it's I guess I would say I'm speaking my book, but we probably have more leisure assets and resort assets than anybody, and yet we actually trade at one of the greatest discounts to our implied. And it's not a leverage question. We have one of the lower leverage balance sheets, too. So I think it's just how people bucket hotels and they kind of put the same multiple on everybody, they assume there's not much difference. But yes, I would say the independent side, it just gives us much more control.

And I think in your segment, like the CapEx investments are great because you're a really unique niche that you can monetize that. I think in lots of cities where the brands tend to mandate renovations every 7 years, the time clock doesn't always make sense, candidly. It's -- you could be the best performing asset in the market, you don't need to renovate.

But they're very time-based, and that's where it's just -- we tend to have a lot of friction with that view that you have to be reinvesting on a whether or not the asset needs it or whether or not it will benefit.

Are there operational flexibility that comes with that as well as you think about independence and that exposure?

For sure. I mean we can influence what staffing will be, and that really is beneficial with margins. To your point about when we look at our independent hotels that our margins tend to be much better.

One of the unique things about our portfolio, given the scale and the scale of the projects that we work on, we do most of that internally. We really drive timing of spend, how dollars are spent, both in terms of maintenance as well as enhancements. We have internal design and construction teams that manage -- we manage all our own room renovations, et cetera. So we're we've taken control of that part of the value creation.

And Mark, going back to the Opryland renovation or I should say, convention expansion, will that be something that we should then assume will build over time because of the long lead times of some of these groups?

Well, we start selling meeting space the day that we approve it and start construction. So sales teams have sales goals for that expanded space. They're selling off of renderings and doing site visits and walk-throughs during construction. And so in most cases, when we open incremental rooms or we open incremental meeting space, it really almost opens a lot.

That's great. Other topic du jour is around AI. Are you seeing any change in either customer behavior or even any thoughts that you have on the long-term impact from AI on either demand or margins?

It's whether it's AI or I'll just call it technology because I do think there will be some aspects. When I say like robotics, I don't mean like humanoids walking around, but whether it's something as simple as a robot.

I meet Adam Jonas, our informatics analyst. He will tell you all about humanoid robots coming.

Yes. I mean I do think that when you look across the industry that the opportunity is probably greatest for owners. I don't say that just because it's -- we're talking our book. I just feel like if you think about the owner, we have -- we're the beneficiary of the revenue and the expense savings. And I think when you think about lodging, it's one of the higher cost to operate segments of real estate. When you just think about the broader real estate sector, any office building out the window has like no employees in it. I mean employees of the office building itself, maybe no employees otherwise.

But maybe on the retail apartments, I think we have more inefficiency that can be solved. And I think on the revenue side, it's the same. I think that will ultimately be propelled by owners in some way, shape or form because a lot of the brands and our third-party managers, they're all paid off the top line. So I don't know what you've seen -- I haven't seen many brands expend a lot of money on trying to find ways to save owners' money. They tend to just think about driving top line.

So I think that the AI beneficiary, whether it's labor management or sort of complex jobs that -- accounting type jobs of the property that might get consolidated, I think those will accrue to the owner's benefit.

Yes. And look, for us, again, because of the lead time and selling rooms 8, 10 years in advance, we think that ultimately, there's a lot of opportunity for us in terms of pricing and yielding and how to think about how do you maximize revenue. It's a pretty complex yield management exercise for us because of the amount of inventory that we're selling at any given time. So being able to crunch big data and with a lot of variables, AI should be helpful.

So been a bit of a back and forth in terms of will AI reduce jobs, will it add jobs? Are you seeing any signs in your business, whether it's maybe leads that are coming from new AI start-ups or otherwise?

You mean in terms of our bookings coming through LLMs? Or do you mean like the employers themselves are.

Yes, employers themselves are -- or even if you just see any kind of change in corporate demand one way or another that could be associated to it?

I mean if you look at a market like San Francisco, where -- I mean, there's a variety of reasons why San Francisco is working. I mean it's fallen so far that it's effectively concerned. But I think there's a lot more enthusiasm in the San Francisco market around AI.

We have a property in Sausalito sort of under the Golden Gate Bridge that does a lot of midweek group for tech companies like the 50- to 100-person off-site. And you see a lot of the who's who of technology companies go there for meetings.

We haven't really seen it in our hotel business that much in terms of changing consumer behavior at this point. We're obviously experimenting with it in a variety of ways as it relates to pricing. And then in our entertainment business, we've started to deploy, particularly around things like dynamic pricing, how we market to concert goers and those types of opportunities. We've gone to a fully automated call center in our entertainment business now.

Since you're talking about the entertainment business, perhaps you can set the stage a little bit for folks that are less familiar or maybe more focused on the lodging side of the space. Just what are the various brands and platforms that you own and operate? And it sounded like in the last call, you were a little bit more excited about that business or positive about that business. So what are you seeing there?

Well, I mean, we've always been positive and excited about the business. For those of you who aren't familiar with the Opry Entertainment Group, it is a live entertainment business that's really focused on the country music consumer. We own a number of highly acclaimed brands, specifically the Grand Old Opry, the Ryman Auditorium, Austin City Limits Live in Austin, Texas. So -- and we have a number of verticals that all service that same customer. We're in the venues business. We are in the artist partnership business. We have a brand with Blake Shelton called Ole Red and another called Category 10 with Luke Combs.

And then we're in the festivals and amphitheater business as well as the content creation business. All of those verticals really focus on that singular customer, the country music fan. And it's a genre that's growing rapidly along with -- obviously, with Nashville as a tourism market, but also just as a city that's attracting a lot of high-quality employers.

And so that's a business that we've owned and operated forever. It was 100 years old last year. And we operate in a TRS. And it's about 15% of our revenue and 15% of our EBITDA.

For 100 years, how would you characterize the competitive moat of that business? And how does it -- maybe remind us of the interplay with the hotel side of the business? Are these totally run separate? Or are there still synergies within them?

Well, they are run separately with Marriott as our manager and us operating the entertainment business where we have opportunities to work together, primarily Opryland and the Grand Ole Opry because they're geographically next to each other. Those are all just arm's length commercial transactions. And these are -- it's an incredibly unique business.

And as I said, Country Music is growing very rapidly. And ultimately, our view of the business is that it shouldn't be in a TRS inside of a hotel REIT. And so as it continues to scale, ultimately, we'll separate that business in one form or fashion and let it stand on its own. But an incredible collection of brands in a really rapidly growing market.

Maybe you can elaborate on that a little bit since you talked about scaling it up. What does normalized margin for this business look like?

That business today runs in the kind of high 20s in terms of EBITDA margin. I think you'll -- over time, as it grows, depending on which of those verticals contributes to that growth over time, you'll continue to see that margin in kind of, I would say, in the mid-20s over time.

We've scaled the infrastructure of that business to the point now where when we're adding incremental units, we don't need to add incremental corporate capabilities. Obviously, it will be a step function over time. But as you think about the next -- we have a Category 10 right now under construction in Las Vegas.

We've announced one in Orlando, and we have a new Ole Red that we're doing with the Pacer organization in Indianapolis. We'll be able to bring those units online without driving a lot of incremental corporate costs. So we'll start to get some operating leverage.

We only got a couple of minutes left. I can go to some of my lightning round questions for everybody. But if anyone has a question in the audience, we can do that as well. We got one right here.

This is more of a general REIT question than hotel-specific perhaps. But we've seen REITs become a big part of the hotel industry, the casino gaming industry. I'm just wondering why it hasn't become a big part of the amusement park industry, the theme park industry. Are there any...

I don't know the amusement park business all that well. I think it's honestly like the capital investment in order to keep amusement parks interesting. What little I know of it, just from people I know who've been in the business, amusement parks sort of thrive on having like the hot new roller coaster or the hot new thing. And it's just the capital investment cycle is very intense.

Would you include water parks in there? Water parks are very low CapEx.

The other is that it's not -- compared to like the number of hotels in the country, there's not many of them.

Many of them, but we don't see REITs in any of them.

Yes.

Gaming, right, not so much amusement parks.

In terms of the questions that I had, these are -- we'll try to keep it tight here, but industry demand, a lot of back and forth. Do you generally think that as we look over the next couple of years, are you more constructive on the trajectory that we could be on, equally constructive or less constructive based on what you're seeing right now?

I mean, yes, we're certainly more constructive, particularly in our segment, where there's really no new supply coming online. Group demand is -- continues to grow. And so we think we're set up extremely well for the next couple of years.

I would say the same. I think when I look at our portfolio, while we're roughly in third in terms of our business mix between sort of leisure and business transient and group, you think about like the group fundamentals continue to look very good. We've eclipsed prior peaks on demand at sort of higher and higher rates. It's hard to see how that changes. We don't have the visibility that he does, just given the scale of their assets, they tend to have a much longer booking window, but I think the trends look good.

That really makes me enthusiastic and why I was saying independent resorts is that just demographically, you have sort of these 2 bumps within the portfolio -- within the population. One is sort of an aging consumer that is at peak earnings and peak spending. And so they're taking more trips that are longer and spending more on them. And at the same time, you have sort of a younger generation that's probably someone in their 30s that also value experiences over things.

And we, as an industry, haven't built resorts in the country 30 years. And it's not all beachfront. It can be -- we have stuff in Montana, I said Sedona, it can be ski related. But it's an industry that has no supply growth and demand is going to continue to outstrip, I think, inflation for the next few years on the leisure side.

Yes. Look, I think you have to be careful that you don't lump all hotel REITs into the same category, right? It's really -- the winners and losers are going to depend on the quality of the assets, the quality of the service that's delivered and what's your unique positioning? And are you servicing the consumer's needs or not?

Right. And then the last one, and we talked about artificial intelligence, but let's try to narrow it down to a single kind of thing that you think will have the biggest impact? Is it going to be more top line or reducing costs or other?

I think for us, top line will be where it will uniquely enhance our capabilities. I mean we're not there yet. But as I said earlier, having the ability to better yield manage over a long period of time, I think, can be very powerful for us.

I'm mixed on that just because we already operate pretty deeply in 3 channels when you think about it at most of our hotels. So I do think there's always opportunities to improve yield management as long as the increment sort of flows to the owner and ownership, I think, will be beneficial. But I think on the -- as I said, on the operations side, I mean, any given hotel in the United States probably has 7 to 10 software systems running, none of which talk to each other.

And when you sort of think of that as an example of how technology investment has happened in the hotel industry, historically, the brands didn't really focus on that. And so I think that that's where there's just a lot of inefficiency in the business where it's not about replacing headcount. It's like you can provide better service effectively with a little AI investment or technology investment. And maybe it lowers your cost structure, you can provide sort of for the same cost, a much higher level of service that I think that could benefit revenues as well, but I think it's going to be a mix for us.

It's great to get both of your perspectives. Please join me in thanking Jeff and Mark for all their thoughts today.

Thank you.

Thank you.

Welcome to the Ryman Hospitality Properties First Quarter 2026 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Executive Chairman; Mr. Mark Fioravanti, President and Chief Executive Officer; Ms. Jennifer Hutchison, Chief Financial Officer; Mr. Patrick Chaffin, Chief Operating Officer; and Patrick Moore, Chief Executive Officer, Opry Entertainment Group. This call will be available for digital replay. Number is (800)7230607 with no conference ID required. [Operator Instructions] It is now my pleasure to turn the floor over to Ms. Jennifer Hutcheson. Ma'am, you may begin.

Good morning. Thank you for joining us today. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance. Any statements we make today that are not statements of historical fact may be deemed to be forward-looking statements. Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release. The company's actual results may differ materially from the results we discuss project today. We will not update any forward-looking statements, whether as a result of new information, future events or any other reason. We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in exhibit to today's release.

I'll now turn the call over to Colin.

Thanks, Jen. Good morning, everyone, and thank you for joining us today. We delivered a strong start to the year with results that exceeded our expectations despite the complex geopolitical backdrop. Our first quarter performance reinforces what we've long believed about this company. The quality of our assets, the durability of our business model and the way we allocate capital delivers superior outcomes for our customers an attractive, sustainable returns for our shareholders.

In our same-store hospitality business, we grew revenue and market share and expanded margin on slightly fewer room nights, a clear demonstration of pricing discipline, mix management towards higher-value customers and enhanced monetization of on-site demand. Results were particularly strong for the assets that we have -- that have recently benefited from the capital investments. Gaylord Opryland delivered record first quarter revenue and adjusted EBITDA Gaylord Rockies delivered record first quarter revenue, and Gaylord Palms delivered record revenue and adjusted EBITDAre of any quarter in its history.

The JW Marriott Desert Ridge also delivered strong first quarter results, which given the seasonality of that market, is especially meaningful for the full year profitability. Though we've owned this hotel for less than a year, the benefits of our ownership are already evident. Our growth-focused yield strategy resulted in meaningfully higher group volumes, which supported strong outside of the room spending and margin outcomes. Together, this property in the JW Hill Country, which is now undergoing the capital investment that we identified at the acquisition we had a tangible runway for growth over the medium term, and I couldn't be more excited about their role in our future.

On the entertainment side, demand for live entertainment remains incredibly healthy. Our Allred brand continues to resonate in a meaningful way, particularly in markets like Nashville and Las Vegas and soon, we believe Indianapolis. Indianapolis has long been on our radar as a vibrant convention and leisure market with strong economic and demographic drivers and a deep base of country music fans. To that end, we were excited to announce just this week a development partnership with the organization behind the NBA paces and the WNBA fever. This red development will contribute to the broader revitalization of the downtown corridor between the convention center and the paces arena.

This announcement marks our third development update this year, and our team remains active in evaluating both organic and inorganic growth opportunities toward expanding our platform and enhancing the value proposition for artists and consumers alike. Looking ahead, the future looks very bright for both of our businesses. Over the last 2 years, we've meaningfully improved the growth profile and pipeline for each while continuing to build customer satisfaction and loyalty through consistent execution and focused capital investment. We remain on track to achieve the 2027 financial targets we set in early 2024, and we look forward to updating you on our continued progress.

Now -- before I hand over to Mark, let me go off script and say just a couple of things about our team. Our asset management team, led by Patrick Chaand I believe, is the best in the industry. And our team at OEG, led by Patrick Moore, is firing on all cylinders. Mark, Jen, and Scott and their teams are showing tremendous leadership and our company couldn't be in better hands. So Mark, what have you got to tell us?

Thanks, Colin, and good morning, everyone. I'll provide more color on our operating performance and business momentum before discussing our updated outlook. From an expectation standpoint, we entered the quarter assuming relatively flattish revenue and some margin pressure in our same-store hospitality business, along with softer profitability trends in entertainment, due in part to mix-driven seasonality and a challenging year-over-year comparison. Entertainment performance finished in line with our expectations, while the hospitality business delivered meaningful outperformance.

Same-store ADR increased just over 5% year-over-year, more than offsetting lower group occupancy. As you'll recall, the timing of Easter last year resulted in unusually strong group demand in the first quarter, creating a challenging year-over-year comp. High-quality corporate group demand proved far more resilient than lower contribution segments, resulting in higher ADR and higher levels of outside-the-room spending compared to both our expectations and last year. Banquet Navy revenue contribution per group room night increased more than 6% year-over-year with gains at nearly every property in the portfolio. Our leisure business, while a smaller contributor to the first quarter results also surprised to the upside.

Both demand and rate increase compared to last year supported by seasonal spring break travel with particular strength of the JW Marriott Hill Country and Gaylord Rockies. Higher flow-through from growth in room rate and catering business together with ongoing efficiency initiatives drove adjusted EBITDA margin expansion in the quarter. Looking forward, leading indicators of group demand remained resilient. The elevated attrition and cancellation activity we experienced last year has largely normalized. Excluding January, which was impacted by winter storm firm, attrition improved year-over-year and cancellations for the year were essentially flat.

On the heels of record monthly production in December, group bookings activity continued at very strong levels in the first quarter. Growth group room nights booked in the first quarter for all periods increased nearly 27% year-over-year representing the strongest first quarter reduction since 2018. Reflecting our continued focus on premium corporate groups, corporate bookings comprised approximately 2/3 of production. Association bookings were also strong surpassing pre-COVID first quarter levels for the first time, setting aside pandemic-related rebooking activity.

As a result, growth in same-store group rooms revenue on the books for all future periods compared to the same time last year, accelerated sequentially from 6.5% as of December 31 to 7.6% as of March 31. Across the portfolio, and most notably at Gaylord Opryland, we've invested in food and beverage offerings and carpeted meeting space to attract and serve the premium Corporate Group segment. In support of our capital deployment strategy, and the increase in corporate demand for our hotels, we've refined our inventory management approach to make more sellable inventory available through the entire 24-month corporate booking window.

Enhancing the corporate mix of our hotels drives higher room rates, outside the room spending and profitability. However, these changes in our inventory management approach create challenging year-over-year comparisons as we move into the prime corporate booking window for 2027 and 2028. For 2027, same-store group rooms revenue on the books is up over 3% compared to the same time last year and down 1% for 2028. Importantly, ADR growth for both periods is pacing up mid-single digits and corporate meeting planner feedback and lead volumes are strong. Given this interest, we're confident that we are well positioned to achieve the booking goals required to enter 2027 and 2028 with our targeted 50 points of occupancy on the books and strong rate growth.

Now I'll turn to JW Marriott Desert Ridge, which also delivered a terrific first quarter. Prior to our ownership, the property prioritized higher-rated leisure demand during the peak first quarter period. Under our group first sales and revenue management strategy, group mix increased by nearly 200 basis points and group demand grew more than 9% while maintaining ADR discipline. In fact, total ADR for the property increased nearly 8% year-over-year with growth across the group and leisure segments and bank went and AV revenue, up 25%. We expect these trends to build over the next several years as the property grows its share of the meetings market under our group strategy.

Supporting this strategy, we completed the 5,000 square foot meeting space conversion in April which we believe will further enhance the hotel's ability to attract high-quality corporate groups. Turning to entertainment. First quarter results declined year-over-year due to a challenging comparison seasonality associated with our new business line and the impact of winter storm firm. Overall, business performance was in line with our expectations, and we continue to be encouraged by the underlying trends. Both old red and category exceeded our expectations with particular strength in Nashville in Las Vegas in the back half of the quarter.

March represented a new high watermark for Old red Las Vegas with the venue generating the highest multi-revenue and adjusted EBITDAre in its operating history. Finally, I want to spend a few minutes on our outlook. As we noted in the press release, we are raising the midpoints of our guidance ranges to reflect the first quarter hospitality outperformance. Our outlook for the rest of the year is essentially unchanged from our prior expectations, reflecting measured confidence in our business. We continue to feel good about the areas of the business within our control, sales production, pricing discipline, margin initiatives and execution of the capital projects we have underway.

And so far, meeting planner sentiment and the leisure guest willingness to visit our properties has remained resilient. What gets us to the high end of the range is continued strong near-term group business trends including normalized levels of attrition and cancellations, healthy in the healthy in the year for the year production and strong on-property spending as well as continued momentum in leisure. The low end of the range assumes some hesitation in near-term meeting plan or decision-making, a potential pullback in 2026 meeting budgets and softer leisure demand, potentially in response to higher gas prices.

At the midpoint for the rest of the year, we continue to assume mid-single-digit growth in group rooms revenue and flattish year-over-year leisure performance. Let me make a few comments on seasonality for the same-store hospitality business, we continue to expect the third quarter to show the strongest revenue and margin growth for the year, reflecting strong corporate group mix on the books and easier year-over-year comparisons followed by the second quarter. We expect same-store RevPAR growth to accelerate as the year progresses, especially as the Gaylord Texan room renovation is completed in August.

For JW Marriott Desert Ridge, we expect the second quarter to contribute slightly more than 25% of full year adjusted EBITDAre. And for the entertainment business, we continue to expect the second and fourth quarters to be the largest contributor to full year adjusted EBITDAre. Looking beyond 2026, we remain confident in the '27 adjusted EBITDA targets we outlined at our last Investor Day. Our forward book of business the addition of the JW Marriott Desert Ridge and the capital investments underway across the portfolio position us well to deliver those objectives.

And with that, I'll turn it over to Jennifer to walk you through the balance sheet and capital allocation.

Thanks, Mark. We ended the first quarter with $424 million of unrestricted cash on hand. In addition, we held $27 million of restricted cash available for FF&E and other maintenance projects. Both our corporate and OEG revolving credit facilities were undrawn resulting in total available liquidity of approximately $1.35 billion. At the end of the quarter, our pro forma net leverage ratio based on total consolidated net debt to adjusted EBITDAre assuming a full year contribution of adjusted EBITDAre from JW Marriott Desert Ridge was 4.3x. In March, we completed an opportunistic refinancing, issuing $700 million of senior unsecured notes due 2034. And together with cash on hand, redeeming in full the prior 2027 notes.

The transaction was well received and priced through our expectations, extending our weighted average maturity and eliminating near-term refinancing risk through the first half of 2028. With respect to capital expenditures, our full year outlook is unchanged, and we continue to expect total capital spending for the year in the range of $350 million to $450 million. In April, we completed the foundry field house ports bar development at Opryland. And as Mark mentioned, the meeting space conversion at JW Marriott Desert rich. Also in April, we kicked off the JW Marriott Hill Country rooms renovation which is expected to run through the first quarter of 2027.

The Gaylord Opryland meeting space expansion, the Gaylord Tech and Ridge renovation and Category 1 Las Vegas development remain underway. All major projects remain on time and on budget. Finally, regarding our dividend, it remains our intention to distribute 100% of our retaxable income through dividends over time. With that, let's open it up for questions.

[Operator Instructions] And our first question today comes from Patrick Scholes with Truist.

Question for you on your Dallas property in the World Cup. It looks like it's about a half an hour away. Are you expecting to get much business from the World Cup on that? And if so, has it been trending? There's a lot of media about FIFA cancellations? Did you have any of those FIFA bookings? And any color in that regard.

The World Cup is going to be marginally impactful to our Dallas property. We already had a substantial level of group room nights on the books, and we're in a really strong position, but it will help us on trend at rate. So we will see a little bit of lift there. Overall, World Cup, I think, has been a mixed bag in certain markets, but Dallas is seeing a positive impact, and we should see some on ADR as well.

The fan base though in Dallas, Patrick, is going to be pretty aggressive with the England team being playing in Dallas.

Duly noted.

Our next question comes from Dan Politzer with JPMorgan.

I just wanted to go back in terms of how you're thinking about the guidance, right? It sounds like there's a little bit of not caution, but maybe conservatism is a better word in terms of how you're thinking about the leader trends. And I know you mentioned fuel prices. Have you seen anything yet? Or what are you kind of baking in there in terms of how you're kind of thinking about the puts and takes specifically on -- as you enter 3Q with leisure travel kind of having a bigger part of the mix?

There's no point of caution that are embedded in our full year guidance. Our outlook for the remainder of the year, Dan, is unchanged from what we had at the beginning of the year. We're raising our full year guidance in recognition of the strong trends we had in the first quarter. And as we noted throughout the prepared remarks, all the leading indicators are continuing to remain very resilient. You saw attrition, for example, improved year-over-year when you look at the February and March trends. You see bookings continue to trend upwards on the group side meaningfully. So -- and outside the room spending is good leisure performance in -- from spring break was exceeding our expectations. So there are a lot of good reasons for optimism. And I think our approach to full year guidance at this point is measured confidence.

Having said all of that though, I'm sure Dan, you probably read the 2 of the 4 dissenting Fed governors this morning put out statements saying that we live in extremely volatile times. There could be rate hikes going into the future, simply because what is going on in Iran with oil prices could affect unemployment could affect inflation. And so here we sit, we've got a wonderful business on our hands, firing on all cylinders -- but there are some stone clouds in the horizon that we have to be cognizant of that. So there is a degree of caution in this. But as Jen said, our businesses are performing admirably. .

And our next question comes from Smedes Rose with Citi.

Mark, you alluded to this in your opening remarks, but I did want to ask a little bit about the cancellation and attrition rates that you saw during the quarter that it did look elevated, at least what you've reported over the past several quarters. And are you saying it was really all due to that terrible storm in January? Or just kind of wondering if you could unpack that a little bit of what you guys are seeing.

Yes. I mean essentially, if you look at the first quarter by month and you back out what occurred in January during the winter storm Fern, attrition was actually lower for the remaining few months year-over-year. And cancellations, we said in the script was essentially flat. I think it was about 200 room night difference. So it was essentially flat. So the trends we're seeing with the trends we've seen thus far in April would continue to support that .

Our next question comes from Aryeh Klein with BMO Capital Markets.

On the future group pace in '27 and '28, you mentioned some of the inventory management changes that are maybe having impact on comps. Hoping you could just provide a little bit more color there how maybe we should expect things to trend from here?

Sure. I'll start and then I can jump in. What you're seeing in those '27 and '28 numbers is really kind of the manifestation of the strategy that we've implemented over the last really the last couple of years as it relates to refining our group strategy to maximize the performance of the hotel and what that really is doing is making inventory available for premium corporate groups. If you think about what we've talked about really starting several years ago with we undertook primary research to really understand what those customer needs were for those premium corporate groups.

We're now in the process of deploying capital into the various hotels to provide the food and beverage and meeting space as I called out in the script or in particular, and we're now modifying pricing and inventory management and what -- really what we're -- what we're doing there is making sure that we have the right rate states and space available when that premium business is ready to transact, which, as you know, the corporate window is significantly shorter than the association and SMERF, it's about 2 to 2.5 years.

And so as we've looked at how we manage that inventory, we've held more inventory available, and that's what you see reflected in those year-over-year growth numbers. And then the last piece of this is that we worked with Marriott to modify our sales incentives to ensure that the sales teams are focused on the right segments that we're trying to sell to and that they have the appropriate short- and long-term goals to ensure that we hit these crossover these crossover goals that we have for future years. And so what you're seeing in those numbers is really the culmination of the strategy to push more corporate business higher-end corporate business into our hotels.

And in terms of how we get from where we are today to that 50 points and what gives us confidence we can get there, it's really around a number of different points, I would say. One is that we have the best physical product that we've ever had to serve the corporate customer as it relates to our portfolio, and it's getting better each and every year. current corporate demand trends are very positive. Leads are -- our corporate leads are the highest they've ever been. They're about 27% above where we were in 2019. Pattern availability is good. As I said, we've been holding inventory. And when we look at the data, the shift is already happening. If you look at rest of the year '26, we're up about 3 points in terms of corporate mix. For '27, we're up right now about 3 points year-over-year. And in '28, we're up about 6 points. So we feel like we're in really good shape, and we have the pieces in place to execute this strategy.

Our next question comes from Rich Hightower with Barclays.

I guess maybe just a follow-up on the corporate booking question. Obviously, trends have been very, very strong. And I'm wondering if that is surprising at all in the context of some of the macro headwinds that have already been referred to. And the jobs market is choppy. We're reading about layoffs in different pockets of the economy. So does that surprise you? Or is it sort of a fundamentally different composition of the customer base that would be staying in your properties?

Rich, this is Colin. Let me kick this off a little bit. what you're saying about the jobs market. There's a question about how much of the jobs market is being affected by being tremendous amount of capital that's flowing into artificial intelligence. But when you look at the underlying strength of what is going on in corporate America today, when you look at where the markets are trading, this morning, the S&P, again, is at all-time highs. And the reason for this is corporate profits are in really good shape. Look at what's going on in the banking industry, you look at what's going on in our industry, it's in really good shape.

And so the strategy that Mark just talked about in answer to Arlay's question, -- when Patrick came and sat down with Mark and me some months ago and talked about becoming a little bit more aggressive on cutting these blocks out in '28. It made a hell of a lot of sense to us simply because of the underlying strength of what we're seeing in volumes having more inventory to book into in these periods ahead of us at higher-rated business makes a ton of sense -- and so I think our economy -- we've got this unfortunate noise of what is going on in the Middle East -- but putting that aside, our economy is in pretty good shape. And we're back for the rest of this year and next year, it's going to remain that way.

Yes. And this is Patrick. Mark and Colin have both done a great job of outlining how we feel about the bookings and the trends we be there. And I would just add to this. But if you just look at on-property actualization of groups, we saw some hesitation back in Q3 and even into October and November. But as we entered December, we started to see that hesitation to spend abate. And that has continued as we moved through the first quarter. I would tell you that as we went into the first quarter, we were hesitant, but meeting planners have shown up in a major way and spent very well on property, and that seems to be continuing. So we are growing in our confidence that the groups that are traveling to our hotels are in a mindset of feeling comfortable enough to proceed with their programs at the levels that they originally anticipated. .

Our next question comes from Cooper Clark with Wells Fargo.

On OEG, it seems like every quarter now, we're talking about a new development or operating contract for the business. I'm just curious how you're thinking about EBITDA growth of that business over the next couple of years? And when you'll consider making some of the additions to management structure that you discussed as being prerequisites for a potential spend? .

Sure. So in terms of growth, we have perhaps the most robust pipeline of confirmed growth that we've ever had as a business. And we've continued to make some additions from an organizational standpoint in terms of talent and capabilities, including a new COO and a new CMO in the last sort of 18 months. And we've added some great expertise in festivals and amphitheaters and for the artist partnerships, we've added some strength and talent and capability there as well. We'll continue to look at expansion in capacity and capability from an organizational standpoint. And we're also working in terms of technology and adding to our tech stack overall for the entertainment business. So really excited about what the future holds over the next 2 or 3 years. .

And we put dedicated design and construction folks within the business to deal with this volume of growth. It's exciting stuff.

Our next question comes from David Katz with Jefferies.

And all the impression so far. I wanted to just talk about Marriott Desert Ridge. I know you talked about it a little bit. But I noticed in the guide you're sort of pushing those numbers just slightly higher for this year. Does that change your long-term underwriting view on it? Is that how we should take this. And I know there have been some discussion about some capital going in there and update and some perspective there would help. Thank you.

No. I think we were very pleased with the outperformance from Desert Ridge in the first quarter. We outlined our group forward strategy relative to the prior more leisure-focused strategy. We talked about the fact that spring break there outperformed our expectations, and we're happy to be able to flow that through. I think our expectation for the remainder of the year for Desert Ridge again compared to what we thought when we said our initial guidance is a little unchanged. It's a little bit of flowing through what we saw in terms of good performance during the first quarter.

That's nothing that needs that, that first quarter is over 40% of the annual contribution for that property, annual profitability. I would also say we acquired this property 3 quarters ago now, we had talked about being able to buy down that multiple what our expectations at that point were for our first full year of ownership. And we're right on track, I think, with those financial expectations in terms of the longer-term outlook, I know as a management team, continue to be very confident about that. And Patrick, you may want to weigh more on that.

Yes. I mean we're in our first year owning and operating this hotel. And we are developing and further refining what we want to do from a capital perspective. We don't see a massive need for capital. This hotel was in great at. And so it's just about continuing to tweak and meet the needs of the meeting planner. We talked about we've converted some space into usable meeting space, and that's been received very, very well already. So we'll continue to weak and refine what we're going to do there long term, but it's not going to be a massive strain or suck on our capital needs.

Our next question comes from Duane Pfennigwerth with Evercore ISI.

Just wanted to come back to the strong bookings growth for the first quarter. How much of that would you say was higher conversion of existing leads effectively planners getting off of the sidelines versus easy comps last year. And then maybe for my follow-up, could you speak to the underlying drivers of outperformance in Nashville?

Yes, a couple of comments I would make. Number one, our first quarter is coming off of an extremely strong December, the strongest December that we've ever seen in terms of production. So the fact that we're seeing that continue through the first quarter and even into April, is a strong indicator that group is on an upward trajectory. We are really focused on acquisition business. It's probably about 30% of what we book into the hotels in any given quarter. So we're bringing in a lot of new business as well as the strong multiyear rotational business. So a little bit easier comp, but that comp is really easier when you compare it to second quarter of last year when the tariff announcements and everything like that have really started to materialize in cancellations. So I would say there's not necessarily an easy comp, just continued growth, both on the acquisition front as well as strengthening group dynamics.

Our next question comes from Jay Kornreich with Cantor Fitzgerald.

You put a clear focus on investing and improving the portfolio with many ongoing CapEx opportunities. So I just wanted to ask about incremental portfolio CapEx opportunities you can do. You previously discussed potential for adding rooms at the Gaylord Rockies, I think the JW Hill Country as well. So I just want to see if there's an update on timing for any of these even similar projects.

Yes. You already hit it right on the head. We are definitely interested in expanding Gaylord Rockies and we're working through some opportunities at the local level there before we can proceed with that. but are excited to be able to add to that property at some point in the near future. Hill Country is definitely something we're studying and looking at and working to continue to refine that property, but there's definitely an expansion opportunity there. And then I would tell you that we're continuing to look at Gaylord expansion opportunity. Beyond that, we have multiple opportunities to make marginal tweaks, whether it's repositioning food and beverage. -- or adding a little bit of space here and there, but we have a target-rich environment for additional expansion and investment opportunities across the portfolio.

Our next question comes from Stephen Grambling with Morgan Stanley.

I think you talked to confidence in hitting the 2027 targets you had laid out in 2024, as we're about the midpoint here and look back at some of the drivers of that outlook, what are some of the biggest surprises, both maybe positive and negative to consider in each segment? And any reason to believe that those growth rates have evolved relative to the one you actually had outlined them.

Relative to our -- the assumptions that we made when we put that together in 2024, probably the biggest difference between our performance and what we planned is really the acquisition of Desert Ridge and the expansion of the Rockies, while still working through that expansion. And I think we're getting very close to actualizing it. We had assumed that it would be completed prior to 2027. It was in that 2027 number. I think that as we look at -- as we look at how our same-store business has performed, it's performed frankly admirably relative to our expectations, particularly as you look at how the corporate customer has responded to the activities and the capital that we've deployed that we talked about a little bit earlier. You see the rate growth that we've actualized as well as the rate growth that's on the books and the level of bookings that we're achieving, it really all flows back to that focus on that corporate customer. And frankly, I think it surprised us a little bit to the upside.

Entertainment, Mark, is tracking pretty much as we thought back in...

Yes. And I think entertainment actually we have more growth in the pipeline than I think we've laid out. .

Our next question comes from Michael Herring with Green Street.

With the change in your group booking strategy, can you quantify the target mix shift in terms of corporate group relative to association and SMERF relative to historic levels? And then how are you thinking about the risk profile of your forward bookings from targeting more of these corporate groups given the shorter booking windows that you mentioned earlier?

Yes. I think it's important to -- for everyone to realize that what we're talking about is we're talking about a few points of occupancy here. We're refining and turning the dial where we might settle in where we're 3, 4, 5 points higher in terms of corporate versus association and SMERF and it's really about raising the level of customer, not only in the corporate business, but also in SMERF and association. All groups are not created equal. And so it's really about moving up the rate scale and driving premium customers across all 3 of those. So this is not I don't think it's going to create a significant amount of incremental volatility, right? In our performance. The other thing I would say is that these are contracted room nights. And if you look back historically to say the '09 recession, where we had a high level of cancellations, we also had a high level of collection fees. -- which obviously helps mitigate the lost profitability. So we feel very comfortable in making this shift and driving yield and not materially changing the volatility of our earnings.

And just to accentuate your point, collections of cancellation fees on corporate are usually easier to collect than they are with association and SMERF because it doesn't create a financial risk or danger for the overall organization, corporate pays pretty quickly and with very little negotiation.

Do we have any more folks in the queue? Or is that it? .

We have no additional questions at this time.

Okay. Well, we will thank everyone for the participation this morning and upward and onward. Thank you very much. And Angela, thank you. .

This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Welcome to Citi's 2026 Global Property CEO Conference. I'm Nick Joseph here with Smedes Rose with Citi Research. We're pleased to have with us Ryman Hospitality Properties. This session is for Citi clients only and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqa.com and enter code GPC26 to submit any questions.

Mark, we'll turn it over to you to introduce the company and team, provide any opening remarks, tell the audience the top reasons that investors should buy your stock today, and then we'll get into Q&A.

Thanks. Good morning, everyone. Thanks for having us today. Joining me today is Jennifer Hutcheson, our Chief Financial Officer; and Sarah Martin, who runs our IR operations. For those of you who aren't familiar with Ryman Hospitality, we are a group-focused high barrier to entry lodging REIT, and we're built around a unique portfolio of large, irreplaceable group-oriented assets.

We also own a rapidly growing entertainment business that owns some of the most iconic brands and venues in the country music space. I think what makes us unique is that our hotels are large. They're all under one roof, destinations for groups and leisure customers.

And that focus on group, about 70% of our business being the group segment, it gives us strong visibility into the future business because of the long booking windows associated with groups. And it also gives us a level of stability because those groups are under contract. And when they either attrite or cancel, we collect fees. So in significant downturns or economic -- difficult economic times, our profitability is bolstered by that fee collection.

We also have a growth profile that our peers don't have through capital allocation. These large assets, this platform that we operate as really a single business allows us to deploy capital at high returns to do enhancements and expansions of these existing assets, which -- when you leverage that infrastructure, you get very high returns on invested capital.

And you also reduce the risk because we have so much information as a result -- as it relates to what our guests are looking for and what that property needs to continue to drive profitability.

Lastly, we outlined a multiyear growth strategy in 2024 that we're executing. That execution continues. And we have the balance sheet to continue to deploy capital into these businesses. We have moderate leverage at 4.3x, we've got strong liquidity. We have over $1.4 billion of liquidity, and we have no maturities until 2028. So company is in really good shape.

We've carried some strong momentum into 2026 coming off the fourth quarter with -- in terms of business on the books, lead volumes, what we're seeing in terms of meeting planner sentiment. So we're very, very optimistic about how we'll perform in 2026.

In terms of three reasons that you should own the stock, first and foremost, we are a highly differentiated model within -- in the REIT space. We're the only ones focused on the group segment. And you benefit in terms of stability and visibility because of that. We have a very clear and effective capital allocation strategy that delivers and has delivered durable and accretive growth. And we have a long tenured management team that has a clear track record of creating shareholder value. The majority of our management team has been with us for anywhere from 18 to 23 years. It's the team that built and operated these hotels prior to converting to a REIT in 2013.

And since that time, in 2013, whether it's total shareholder return, whether it's AFFO per share growth or whether it's dividend per share growth, we've delivered the highest growth rates of our peer set and in most periods in cases above the REIT index generally.

So best-in-class assets with durable and accretive growth and then a consistent track record of value creation, I would say, are the three reasons why you should own the stock.

Okay. Great. Thanks. I wanted to start out with maybe talking a little bit about -- I mean, you obviously like, in line with everyone else, you recently reported fourth quarter and your outlook for the year. So your RevPAR guidance is 1.5% to 3.5%, essentially in line with what we saw from most of the lodging REITs, low single digits.

And I guess, I wanted to ask you first, just given the visibility that you have, and I think you said 50% of the occupancy points are on the books. So there are certain higher rate. It seems like to get to the low end of that range, you would have to see negative RevPAR through the balance of the year, but correct me if I'm wrong and just kind of maybe talk about getting to the low end and the high end of that range.

Yes. So we're entering the year with about 50 points of occupancy on the books. Group rooms revenue on the books is about 6% ahead of where we were entering 2025. So very well positioned for the year.

The real issue for us is that we seem to be living in a very volatile world. And so, as we talked about on our earnings call, what we try to reflect in our guidance is just some of the uncertainty associated with the environment that we're in. When we look at our internal metrics, the things that we look at as it relates to group and how group may or may not perform. We don't -- our dashboard right now is all green. It's not showing -- it's not flashing yellow or red anywhere in terms of business on the books, lead volumes, what we're seeing in terms of outside-the-room spending, attrition and cancellation rates. All those factors are positive.

What we're trying to factor in is, a little bit of what we saw last year when we had Liberation Day in April, which really took some of the momentum out of the market. We saw some meeting planners pull back and then we recovered in the fourth quarter and saw a very good performance and had an overall good year.

But frankly, I think that the guidance that we provided just tries to reflect that uncertainty in a range of outcomes that...

So it sounds like from what you're saying 1.5% would be disappointing relative to what you're seeing now and your expectations and what's on the books. But I mean, no one's faulting you for having conservatism. It just seems like 1.5% would be hard to get to given what you know so far.

I think based on the controllables and what we know so far, we would not anticipate that. But the range that we provided is our guidance, and we'll update that when we get later in the year and as the year unfolds and we see how some of the things that are occurring in the environment, how it shakes out. But to your point, there's no real benefit to being Herculean in your guidance in February, frankly.

No, absolutely not. I just feel like a big point, a selling point at Ryman is that, you have better visibility relative to peers. So when you come out with a RevPAR outlook that's in line with peers, I just sort of wanted to explore it a little bit more. But I mean, everything you're saying makes sense.

We have a question?

We do have a question that's come into LiveQA. How are you finding the progress of the multiyear growth strategy compared to your expectations thus far?

Generally, we're on track in terms of timing, in terms of budgets. In terms of those projects that are up and running. Results have been consistent with or better than what our expectations were. I would say that the one -- if you look back at what we laid out in 2024, the one, I think, significant project that we are -- that we had anticipated being underway at this point that's not is an expansion of the Gaylord Rockies. We're working with local government there on a number of initiatives prior to starting that project.

And as we said on the call, we anticipate that, that process will draw to a close fairly quickly, and that we'll begin that project at some point here in the near future.

So when you look at the update that you gave -- or the outlook that you provided, I think the range was $900 million of EBITDA at the low end and $1 billion at the high end. And I think that included the Rockies rooms or rooms expansion being in there. So what would you say adjusted that range should be if people were going to kind of maybe look at that now? And I think that was obviously before you bought the JW Desert Ridge as well.

Yes. It kind of depends on -- it depends on kind of what's in and what's out. To your point, we had anticipated we would have that.

Let's put the Desert Ridge aside because you've already said what the EBITDA is going to be there. So just taking out the rooms, what do you think that $900 million to $1 billion should be adjusted to?

I think that without Desert Ridge, we will be comfortably in the lower half of that range. I think if you include Desert Ridge, you're now in the upper half of that range, is the way that I would characterize it.

Okay. And then on the Rockies, I mean, when you built that, you talked a lot about getting some, I think, sort of, I guess, you call it tax incentive financing. Just kind of remind us what your agreement with the local authorities is? And is that kind of what's holding up your rooms expansion there?

So, our current incentive package is on the original 85 acres where the hotel is developed. We also own 130 acres of undeveloped land around it. But on that 85 acres, we collect the majority of our real estate taxes, occupancy taxes in a portion of the sales taxes. And depending on the tax stream, that incentive was anywhere from about 25 to 30 years. So it's a meaningful incentive package.

The issue that we're wrestling with right now is around property tax valuations in where those valuations are in that local jurisdiction. And so we've been working on that issue. So hopefully, we'll have that resolved fairly quickly and be able to move forward with the project.

And what sort of the capital allocation roughly to build rooms at Rockies?

So this expansion will be 450 rooms and an indoor expanded water amenity similar to SoundWaves and Nashville. The cost for the rooms expansion and the water park would be about $300 million. You'll recall, Smedes, that we did a significant amount of work on this property over the last 2 years to enhance and expand the food and beverage offerings there in the seat count. So from a meeting space and seat count perspective, we have the infrastructure to support that room's addition. So the leverage that we'll get from that room count should be quite good in terms of operating leverage.

Okay. And then just kind of what target -- what kind of returns would you target on that $300 million roughly?

Mid-teens unlevered.

Okay. One of the things I wanted to ask you about I know you're over 70% group. But I think some years ago, you tried to improve your leisure kind of amenities and target that audience a little more. I sort of -- how is that going in terms of the segmentation to leisure? And then maybe you could just touch on, you had a much better 4Q '25 holiday programming season relative to the prior year. Any kind of lessons learned there in terms of bringing folks in? Because obviously, it was quite successful this year.

Yes, holiday period was quite good in the fourth quarter of this year, really off of what was a little bit of a disappointing '24. We made some changes based on the consumer research that we did post the '24 holiday season and really made some changes to the timing of our marketing, how we packaged -- how we package the offerings and then how we price the offerings, which drove some earlier bookings, which allowed us to build some compression. And ultimately, as you mentioned, we served a record 1.5 million customers through that ticketed event ICE!.

In terms of the focus on leisure and investment, that's -- that focus really has been across our business. We did some work pre-COVID that we called internally this notion of enhancing the project, our portfolio overall with the idea of growing our average rate, attracting higher quality not only group customers but leisure customers. And that's a big part of our whole strategy around the capital deployment, whether it's in carpeted breakout space, whether it's in food and beverage or other amenities like pool product. It's to drive value and so ultimately, to drive rate.

And if you look at how our business has performed over the last 4 or 5 years, we've seen a very strong growth in our average rate. We're attracting more premium groups and more premium leisure guests.

So, the segmentation is not changing that much. It's just charging more for the 30% or so, that's leisure.

Right. We're still 70% -- about 70-30 in terms of group leisure. But we have been able to increase our rates because we're delivering greater value to the customer.

Okay. Okay. I mean, we had a question come in that was touched on leisure, but I guess the part that I didn't ask is, has adding the JWs and the water parks change the terminal mix going forward. I'm not sure what the terminal mix is, but...

I assume you're talking about the mix of group leisure.

Yes. I guess. I mean, having the two JWs in the portfolio has set up your leisure segmentation at all.

I mean, marginally, because they're about 60% group as opposed to 70%. So -- but relative to the size of the portfolio, it won't move the weighted average significantly.

And just in terms of your footprint, I mean, I felt like -- and maybe I overinterpreted this. But it's sort of -- it seemed like you alluded on the call of maybe potentially adding another JW Marriott to the mix over time, because you have the sort of subset of like higher-end groups. JW is a higher-end hotel relative to a Gaylord. Could you just talk about that? Do you feel like you need to...

Yes, I mean, I don't know that we need to. I think it's desirable over time to continue to grow distribution if we're -- if we're finding the right asset for the portfolio that's consistent with our strategy, and we can acquire that at a price that makes sense for our shareholders. Certainly, we would look at that. You won't see us go out and push into other segments or different product types.

We've been -- we have been, and we'll continue to be very focused on that large group customer. And preferably, for it to be a Marriott-managed product so that we can integrate it into the portfolio and try to capture some of the synergies that come both operationally as well as from a consumer perspective with the rotation of groups.

Okay. Question came in. The question is, does the 2026 RevPAR guide include renovation headwinds? If so, could you please quantify the impact?

It does. And it's essentially consistent with what we had in 2025. I don't know if you have any other comments you want to make as it relates to that in guidance?

No, I think that's exactly right, and that's why we were not explicit necessarily in the guidance that was in the release was because it was comparable to 2025. So not a meaningful call out from a year-over-year change standpoint.

Okay. I wanted to ask you, I mean, I don't think there's a lot of competition or new competition in this space. Not a lot of people are building hotel -- big hotels. But the Chula Vista, Gaylord did open. And then in the Glendale area. So Phoenix, there is the -- I'm not sure if I'm pronouncing it right, but it's VAI or V-A-I, large hotel. I don't think it's directly competitive for you, but it is a large property. Could you just talk a little bit about what, if anything, you've seen from the Chula Vista, Gaylord and from the new asset in Phoenix?

Sure. I think, broadly speaking, having an additional unit of another Gaylord with -- to add to what's currently a fairly limited distribution of the Gaylord Hotels brand is additive. So when we saw that open last year, we were excited to be able to attract and have a location that's more Westward that could be more accessible to folks who are west of our most western location, the Gaylord Rockies.

And so the thought there is groups, people who had not previously been aware of the Gaylord Hotels brand could experience the Gaylord Pacific in the California location come in at arguably a higher ADR given that market and then rotate into our hotels. So we're supportive in general.

There are, of course, brand standards that we support to make sure that the product is consistent and that meeting planners have a good experience. And I think what we've seen around that is there have been a few rooms that have been introduced into our portfolio as a result of that.

So I think on the group side, it's played out as we might have thought. The reception from meeting planners from what we hear has been good in terms of their experience on site, and we'll continue to see how it performs.

So it sounds like it's been a net positive for you, opening up the Gaylord.

It has been. And I think it'll -- that will continue to grow as the they introduce customers to the Gaylord brand and those customers then begin to rotate. We saw that whether it was opening the Texan or the National or the Rockies, each time we've grown distribution. We've seen new customers come into the brand and then ultimately rotate. And if they enter it in a higher-rated market like San Diego, they rotate at a higher rate. So, when we look at those customers who have entered the brand thus far through Gaylord Pacific, we look at that multiyear contract, they rotated about a 9% higher rate than our typical rotational customers. So that -- again, that same phenomenon we've seen historically has continued to hold with the Pacific opening.

Okay. And then how about this new property that opened in Glendale?

It's really not competitive. It's kind of a leisure oriented. I think they've got a big -- they've got a big like surfing wave pool, and their concept is to have this large hotel that kind of surrounds a concert venue. So, if you go to bed early, I would stay somewhere else.

Okay. I wanted to go back, you mentioned you're investing across the portfolio. I think it's about $1 billion program, putting aside the Gaylord Rockies, which I realize the timing is kind of unclear. But how are you thinking about what percent you should be seeing incremental returns on that investment versus like new car bidding or something, which probably doesn't get a particular an ROIC, if you will?

I mean, we've said that we target at least mid-teens unlevered returns on any growth projects. And as far as the multiyear investment capital plan goes, we've initiated all of the projects we've talked about with the exception of the Gaylord Rockies, as Mark has just talked about earlier.

So it's mid-teens on the entire $1 billion investment you're thinking?

There are some components of it that some would argue could be maintenance, i.e., we've done some room renovations as part of that. The Gaylord Texan rooms are underway right now and should wrap up midyear, and then we'll be picking up the renovation of the San Antonio Hill Country rooms after the Valero open this year.

And then one thing you mentioned on the call, I think Colin mentioned, I think he's paraphrasing, it's like we have such a small percent of this group business. Could you talk about how -- what do you think your percent your share of group business in the U.S. is? And how do you go about driving incremental share, bringing new, I guess, higher-paying groups into the mix, which I think is part of your strategy?

Sure. We actually put out a deck earlier this week in advance of these conversations we're having with all of you and put out some data to put a finer point on that. And we've estimated that the group meetings business is around 240 million room nights in the U.S. And so we're 1% of that, it's very small.

And the other point that we would make in describing our piece of that is that we are focused on a particular type of group meeting. There are obviously a large variety. When you look at the 243 million, there are citywides that travel to convention centers, and there are much smaller groups. We're focused on what we feel is a very profitable segment of group meetings, which is those 600-plus on-peak group room nights, half of our group room nights being corporate focused with a lot of our capital allocation right now towards investments that will continue to drive, hopefully, more premium corporate group types.

When you look at the STAR data, you can -- and it's actually in that presentation, I think, you look at our market share premiums, we've grown most dramatically since pre-pandemic. And if you look at our revenue and profitability, we've grown that dramatically as well. And most of that growth has come through, again, growing rate by investing in these properties and changing the value proposition for meeting planners and consumers. We're not back to pre-pandemic occupancy levels across the brand. So we see a real opportunity to continue to drive our occupancy as we continue to make this mix shift into these higher rated customer segments. And so there's a significant incremental profitability opportunity for us there just on a same-store basis.

I don't know if you have this handy, but when you talk about 240 million group room nights in the U.S., do you have a sense of what percentage of that is in Las Vegas?

I don't have that data right in front of me, but clearly, Las Vegas is a top meetings market.

Okay. Because that's not really -- you're not really competing with that market. I think that was always like a point that you guys tried to make, like there's a certain number of group meeting people that don't want to have meetings in Las Vegas. Is that still part of your...

I think, that's fair. I mean, I think there are groups who have an opinion and a perspective on all markets about where they would want to go and where not to go. I think, Vegas has very specific attributes that probably don't appeal to a lot of the groups that want to travel to our properties, right? The gaming element being one. And -- but our product size-wise does obviously put us in a, I guess, a sourcing conversation for certain size groups.

One of the topics we're kind of exploring with every company is the deployment of AI and how you at Ryman are thinking about either efficiencies or other opportunities internally to use AI?

Yes. So depending on the business, on the hotel side, obviously, we are tied to Marriott's activities in the platform and the strategy that they're developing. For our hotels specifically within that context, some of the areas, I think, where we're most interested in are doing some work is really around the sales process. How we think about pricing and yielding and managing these longer booking windows, if you think about we're committing contractually to business, on average, 3 years in advance, but in many cases, 8, 10 years in advance.

So as you think about manipulating large amounts of data and trying to do predictive modeling, it's an area where AI, we think can help us dramatically. And then obviously, there's a lot of interest in how AI can help us on the labor front in terms of these larger operations, like I think most of our peers are interested as well.

On the entertainment side, we're doing quite a bit of work really around things like marketing, customer acquisition, how we think about dynamic pricing in terms of live entertainment and venues and then operational efficiencies as well. But we're really just getting started.

Is that mostly buying off the shelf? Is it building, partnering? How are you thinking about the actual deployment of it?

Certainly, on the entertainment side, it's buying off the shelf. With Marriott, we'll -- they're in the process right now, I think, of really developing and executing what their longer-term strategy. I would assume that, that will be some combination of off-the-shelf plus some -- given their scale, some proprietary platforms.

Maybe we can switch to the entertainment business for a moment. First, you have a 35% partner in that space. They have a right to buy up or put back to you the business. Can you just remind us when those options come back into play for them and maybe how your relationship with them is going?

Sure. I think you're talking about our Atairos partners in OEG. They own about 30% of that business today. They do have a right with that respect -- with respect to that 30%. To put it back to us in the event that they call for an IPO of that business and we determine as the majority owner that it's not the right time to pursue that particular transaction and decline to move forward with an IPO. They could put that back to us at a contractual amount that's already, really reported on our balance sheet as their non-controlling interest value.

So -- and we would, if that were all to happen, be able to elect whether or not we would settle that put right exercise in cash or shares. And we could also elect the timing of that settlement to occur over 3 years as opposed to immediately. So that's the mechanics of it.

Yes. And I think as it relates to an IPO and the timing of an IPO, I would just -- all I would say is that I think that we are well aligned with Atairos in terms of how we think about that, the timing and what that opportunity could -- may or may not look like.

Don't those rights kind of come in and out when they have a right to buy up or right to put back to you? Or is it always available to them?

So they're right to buy up additional shares above their 30% up to an additional 19% was available to them annually since they came into the investment through last fourth quarter at the end of the year. The timing was a window at the end of the year so that we could provide them the data around our REIT compliance limitations. The value was already contractually set based on a trailing 12 months, profitability, adjusted EBITDA defined metric in that investment agreement. So those windows opened and closed essentially at the end of every calendar year.

Okay. Okay. And in terms of like the big growth drivers there. I know you've got -- you've got the Category 10, right, under construction in Las Vegas. It's near your Ole Red facility, I think, sort of down the street a little bit, right? In the Flamingo, right, that where it's opening. Okay.

It's in front of a Flamingo, where the old Margaritaville was right where the link ties into the strip across from Caesars.

Okay. I mean when is that expected to open?

That will open this fall.

Okay. And are you -- I mean, are you kind of pre-booking? Or how are you thinking about the opening there? I mean, is it going to do a lot of corporate or is it going to...

Yes, it will do -- all of those venues do a significant amount of special events and buyouts. And so we have sales folks that are already working on that.

Okay. And then you announced another venue opening, I think, in Universal Studios, maybe -- is that -- can you just remind us?

Yes, here in Orlando.

What is it?

We're not in Orlando anymore.

We're not in Orlando. Yes, I was in Orlando yesterday. Sorry. Yes, in Orlando. That will open late next year.

Okay. And that's a Category 10 as well?

Correct.

Okay. Okay. And you have one in Nashville.

We do -- it's the former Wildhorse, that was converted.

And just -- so everyone knows, these are kind of in conjunction with Luke Combs, Country Star.

Correct.

Okay.

Country superstar.

Country superstar, yes, sorry. Yes. Are you -- I mean, are those the main drivers of growth? Because you've also made some headway into kind of festivals. I know you're managing some auditoriums, which looks like there's some out-of-pocket going into, but not that much.

Yes. So Category 10 is another brand within kind of this kind of artist-inspired venue category. We also have a concept with Blake Shelton called Ol' Red.

And then to your point, Smedes, we bought a controlling interest in the festivals business. And so, we now kind of have established ourselves with a platform in that festivals business that we can now grow in that vertical. And then in the last 4 months or so, we were selected in an RFP to operate the Ascend Amphitheater in Nashville and also in another RFP to operate an amphitheater in Simpsonville, South Carolina.

And so that puts us in the amphitheater vertical. And so if you look across the business, what we're doing is that we're establishing growth platforms in these different verticals that service the same customer and then also allow us to, as we grow, leverage things like marketing, sponsorship, ticketing, et cetera, and to build scale.

All right. We're coming down to less than minutes. We do have two final questions I want to ask you. I guess, first, as you think about the public hotel REIT space, do you think there'll be more fewer or the same public companies a year from now?

Should be fewer or they'll be the same.

I need one answer.

The same.

Okay. And then if we think nationwide RevPAR could be 2% in 2027, what do you think same-store EBITDA could be? Nationwide, not for you.

Yes. Not for us, I would say probably flat to slightly down. I think the real story here will end up being mix. I think that quality group hotels, quality luxury hotels will have the -- could have the ability to grow their EBITDA margins despite that lower growth rate, at least that would be my expectation for us.

Thanks for your time this morning.

Thank you.

Good morning, everyone. Welcome to the Ryman Hospitality Properties Fourth Quarter 2025 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Executive Chairman; Mr. Mark Fioravanti, President and Chief Executive Officer; Ms. Jennifer Hutcheson, Chief Financial Officer; Mr. Patrick Chaffin, Chief Operating Officer; and Mr. Patrick Moore, Chief Executive Officer, Opry Entertainment Group. This call will be available for digital replay. The number is 1(800) 688-9445 with no conference ID required.

[Operator Instructions] It is now my pleasure to turn the floor over to Ms. Jennifer Hutcheson. Please go ahead, ma'am.

Good morning. Thank you all for joining us today. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance. Any statements we make today that are not statements of historical fact may [indiscernible] be forward-looking statements. Words such as believes or expects are intended to identify these statements. which may be affected by many factors, including those listed in the company's SEC filings and in today's release.

The company's actual results may differ materially from the results we discuss or project today. We will not update any forward-looking statements, whether as a result of new information, future events or any other reason. We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in exhibit to today's release. I'll now turn it over -- I'll now turn the call over to Colin.

Thanks, Jen. Good morning, everyone, and thanks for joining us today. We're pleased to report full year results above the midpoints of our guidance ranges. And for the entertainment segment as well as AFFO and AFFO per share above the high end of our guidance ranges. The fourth quarter came in ahead of our expectations at the start of the quarter due to strong reception for our holiday programming in our hotel portfolio and better-than-expected volumes in our Downtown Nashville entertainment venues.

Looking back at how we expected '25 to play out when we first provided guidance a year ago, our results, excluding the JW Desert Ridge acquisition are almost right on the midpoints of that initial guidance range. To be in the position we sit in today is an incredibly accomplishment in what was a challenging year and a testament to both the strength of our business model and the quality of our people. Importantly, we managed last year's volatility while continuing to advance our long-term strategy.

Our investments in the portfolio continue to differentiate our platform from our competitors and attract more premium group customers. In our hotel portfolio, we acquired the JW Desert Ridge, an asset that's long been at the top of our acquisition list which expands our rotational group customer strategy into a new top 10 meetings market and creates opportunity for a second rotational pattern within the JW Marriott brand. Also, we continue to progress our multiyear investment plan for Gaylord Opryland.

To date, we've now refreshed about 40% of the hotel's existing competing meeting space and we're nearly halfway through the 100,000 square feet meeting space expansion, which will open next year. Foundry field house the new sports bar development with premium indoor outdoor reception space will open in April of this year. Our recently completed investments are generating early returns. Gaylord Palms and Gaylord Rockies, which received meaningful investments in 2024, both delivered record top and bottom line performances in '25. And given the rotational nature of our customer base, these improvements are driving meaningful share gains for the portfolio as a whole.

For the trailing 12 months through the end of December, the same-store portfolio achieved the highest RevPAR index to the Marriott defined competitive set in the portfolio's history, excluding, of course, the COVID impacted periods. In our entertainment business, we've continued to expand our growth platform, especially in festivals and ampitheaters. This includes our latest win to program and manage the 14,000 square feet of 14,000 seats capacity CCNB ampitheater in Simpsonville, South Carolina.

Our partnership with Southern entertainment, who's been producing the Greenville County music festival at CCM since 2018, helped us build a strong relationship with the city of Simpsonville and our combined capabilities and expertise offer a compelling solution. This success, in particular, underscores the strength of our platform model. In addition, we are continuing the expansion of Category 10 -- at the Category 10 brand with our friend [indiscernible] with a Las Vegas location opening in the fourth quarter of '26.

And with the third location to be developed at Universal CityWalk in Orlando adjacent to the Islands of Adventure Theme Park. Early returns on our investments behind Opry continue to exceed our expectations. Programming in October, the official birthday month produced a record number of shows and attendance resulting in an all-time high monthly revenue and adjusted EBITDAre for the brand. We expect this momentum to continue into '26 and before and beyond.

Now before I hand it over to Mark, a comment or 2 about what lies ahead. A week ago, I received a monthly report from an outside organization comparing returns for publicly traded lodging companies. It's worth highlighting that since our REIT conversion announcement in 2012, our stock has generated a nearly 12.5% annualized return, including reinvested dividends. This represents a rate of return of approximately 2.5x greater than that of our next highest REIT peer over the same period. This is quite an incredible difference, anecdotally reflecting about the last 13 years and how we're positioned for the future. It would be my view, and I think those of my colleagues that we're certainly better positioned today to create value than we were back in 2013.

At our Hotel business, we now own 7 world-class market-leading hotels, which are in great physical shape and most of which we plan to enhance and/or expand over the years ahead to make them even more competitive in the markets that they are in. Over the years, I've heard some members of the analyst community questioning the underlying strength of the large meetings industry, particularly in economic economically trying times. And there was some of this during the last year's third quarter. But the reality is the large meetings industry is massive here in the United States and the Gaylord Hotels brand has such a small share, but our relationship with the meeting planner is so good, and we believe we can capture more share as our rooms and meeting space grows and our relative positioning continues to strengthen, supported by our fabulous service levels and our people-centric culture continues to thrive.

And from an amenities perspective, we're constantly upgrading, adding sports bars, upgrading restaurants and expanding pools and other amenities. Yes, our hotel business is awfully well positioned as we look to the future. And then, of course, so is this gem of an asset we own that we refer to as our entertainment business. That's growth characteristics are materially better today than back in 2013. It's quite incredible what is happening to the music we call country. as its popularity explodes all over the world and creates the desire for folks to come visit Nashville.

Live Entertainment is a very valuable asset in this day and age, and we're deeply engaged in figuring out the best possible path to create even more value for our shareholders. Now hopefully, those of you who have followed our company for a while will remember that back in -- back a couple of years ago, we laid out a 4-year plan to the investment community at our Investor Day in January 24.

By the end of '26, we expect to have initiated all major capital projects in the plan. with the possible exception of the Gaylord Rockies expansion, and we will have meaningfully expanded OEG's growth platform as well. Looking ahead, we continue to feel very comfortable with the targets we outlined then, and we look forward to updating you on our progress as milestones are hit. As we embark on 2026, the period ahead looks awfully exciting for us. And as always, we appreciate your interest and support. Now with that, let me turn you over to Mark.

Thanks, Colin, and good morning, everyone. I will review our fourth quarter results and also provide some color on how we're thinking about 2026. I'll start with our hospitality business. Our same-store hospitality segment delivered the highest total revenue of any quarter and the highest adjusted EBITDAre of any fourth quarter driven by strong demand from holiday programming and higher leisure volumes across the portfolio.

ICE! ticket sales increased more than 14% to a record 1.5 million tickets. The Gaylord National had its best season since 2010 and in Opryland and the Rockies had their best seasons ever. In its second year, ICE at the JW Hill Country achieved the highest guest satisfaction ratings for holiday attractions across the portfolio. Leisure performance at Opryland was a bright spot in the quarter. Both leisure demand and leisure ADR increased year-over-year and record ice volumes contributed to strong flow-through.

Our group business also performed well. Same-store attrition [indiscernible] improved year-over-year and sequentially from the third quarter and same-store banquet Navy revenues were up nearly 5% despite lower corporate group volumes compared to last year. same-store banquet Navy contribution for group room night, a proxy for catering spend per group guests increased more than 10% year-over-year, an indication that once on property groups continue to spend at healthy levels. In the fourth quarter, the same-store portfolio booked more than 1.2 million gross group room nights for all future years.

Notably, meeting planner sentiment improved as the quarter progressed leading to record room night revenue and ADR bookings production for all future years during the month of December. ADR in those December bookings was up more than 10% compared to what was booked in December of 2024. The result at the end of December, same-store group rooms revenue, room nights and ADR in the books for all future years were at all-time highs. Looking ahead, our same-store group pace for 2026 and 2027 remains healthy.

For 2026, same-store group rooms revenue on the books is up approximately 6% compared to the same time last year. for 2025. And as expected, we entered the year with approximately 50 points of occupancy on the books. For 2027, same-store group rooms revenue on the books is up approximately 5% compared to the same time last year. and ADR on the book continues to pace up in the mid-single digits range. The number of new leads and late-stage opportunities also remains near record levels. Let me make a few comments on the JW Marriott Desert Ridge before moving on to entertainment. The fourth quarter results were in line with our expectations.

Transient demand increased nearly 10% year-over-year supported by expanded holiday programming, which we view as an encouraging indicator ahead of introducing ICE! in 2026. The more that we learn about this property, the more bullish we are on its long-term potential under our ownership. Now turning to our entertainment business. Entertainment segment delivered fourth quarter revenue growth of nearly 12% and adjusted EBITDAre growth of nearly 13%.

As Colin mentioned earlier, the Opry delivered a record quarter behind strong October birthday month programming in attendance. In addition, a strong show calendar at the Ryman and improved volume in our downtown Nashville venues contributed to the growth. Before I turn it over to Jennifer, let me provide some color on our initial guidance ranges for 2026. For our same-store hospitality business, at the midpoint, 2.5% implies modest assumptions for growth in group rooms revenue and flattish leisure performance.

As I mentioned earlier, group room revenue on the books for 2026 is up approximately 6% compared to the same time last year. The difference between our pace entering the year and our RevPAR growth guidance range includes assumptions for in the year for the year group bookings group attrition and cancellations and transient leisure performance. Historically, it's typical for RevPAR growth to actualize lower than the group pace at the beginning of the year. Same-store total RevPAR growth also 2.5% at the midpoint reflects growth in banquet and AV revenue behind stronger corporate mix and contribution from the new sports bar at Gaylord Opryland beginning in the second quarter.

The midpoint of guidance range for same-store hospitality adjusted EBITDAre implies approximately 2.5% operating expense growth or 10 basis points of margin expansion as we continue to work with Marriott to improve efficiencies. The level of macroeconomic uncertainty and its impact on meeting volumes and meeting planner sentiment will be the primary driver of how our actual full year results compared to this initial guidance range. Given the current political and economic environment, here and abroad, we believe a measured view of demand is prudent. For the JW Marriott Desert Ridge, the midpoint of guidance range for adjusted EBITDAre reflects our first full year of contribution. The meeting space conversion currently under construction remains on track to open in April 2026 and we have assumed some modest marketing investment behind the launch of our ice holiday programming at the property.

And finally, for our entertainment business, the midpoint of the guidance range for adjusted EBITDAre reflects nearly 10% growth year-over-year on increases in our existing businesses as well as contributions from our recently announced projects coming online in 2026. Note that 2026 seasonality will be more heavily weighted to the second quarter compared to 2025. The first quarter of 2025 is a challenging comparison for both business segments and recent winter storm Fund was a modest drag on January results.

For the same-store hospitality business, we expect first quarter RevPAR and total RevPAR to be roughly flat an adjusted EBITDAR margin to decline approximately 100 basis points. The Entertainment business, we expect first quarter adjusted EBITDAre to decline by several million dollars. With that, now I'll turn it over to Jennifer to run you through our financial position and cash flow expectations for 2026.

Thanks, Mark. Starting off with liquidity. We ended the fourth quarter with $471 million of unrestricted cash on hand and our revolving credit facilities undrawn. Total available liquidity was nearly $1.3 billion. We've retained an additional $29 million of restricted cash available for FF&E in our maintenance projects.

Turning to the balance sheet. At the end of the quarter, our pro forma net leverage ratio based on total consolidated net debt to adjusted EBITDAre, assuming a full year contribution of adjusted EBITDA are from the JW Marriott Desert Ridge was 4.3x. In December, Fitch upgraded our corporate family rating to BB from BB- which in turn lowered the applicable interest rate margin on SOFR for our corporate term loan B from 200 basis points to 175 basis points. And in January of 2026, we successfully refinanced our corporate revolving credit facility, increasing the size from $700 million to $850 million and extending that maturity from May 2027 to January 2030.

Pricing and other terms of that agreement are largely similar to our previous credit facility agreement. Pro forma for this transaction, total available liquidity increased to approximately $1.4 billion. And finally, let me comment on our anticipated major cash outlooks for the year. regarding our outlook for capital expenditures in 2026, we expect to invest between $350 million to $450 million, primarily in our hospitality business. Our earnings release provides more detail on our capital plans and expected project loan costs.

Regarding our dividend, we are pleased to announce the declaration of our first quarter dividend of $1.20 and payable on April 15, 2026, to shareholders of record as of March 31, 2026. It remains our intention to continue to pay 100% of our retaxable income through dividends. With that, [indiscernible], let's open it up for questions.

[Operator Instructions] We'll go first this morning to Cooper Clark, Wells Fargo.

Curious if you can provide an update on your group business mix for the year and how that's impacting your spread between RevPAR [indiscernible] assumed in guidance?

Yes. We are in a position as we entered the year with a higher level of corporate mix on the books. It's about 3 points higher than last year, a decline in our other segments and [indiscernible] as a result. So that positions us well for outside-the-room spend as we head into this year.

Great. And then I appreciate some of the earlier comments in the prepared remarks on the RevPAR guide, but hoping you could provide some additional details on the puts and takes as we think about the 2.5% midpoint within the context of group pace for the year? Just trying to think about some of the headwinds potentially embedded in guide as we contemplate last year's higher initial RevPAR guidance on lower group pace? .

Mark, do you want to take that?

Yes. I mean, so typically, when you enter the year, you're typically going to -- by the time you factor in your in the year for the year, your attrition to cancellation in your leisure business, you're typically going to finish the year at a lower average RevPAR growth. And as we mentioned in the prepared remarks, what we're really looking at is a combination of what we pick up from in the year, full year bookings as well as attrition and cancellation. We're not -- I would tell you that our guidance doesn't assume any major shift in what we're seeing in trends. As I said, we are in our guidance reflects flattish leisure business. And broadly speaking, what I would tell you is, is that what it ultimately reflects is what we don't know about what's happening in the economy. When you look at what transpired last year with Liberation Day, tariffs on and off, some of the different political and geopolitical issues that are occurring right now in the economy and how they're influencing our meeting planner sentiment as well as meeting planner trends. There's just not a lot of clarity into how things how things are going to unfold this year. So as I said in my remarks, we felt like that it's prudent to have take a fairly conservative view on demand for the year, and we'll see how it shakes out. And we'll update you as the year progresses on how we're performing.

We go next now to Patrick Scholes of Truist Securities.

Two questions. One, can you share any additional or latest thoughts about possible development or expansion at the Rockies? That's the first one.

Mark, do you want to take that one?

Sure. So we continue to work on expansion, as you know, Pat. That's an asset that pre-COVID we were prepared to expand. That business, as you know, has performed extremely well. And we're very, very bullish on that market in the long term for long-term potential of that market. As we've said on previous calls, we're working through a number of issues at the local level in terms of property taxes, et cetera. And those -- that work will ultimately determine how we expand and when we expand. But I think we'll have more to say on that over the next few quarters.

I think, if I may, that hotel this year. I think it's right, Patrick, has the highest occupancy and the demand for group in that hotel is as strong as it's ever been. And I think we're a lot nearer pulling the trigger on an expansion in that hotel today than we were a year ago. I think as Mark said, I think you just got to be a little bit patient with us over the next 1 or 2 quarters, but we really do like the trajectory of this hotel.

The other comment I'd make is just to remind everyone, -- the investments that we made over the last couple of years, the new food and beverage and the new -- some of the new meeting space that all -- all those investments were made to accommodate an expansion. So from a food and beverage capacity and meeting space capacity, we're prepared to receive additional rooms [indiscernible]

And those investments are really paying off right now. They're doing extremely well.

Yes. Second one, just a little bit more backward look here. You did have a sizable year-over-year increase in the year for the year cancellations in the quarter. Now granted, it was only like 5,000 room nights, but what drove that? Was it government cancellation? Anything else or not government, but the government shutdown related in solutions.

Yes, great question. This is Patrick Chaffin. Yes, to your point, cancellations are up about 3,000 room nights, but they were down significantly versus Q3, which is when we saw a lot of the impact of the tariff situation. but they were in line with levels that we saw both in 2016, 2017, 2018 and 2019 before COVID. So we're not concerned in any way. And if you look at the nature of the cancellations to your point, they were all companies specific. There were no macroeconomic concerns or reasons given. Mostly, it was CEOs or C-suite turnover as the primary reason for the cancellation. So not macroeconomically driven and in line with what we saw prior to COVID. So we were not concerned.

And let me remind you and everyone else that -- we have really good contracts. So when cancellations occur close both in, we tend to collect the profitability loss. So our business model is very different to most of the other hotels that you followed.

We go next now to Smedes Rose with Citi.

I wanted to ask you, you mentioned in your opening remarks significantly better holiday programming results. And I was just wondering -- do you think you just went into the quarter being conservative, given what had happened in '24, where I think sort of a disappointing results? Or what are you sort of marketing or ticketing differently kind of what maybe did you learn this year that maybe can work going forward?

There's multiple things. So do you want to give it a shot, Patrick?

Sure. Smedes, this is Patrick. Good question. We did a lot of research in September to try to understand the mindset of the consumer going into this holiday season. And it was very clear that there was a very conscious attitude and really focused on value as we're entering the season. So we shifted a lot of our marketing to buy early and bundling opportunities and that started the volume of demand on the books early and we really built from there. Once we saw the consumer get on property, they were hesitant. So we feel that we made the right decision in getting them to book early through bundling and special offers. But as you can see, it still generated really, really solid revenue for us. So getting folks on property and getting them exposed to our food and beverage opportunities and other outside the room spend really paid off for us. I would tell you that until we see a dramatic shift from a macroeconomic perspective, we're probably going to maintain that same strategy of getting folks in early and booking early and giving them bundling opportunities to do so, so they see the value. But we were very, very proud of where we performed this year and have some exciting news that we'll be talking through in July as far as themes for next year that we think will drive even more demand.

Great. And then can I just ask you, you mentioned in your release $23 million of EBITDA disruption in '25. Does your outlook incorporate a certain amount of construction disruption this year as well?

Smedes, it's Jennifer. Yes, it does. We have those projects that are outlined in the release that are continuing on into 2026, largely at Opryland and of course, the rooms renovation wrapping up at the [indiscernible] as well as the rooms renovation in the Hill Country JW that will kick off midyear or post April after the Valero open. So those will have some impact on the results and our expectations for 2026 and we would not expect those to be meaningfully different than what we saw in '25.

We'll go next now to David Katz with Jefferies.

I wanted to just focus on the Entertainment business. Mark, I think you may have said in your prepared remarks that 1Q entertainment should be down -- could you -- would you mind repeating yourself just a bit and two, just giving us some color on the cadence for the year as we think about the entertainment business and what's driving that cadence.

Yes. So in terms of the cadence for the year -- well, actually, do you want to...

Sure. Sure. Yes. This is Patrick Moore Yes, a couple of things in Q1. One, we had the launch of ARI-100 last year as an NBC special that that was a little bit of a spike in March. But most of what you're seeing from a Q1, the rest of the year is a shifting and concert count across the portfolio, which is much bigger and the concentration in both amphitheaters and festivals in that Q2, Q3 period. So that's -- those are part of the reasons for that shift.

Okay. And if we could just get an updated view while we have you on sort of how you see the earnings power of this looking out years, couple of years into the future, where should we be setting our sights on what this business can do as you see it today?

Do you want me to take?

Yes, please.

David, Colin. This business, in our opinion, is awfully valuable. Live entertainment is such a sort after commodity in this day and age. And I think we see a lot of growth in this business over the next 3, 4, 5 years. And I can tell you that the folks in this from Patrick actually more Mark and myself, we spend more of our time fielding inbound opportunities on this business than we do, certainly on our hotel business. The opportunity for growth in this business, I think, over the next 2 to 3 years is extraordinary. We think that we will plug in more anti theaters. We believe that we'll do more category terms more REDs. And I think -- and I think there is opportunity here here in Nashville for us to take all of our undeveloped labs around the Opry House. And we have, I don't know, 12, 15 acres of undeveloped land there to do something fairly spectacular for our business in the city of Nashville to to accommodate the amount of people that are just pouring into Nashville now wanting to experience country music in its real authentic form. So we're not going to give you numbers for '27, '28, '29. But I can tell you, our Board last week reviewed our own range plan for this business and it is very attractive. And we like what we have on our hands here, and we're trying to figure out how we create even more value for our shareholders than we have over the last few years. I know that's a bit waffly but we've got a lot of things we're working on on here, David. And this is an outstanding business.

We'll go next now to Duane Pfennigwerth with Evercore ISI.

I appreciate the commentary about acknowledging what you don't know about how the macro will play out this year. But I wonder if you could comment on what your business is telling you. If we play back what you saw in the fourth quarter from a group demand perspective for future bookings, are you seeing any changes in booking patterns versus what you'd normally expect for a fourth quarter? Any particular types of customers or industries that stood out positively or negatively?

This is Patrick Chaffin. Let me hit a couple of things here. First, I'd start with bookings. As far as what we saw in the fourth quarter, I would say the most important thing was we saw an easing in the tensions that have been created by the tariff situation back in April of 2025. So if you think about it, recall that our leads were down about 4% in the third quarter. and we were messaging on that third quarter call that there could be some hesitancy on the part of meeting planners as we move through the fourth quarter regarding forward bookings because of the macro situation, and we're going to watch that and see what would happen. October, November really followed that trend where we saw leads down and production down. But then December, which is the most important bookings month of the entire year for us, came roaring back, and we saw medium planners relax in their hesitation. And our sales team came through really, really strong with the very best December production in terms of room nights that we've ever seen in the company's history, and ADR continued to be strong. So that's a clear indication that we weren't just selling room nights to get room nights off the door, but we were doing it at a growing rate would ended up being a record for the company. So we were encouraged by what we saw develop as we went through the fourth quarter in bookings because it did indicate that the tension around tariffs was starting to ease. We've talked a little bit about leisure, when we hit that side of the business. We are talking about flattish, but the reality is if you dig into that, leisure is flattish because of the renovations that are going on at Texan and Hill Country and the fact that we have more group room nights on the books. And so some of that group is blocking out some of the transient opportunities. And so when you consider that and you look at the hotels that don't have renovations they either have more group business on the books or they actually see an improvement in leisure year-over-year. So group business is moving in a good direction. Leisure looks very, very strong. as we look at spring break, everything is coming in as we expect thus far, we're still early in that process or in that time line, but we see nothing that gives us concerns. And then governments -- the last thing I'l hit. There's been a lot of concern around government business. we've been pivoting away from it, and it composes less than 0.4% of what's on the books for us. So we feel like we're in the right group business right now given everything that's going on and our leisure business remains strong. So fourth quarter for us gave a lot of confidence that we're in a good spot going into this year.

And just talk a little bit about [indiscernible] In terms of performance.

And just in terms of the move to the meeting plan because this is what Duane is asking.

Yes. I mean the move of the meeting planner has remained resilient, I guess, I would say. We went into the month I would tell you that were storm firm obviously had an impact on us, but we were pacing ahead as we started January until we got to that winter storm and medium planner sentiment remains very resilient and interested in booking forward. So our funnel remains strong, and we feel good about where forward bookings are heading.

These are good attrition cancellations, really no issues. On property spending is still very good. So the early indicators that we look for, we're not seeing anything flashing yellow or flashing red. It's really just a recognition of the fact that when you look at what's happened over the last 12 months, environmentally, it's very difficult to predict where we're going to be tonight after the state of the union, let alone 6 months from now.

Yes. And look, -- the other point I want to make, and I sort of try to make it in my prepared remarks is that the folks sitting around this table that have been looking after and building this hotel business, we've been doing this for 20 years. And we -- over the period -- over this period of time, we have dealt so many times with the mood of the meeting plan is shifting, yet our returns and our business and our performance we sail through that because our relative positioning is so strong compared to those folks that we compete with. And so yes, the meeting planners move may shift in negatively like it did in the third quarter of last year, but our business will be just fine.

We go next now to Chris Woronka at Deutsche Bank.

I was hoping to get a little bit more color on how you expect the pavilion new sports far patio complex at Opryland, how that's going to kind of unfold over the next couple of years? And the question really is, is it meant to draw a little bit more lease shoulder periods and weekends in addition to being obviously a big amenity for groups or just kind of thoughts on whether that helps leisure in addition to group at Opryland.

Chris, this is Patrick. I would tell you that the sports bar is all about sea count. Gaylord Opryland does not -- is not able to accommodate the demand that it has for food and beverage. There are just not enough outlets in that hotel. And so we're adding taking the best of what we've learned at Texan and Palms and Rockies, we're building the sports bar as far as the size and the capacity and then putting that [indiscernible] right next to it, 12,000 square foot of [indiscernible] so that you have an indoor and outdoor component, and we've added a whole lot of flexibility to it. So you can sell 1 portion of it, you can sell the entire restaurant it is a very flexible outlet. And so this is all about adding seat count and giving additional buyout opportunities to groups who want to get their folks together. It is strategically located right outside of the convention center because we know that as folks are coming out of the convention center. They want to go with a group of folks that they've spent the whole day with and sit down and have a beer or a drink, watch a show, spend some time together. And so we feel this is both a leisure opportunity for us when we're in the off season for group but primarily a group opportunity for buyouts and just capturing more seats, more demand in-house for Opryland because it just does not have the seats necessary to support demand.

Yes. And what I was going to say, Patrick, is that when we have done this before, this is not our first rodeo. We've done this before in other hotels, and the returns on the investment have been spectacular. It's just that we haven't had one of these in this particular hotel, which is really candidly the most successful convention resort in the United States of America. This year, that hotel will push $200 million of EBITDA out of it. I know we don't break it down in our guidance, but there is not another hotel like this in America. And so we believe, because of the volume of consumers in this hotel, both group and leisure. These -- the returns on investment here will be very encouraging.

And Chris, this is the first outlet of a multiyear kind of food and beverage refresh and expansion at Opryland. It's -- to Patrick's point, it's increase the seat count to capture demand that is there that we are not monetizing. And it's also to raise the level of food and beverage experience in that hotel as we track more and more premium corporate customers to that property.

And I would tell you the -- both with what's happening in the media space renovations and the new expansion as well as the sports bar site visits to this property are revealing a lot of excitement from [indiscernible] so starting to lay eyes on this. It's all been a rendering and a promise for the past couple of years, and now they're seeing it come to fruition. And there's a lot of excitement and a lot of energy to get booked into these spaces.

Okay. A lot of great color there. Appreciate that. Just as a follow-up, and this goes back to the entertainment OEG, which I agree you guys done a great job of building over the years. Maybe, Kyle, a strategic question or remark, I mean are there any impediments to franchising potentially one of those brands, you got Category 10, [indiscernible]. I understand the REIT framework, but I think you probably have some room within that if this was something you wanted to do. So any thoughts on whether that's being considered?

Well, it's very interesting is that question. the music of this thing, when you look at what is happening in markets like the United Kingdom, you look at throughout Northern Europe, France, Holland, Belgium. [indiscernible] comes will go over and play Wembley Stadium in July, 3 nights sell out Wembley Stadium, 80,000 people at night. You go to Ireland playing [indiscernible], 80,000 people there goes to Murrayfield in Scotland, plays that stadium sold out already. That will happen in July. And so the demand for this music overseas is very, very, very high, very strong. And I think our view is that the opportunity to expand the brands that we have built with these iconic artists are really, really good. But I think we would like to -- if we do it overseas, we would want to find a partner that does it on our behalf. So we don't have to set up shop in these countries. But the answer is yes. is a big opportunity, and it's a bigger opportunity because of the popularity of what is happening to the product of the city on a global basis.

We'll go next now to Aryeh Klein with BMO Capital Markets.

I was hoping to get a little bit more color on the total RevPAR guide for '26. It looks like in '25, reprint total RevPAR kind of grew similarly. And in '26, you have the benefit of a higher corporate group mix component. Why wouldn't we expect total RevPAR growth to outperform RevPAR growth this year?

Yes. Some of that is just the law of numbers, Aryeh, with a bigger base on RevPAR than it is to [indiscernible] Patrick Chaffin mentioned earlier that it's about a 3-point swing. And corporate mix does tend to, as you know, outperform outside the room, but we also can get good performance from premium associated and noncorporate groups as well. And we saw that did play out favorably in the fourth quarter of 25 as well. So I think those are the factors to think about when you think about the relative room revenue -- RevPAR [indiscernible] outlook '26.

Okay. And then, Colin, you mentioned the potential rotational benefits with KW DR and a new market, recognizing that it's still fairly early. What are some of the early trends you've been seeing on that front?

Could you repeat that first part of -- the first part of the question?

Just in terms of the rotational benefits with JW DR and having a new market to offer fully recognize that it's still early, but just curious what some of the early trends you're seeing there from a rotational element standpoint?

Yes. So with Desert Ridge and Hill Country both in the family now, we are -- we talked about this in the last quarterly call that we had hired a couple of positions that would focus just on that multiyear rotational business moving them back and forth between the JW's and then JW to the Gaylord. And I would tell you that we've had some good success. We've only had about 1 quarter of having those positions in place, but we've booked about 22,000 multiyear room nights that were manufactured just as a result of that JW relationship of the 2 hotels being able to push back and forth to each other or over to the Gaylord. So we continue to believe that there's upside here, and we'll continue to push that really hard.

And Patrick, de facto in what you've said, we've aligned the sales organization. So Men,just talk a little bit about that.

Yes. So we have a really strong sales team in the Gaylord side of the house, and we have added resources to ensure that there's more communication and more synergy between the JW and the Gaylords and that we're taking all the learnings from creating a multiyear rotational business across the Gaylords and applying that to the JW and that is what we're starting to see gain some traction.

We'll go next now to Dan Politzer with JPMorgan.

First, I want to touch on the leisure. Obviously, your guidance reflects a flattish outlook there. Can you maybe talk about what you're seeing across your portfolio specifically, what's embedded in your outlook for Nashville, just given that was a bit of a headwind in 2025 on the leisure side.

Yes. So as it relates specifically to Nashville, Gaylord Opryland has a really solid book of business on the books going into this year. They're in a better position than they were last year. So we see really kind of more flattish because some of that group demand is taken up some of the -- is pushing out some of the leisure opportunities. But this market has sustained a lot of supply increase, but we've held our own and increase our RevPAR penetration, and we see that continuing as we move into '26.

Got it. And then just for my follow-up. I think it was you, Colin, that mentioned the 2027 guidance that you laid out back in January 2024. I mean it sounds like you feel very comfortable with the target there. We'll get an update later in the year. But just to clarify, when you talk about the level of comfort there, does that now include Desert Ridge, which obviously you've acquired expos?

Yes, there are some, what I would say, kind of ins and outs in terms of our assumptions. To your point, we did not assume Desert Ridge when we made those projections in '24, but we assumed that we had -- we would have our rooms addition open in the Rockies. And so if you kind of trade on property out for the other we are -- we remain well within that guidance range. And I would tell you that depending on whether you include Desert Ridge in or whether you leave it out, you're in the guidance range, it's just a question of whether you're -- where you're at in the guidance range.

We'll go next to now to Rich Hightower with Barclays.

To I guess, as we think about the ranges within the varying sort of guidance parameters. I guess, to hit the high end from where we sit today, let's say, of EBITDA or FFO? Is it going to be revenue driven to get there? Is it going to be expense driven? I know you said there's an embedded expense growth assumption of around 2.5%. But what -- just walk us through maybe the different flex points that would bring you to one end to the other?

Yes. On the top line, I think we've said it in various ways, but it's going to come down to where kind of group lands and all the components that Mark mentioned in his prepared remarks and some of the Q&A, we've referenced how do attrition and cancellations play out? How do meeting volumes respond to meeting plan or sentiment in response to what policy changes may come out of Washington and how that affects the macro. So it's largely on the group side, I think, where we can see driving a lot of where we land within the range of outcomes, particularly on that RevPAR range. From an expense standpoint, and the midpoint of our guide assumes that we're a little shy of 3% in terms of operating expense growth. So that feels pretty manageable at this point. I don't think that there are big drivers, I think, on the operating expense side that are going to move it. It's going to be demand-driven.

Okay. Very helpful. And then, I guess, maybe a slightly bigger picture question, but you did Desert Ridge last year. It sounds like that's folding into the portfolio successfully. And I guess as you think about the transaction market more broadly, there might be 1 or 2 assets on the market coming to market this year. It's not a lot, but there might be something in there that might fit within what you guys are trying to do. So talk about maybe your appetite for doing another deal in line with maybe the size of a Desert Ridge balance sheet capacity, how much could we do there? And what's the appetite, if any?

Yes. Look, I would tell you that we certainly have the balance sheet capacity to do a transaction. We are in the process right now of kicking off some renovation and some enhancements at Hill Country and digesting Desert Ridge. So we're very focused on those 2 properties. If an asset came to market that checks all of our strategic boxes in terms of the quality of the product, the market, the fact that it's group-oriented has the leisure and the leisure components and it's priced appropriately. It's certainly something we would look at and we have the capacity to do it. But the reality of it is that when we look across our current portfolio and the opportunities we have to reinvest incremental capital in very, very high rates of return, that's very, very -- that's a very attractive alternative to us. So for us to add a hotel, it needs to be a bull's eye for us. We're not -- we wouldn't look at marginal deals.

Yes. So Rich, just to give you a little bit more color these 2 hotels that we've acquired over the last 2 years are hotels that we had earmarked to purchase, I want to say, 10 years ago. We've been looking at these hotels every single year. And I don't think that there is another hotel that had -- that we have the same appetite for those two. So as Mark said, it would have to be something extraordinarily special. But the great news for us is we have tremendous opportunity to grow. We can grow the ones that we own. I mean, 6 of the 7 that we own, we would consider expanding. And then we have an entertainment business that's growing like a weed. And so the growth characteristics of our company are great. We don't have to go to the market and go buy some fancy hotel in a market that that really, over time, won't create the value that the existing portfolio will.

We go next now to Shaun Kelley with Bank of America.

Or whoever the right person is, I think there's a proposal out there for a potential sphere or a smaller version of it. or around the National Harbor complex. I'm just wondering if you could -- if you explored that or could talk a little bit about that and what the potential for that might be, especially given how transformative it's been for certain surrounding hotels in Las Vegas.

Well, I think that was -- there's been some chatter in the market about the developer of National Harbor, the [indiscernible] company. I think I read this partnering with the Sphere organization to do something like that. And if it did, it would be great for National Harbor. And so the answer is we would encourage them the Petersen company to do it. But the reality is the spheres are very expensive. You can't build 1 of these things, probably under $1 billion unless it's a real small sphere. And so the issue for us is that we like projects that generate 12%, 14%, 15% rates of return. We would be a sheer leader in Washington.

Yes. And at the right time, this is probably 2 to 3 years off. But at the right time, we would reach out and partner with that organization to create packages and opportunities for us for the hotel -- our hotel and the sphere to work together. In bringing folks in and giving them overnight visitation into our hotel.

Got it. Great. And then back in the prepared remarks, there was a mention around working with Marriott on efficiency. And obviously, I think that was in the context of the margin profile that you're looking for, for this year's guide. But could you just talk a little bit more broadly about initiatives there, what you've been able to accomplish and sort of anything that they're doing on the charge-out rates kind of following the credit card transactions that they're working on and just sort of how your structure with them is evolving.

Yes. I would tell you, our focus has primarily been -- we've spent about to months of 2025 working with them on procurement as well as third-party vendor contracts, really going back to some of our largest third-party contracts and breaking them down, looking at alternative vendor sourcing and really pushing folks to get the most aggressive and efficient contract in place. Same thing on the procurement side. There's been some changes with [indiscernible] and other outside vendors that Marriott uses on procurement. And we are really pleased with the results of that. On the credit card, we have been told that we stand to potentially benefit. That's not something that Marriott gives a lot of insight on to and that is within the management agreement that that's something they keep a little closer to the chest, but we understand it is a benefit for the system, and we wait to see what that will be.

We go next now to John DeCree of CBRE.

I think most have been answered, but I think I heard a comment about government business, I wanted to circle back to, if I heard correctly, was it 4% or 0.4% of your bookings for this year so far? And then the follow-up, are there any other sectors that your group business might be indexed to a lot of us are kind of focusing on the technology sector, et cetera. Is there anything that you would call out that you'd have more exposure to than another sector?

Yes. So the comment I made earlier was if you look at the same store, what we booked in the fourth quarter, government accounted for just about 0.4% of the production. And similarly, on the books, government room nights as of January 1 stood at about 0.4% of our total group room nights on the books. So very small exposure there as we have tried to pivot away from that given some of the challenges there that we've seen over the past year or so. Again, as a reminder, we have less than 5% of our business in any one sector. We're very well diversified as far as sources of our group business. We have been leaning into West Coast tech and fintech to try and grow that business that we see opportunity there. So limiting where we see some contraction on the government side and really pursuing and trying to grow our West Coast and fintech exposure.

We go next now to Jay Kornreich of Cantor Fitzgerald.

Just one for me. You mentioned seeing positive momentum from the meeting planners recently. And I was just curious as you look at the out years such as 2027 and 2028, which have more of the benefit from completed CapEx projects, can you comment just as to how room rate and overall bookings are trending at this point?

Yes. We've talked about '26 is in a great position, '27's in a good position. And as you look out beyond, we're very encouraged rate. What the sales team has been able to do by -- we've pivoted our value proposition with all these investments and the sales team has been able to deliver on the rate side. And obviously, rate is more sticky. It's going to stay with us once it's booked. So as we look out into the future years, we continue to see really solid growth as far as what we already have on the books and rate is the major driver of that.

'28 rates and beyond is up over [ 5%. ]

Yes. We're kind of holding that mid-single-digit rate growth for '28, '29, et cetera.

We'll go next now to Chris Darling of Green Street.

Colin, in the prepared remarks, I think you mentioned that the same-store hospitality portfolio RevPAR index share is effectively at the highest point it's ever been. Curious if you could share what that looks like? And then as you look out forward, and it probably some of the prior questions. But what's your level of confidence in being able to take further share over time? I always wonder if there's sort of a natural upper bound in your ability to push price relative to your concept.

Yes. Let me talk big picture and then Patrick will give you the detail. What we have tried to do over the the years that have gone by is to create a business, a hotel business, that is -- has relative sustainability to it compared to the organizations we compete with. And we do it through a number of pillars. One, the physical product of the of the hotels have got to be world class. And we have -- I think we've demonstrated over the last years our desire to continue to improve the quality of the assets, each asset in the portfolio. The second part of it is the service levels. And the way we sit on Marriott in terms of customer satisfaction, and the work we do directly going to the meeting planner, speaking directly to the meeting planner, our organization, not through Marriott speaking directly to the meeting around understanding the level of service execution, and we keep growing that. And then the third part of it is these convention goes, when they go to a market, they want to go to markets where they can have fun over 3, 4 days. And so the constant improvement to the what I would call the fund side of the stay is something that we have just continued to focus on. And this is why we are spending a lot of money on things like pool complexes sports bars, improving the quality of the restaurants, music in these hotels. And then it's just the knowledge of the meeting panel itself and understanding is exactly what they want. And it's a combination of these things that build this sort of sustainably this business that is continuing to get more and more market share. And this is one of the things that I feel very, very strongly about -- we go through these periods where the meeting plan or switches off, the meeting plan of switches on. We have an economic meltdown. We have 2 or 3 years of economic growth, but what we're interested in is managing through that noise. We have such a small share of this industry, and we are continuing to take out the customers that we don't want, bring in customers that we do want the higher-rated business and building just sustainable business here, and that is showing up in these RevPAR indexes. So Patrick, that's the process.

So to Colin's point, fourth quarter, we delivered an average RevPAR index on the same-store side of 143% versus the comp set. That's a 1,200 basis point improvement year-over-year. So really, really solid performance by the hotels in stealing share. Full year, our RevPAR for the same store against the comps that finished 127%. That's an increase of 610 bps year-over-year and even an increase of 410 bps versus 2023. So to Colin's point, we continue to invest to enhance the value proposition. We increased our distribution that allows us to capture more multiyear rotational business and a greater share of each individual meeting planners total book of meetings business, and that's how we'll continue to steal share.

And that's why there's no upper bound because the product. We continue to evolve the product, and we continue to change the value proposition. So we don't view it as a -- if there's an upper on this. We can continue to to drive more and more and more share and take share away from others who aren't investing.

We'll go next now to Stephen Grambling of Morgan Stanley.

This is maybe a big picture question, but how do you think about the impact of AI on the hospitality business, both as you think about demand drivers and the make up what meetings may look like, plus any opportunities you're seeing now on an operational -- from an operational standpoint for potential margin uplift?

Yes. Stephen, this is a question that we've spent a lot of time as a company asking ourselves and asking Marriott and frankly, discussing it with our Board. We had a long conversation about this last week at our Board level. And so Patrick, do you want to just give Stephen a broad outline of the engagement that we have made with Marriott and the areas that we see AI really helping in terms of efficiency?

Yes. I would say that our primary 3 areas of focus are going to be on the sales transaction and efficiency around that. Second, around revenue management with dynamic pricing and just understanding the competition and in enhancing our capabilities there. And then finally, which may get overlooked, but it's a massive opportunity labor is over 60% of our total cost. And so the ability to use -- to move away from Microsoft Excel spreadsheets to move away from some of the current systems they're pretty antiquated in the light of the AI revolution and move to AI-capable labor management tools, we're really focused on those 3 areas. And we are like all owners putting a lot of pressure on Marriott, Marriott is working to understand exactly what the cadence and pace of their investment and progress will be here. And so it's an ongoing discussion, but those are the 3 areas we're focused on.

The interesting thing about our business, both the hotel business and the entertainment business, the live entertainment businesses is that they are both businesses that are almost kind of an anti-AI play in that. We're going to reach a point where unless you're in the room with someone, you don't know whether it's real or whether it's AI generated. And so much like the pandemic became a tailwind for both of our businesses. I would argue that I think AI may ultimately be a tailwind as well because people are going to value -- they're one going to have more time; and two, they're going to value being face-to-face without a human being in the [indiscernible]

Yes. I agree with that, Mark, 100%. And -- so anyway, Stephen, hopefully, that helped you understand that it is a major focus for us as a company and we are going to continue to work with our friends at Marriott to make sure that we are an early adopter and the efficiency of the company just improves CEO over the next 1 to 2 years. .

I think that's everybody in the queue. So we would like to thank everyone for their participation this morning, and we'll do it onward. And if you have any further questions, you now have a good hold of our CEO at Ryman. Thank you very much indeed for your time.

Thank you very much, Mr. Reed. Ladies and gentlemen, that will conclude today's Ryman Hospitality Properties Fourth Quarter Earnings Conference Call. Again, thanks so much for joining us, everyone. We wish you all a great day. Goodbye.

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" Wells Fargo Securities, LLC, Research Division

" BMO Capital Markets Equity Research

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" Citigroup Inc., Research Division

" Truist Securities, Inc., Research Division

" JPMorgan Chase & Co, Research Division

" Evercore ISI Institutional Equities, Research Division

" Deutsche Bank AG, Research Division

" Jefferies LLC, Research Division

" Cantor Fitzgerald

" Green Street Advisors, LLC, Research Division

" CBRE Securities, LLC, Research Division

Welcome to Ryman Hospitality Properties' Third Quarter 2025 Earnings Conference Call.

Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Executive Chairman; Mr. Mark Fioravanti, President and Chief Executive Officer; Ms. Jennifer Hutcheson, Chief Financial Officer; Mr. Patrick Chaffin, Chief Operating Officer; and Mr. Patrick Moore, Chief Executive Officer, Opry Entertainment Group.

This call will be available for digital replay. The number is (800) 839-3516 with no conference ID required.

[Operator Instructions]

It is now my pleasure to turn the floor over to Ms. Jennifer Hutchison. Ma'am, you may begin.

Good morning. Thank you for joining us today. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance.

Any statements we make today that are not statements of historical facts may be deemed to be forward-looking statements.

Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release.

The company's actual results may differ materially from the results we discuss or project today. We will not update any forward-looking statements, whether as a result of new information, future events, or any other reason.

We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in the exhibit to today's release.

I'll now turn the call over to Colin.

Thank you, Jen. Good morning, everyone, and thanks for joining us today. We're pleased to report third-quarter results in line with our expectations in what continues to be a somewhat volatile operating landscape.

On the hotel side of our business, our group business actualized a bit better than we had anticipated, with a stronger short-term pickup in corporate group meetings.

In addition, the leisure hotel market in Nashville improved as the quarter progressed. And in September, transient ADR growth for the upscale and luxury hotel segment turned positive for the first time since February of '25.

Overall, our same-store hospitality portfolio meaningfully outperformed the industry in the third quarter, achieving a RevPAR and total RevPAR index relative to our Marriott-defined competitive set of approximately 141% and 195% of fair share.

In our entertainment business, our recent investments in Category 10 and Block 21 continue to perform well, while some of our downtown Nashville venues saw some impact from the surge in new bar and restaurant openings on Lard Roadway.

Similar to what we're seeing in the hotel market right now, the rising popularity of country music and Nashville as a destination has attracted new live entertainment supply into the market.

Despite this near-term period of absorption, we continue to be extremely bullish on the long-term trajectory of Nashville. Progress on the new Derm Titan Stadium and the East Bank development continues.

Construction on Oracle's new headquarters there is expected to begin soon, following recent approvals by the Metro Council. Soil testing on the initial launch site of the boring Company's Music City loop has commenced.

And just last week, the Airport Authority outlined more details for the demolition of the current Concourse A and rebuilding of a new 16-gate terminal.

Today, with Concourse A out of commission, Nashville has 54 gates in operation and enough capacity to accommodate about 28 million travelers. When the new concourse opens in, I think it's early 2029, Nashville Airport will be able to accommodate up to 40 million travelers.

These long-term demand drivers are arguably some of the strongest amongst large cities in this country. And our iconic portfolio of brands is well-positioned to continue to induce and capture more of our fair share of incremental demand.

From a brand perspective, the third quarter was a major milestone for our entertainment business. The Opry traveled to the Royal Abbott Hall in London for its first-ever international performance, which was also broadcast on BBC2 in the U.K.

The show garnered over 1.2 billion media impressions, and the broadcast was BBC2's highest-rated program of the day. As an aside, the former Chair of the Royal Albert Hall Board told us that in all of his years, he's never seen an audience so engaged at a performance like he did at the Opry Show; folks were bouncing in the aisles at the Royal Albert Hall. That's never normally done.

The music that has made Nashville Music City is becoming so incredibly popular across Northern Europe. Now, to give you some idea of what's going on in this incredible feeder market, a couple of weeks ago, our business partner, friend, and country music superstar, Luke Combs, announced a series of stadium dates for next year across Europe.

And here's an illustration of why I say this genre is exploding in this region. He announced 2 nights at Wembley Stadium and an 85,000-seated stadium; both nights sold out. And now they've announced the third date.

The stadium in Glasgow, again sold out. And Slane Castle, look it up, an incredible festival site north of Dublin, catering to about 80,000, again sold out, and they've now arranged a second date.

And what Luke told me was that there's only ever been one band that has played 2 consecutive nights at Slane Castle, and that was U2. This is extraordinary stuff, creating Pilgrims who will make their way to Nashville and to our businesses.

As we had anticipated, through the investment we're making behind Opry 100, the brand is reaching far more fans than ever before. And we are continuing to expand the platform.

A couple of weeks ago, we, together with Luke, announced a second Category 10 development in the heart of the Las Vegas Strip. Construction is already underway.

And once open in the fourth quarter of '26, it will be 1 of only 2 country music live entertainment venues with Frontage on the Strip, the other being, of course, Old Red, which has performed incredibly well since opening early last year.

As we look ahead, our businesses are in great shape. The amount of group business we have on the books remains healthy, and we continue to generate good returns on the investment we're making in our hotel portfolio.

Our expanded entertainment platform contains more avenues for growth than ever before, and we look forward to building on the momentum of the Opry brand and Country Music more broadly in the years to come.

As always, we appreciate your interest and support. And with that, let me turn over to Mark to discuss the quarter, our positioning in more detail. Mark?

Thanks, Colin, and good morning, everyone. I'll review our third-quarter results and also provide some color on how we're thinking about 2026.

I'll start with our hospitality business. Our same-store hospitality segment delivered results towards the high end of our expectations due primarily to short-term corporate group pickup in the quarter for the quarter.

As a result, the year-over-year group mix shift was not as significant as we had anticipated, with corporate group room nights down only about 20,000 room nights from last year, about half the magnitude we saw in the second quarter.

With the decline in corporate group rooms, banquet and AV revenue declined approximately $14 million, but as has been the case all year, contribution per group room night, a proxy for catering spend per group guest, continues to exceed our expectations, so groups continue to spend at healthy levels.

Food and beverage outlet performance was a bright spot in the quarter, driven by a combination of higher leisure demand, better-than-anticipated corporate group volumes, and our recent capital investments.

Outlet sales per occupied room increased nearly 13% and performance was particularly strong at Gaylord National, Gaylord Rockies, and Gaylord Palms, where we've made significant investments in recent years, both in the quality of the offerings as well as our capacities.

In fact, total revenue for Gaylord National and Gaylord Rockies was a third-quarter record. And for Gaylord Rockies, the second-best total revenue quarter of all time, behind the second quarter of 2025.

Our leisure business was another bright spot in the quarter, including at Gaylord Opryland. Leisure room nights at Opryland increased more than 5% compared to last year, and leisure ADR, while still modestly lower year-over-year, actualized a few percentage points better than our expectations as of last quarter.

Finally, the JW Marriott Desert Ridge delivered third-quarter results right in line with our expectations. The existing meeting space renovations wrapped up at the end of September, bringing the multiyear comprehensive property refresh that was initiated by the prior owner to a conclusion.

As a value creation opportunity post acquisition, we have begun the work to convert 5,000 square feet of existing vacant office space into sellable carpeted breakout meeting space.

As we learn more about this property, we continue to be very bullish on its long-term potential under our ownership. Looking ahead to the fourth quarter and the next couple of years, we're pleased with the amount of business we have on the books.

Same-store group rooms revenue on the books for the fourth quarter is comparable to the same time last year, and early ticket sales for our holiday programming are pacing ahead of the same time last year.

Despite some of the macroeconomic uncertainty in government policy weighing on the broader lodging industry, the visibility we have into our group business for 2026 and beyond continues to be encouraging.

We're continuing to book more room nights at higher room rates. In the third quarter, same-store gross group room nights booked for all future years were up 9% compared to last year, bringing room nights on the books for all future years to a third-quarter all-time high.

The ADR on those bookings was also an all-time high, up nearly 3% year-over-year. Our group pace for 2026 and 2027 remains healthy. As of the end of September, same-store group rooms revenue on the books for '26 and '27 were up approximately 8% and 7%, respectively, compared to the same time last year for '25 and '26, with ADR growth continuing to pace in the mid-single digits, while the number of new leads and late-stage opportunities remain at near record levels.

Certainly, we've seen elevated cancellation activity this year due primarily to the government sector, but we've also responded with strong in-the-year-for-the-year bookings production and disciplined margin management while continuing to pursue long-term value creation through enhancements and additions to the portfolio.

Turning now to our Entertainment business. OEG delivered third-quarter revenue of approximately $92 million and adjusted EBITDAre of approximately $25 million.

Growth from Category 10 and Block 21 behind our recent investments was partially offset by softer volumes at our downtown Nashville venues as the local live entertainment industry absorbs the cumulative impact of recent new supply.

As a result, and as Jennifer will review in a minute, we've narrowed our range of expectations for full-year adjusted EBITDAre in our entertainment business with a new midpoint of $112 million, which represents approximately 6% growth year-over-year and approximately 12% annualized growth since 2019.

Before I turn it over to Jennifer, let me also provide some color on some of the building blocks for 2026, with the caveat that we're still working through the budgeting process with Marriott and expect to provide formal guidance when we report fourth quarter results in February.

From a macro perspective, we are optimistic we'll see an increase in group demand given expectations for lower interest rates and a more favorable business and regulatory environment.

However, even if the current uncertainty persists, we still expect our business model to outperform others in our sector and the broader group industry.

As I mentioned earlier, the group rooms revenue we have on the books for 2026 for the same-store hospitality segment is pacing approximately 8% ahead compared to the same time last year for 2025.

From a mix perspective, corporate group bookings are pacing ahead of association group bookings. Should this trend continue, we would expect it to be a modest tailwind for group outside-the-room spending levels in 2026.

On the cost side, recall that the collective bargaining agreement for the Gaylord National became effective in November of 2024, so we will lap the initial wage and benefit increases in the fourth quarter of this year.

Regarding capital, we anticipate that the sports bar development at Gaylord Opryland will open in April of 2026, and the Texas rooms renovation will finish sometime in the second quarter.

We also expect the meeting space conversion at the JW Marriott Desert Ridge to come online in the second quarter. The ongoing meeting space expansion at Opryland will continue through 2027, and we expect to kick off a room renovation at the JW Marriott Hill Country beginning in April 2026.

And finally, on entertainment, we expect our 2025 investments behind Opry 100 and the new amphitheater addition to our portfolio to be a modest tailwind to growth in 2026.

As Colin mentioned, Category 10 Las Vegas will be under development for much of the year, opening sometime in the fourth quarter of 2026 with full-year contribution in 2027.

As with all our ROI projects, we expect to generate at least mid-teens unlevered IRRs on the estimated project cost of approximately $35 million. We look forward to providing more details on how we expect the year to shape up on our fourth quarter call in February.

And now I'll turn it over to Jennifer to run you through our guidance revisions and review our financial position.

Thanks, Mark. Regarding our outlook for the full year 2025, we are narrowing our guidance ranges now that much of the year is behind us.

And in our Entertainment segment, we are lowering the top end of our guidance range for adjusted EBITDAre to reflect softer volumes in our downtown Nashville venues related to new supply in the market.

On a consolidated basis, we now expect adjusted EBITDAre in the range of $772 million to $802 million, AFFO in the range of $509.5 million to $538 million, and AFFO per fully diluted share in the range of $8 to $8.38.

Turning to our balance sheet. We ended the third quarter with $483 million of unrestricted cash on hand and our revolving credit facilities undrawn.

Total available liquidity was nearly $1.3 billion. We retained an additional $33 million of restricted cash available for FF&E and other maintenance projects.

At the end of the quarter, our pro forma net leverage ratio based on total consolidated net debt to adjusted EBITDAre, assuming a full year contribution of adjusted EBITDAre from the JW Marriott Desert Ridge, was 4.4x.

Finally, let me comment on our anticipated major cash outflows for the year. Regarding our outlook for capital expenditures in 2025, we are narrowing the range of our expectations to $375 million to $425 million based on our latest construction timelines for projects currently underway.

As we mentioned in our earnings release, these estimates include modest investments at the JW Marriott Desert Ridge, accelerated material purchasing for the planned 2026 rooms renovation at the JW Marriott Hill Country, and initial project costs for the development of Category 10 Las Vegas.

Regarding our dividend, it remains our intention to continue to pay a minimum of 100% of our REIT taxable income through dividends. And with that, Mickey, let's open it up for questions.

[Operator Instructions]

We'll take our first question from Cooper Clark with Wells Fargo.

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.

Should I start, Patrick? Yes. This is Colin Reed. So the issues that we saw within this city over the period of time, February of this year through June, were that the more budget-conscious consumer pulled back a little.

And we saw it in other markets, too, like Las Vegas. But it happened here. And I think a lot of it was created by the overhang on what the hell was going to happen with the big beautiful bill and tariffs, and the media was saying the world was going to fall apart.

But what has actually happened as the year has progressed is that obviously, things have stabilized very, very well. The market, the New York Stock Exchange, and the S&P at all-time highs right now.

Trade agreements are being confected, and interest rates are moderating. Corporate profits seem to be in good shape, and airline traffic is up. And I'll give you a statistic that was relayed to me last night by the CEO of the Nashville Airport.

October traffic into Nashville was up 10% over last year. And the amount of traffic that the airport received in October was the best October Nashville has ever had.

We've been, I think, a little cautious in what is going to play out in the months of November and December, and that is reflected in our guidance. But as we look forward to 2026, 2027, we have this new stadium opening that is going to dramatically increase big, big concerts.

We have a whole bunch of new developments taking place on the East Bank. We have a greater capacity to put more traffic through this airport. We have folks, I can tell you, every one of the 3 large airlines that are flying in from Europe has increased the capacity of their airlines over the course of the last couple of months.

So as we look forward to '26, '27, '28, I think we're going to see a surge in tourism in this city, and I think it's going to be long-term, really good for these iconic assets that we own.

And then I guess, how should we be thinking about a potential spin of OEG? Are there more bolt-on acquisitions within the entertainment business or additions you need to make to the leadership team that you want to get done first?

Well, the opportunity we have with this business with the acquisition of Southern, what we've done in Austin, the expanding into markets like Las Vegas, I would be very surprised if you don't hear from us over the course of the next few months in other markets that we will potentially move into markets that are very country music-centric so we can intercept those consumers in their source markets.

The great thing about this business is I think we have more opportunity to grow it today than we've ever had. And I would suggest that over the course of the next 12 to 24 months, you'll hear from us more on the growth of this business.

We will move next with Aryeh Klein from BMO Capital Markets.

Maybe first on cancellations, which ticked up in the quarter. Can you provide a little bit more color on recent trends? What have you seen here in October?

And is this still mostly government-related or any other sectors where you've seen an uptick?

Aryeh, this is Patrick Chaffin, and good to hear from you. Yes. So cancellations were up in the quarter.

We were expecting that as a result of the tariff situation that began in the second quarter of this year. I would tell you that as we look across the year, if you look at the Smith Travel Research information, U.S. group monthly occupancy started to decline in April of this year with the tariff situation emerging.

And while our group business has fared really well through that tariff situation that's characterized Q2 and Q3, the overall U.S. group monthly occupancy has continued to decline and appeared to trough roughly in August based on Smith Travel information. And it has been recovering in September and potentially in October based on what we've seen so far.

So it's too early to tell how cancellations are going to fare in the fourth quarter, but it appears that while it's still down, it's starting to move in the right direction.

For us we have seen elevated cancellation activity. We have also seen group leads and group demand in the corporate sector increase at the same time. So we've been able to mitigate some of that impact. But cancellations have been elevated.

They've been mostly in the government and government-related sectors, but we have seen some impact from corporate layoffs that have been occurring across the country.

But again, I would stress corporate leads and corporate booking volumes continue to be very, very strong. So we've been able to mitigate some of that.

So we'll see how the fourth quarter goes. But we do feel like, while overall U.S. monthly occupancy and demand are still down, it is moving in the right direction.

And then curious if you can touch on some of the underlying leisure assumptions for the fourth quarter.

Last year was a bit of a challenge, and I think you made some changes to the ICE programming. Any early feedback on either bookings or expectations? And then I believe you're also bringing ICE to Hill Country. How is that shaping up?

Good questions. Pat, do you want to deal with that?

Yes. So Hill Country will have ICE for the second year in a row. We'll bring ICE to Desert Ridge next year.

But we are expecting improved performance in ICE and in leisure in the fourth quarter of this year versus last year, about a 5% improvement. I would tell you that we're cautiously optimistic. It's still early, but we have some really positive trends occurring right now.

Our ICE tickets are up. We've booked about 300,000 tickets to date. It's only about 21% of what we expect to actualize for the full holiday period. But the 21% we have on the books is about a 6-point improvement over what we had booked at this point the same time last year.

So we're up about 95,000 tickets over the same time last year. So we're moving in the right direction to achieve that improved performance year-over-year, and we're in a good spot.

From a transient room night perspective that's associated with the leisure holiday bookings, we booked about 127,000 room nights to date. That represents about 60% of what we expect to actualize for the 2025 holiday period, and that's an improvement over what we had booked same time last year as well. So we're up about 11,000 leisure room nights.

So we've forecasted an improvement both in tickets and in leisure room nights, and we appear to be on pace to make that happen. I would remind you that we still have about 79% of our ICE tickets to book, and about 60% of those book within a 10-day travel period.

So still a lot of wood to chop, but we are moving in a very encouraging direction, and we're cautiously optimistic.

Our next question comes from Smedes Rose with Citi.

I wanted to just ask a little bit about, I guess, the relationship between gross definite room nights that you show quarterly and the net definite room nights. Obviously, the gross improved nicely year-over-year.

The net declined for the second quarter sequentially. I'm just wondering, do those 2 go together? Should be looking at the flow-through of one to the other? Or maybe you can just speak to what those numbers are telling you?

Hi, Smedes, it's good to hear from you. Let's talk about gross versus net on the group side. So the main difference between those 2 is -- let's talk about gross first.

As I mentioned earlier, we're seeing really great production from the sales team. We believe we have the best sales team on the planet on the group side, and they continue to perform.

Corporate leads are up, and corporate bookings continue to be up. And so they're doing a great job of really taking advantage of the opportunity, even though we are losing some of the cancellations and revals.

So on the gross side, we see really good production on the corporate side. To your question on net, the difference between gross and net is essentially cancellations and revals.

And when I say revals, that's groups who have previously contracted for, let's say, 1,000 room nights in their block who then call in and say, "Hey, due to tariffs, we're pulling back down to 800 or 700 rooms from our originally agreed upon block.

So you have your gross number, which is booked by the sales team. And then if a cancellation or reevaluation of that room block occurs, that's the difference in the net. And so that all the nets together produce the net production in the month or in the quarter.

So if you think about what's going on, as I mentioned, corporate room nights continue to be strong, and the folks who are booking right now have already taken into account the impact of tariffs and everything else that's going on within their business.

And so they're contracting at a more realistic level based on what they know is going on in the economy. The room nights are on the books previously that are calling in and reducing their blocks are just taking into account now what's going on in the economy.

So we continue to see really strong gross results, offset somewhat by what's happening on the netting side with reevaluation of the blocks from groups already on the books and the cancellation that has been occurring.

And then you mentioned in your opening remarks that corporate bookings are outpacing association bookings.

Do you attribute that largely to the context of tariffs that you were just speaking to? Or is there something that you might think might, I guess, fuel association bookings going forward over the next few quarters?

Yes. I mean, there's definitely some impact from the tariffs without a doubt. The other thing I would point to, though, is where we stand at this point in the year.

We currently have 7.9 million group room nights on the books from a same-store perspective for all future periods. At this point in the year, that's the highest level we have ever seen, and it has a really strong rate associated with it as well.

So there's the impact of tariffs, but there's also the impact of the fact that we just have less availability on the books for selling into the future than we've ever seen in our history, which is a good problem to have and will help us further compress group ADR going forward.

Smedes, my hope would be that, that this shift towards the corporate mix will become more systemic over time because as we've talked about in the past.

One of the things that we're trying to accomplish with the capital investments we're making across these hotels is to improve the quality of the rate and improve the quality of the group, and lean more into that corporate customer versus some of the lower-rated SMERF and association business.

We will move next with Patrick Scholes from Truist Securities.

Question for you specifically on the D.C. National. Are you seeing any impact from the government shutdown as it relates to 4Q expectations or just forward bookings in general?

Yes. Patrick, this is Patrick. Yes, we have seen a few groups that have pulled back or canceled as a result of the shutdown.

But it has been pretty isolated, honestly. And it's not really been material in terms of the number of groups that have called in and said, "Hey, we're having to pull back or cancel.

So there has been some impact, but it has not been very material. It's pretty isolated thus far.

But it's fair to say National's performance was terrific.

Yes. National is right on plan for the year, doing a great job. And as we look to 2026, we look for additional ways to offset the impact of the collective bargaining agreement, but the property is in a really good position.

And some of that you're seeing from the capital we deployed coming out of COVID, around food and beverage, and the room renovation that we did. Those investments are paying off.

Yes. And we're booking a bunch of business. So it's pretty good.

Our next question comes from Dan Politzer with JPMorgan.

Group, it's pacing up nicely for 2026, up 8% and 2027 up 7%, I believe you said. Can you maybe talk about how the conversations with group and meeting planners ex ex-government, obviously, have evolved?

Like, have they meaningfully improved versus 3 or 6 months ago, that gives you maybe increased confidence as you look out to that '27 guidance that you still have out there?

Do you want to take it?

Sure. Yes. I mean, you saw what happened in our third quarter results. There was a bit of an overreaction in the second quarter to the tariff situation, and folks significantly reduced their expectations for the third quarter.

As we actually moved through the third quarter, things improved somewhat, and we actually ended up beating our expectations on the banquet contribution per group room night.

The fourth quarter is more dominated by the transient side. And I don't want to give any guidance on 2026 right now, but we feel like we're well-positioned for 2026, and we're hopeful, as I was alluding to earlier, that while, again, U.S. group demand is currently still down, it is moving in the right direction.

So we see meeting planners pausing somewhat in some of their decision-making around when to book, but we're not seeing them wholesale pull back and make any changes.

It's really just, hey, the environment is volatile. We're watching it, and we may delay our decision-making a little bit, but we feel like we're in a great position for 2026 as we look towards that and start planning for it.

Hi, Dan, this is Colin. I want to make one observation. And we've been in this business here, certainly, Mark and I, Patrick, almost 25 years running this business here.

And we've seen these periods where we have volatility in the mindset of the group consumer. But Mark said it 5 minutes ago, the group is not vanilla. Different companies that are focused on group operate in very different ways. And what we have done is, I think, we put together a pretty good management team in these hotels.

We have world-class physical assets. We generate really good levels of service. And as a consequence, we have a high degree of loyalty amongst these meeting planners. And that is one of the reasons why you see us booking the living daylights out of this business and why going into 2026 with the numbers that we have on the books.

And it's something that's taken a long time to perfect. And we will go through these periods. Tariffs will create a problem in the mindset of many companies. But at the end of the day, these companies have to meet and the associations have to meet, and they choose to meet in the places that deliver the best levels of value for them, and we believe that is our company.

Yes. And I think an important aspect to keep in mind as it relates to '26, that 8% revenue increase year-over-year, was about 2/3 of that premium was from rate.

The durability of that rate premium versus an occupancy premium at this point of the year is much stronger. And that's really driven by the fact that we have been investing capital and we have been focusing, as Colin was talking about, on these higher-quality corporate customers.

So you're seeing that strategy play through into the numbers.

And then just pivoting to entertainment. It sounds like there are a couple more investments coming in, obviously, Category 10 in Las Vegas. What's your appetite at this point, or thoughts around monetizing that?

Is there a certain EBITDA number you guys have marked internally that you want to get to? Or is it just that you're seeing how it evolves over time?

Well, Dan, you're a sophisticated analyst. The EBITDA is one measurement. The growth characteristics are another measurement.

Companies that are able to articulate that they have a growth rate of whatever it may be, whether it's 5%, 10%, 15%, or 20%. As you go up the scale, invariably, the investment community is far more receptive to companies with higher growth rates than lower growth rates.

And so it's a combination of things. And as we are plowing the field and sowing the seeds, we've got a lot of stuff that will come out of the ground here over the next 12 to 24 months.

But here's what I do believe. And I know Patrick Moore, you believe this, too, that this is an extraordinarily valuable asset that we have. And we want to pick a moment in time. And at that moment in time, we will create a lot of value for our shareholders.

This is a very valuable business.

Our next question comes from Duane Pfennigwerth with Evercore ISI.

Within your corporate group bookings, are there any specific industries you would call out from a recovery perspective?

That's one of the beauties of our business. We don't have one segment that operates over 5%. So how would you answer the question, Patrick?

No, I would completely agree with what you just said, Colin, which is that corporate is strong for the most part across the board. And I would call out any one sector as being stronger.

I mean, we've obviously been shifting our guns towards fintech quite a bit. So that's an area that we've been expanding in, but I wouldn't say there's greater growth in any one segment right now.

It's fair to say that the impact that we've seen this year, obviously, from the government shutdown as well as all the devil's work It's we're really seeing weaknesses in the government-related large consulting groups, segments that rely on government contracts.

And then just with respect to Desert Ridge and some of the groups booking into that, broad brush, how many are existing rotational groups versus new to your portfolio?

So I would tell you that we've only begun to scratch the surface on that. We actually just hired 2 new sales resources who focus on lead generation, who are going to be solely focused on increasing the overlap between Gaylord and JW, as well as increasing the rotational opportunity between the JWs that we own.

So it's really too early because they honestly have just been hired in the past 45 days, but we're really encouraged because we believe that we've seen immediate impact in the collaboration and communication between the teams.

And I think I'll be able to talk to you in February about some really interesting and encouraging results as a result of those hires.

We will move next with Chris Woronka from Deutsche Bank.

I want to ask, as you look out, this is more of a multiyear, longer-term question, if that's okay. When you look at the composition of groups, and I'm really talking about by size, but also maybe a little bit corporate versus association.

Is there any desire to maybe reduce your mix of the smaller short-term groups that can be more unpredictable? And are you seeing greater, I guess, growth in demand from the larger groups on the corporate side or from the smaller groups that like to book closer in? And then I have a follow-up.

Let me start. The last time we did a big, big, big piece of research, and the last time we observed the research that Smith Travel did, large groups are the groups that are growing in this country.

And we are uniquely positioned because of the scale of our assets and our ability to accommodate these large groups. And it's one of the things that I know I look at every month, Patrick, when we get our sales report, is the way the room nights how they fall between 10 to 300 and larger.

So we're seeing good growth in the large groups, but how would you answer that question?

Yes. Chris, I was actually looking at that last night, and it was interesting to see that for 2026, we have a higher mix of the larger groups on the books versus the same time last year, as we looked into 2025.

So, as Colin has been talking about for a few years now, we continue to see that growth in the larger groups. But I do want to say the small groups are always essential to what we do.

They have a higher rate, they book short term, and they allow you to really top off your group business with the remaining patterns that may be open.

And so they come along at the last minute and help you fill out that piece of business, and then you put on top of that any leisure opportunities that you might have.

So we're increasing the mix towards the larger group, but the small group will always be essential to finishing off the business.

The follow-up is maybe for Colin or Mark. I mean, you guys have a lot of perspective. You've been in Nashville for a long time.

Colin, I think many years ago, I'm not going to hold you to this, but I think many years ago, there was a thought to maybe doing something around your Opryland with some of the parcels that might be available or you already.

My question today is, really, how do you see that little submarket near Opryland evolving? There's kind of a lot of retail stuff across the street. I know you guys at one time were partners in the development across, I think, Briillley.

Is that submarket of Nashville something where you think that could become a new little market aside from downtown, and you can kind of create your own buzz there aside from obviously what Opryland already has?

Yes. So here is my belief. And I spent a lot of my time talking with the elected political leaders of this city and the state on this issue.

My perspective is, and some of it has been shaped by Mark's and my history in the early '90s, shaping casino gaming throughout the country and particularly in Las Vegas.

My view is that the demand for the product that originates in this city is blowing up right across the planet. And the opportunity for this city is extraordinary.

And the question becomes how do we do it, and the form in which we do it. So we own a lot of land out here on the eastern side of the city. And I think we've proven to the world that we don't have a geographic problem here because we've created with Opryland, the most successful convention resort in America that doesn't have a casino.

There's not another convention resort that comes close to what we have built over here. And then you look at the Grand old Opry that puts 0.75 million people through it every single year.

And my view is that we have a big-time opportunity to change the campus and make it more compelling over time for the consumer that I believe will turn up in this city in droves over the course of the next decade.

And I think the other thing that using the parallel to Las Vegas, you think about Vegas and gambling. And 10 years ago, the notion of putting professional sports in that city was crazy.

Nobody would have thought it was possible. Now you have professional sports in that city, and that city has become arguably the sports capital of America.

We're going to be building here a state-of-the-art city, a state-of-the-art stadium here. And we're going to be attracting Super Bowls, final bowls, college playoffs, WrestleMania, as Las Vegas has that didn't exist.

The notion of putting a Super Bowl in Las Vegas a decade ago was crazy. But we have a product here that people want, and it is absolutely blowing up right across the globe. And I do believe that the potential for Nashville is extraordinary.

We will move next with David Katz with Jefferies.

This may or may not be top of mind today. But just curious what your appetite is and what the boundaries would be for potentially more acquisition.

One of my go-to issues is always, as you know, I've followed the property in Chula Vista for many years. And that's underlying a more general question.

Shall I start? Yes, go ahead. So, David, the way we've known each other for a long, long time. And I think you would appreciate that the way we think about acquisitions is purely how do we create value for our shareholders?

How do we generate really high-quality return on invested capital? So as we sit here today, we have 7 of these beautiful babies, these great hotels in great markets, 2JWs, 5 Gaylords.

And here's the thing. We have, I don't know, right now, $1 billion, $1.5 billion in capital in some way, shape, or form under construction that will happen over the next 1, 2, 3 years, and we believe that the majority of that capital is going to generate mid-teen type returns.

And all of that is going to create value for our company. So the issue for us is, is there a market that we can plug an asset into? Is there a market that Patrick Chaffin was talking about a second ago about plugging in Desert Ridge into our system and moving customers around?

Is there a market that we're not in that we'd like to be in? And the answer is there may be 1 or 2 markets left in the country. But the issue is the asset that we would acquire, the price at which we would acquire it for and how we create real value for our shareholders by doing that.

My personal view is I think that if I were a betting man, I would say over the next 1 to 2 years, I think the deployment of capital will be focused internally versus externally, but who knows?

The internal rates of return on these incremental investments are pretty hard to compete with if you've got to buy existing assets at market rates.

Yes. But we did the bridge a few months ago, and we've been at that one for, I don't know, 10 years, looking at it and trying to get it. And it's simply because of the belief that we can rotate customers into that top 10 group market, Phoenix, Scottsdale, and that over time, we can expand that property and generate really high returns on that incremental capital.

So we'll see. But if I were a betting man, I bet you we'd be more likely focused on deploying capital internally than externally.

We will move next with Jay Kornnerbreg with Cantor Fitzgerald.

Last quarter, I believe you guys had commented on the expectation for RevPAR in the third quarter to be down mid-single digits and reverse for the fourth quarter.

And so I guess just curious now that the third quarter came in ahead of those expectations and yet the annual guidance was maintained, I guess where are you maybe seeing some 4Q softness?

Is it really just related to government or anything else that's worth calling out?

We've mentioned several times throughout the call already, Jay, that we are seeing government, government-related weakness. That's not a surprise as it relates to the shutdown that's still ongoing.

But certainly some bright spots in terms of how leisure is pacing. So all of that's coming together to where I think we are cautiously optimistic about how the fourth quarter will pan out.

We're in as good a position, I think, as we can be with all the headlines that are ongoing. Certainly pleased with how the third quarter turned out relative to our expectations, and feel very comfortable being able to reiterate that full year guidance on the hotel segment.

I think the other part of it is the thing that we don't know that we're being cautious about is how long this dam shutdown lasts. And as the shutdown prolongs, do we see an acceleration in negative behavior by the consumer?

And we don't know the answer to that question. Nobody does. And if these politicians can get their act together and get this country back to work, I think our fourth quarter should be pretty decent. But the big unknown is the craziness of what is taking place in Washington right now.

Yes. But Mark mentioned we've got a comparable number of room nights on the books from a group standpoint in the fourth quarter.

Patrick mentioned that at improving rates. And ticket sales, while a small proportion of the total complement that we would expect for the full holiday season has transpired this early on, given the short booking window for leisure, it's pacing ahead.

I'm encouraged by what we saw in October here in Nashville in the amount of airline arrivals, which is material. So we'll see.

And I would point out, this time last year, it was very clear that folks were very distracted by a national election. That is not the case this year.

We believe that's going to bode well for leisure. But to Colin's point, it's just a question of how much this government shutdown is a distraction to the groups of the country.

And then maybe just one follow-up, moving just to the renovation side with a number of renovations being completed and others ongoing.

As we look towards 2026, do you expect the EBITDA lift from completed projects this year in 2025 to outpace the EBITDA displacement from renovations that will be ongoing next year in '26?

Yes. Jay, I appreciate the question. We're going to give guidance in '26 as we finish out our budget.

We'll be meeting with Marriott here in the next week or 2 to review what that's going to ultimately look like. We can certainly give you the building blocks, which are very consistent with what we've talked about all year.

Certainly, we've already shown that the capital that has come online from the projects we did last year, if you look at the Rockies, has started to return.

Performance has been great there, related to the Grand Lodge work that we did there last year. So you're seeing that. So certainly, as things come online like the Opryland Sports Bar, which will be completed early in the year in 2026, you will start to see returns from that.

But as Colin mentioned, we've got a lot of things in the pipeline, a lot of good things that are going to return well, and those are going to be ongoing. So we'll just see how that can shape up in terms of improvements from what's coming online and then continued investments as we continue down the multiyear path.

It would be fair to say that we don't expect any incremental headwinds from a disruption perspective next year?

No. And I would give a shout-out to our design and construction teams, who are really getting all of this renovation and construction work down to a science and doing a phenomenal job with minimizing the impact on the business and trying to pull back on the displacement that we've already projected.

We have 3 minutes from the top of the hour. Maybe take one more question. Got a couple. We'll shorten our answers. Let's try to get through all these. Go ahead. All right.

We will move next with Chris Darling with Green Street.

Colin, you mentioned that in all likelihood, OEG will expand into other markets in the coming years, or at least you have the opportunity to do so. How do you think about the international opportunity for OEG? Any thoughts on growing overseas? Or were you primarily referencing new U.S. markets?

It's funny you asked that question. Patrick Moore, Mark, and I, 2, 3 weeks ago, had dinner with Luke over in London, Luke Holmes, who was with us on the Opry show that we did at Royal Alber Hall.

And Luke would love to do a category over there simply because of the popularity that, that man has. It's extraordinary. I think it's something that we'll be looking at, but it's not something that I would say, no, we're not going to do that. The popularity here is music.

And I think the product that we deliver would be well sought after. The issue is finding a partner to do that in that neck of the woods. Doing business in the U.K. is difficult. And so we'll see.

But the good news is, I think we've got lots of other opportunities to grow this business domestically.

And we do have content airing in the U.K. now for the Opry show. Yes. So the brands are present. We just don't have a physical presence in those markets at this point.

We will move next with John DeCree with CBRE.

Maybe just one on that same theme about international next year, the World Cup in North America. I know there's only a handful of games in Dallas, but how do you think about given Country Music's penetration in Europe, follow-on trends?

Is there any programming that you're thinking about doing? Have you seen any early bookings yet? I know it might be early, but I think it dovetails with our conversation on country music expansion in Europe, given there might be some customer overlap. Curious if you have any initial thoughts.

Well, we're going to see a lot of international travel in the summertime next year for the World Cup. And unfortunately, our stadium here will not be complete. And I can tell you, I've spent quite a bit of my time with other folks in the city, quoting FIFA to try and get the 2026 World Cup here in Nashville.

But there are going to be markets where there will be some lift, like, for instance, Orlando is a market, I think that we'll see lift because of the World Cup next year.

But the interesting thing is, we're very active, not we, Ryman, but we, the city, are very active in quoting FIFA for the Women's World Cup here because we will have a beautiful stadium.

And so this is a consumer base that we think could be potentially very valuable for international sporting events. We just announced, I think it was last week, that we secured the Olympics for the physically disabled folks.

What are we, Special Olympics? Yes, Nashville has secured that here. So this is a consumer base that we are very interested in.

All right. I think, Nikki, that's it. I appreciate everyone being on the call this morning. A lot of good questions. Our business is in good shape, and we're looking forward to this fourth quarter. And I know I'm looking forward to seeing how '26 plays out because I think it could be a good year for our company.

Thank you, everyone.

Thank you. And this concludes the Ryman Hospitality Properties Third Quarter 2025 Earnings Conference Call. Thank you for your participation, and you may now disconnect.

Welcome to Ryman Hospitality Properties Second Quarter 2025 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Executive Chairman; Mr. Mark Fioravanti, President and Chief Executive Officer; Ms. Jennifer Hutcheson, Chief Financial Officer; Mr. Patrick Chaffin, Chief Operating Officer; and Mr. Patrick Moore, Chief Executive Officer, Opry Entertainment Group.

This call will be available for digital replay. The number is (800) 727-5306 with no conference ID required. [Operator Instructions]

It is now my pleasure to turn the floor over to Ms. Jennifer Hutchison. Ma'am, you may begin.

Good morning. Thank you for joining us today.

This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance. Any statements we make today that are not statements of historical facts may be deemed to be forward-looking statements. Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release. The company's actual results may differ materially from the results we discuss or project today. We will not update any forward-looking statements, whether as a result of new information, future events or any other reason.

We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in exhibits to today's release.

I'll now turn the call over to Colin.

Jennifer, thank you. Good morning, everyone, and thanks for joining us today.

Before we start, I'd like to take a moment to acknowledge the families and communities affected by the catastrophic flooding in Central Texas. Managing through the devastating flood that we experienced here in Nashville in 2010 that directly impacted our businesses, our employees and our city was, I can tell you, one of the most difficult experiences of my entire career. And we're heartened to see how communities across Texas have wrapped their arms around their neighbors. While our assets were not directly impacted by the flooding, we have contributed to the relief efforts through our Texas-based properties and directly by making a donation to The Community Foundation of the Texas Hill Country. We will continue to engage in the recovery efforts as we learn more.

The second quarter was an exciting one for our company, both strategically and operationally. Strategically, we announced, funded and closed the acquisition of the JW Desert Ridge in Phoenix, Arizona, an asset that has long been at the top of our acquisition list and one that we have tried to acquire, I don't know, several times in the last 10 years. Mark will talk about the acquisition in more detail in just a moment.

In addition, we completed the presidential meeting space renovations at Gaylord Opryland, among several other projects smaller in scope, including food and beverage enhancements at the Gaylord Texan and the Gaylord National. The presidential meeting space, together with the recently renovated governor space, represents approximately 40% of the carpet meeting space at Gaylord Opryland today. Actually, we will be unveiling new names for these meeting spaces in the coming weeks.

And for our entertainment business, the second quarter marks our first festival season with Southern Entertainment. Operationally, our businesses delivered record consolidated revenue and in our same-store hospitality segment, the second-highest adjusted EBITDAre in the history of that business, trailing only the second quarter of last year. In fact, for the year-to-date period, same-store hospitality adjusted EBITDAre came within $30,000 of our original operating plan for that part of the year, an incredible result given the complexities of the current operating environment.

I said this on our last call, but it warrants saying again, we're living and operating in very unpredictable times. Throughout my 24-year tenure at this company, I cannot remember a period when there were so many different and complicated issues occurring at once. We and our customers are bombarded daily with the rhetoric around tariffs, inflation, interest rates, wars and other issues that could have significant implications for our businesses. This level of uncertainty has caused some of our group and leisure customers to put activities on hold or at least proceed with caution. Since Liberation Day in early April, some of these near-term uncertainties have abated, and we've seen some improvement in meeting planner sentiment for '25.

In-the-year-for-the-year bookings activity has trended better than our expectations in early May. But given the complexities of the overall economy, our outlook still contemplates the potential for slightly higher group attrition and cancellations in the second half of this year.

For the portfolio, our leisure business is, I would say, steady as she goes, with particular strength at the Gaylord Palms and Gaylord Rockies, behind our recent investments in those assets, particularly offset by softness at Gaylord Opryland. For several quarters now, transient occupancy trends in Nashville had lagged the top 25 markets and, in the second quarter, so did transient rate trends, both of which we view as a temporary side effect of the substantial influx of new hotel supply in this market.

Visitation and tourism in Nashville remains robust. And in fact, rooms sold in the market in the second quarter increased year-over-year. We expect the transient occupancy and rate trends to begin to reverse as tourism grows and hotel demand catches up with the new supply.

Our entertainment business continues to perform well. Demand for live entertainment remains robust and our recent capital investments in Cat 10, Block 21, Ole Red Las Vegas are delivering strong results. Next month, the Opry heads to the Royal Albert Hall in London for its first-ever international performance. which we will also be broadcast in the U.K. NBC will also be re-airing the televised Opry 100 special from earlier this year. And we just announced that the Opry will have a special performance at Carnegie Hall in New York City in the first quarter of '26. As we had anticipated through the marketing investments we're making behind Opry 100, we are reaching more fans than ever.

Now before I hand over to Mark, I want to make one more comment. As a fairly large investor in this company, I'm, of course, very much interested in what's going on in the business on a daily basis. But my focus always has been on the long term. At our hotel business, which represents the lion's share of Ryman, our customers are making decisions 2 to 4 years out and, in some cases, much longer. What's really important is how strong our relationship with these folks are. Do they trust us? Do they recognize the superior proposition we're putting before them? Are we growing our share of their business? Do our advanced bookings for the future years look strong? Will the large capital projects that are underway create meaningful growth for our shareholders? The simple answer to all of these questions is an emphatic yes.

And Mark will now explain to you why Ryman and our hotel business, in particular, has never been in such a strong position.

Thanks, Colin, and good morning, everyone.

Before I discuss the second quarter, I'll spend a moment on our acquisition of the JW Marriott Desert Ridge. As Colin mentioned, this is an asset that's long been at the top of our acquisition list. For us, the Desert Ridge property is an ideal acquisition target, a large Marriott-managed group hotel with significant leisure demand in a top 10 meetings market with opportunities to create value through inclusion in our portfolio and incremental capital investment. This acquisition unlocks incremental group rotation opportunities for our existing Gaylord hotel customers and, as the second JW branded asset in our portfolio, rotation within the JW brand.

For our Gaylord hotels customer base, we estimate groups comprising approximately 25% to 30% of group room nights could rotate to one of our JW properties, with the limiting factors being group size and ADR. For our JW customer base, where those limitations don't apply, the opportunity is arguably more significant. We estimate the overlap in meetings today between the Desert Ridge and the Hill Country properties is approximately 5%.

Our 2023 acquisition of the JW Marriott Hill Country provides a repeatable playbook for integration and subsequent value creation. And with the benefit of that experience, we're moving quickly on Desert Ridge. We've already aligned the resources within Marriott dedicated to our portfolio, and our design and construction team is on the ground completing the meeting space renovations that were initiated prior to our purchase.

In addition, we're pursuing a handful of capital-light, high-return enhancements to drive better yield, including converting approximately 5,000 square feet of vacant office space to sellable carpeted breakout space and enhancing some of the event launch to support the addition of our ICE! programming for the 2026 holiday season. We expect many of these enhancements will be completed by the first quarter of 2026.

Longer term, we believe the dynamics in the Phoenix-Scottsdale market will support a resort expansion, providing the ability to accommodate groups with over 1,000 room nights on peak all under one roof. Today, the only larger hotel by room count in that market is the 1,000-room Sheraton located in downtown Phoenix. Like the JW Marriott Hill Country, the more we learn about this property, the more we like it, and we look forward to sharing our progress over time.

Now let me provide more color on the second quarter results. Our same-store hospitality segment delivered results at the midpoint of the color we provided on our first quarter earnings call. RevPAR was essentially flat compared to last year and total RevPAR declined 160 basis points. We estimate the timing of the Easter holiday was a 130 basis point headwind to RevPAR growth and higher association group mix, which came in with lower absolute banquet, and AV revenue was a 270 basis point headwind to total RevPAR growth.

As anticipated, association group room nights traveled in the second quarter were approximately 49,000 higher than last year and corporate group room nights traveled declined by a similar amount. 2024 had unusually strong corporate mix of 59%, whereas 2025 mix is more consistent with historical trends. Typical historical patterns reflect corporate group mix in the low 50s as a percentage of total group room nights and association group mix in the mid-30s. In general, association group ADR is lower than corporate group ADR. However, ADR for both segments were higher year-over-year and supported higher total group ADR.

Banquet and AV revenue declined approximately $16 million compared to last year driven primarily by the group mix shift and, to a lesser extent, lower in-the-year-for-the-year bookings for travel in the second quarter. As Colin noted, in-the-year-for-the-year bookings activity improved in the second quarter, but bookings for travel in the second quarter were adversely affected by the first quarter pause in meeting planner decision-making. Banquet and AV contribution per group room night or spend per attendee actually finished slightly ahead of our expectations. As we've seen in recent quarters, group outside the room spending levels, once attendees are on site, continues to exceed our expectations.

Leisure demand increased approximately 4% compared to last year driven by strong performance at Gaylord Palms and Gaylord Rockies, partially offset by softer demand at Gaylord Opryland due to the supply-induced challenges in the Nashville market.

Over time, we've consistently demonstrated that our group-focused strategy, irreplaceable assets and capital investment strategies drive superior growth, and our competitive position has continued to strengthen in 2025. For the year-to-date period through June relative to 2019, we've grown the STR RevPAR index for our Gaylord hotels portfolio by more than 7 points relative to both our primary national competitive set and the local luxury and upper upscale competitive sets in the markets in which our properties are located.

Same-store Hospitality segment adjusted EBITDAre was $187 million, a decline of approximately $18 million year-over-year, but still the second highest quarter of all time. Same-store adjusted EBITDAre margin declined 280 basis points due to the timing of Easter, the group mix shift from corporate to association, the onetime franchise tax refunds received in the second quarter of last year and the planned wage and benefit increases under the collective bargaining agreement for Gaylord National.

Several properties delivered standout performances, including the Gaylord Rockies and the JW Marriott Hill Country, both of which achieved all-time monthly records for revenue and adjusted EBITDAre in the quarter. Outlet spend per occupied room at Gaylord Rockies increased nearly 30% compared to last year as the repositioned Grand Lodge continues to perform ahead of our underwriting expectations. The recent renovation at Gaylord Palms continues to receive favorably by our customers and recent guest and meeting planner satisfaction scores for the property are some of the highest in Marriott's convention resort network. These results confirm our capital deployment decisions are driving value for our customers and shareholders alike.

Same-store group production trends were also strong, but last year's record second quarter created a challenging year-over-year comparison. Gross group room nights booked in the second quarter for all future periods were down approximately 15% from last year's record second quarter, which benefited from a handful of very large multiyear bookings at Gaylord Opryland. However, compared to the average quarterly bookings for the 2019 to 2023 period, this quarter bookings were up high single digits.

Given the uncertain near-term economic environment, lead volumes for the in-the-year-for-the-year period were down 16% year-over-year. However, closure rates were up meaningfully and gross group room nights booked in the second quarter for the year were up 3%. As a result, year-to-date in-the-year-for-the-year group bookings demand recovered to flat to prior year levels with mid-single-digit ADR growth. These results are a testament to the quality of our portfolio, the loyalty of our customer base and the strong execution of our Marriott sales teams.

Looking beyond 2025, group demand remains strong and our book of business remains healthy. Group rooms revenue on the books for 2026 and 2027 is up 9% and 10% compared to the same time last year for 2025 and 2026, and ADR growth is in the mid-single digits. Lead volumes for all future years remains robust and the sales funnel sits near-record levels.

Our Entertainment segment delivered record revenue of $143 million and adjusted EBITDAre of $34 million driven by our recent investments in Category 10, Block 21 and Southern Entertainment. Consistent with the color we provided on our first quarter call, Entertainment adjusted EBITDAre margin declined year-over-year due primarily to our investment in Southern Entertainment as well as the onetime franchise tax refunds received in the second quarter of last year.

Seasonality for the Southern Entertainment business is heavily weighted to the second quarter due to the timing of their largest festivals. And this year, some unfavorable weather conditions impacted festival attendance and margin performance in that business. We continue to be very bullish on the long-term potential of the festivals business given its customer demographics, capital-light growth potential and artist reach.

Before I turn it over to Jennifer, let me provide some color on our expectations for the rest of the year. Recall in early May, we lowered RevPAR and total RevPAR growth guidance ranges for increased conservatism around near-term group behavior. While in-the-year-for-the-year bookings activity has trended modestly better, we're maintaining our cautious outlook for higher group attrition and cancellations in the second half. In addition, the second half continues to present challenging year-over-year comparisons due to the unusually strong corporate mix in 2024.

Market dynamics in Nashville for the transient segment are modestly softer than anticipated earlier this year. As Colin noted, transient demand in the market remains healthy. However, the significant influx of new hotel supply is pressuring room rates. While we continue to believe our hotels are well positioned in the market, we have revised our outlook to account for these dynamics. Outside of Nashville, our leisure business continues to perform in line with our expectations.

Our Entertainment business is well positioned for the second half with strong Opry 100 programming ahead of the Opry's birthday month in October, a strong show calendar for the Ryman and continued momentum behind our recent investments.

Taken together, our business is in a terrific position. We're pleased to have the first half largely in line with our original plan for the year. Along the way, we picked up a premier asset in the JW Marriott Desert Ridge that's been on our wish list for a long time, and we're nearly halfway through our multiyear capital program. And at the midpoint, our adjusted EBITDAre guidance revision is less than 1% of full year profitability.

Now I'll turn it over to Jennifer to run through our guidance revisions and review our financial position.

Thanks, Mark. Regarding our outlook for full year 2025, we adjusted our guidance ranges to include the acquisition of the JW Marriott Desert Ridge.

For our period of ownership in 2025, we expect to generate adjusted EBITDAre from Desert Ridge of $18 million to $22 million, which reflects the normal seasonality of that business and some construction disruption related to the meeting space renovation currently underway. We also lowered the top end of our adjusted EBITDAre guidance range for the same-store hospitality business, which lowered the midpoint for that by $5 million to $690 million. This primarily reflects the flow-through impact of incremental transient rate risk for our Nashville-based hotel properties. On a consolidated basis, we now expect adjusted EBITDAre for the full year 2025 in the range of $767 million to $813 million.

Our revised guidance ranges for full year AFFO and AFFO per fully diluted share incorporate the adjustments to adjusted EBITDAre as well as the financing activities we completed in the second quarter. We now expect AFFO for the year in the range of $505 million to $546.5 million and AFFO per fully diluted share in the range of $7.93 to $8.49.

Let me also provide some additional color for how we expect the third and fourth quarters to play out. For the same-store hospitality business, in the third quarter, we anticipate RevPAR and total RevPAR to decline low to mid-single digits with lower adjusted EBITDAre margin. In the fourth quarter, we expect those trends to reverse driven by greater rooms availability at Gaylord Palms this year and easier comparisons in our leisure business. And we anticipate RevPAR and total RevPAR growth in the low to mid-single-digit range with adjusted EBITDAre margin expansion.

On the contribution for JW Desert Ridge this year, the typical seasonality for the Desert Ridge results in approximately 40% of adjusted EBITDAre generated in the first quarter and approximately 30% to 35% of its annual profitability in the back half.

Finally, in our entertainment business, due to typical seasonality, we expect stronger adjusted EBITDAre contribution in the fourth quarter than in the third quarter.

Now turning to our balance sheet. We ended the first quarter with $421 million of unrestricted cash on hand and our revolving credit facilities both undrawn. Total available liquidity was approximately $1.2 billion, and we've retained an additional $30 million of restricted cash available for FF&E and other maintenance projects.

During the quarter, we issued approximately 3 million shares and $625 million of senior unsecured notes to fund the acquisition of the JW Desert Ridge. The equity transaction represented the first marketed equity offering in the lodging REIT space since we last issued equity in 2023 to fund a portion of the Hill Country acquisition. Our current bond offering priced approximately 30 basis points better than the average yield for our credit ratings category. Additionally, and related to the JW Desert Ridge acquisition, we received a same-day credit ratings upgrade from S&P from B+ to BB-.

We also refinanced a $128 million Block 21 CMBS loan that was set to mature in January 2026 with an add-on to the existing OEG Term Loan B. As a result, at the end of the quarter, our pro forma net leverage ratio based on total consolidated net debt to adjusted EBITDAre, assuming a full year contribution of adjusted EBITDAre from the Desert Ridge, was 4.4x.

And finally, let me comment on our anticipated major cash outflows for the year. Regarding our outlook for capital expenditures, in 2025, we are reiterating our expectations for $350 million to $450 million for the year based on our latest construction time lines for projects currently underway. This also includes modest incremental capital investment at the Desert Ridge, which Mark touched on earlier. Regarding our dividend, it remains our intention to continue to pay 100% of our REIT taxable income through dividends.

With that, operator, let's open it up for questions.

[Operator Instructions] Our first question will come from Aryeh Klein with BMO Capital Markets.

Maybe first, just on the lead volumes. I think they were down 16% year-over-year. Curious how that's trended, are you seeing kind of month-over-month improvement and how you just expect that to play out for the rest of the year?

This is Patrick. Yes, I mean, our lead volumes have definitely felt some pressure on the in-the-year-for-the-year, and we expect that to continue as we continue to move through the rest of this year. But our lead volumes look very good for 2026, 2027 and beyond. So we do believe that some of the pressures and headwinds that we've been seeing have thus far been relegated just to the 2025 calendar year.

Got it. And then maybe more of a strategic question. You talked a little bit about the potential for rotation within the JW brand now that you acquired Desert Ridge. Curious how you're thinking about JWs more broadly longer term and creating something where you own more JWs, kind of replicate what you have within the Gaylord hotels that you own. Is that something you would potentially consider?

I mean that certainly is -- as we think about what the growth strategy is for the portfolio, adding JWs in the right markets that allow us to create that rotation, not only between JW and Gaylord, but also across JWs, is something that we think quite a bit about.

Aryeh, this is Colin. When we put the crosshairs on these 2 just happened to be JWs 10, 12 years ago, we did so because we like San Antonio as a market and we very much like Scottsdale as a market. And the reason we like those markets is because the large group meeting planner wants to frequent those markets. Those markets are both top 10 markets. These hotels were, in our opinion, leaders within those 2 markets. And both these hotels, in our opinion, have the ability for us to extend these assets from around 1,000 rooms to 1,250, 1,500 rooms over time. And of course, they're within the portfolio of Marriott. So we can aggregate and bring our sales structure into them. I think, Mark, the other benefit of JW is the rate structure of JW has been a little more favorable.

Well, certainly higher than Gaylord.

Than the Gaylord brand. And so picking these customers up that go there today and then rotating them into our infrastructure is a good thing. But the primary reason we like these assets is the market and the fact that our big group customers want to go to these markets. And in our opinion, this was a very efficient way to get into these businesses.

Our next question will come from Chris Woronka with Deutsche Bank.

Kind of a two-parter. The first one is it seems like the out-of-room spend is continuing to hold up really well even in cases where you're maybe having a little bit of attendance attrition or less pickup. But just curious as to what you think is driving that in the context of a little bit of softness you mentioned here and there. And then the second part is we talk a little bit about D.C. market and what you're seeing there. There's a lot of noise in the market. We've heard some mixed things. Can you just talk about maybe your near- and medium-term outlook for National and how you can maybe offset some of the broader market hiccups, if there are any?

Chris, this is Patrick. Good to hear your voice. Let's start with your first question on out-of-the-room spend. Yes, we agree, it has been extremely resilient. And when you take into account the mix shift that we've seen in the second quarter and some of the other things we've seen for the remainder of the year, we're still very, very positive on how banquet and outside-the-room spend contributions per group room night are holding up. 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. And that is a trend that we've been seeing for several years, and it continues to hold up, especially on the corporate side, but the association is definitely not underperforming on that side either. So we've been very encouraged by that.

To your second question on the D.C. market, I would tell you that we're really pleased that the Gaylord National has been doing a really good job in a very challenging market and continues to move in a very positive direction. We've made some fundamental structural changes to that hotel in the wake of COVID when we reopened it, and those have continued to pay benefits for us long term. And so while there is some pressure from the government side, Gaylord National seems to have really found its space to operate in, in a very healthy way and continues to move in a positive direction. So we feel good about where it's heading.

Chris, it's Colin. I want to add just one more comment to Patrick's answer to the first question about average spend. When you step back and you look at what is really going on within the economy of the United States of America, things aren't all that bad. Yes, we had a rough first quarter for multiple reasons. But the second quarter GDP has just come out, 3% GDP growth. If you look at where the S&P 500 is trading, you look at where the market is trading, you look at underlying profits of corporations throughout this country, things are in pretty good shape. And so our thesis is, if interest rates do come down, the big beautiful bill takes effect where people, organizations, can invest in new infrastructure and claim 100% tax depreciation, our view as a company is over the next 1, 2, 3 years, this economy should be pretty decent. And so honestly, I think that's one of the reasons why the average spend is holding up.

But it's very complicated because we're being bombarded every single day with things like what is going on with tariffs and wars and the consumer is pulling their hair out trying to understand what things are going to be like 6 months from now. But I think my personal view is I think things could be decent for '26, '27 and '28.

Yes. I mean, in addition to the macro trends, Chris, the one thing I would add is that when you look over the last several years at how we've invested capital into these hotels in terms of food and beverage, carpeted breakout space, things like what we've done in Colorado, right, all those investments have been to drive outside-the-room spend and to attract a higher quality customer and a higher rate of customer. And I think that you're starting to see those investments pay off in some of the outside-the-room spending behavior that you're seeing in our hotels.

Our next question will come from Smedes Rose with Citi.

I wanted to ask a little bit more about your expectations at the Gaylord Opryland. Does that property do more transient business maybe relative to your other properties? Because I guess I was a little surprised to see that you brought down the guidance based on transient given the emphasis on group across your properties. And just on the room supply pressure that you mentioned, I maybe haven't been paying attention closely enough, but I feel like room supply in Nashville has been increasing fairly steadily for a long time now. And I'm just wondering why you think now you're starting to see the impact, whereas maybe you hadn't seen it as much in prior years.

Shall I start? Okay. So let's step back a second and understand what is going on here in the city, and then we'll get on to Opryland. There is a unique product that emanates from Nashville. It's called music, country music. There's not another city in America that has the infrastructure that we have here. This product has become global. Over the last 5 to 10 years, it has gone global. All these great artists that live here, play here are now playing in cities all across the world. And this is generating tremendous amount of demand for the city of Nashville.

In addition to that, you're right, we've seen, over the last decade, I would suggest probably 15,000 new hotel rooms. There's not another city in America that's seen this supply. And we forget about Airbnb that didn't exist 10 years ago, now it does. We've got about 7,000 of those babies in this town. But on the other hand, when you look at the demand generators, the things that are underway in this city, things like this brand-new stadium, and we call it the Titan Stadium, but it's a domed stadium similar to the stadium in Las Vegas. And this stadium will, I suspect, do 25 to 50 new big concerts a year, playing in front of 70,000 people. This stadium, almost certainly over the course of the next few years, will attract the Super Bowl, will attract the Final Four; has, in fact, recently signed WWE to come here, which was, quite frankly, when it was in Vegas a year ago, was one of the biggest demand generators for that city. We have massive development going on, on the East Bank, with new demand generators being built there. We have the Bridgestone Arena in downtown Nashville that the current owner of is a guy called Bill Haslam, the ex-Governor of the state, owns the Predators, has very, very, very exciting plans for the expansion of that.

I look out of my office window here, I see cranes everywhere. We have relocations coming into Nashville, the likes of which we haven't seen before. We have Oracle bringing their world headquarters here over a period of time, $4 billion relocation. So the city is an extraordinarily unique position.

Now Opryland, we talk about it, and we take it for granted, 2,880 rooms. This hotel, when Mark and I got here 20-plus years ago, did $40 million of EBITDA. That baby this year is going to push just under $200 million of EBITDA. This is the most relevant convention resort in America. And we have added, as you all know, things like SoundWaves because of the incredible amount of influx that we've seen from a tourism perspective. Yes, this hotel does more tourism business than the rest of our hotels, than any of the other hotels, but it's simply because we've got far more rooms and 30% of its business is leisure. So leisure is going to continue to grow in this market.

And by the way, I didn't mention what has happened at the airport. There's not another airport in America that's had 2 major expansions in the last decade. There's not another airport in America that when you speak to the CEO of the airport, good guy, Doug Kreulen, who runs it, and you ask him, "You've just put a new whole series of gates in," he would tell you that we're 30 gates' short today. We're 30 gates' short of what the demand for airlines flying to this town will be. So our thesis for Nashville, I know this is a long-winded answer, Smedes, to a very simple question. Our thesis for this market is, because of this unique product and the desire for consumers to touch it and feel it, we're going to continue to see growth in this market big time, I think, over the next 10 years.

Oh, and by the way, I forgot one other thing. On Monday of this week -- I beg your pardon, last week, The Boring Company, which is Musk's company that digs tunnels, this is the second city that they have selected to come to. And they have been working with the governor's office for the last 12 months to connect the airport to downtown Nashville. And we met with them, and we would obviously like them to connect it through Opryland. And this is exciting. This is going to move people from very crowded streets to subterranean and will, I think, be another benefit to tourism in this city. So that's how we think about it.

Okay. Well, maybe just if I could just ask a quick follow-up and just kind of just backing up a little bit. I mean, you obviously have improving visibility into '26 and '27. You talked about some of the positives there. So are you still comfortable with the EBITDA ranges on a same-store basis that you provided back in, I think, January of '24 in terms of being able to get to those levels in '27?

The short answer, Smedes, is yes. I think obviously, as you go through a period of looking at a 4-year time period, things that are going to be better. there's pluses, there's minus, there's puts, there's takes. There's a lot of ways we can get to that answer, but the short answer is yes, we're as positive as ever on the portfolio of businesses that we have and how we're going to be able to get to that profitability.

I'm really, really glad, Smedes, you remember that because it's something that all of us sitting around this table focus on every single day. As we look out to '27 and we look out to what dividend should be, where the EBITDA ranges should be, as Jen said, there's going to be some ups and downs. But overall, our guide slope is well and truly intact.

Yes, Smedes, this is Patrick. I would just add to it that, to summarize what everyone is saying, this is a short-term phenomenon. You had a pretty significant increase in supply come into the Nashville market in the short term. A lot of our competitors got panicky and dropped their rates pretty dramatically. We tested that within our own hotel at Opryland to make sure that we were responding. But I'm proud to say that the hotel did a great job of holding their ADR share and they grew their group base even as some of the transient occupancy pulled back a bit.

But on the transient rate side, the entire market went down significantly, and the hotel did a great job of managing through that. But it is a short-term phenomenon. And you see it with some of the more price-conscious consumers that are going to places like Las Vegas, New Orleans and Nashville, and it is a short-term phenomenon that we think we're going to move through. To your question earlier, just to build on Colin's point, Opryland does more absolute room nights of transient, but it is in line with what the rest of the brand does from a percentage basis of its total room nights.

Our next question will come from Shaun Kelley with Bank of America.

Colin or Patrick, wondering if we could branch kind of like branch out from the Nashville conversation and just maybe do a little walk around the transient side of the rest of the kind of Ryman portfolio. I think we've picked up a little softness across some Sunbelt markets. I'm wondering what your experience was. I think there's some unique demand drivers that might be good for Orlando, but I'm curious specifically for the Texan, just given what we've heard about the housing market there. And just more broadly, kind of where are you at, what do you think we're seeing on the ground from the consumer right now?

Yes. Pat, do you want to take that?

Sure. Yes. Let me lead with what's going on in Orlando. Everyone has been watching very closely to see what Epic Universe at the opening of that park would do, and it's been a very positive catalyst for the entire market. So we see Palms and the entire Orlando market continue to move in a very positive direction on the transient side.

Gaylord Rockies has really hit the ground running and has found its sweet spot this year and last year and continues to perform really, really well, both on the group side as well as the transient side. And our investments at that property, obviously, are paying significant dividends on both sides of the segmentation of group and transient. So we're feeling really good about where Rockies is headed.

Hill Country in the short term was impacted by the rainfall and some of the issues in that region. But again, we think that's a short-term issue. And when the weather has been very good, the hotel has performed very well. And so we don't see any kind of systemic issue from a transient perspective there. It's just really more related to what happened on the rainfall side.

Gaylord National, that's a house that leans heavier towards group and continues to do very well, even though there are some headwinds, as I mentioned earlier, on the transient side, it's pretty much steady as she goes.

Gaylord Texan, there's a lot of new supply and a lot of new competition as far as it goes in water parks and other summertime attractions, but we continue to invest long-term into that market and into that hotel and feel that it is well positioned for the future. We tried the Universal of Light with DC Comics at that hotel this summer. It was very well executed, and it was a concept that we just wanted to pilot and see how it did. It didn't resonate quite as much as we had hoped, but we continue to feel that the transient picture there is in really solid shape and moving in a good direction.

We have a little disruption there, too, with the room refurb, is that right?

Yes, that's right. In the short term, we have some renovation disruption that will mostly manifest on the transient side. But again, long term, that market is heading in a great place, and that hotel will continue to get investments to make sure it stays at the forefront of that.

But steady as she goes, right, Patrick?

Yes.

Our next question will come from Duane Pfennigwerth with Evercore ISI.

So as your future bookings improve, recover, when would you expect your corporate versus association mix to normalize? How long do you think we'll be in this higher association mix mode for group?

Yes. It goes from year-to-year. As it stands right now, on the books for 2026 shows a higher corporate mix. And so we knew we were going into '25 with a higher mix on the association side, that reverses and goes back in the other direction in '26.

That's helpful. And then just on cancellations, I wonder if you could just put a finer point on how that has evolved since this initial shock period of March, April. And maybe just speak to the underlying assumptions in the back half there. I know you touched on it in your prepared remarks, but I wonder if you could provide any more detail.

Sure. Most of the cancellations that we saw were in reaction to some of the tariff issues and macro concerns. And so that was more of the elevation that we saw in the first quarter. The second quarter, if you look at a 3-year average, really is in line with what we've seen. So a little bit more in the first quarter. We've seen groups not so much on the cancellation front, but just modifying their blocks and maybe showing up with fewer folks than they originally anticipated. That really is going to manifest mostly in the third quarter, but we feel like we're going to move in a positive direction. And as Colin mentioned, the next 6 to 9 months could be a very positive period for the hotels. So some short-term issues, we saw some of that manifest in the third quarter. The cancellation is a little bit higher in the first quarter, but no long-term issues from what we can see.

Most of that cancellation activity is around government and a lot of the large consultants that had significant government contracts that were canceled as a part of DOGE.

Yes, absolutely.

Our next question will come from Cooper Clark with Wells Fargo.

I wanted to touch on OEG. Could you just talk about the contribution from Southern Entertainment in Q2 and how we should be thinking about the seasonality of OEG going forward? Also, any color on further investments, timing around the spin and just the general health of the entertainment consumer would also be great.

Well, I can kick this off and then let Patrick Moore kind of fill in on additional details on that. In terms of the OEG contribution for Southern Entertainment, we don't really give out separate by business within OEG just given its relative significance of the overall portfolio. But certainly, this is a business that we fully consolidate. So the revenue changes year-over-year, certainly, in the second quarter, reflect the fact that the Southern Entertainment business is seasonally weighted pretty much entirely to the second quarter. So there's a few puts and takes compared to the second quarter last year as well.

Also keep in mind, outside of Southern Entertainment, primarily the franchise tax is on the expense side. So we can certainly help you reconcile some of those amounts. But again, we don't necessarily call out specific numbers on the individual business contribution within OEG. I think to the broader point about the festivals business, Patrick, we can talk about why and how and how we see it being a positive contributor.

Yes. To Jen's point, this is Patrick, we are very bullish about the festival segment as a market that we recently entered. Similarly to the amphitheater that we just won the contract for in Downtown Nashville. Both of those are market segments from an entertainment standpoint that we did not participate in before this year. So we're super bullish on both of those opportunities, providing us more service area for the Opry Entertainment Group business to grow. And to Jen's point, it's more seasonal just given the sort of summertime nature of those 2 business segments.

Separately, from an entertainment and a live entertainment perspective at a more macro level, we're very excited about what's happening in the live entertainment space, and it continues to be a very robust demand for that. When you think about through-cycle demand for live entertainment and what people spend their time and their money on, live entertainment tends to be very, very stable relative to some other business segments in the world.

We're seeing good traffic at the Opry, Ryman, Austin. And most of our live entertainment venues outside of Nashville, the Ole Reds, and the one in National already, Category 10, they're all performing as we would anticipate.

Yes. And to Colin's point, we're also offering premium experiences in these markets with a set of distinctive capabilities that we believe set us apart. And so the entertainment business is sort of working very well. We're excited about the prospects for the future.

Yes. And hopefully, we'll have some more to talk about on the entertainment business here over the next couple of months. We've got a lot of things we're working on, and it's all pretty exciting.

Great. And just a quick follow-up on Desert Ridge. Curious if expectations have shifted at all since the closing of the acquisition and if you still expect that acquisition to be accretive to FY '26 results?

Our expectations haven't changed. We do anticipate it being accretive. I know that there was some questions about kind of the back half and timing, and it really comes down to the seasonality of that market and that business. They produce about 40% of their EBITDA in the first quarter. And obviously, with us picking it up in June, we missed the sweet spot of the year, but that couldn't be helped. We didn't buy it for 3 months.

I mean this is a great market and a great asset, and it's got a really good management team in place. And in my conversations with Patrick and Mark, these guys, Patrick has spent a lot of time at this hotel over the last 12 months and particularly since we've acquired it. And Patrick, I don't want to put words in your mouth, but I think you're delighted with what we're unearthing there and the opportunities.

Yes. We're encouraged. We think there's lots of upside, and we're continuing to pursue it. And I think what we can do on the ICE! and holiday programming front is a really, really solid contribution to the market. And there's a lot of low-hanging fruit that doesn't require a ton of capital. So that is nirvana for us.

Our next caller will come from Dan Politzer with JPMorgan.

Just a high-level one. Mark, Colin, last quarter, we sat here, and I think it was early May, you guys said with a tweet, things could change dramatically. As we sit here 3 months later, and I guess, arguably, we got that tweet, though probably a few others along the way. How do you think about your business and the level of uncertainty in this environment versus 3 months ago? And how do we reconcile that with what's changed in terms of lead volumes? And maybe as you look to group and leisure ex Nashville, how are you kind of reconciling the kind of outlook now versus 3 months ago?

Yes. Dan, I probably shouldn't talk about this on the call, but we have our Board meeting tomorrow, starting tomorrow afternoon and Thursday at our hotel in Aurora. And one of the speakers we have is your head economist for JPMorgan that is coming in to talk to our Board and our management about the backdrop that we are operating in. And I wanted him to come in and do this because there's a lot of balls in the air right now. When we were operating in May, we had the promise of the Big Beautiful Bill and some of these certainties around tax being discussed, but the bill hadn't passed. It now has. Yes, we haven't moved interest rates down. There's more clarity around the impact of tariffs, although that changes almost daily.

But I think our sense, my sense, and I don't want to talk for Mark, but he can do it himself, is that we could find our economy through the rest of this year looking pretty decent. And I think there will be a lot more capital investment into the economy of the United States of America. I think there will be more certainty around the issue of tariffs and the impact that, that will have on businesses.

And my personal view is I'm an optimist about the next 12 to 24 months. And I sit on the Board of a fairly large regional bank and the activity in banking is not negative. It's decent. So we spend a lot of our time -- because we've got a lot of capital plans, not just underway, but plans that we're looking to do, expanding things like Colorado, expanding Hill Country, Desert Ridge assets that we have purchased, and so this question that you ask is something that's top of mind for us in terms of the economic well-being of this country and what is likely to happen. But right now, I think I'm a little bit more optimistic than I certainly was in May.

Mark, we had a conversation last night on just this subject. And I think you normally have the half...

You were surprised I was optimistic.

Exactly.

Look, you still wake up every day and don't know what could happen and what could get tweeted. But I would argue that the economy has been fairly resilient. The consumer has been fairly resilient, particularly at the higher end. Rates will come in eventually. That should be a tailwind. And our business, I think our business has proved to be very, very durable, both on the leisure side as well as on the group side. And look, it really comes down to the fact that the model that we have, the assets we have are incredibly unique, incredibly well positioned. When you look at the geographic distribution of our portfolio, I can't think of other markets I'd rather be in than how we're distributed when you think about what's happening more broadly economically with economic growth and population migration.

So we're extremely well positioned. And when you look at '26 and '27, our on the books position remains very, very strong. And so we're really focused on the things that we can control, making sure that the capital we're deploying, we're doing it efficiently, the projects that we have underway, we're executing those and minimizing disruption and just really trying to control the things that we can control. And we'll keep watching Twitter and Truth Social for the next announcement.

And some of the stuff that Patrick talked about this morning, Patrick Chaffin, we are taking share. When you look at how our hotels are performing in their markets, we are taking share. Customers like us, and it bodes really well.

And the other question that was asked earlier this morning about how do we think about the projections that we laid out back 18 months ago, whenever it was, for '27 and '28, and our business looks really good in '27 and '28. And we have a 5% there or thereabouts dividend yield right now. If you look out '27 with the capital we're deploying, the growth, our dividend grows pretty well. And this should create a lot of value for our shareholders.

So your question is a really good one. And I'm really happy that we have an analyst that focuses on the long term here, which is a really good thing because this is what's really important.

Our next question comes from John DeCree with CBRE.

This is Max Marsh on for John DeCree. Considering your expectation for softness in Nashville is really just isolated to that transient side. Could you talk a little bit about the resilience of your group business against new competition in that market and broadly?

You want to take that, Patrick?

Yes, absolutely. Yes, to your point, transient ADR is really the only challenge that's going on at Opryland right now. There's a lot of excitement at that hotel as groups are starting to come in and seeing what we're doing from a CapEx perspective into the hotel and the groups that are performing are performing well at the hotel. So we continue to move the mix towards a higher corporate mix as they're seeing the renovations and the improvements as well as the expansions coming to fruition and feel really good that we have a really solid product to offer to group guests against this downtown or any other downtown in the area. So we feel really good about where Opryland is positioned from a group perspective.

Our final question will come from Chris Darling with Green Street.

Just a couple of quick follow-ups on OEG for me. First, can you update us on where things stand in terms of building out the internal infrastructure there? I'm thinking about the management team, the Board, basically everything you need for OEG to standalone from Ryman. And then second, do you have any indication that Atairos will exercise their purchase option this year? And how might that impact the time line for a spin if it does at all?

Do you want to take it, Mark?

Well, in terms of Atairos and they're buying up, we don't really have any insight into that. That's kind of a year-end activity, starts in earnest in October as part of that process, we'll see kind of where they land and where they end up. I'll let Patrick talk a little bit about what he's doing on the management side, but we continue to focus on building the capabilities of the business, not only in terms of scale, but also in terms of just broad capabilities to be a stand-alone business.

And I would just say that there's nothing that requires us to spin this. We don't have any REIT compliance issues. We're really in the driver's seat in terms of determining when is the appropriate time to separate this business. And it's really on an eye of creating greater shareholder value. So that's really the end game here.

Yes. And from an organizational standpoint, I think about it in really 3 ways: leadership, capacity and then capability and expertise. So from a leadership standpoint, which also adds that capacity and capability, we've added in the last year, a new Chief Operating Officer. recently added a new Chief Marketing Officer. And we've added some important capabilities in pricing and dynamic pricing as well as food and beverage and most recently in the festival and amphitheater space. So really excited about the ability to not only scale up the business on the top line and drive the growth of both the top and bottom, but scale the organization in a way that's differentiated relative to a lot of other entertainment companies, and we're now very sizable relative to the marketplace.

I'm showing no further questions at this time.

Okay. Katie, thank you. Thank you for chaperoning this meeting this morning. And we thank investors for their time and effort. And if you have any other questions, you know how to get hold of either Jen or Mark and our IR team. So thank you, and we'll be speaking with you soon.

Thank you, ladies and gentlemen. This concludes today's event. You may now disconnect.