Playa Hotels & Resorts N.V. Reports Fourth Quarter and Full Year 2021 Results

Playa Hotels & Resorts N.V. (NASDAQ: PLYA) yesterday announced results of operations for the three months and year ended December 31, 2021.

Three Months Ended December 31, 2021 Results

• Net Income was $0.2 million compared to a Net Loss of $73.8 million in 2020.
• Adjusted Net Loss⁽¹⁾ was $4.5 million compared to an Adjusted Net Loss of $58.4 million in 2020.
• Owned Resort EBITDA increased 1,267.1% over 2020 to $56.8 million.
• Adjusted EBITDA increased 436.2% over 2020 to $47.0 million.

Year Ended December 31, 2021 Results

• Net Loss was $89.7 million compared to a Net Loss of $262.4 million in 2020.
• Adjusted Net Loss⁽¹⁾ was $78.7 million compared to an Adjusted Net Loss of $194.2 million in 2020.
• Owned Resort EBITDA increased 867.5% over 2020 to $136.3 million.
• Adjusted EBITDA increased 568.4% over 2020 to $99.2 million.   

^{(1)   Adjusted Net Income/(Loss) excludes special items, which are those items deemed not to be reflective of ongoing operations. See "Definitions of Non-U.S. GAAP Measures and Operating Statistics" for a description of how we compute Adjusted Net Income/(Loss) and other non-GAAP financial figures included in this press release.}

"The Playa team once again did an excellent job during the fourth quarter dealing with the operational challenges, on both the staffing and demand front, presented by the increase in COVID-19 cases. Our focus on ADR discipline combined with improving airlift and guest demand led to better than expected margin performance.

While Mexico continued its steady recovery, the standout in the quarter was the sequential improvement in the Dominican Republic driven by the return of our European guests. Jamaica remained subdued due to more stringent COVID-related travel restrictions compared to our other segments but the performance in the Dominican Republic makes me optimistic about the potential recovery in Jamaica when we move beyond the pandemic.

The momentum from the fourth quarter has carried over into the new year with several successive weeks in January setting weekly revenue bookings records. In fact, our revenue and ADR pacing continue to be quite robust and well ahead of 2021 for every quarter of 2022, even as we lap the surge in bookings we saw in 2021."

– Bruce D. Wardinski, Chairman and CEO of Playa Hotels & Resorts

Financial and Operating Results

The following table sets forth information with respect to the operating results of our total portfolio and comparable portfolio for the three months and years ended December 31, 2021 and 2020 ($ in thousands):

Total Portfolio

Comparable Portfolio ⁽⁵⁾

^{(1)        Total Net Revenue represents revenue from the sale of all-inclusive packages, which include room accommodations, food and beverage services and entertainment activities, net of compulsory tips paid to employees, as well as revenue from other goods, services and amenities not included in the all-inclusive package. Government mandated compulsory tips in the Dominican Republic are not included in this adjustment as they are already excluded from revenue in accordance with U.S. GAAP. A description of how we compute Total Net Revenue and a reconciliation of Total Net Revenue to total revenue can be found in the section "Definitions of Non-U.S. GAAP Measures and Operating Statistics" below. Total Net Revenue also includes all Management Fee Revenue.}

^{(2)        Owned Net Revenue excludes Management Fee Revenue and MICE (meetings, incentives, conventions and events) income.}

^{(3)        A description of how we compute Owned Resort EBITDA and a reconciliation of net income or loss to Owned Resort EBITDA can be found in the section "Definitions of Non-U.S. GAAP Measures and Operating Statistics" below.}

^{(4)        A description of how we compute Adjusted EBITDA and a reconciliation of net income or loss to Adjusted EBITDA can be found in the section "Definitions of Non-U.S. GAAP Measures and Operating Statistics" below.}

^{(5)        For the three months ended December 31, 2021, the comparable portfolio excludes the following resorts: Capri Resort, which was sold in June 2021, and Dreams Puerto Aventuras, which was sold in February 2021. For the year ended December 31, 2021, the comparable portfolio also excludes the Jewel Dunn's River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, which were sold in May 2020.}

Balance Sheet

As of December 31, 2021, the Company held $270.1 million in cash and cash equivalents, excluding $23.5 million of restricted cash. Total interest-bearing debt was $1,145.2 million, comprised of our Senior Secured Term Loan due 2024 and our property loan due 2025. Effective March 29, 2018, we entered into two interest rate swaps to fix LIBOR at 2.85% on $800.0 million of our variable rate Term Loan. As of December 31, 2021, there was no balance outstanding on our $85.0 million Revolving Credit Facility.

Playa is a leading owner, operator and developer of all-inclusive resorts in prime beachfront locations in popular vacation destinations in Mexico and the Caribbean. As of December 31, 2021, Playa owned and/or managed a total portfolio consisting of 22 resorts (8,366 rooms) located in Mexico, Jamaica, and the Dominican Republic. In Mexico, Playa owns and manages Hyatt Zilara Cancún, Hyatt Ziva Cancún, Wyndham Alltra Cancún, Wyndham Alltra Playa del Carmen, Hilton Playa del Carmen All-Inclusive Resort, Hyatt Ziva Puerto Vallarta, and Hyatt Ziva Los Cabos. In Jamaica, Playa owns and manages Hyatt Zilara Rose Hall, Hyatt Ziva Rose Hall, Hilton Rose Hall Resort & Spa, Jewel Grande Montego Bay Resort & Spa and Jewel Paradise Cove Beach Resort & Spa. In the Dominican Republic, Playa owns and manages the Hilton La Romana All-Inclusive Family Resort, the Hilton La Romana All-Inclusive Adult Resort, Hyatt Zilara Cap Cana and Hyatt Ziva Cap Cana. Playa owns two resorts in the Dominican Republic that are managed by a third-party and manages five resorts on behalf of third-party owners.

Total Portfolio

For the three months ended December 31, 2021, the comparable portfolio excludes the following resorts: Capri Resort, which was sold in June 2021, and Dreams Puerto Aventuras, which was sold in February 2021. For the year ended December 31, 2021, the comparable portfolio also excludes the Jewel Dunn's River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, which were sold in May 2020.

Playa Hotels & Resorts N.V.

Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA and Owned Resort EBITDA

($ in thousands)

The following is a reconciliation of our U.S. GAAP net income (loss) to EBITDA, Adjusted EBITDA and Owned Resort EBITDA for the three months and years ended December 31, 2021 and 2020:

^{(a)         Represents changes in foreign exchange and other miscellaneous expenses or income.}

^{(b)        Represents expenses incurred in connection with corporate initiatives, such as: system implementations; debt refinancing costs; other capital raising efforts; and strategic initiatives, such as the launch of a new resort or possible expansion into new markets.}

^{(c)         Represents expenses incurred for employee terminations.}

^{(d)        Relates primarily to a Dominican Republic asset/revenue tax, which is an alternative tax to income tax in the Dominican Republic. We eliminate this expense from Adjusted EBITDA because it is similar to the income tax provision we eliminate from our calculation of EBITDA.}

^{(e)         Represents expenses incurred that are not covered by insurance claims nor offset by insurance proceeds.}

^{(f)         Represents the non-service cost components of net periodic pension (cost) benefit recorded within other expense (income) in the Consolidated Statement of Operations. We include these (costs) benefits for the purposes of calculating Adjusted EBITDA as they are considered part of our ongoing resort operations.}  

^{(g)        For the three months and year ended December 31, 2021, the comparable portfolio excludes the following resorts: Capri Resort, which was sold in June 2021, and Dreams Puerto Aventuras, which was sold in February 2021. For the year ended December 31, 2021, the comparable portfolio also excludes the Jewel Dunn's River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, which were sold in May 2020.}

Playa Hotels & Resorts N.V.

Reconciliation of Net Income (Loss) to Adjusted Net Loss

($ in thousands)

The following table reconciles our net income (loss) to Adjusted Net Loss for the three months and years ended December 31, 2021 and 2020:

^{(a)         Represents the change in fair value, excluding interest paid and accrued, of our interest rate swaps recognized as interest expense in our Consolidated Statements of Operations.}

The following table presents the impact of Adjusted Net Loss on our net income (loss) available to ordinary shareholders and diluted earnings (loss) per share for the three months and years ended December 31, 2021 and 2020:

^{(1)        As of December 31, 2021, the total available borrowing capacity under our Revolving Credit Facility was $85.0 million. The interest rate on any outstanding balances of our $68.0 million Revolving Credit Facility is L+400 bps with no LIBOR floor. The interest rate on any outstanding balances of our $17.0 million Revolving Credit Facility is L+300 bps with no LIBOR floor. As of December 31, 2021, the commitment fee on the undrawn balance of our Revolving Credit Facility was 0.5%.}

^{(2)        The interest rate on our term loan is L+275 bps with a LIBOR floor of 1.0%. The interest rate on our term loan was 5.32% as of December 31, 2021, which includes the LIBOR rate that was locked in December for the one-month period. Effective March 29, 2018, we entered into two interest rate swaps to mitigate the long-term interest rate risk inherent in our variable rate Term Loan. The interest rate swaps have an aggregate fixed notional value of $800.0 million. The fixed rate paid by us is 2.85% and the variable rate received resets monthly to the one-month LIBOR rate.}

^{(3)     Effective June 12, 2020, we entered into $94.0 million of additional senior secured credit facility term loans. On July 27, 2021, we repaid $0.7 million of the principal balance. The remaining $93.3 million is broken into three tranches: $35.0 million term loan at a fixed rate of 11.4777%, $31.0 million term loan at a fixed rate of 11.4777%, and $27.3 million term loan at our option of either a base rate plus a margin of 2.00% or LIBOR plus 3.00% with a LIBOR floor of 1.0%. The weighted average interest rate is 9.25%.}

^{(4)        Represents cash balances on hand as of December 31, 2021.}

^{(5)        Represents last twelve months interest expense and commitment fee. The impact of amortization of deferred financing costs and discounts, capitalized interest and the change in fair market value of our interest rate swaps is excluded.}

Highlights

All of our segments benefited from the resumption of operations this year as compared to the fourth quarter of 2020, during which period we experienced severely reduced occupancy as a result of the COVID-19 pandemic.

Yucatán Peninsula

• Comparable Owned Net Revenue for the three months ended December 31, 2021 increased $31.8 million, or 116.5%, compared to the three months ended December 31, 2020, primarily as a result of pent-up customer demand following COVID-19 related travel restrictions and vaccine availability, and our strategic decision to focus on pricing discipline to coincide with investments in guest satisfaction at our resorts. Other contributing factors:
  • a $14.32 favorable Comparable Net Package ADR impact as a result of a change in billing methodology of an online travel agency ("OTA"), which requires Playa to present this revenue gross of commissions under U.S. GAAP; and

  • a $8.45 favorable Comparable Net Package ADR impact driven by a favorable $1.1 million value-added tax ("VAT") adjustment to Comparable Owned Net Revenue following OECD guidelines for Transfer Pricing for Multinational Enterprises as a result of the economic impact of the COVID-19 pandemic.

Excluding the aforementioned adjustments, Comparable Net Package ADR would have been $349.98 for the three months ended December 31, 2021.

Compared to 2019, our Comparable Net Package ADR for the three months ended December 31, 2021 increased by $112.05, or 43.0%. Excluding the aforementioned adjustments, the increase would have been $89.28, or 34.2%.

• Comparable Owned Resort EBITDA for the three months ended December 31, 2021 increased $18.6 million or 562.6% over the prior year. Compared to 2019, and excluding the aforementioned adjustments, Comparable Owned Resort EBITDA increased $7.6 million and Comparable Owned Resort EBITDA Margin increased 8.0 ppts, driven by a recovery in Occupancy and the increase in Comparable Net Package ADR during the three months ended December 31, 2021.

Pacific Coast

• Owned Net Revenue for the three months ended December 31, 2021, increased $14.5 million, or 129.2%, compared to the three months ended December 31, 2020, primarily as a result of pent-up customer demand following COVID-19 related travel restrictions and vaccine availability, and our strategic decision to focus on pricing discipline to coincide with investments in guest satisfaction at our resorts. Other contributing factors:
  • a $16.58 favorable Net Package ADR impact as a result of a change in billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP; and

  • a $2.76 favorable Net Package ADR impact driven by a favorable $0.2 million VAT adjustment to Owned Net Revenue following OECD guidelines for Transfer Pricing for Multinational Enterprises as a result of the economic impact of the COVID-19 pandemic.

Excluding the aforementioned adjustments, Net Package ADR would have been $375.70 for the three months ended December 31, 2021.

Compared to 2019, our Net Package ADR for the three months ended December 31, 2021 increased by $132.67, or 50.6%. Excluding the aforementioned adjustments, the increase would have been $113.33, or 43.2%.

• Owned Resort EBITDA for the three months ended December 31, 2021 increased $9.2 million or 1,662.9% over the prior year. Compared to 2019, and excluding the aforementioned adjustments, Owned Resort EBITDA increased $3.5 million and Owned Resort EBITDA Margin increased 8.5 ppts, driven by a recovery in Occupancy and the increase in Net Package ADR during the three months ended December 31, 2021.

Dominican Republic

• Owned Net Revenue for the three months ended December 31, 2021 increased $40.4 million, or 341.0%, compared to the three months ended December 31, 2020. The increase was a result of the ongoing recovery in our business and because several of our resorts in this region were not open for the entirety of the fourth quarter of 2020 as a result of the COVID-19 pandemic.

  Compared to 2019, our Net Package ADR for the three months ended December 31, 2021 increased by $88.56, or 51.4%. This increase was driven by pent-up customer demand following COVID-19 related travel restrictions and vaccine availability, the opening of Hyatt Ziva and Hyatt Zilara Cap Cana in the fourth quarter of 2019, as well as the renovation of the Hilton La Romana All-Inclusive Resort and our strategic decision to focus on pricing discipline to coincide with investments in guest satisfaction at our resorts.

• Owned Resort EBITDA for the three months ended December 31, 2021 increased $20.6 million, or 622.7%, over the prior year. Compared to 2019, Owned Resort EBITDA increased $18.0 million and Owned Resort EBITDA Margin increased 36.5 ppts, driven by a recovery in Occupancy, the increase in Net Package ADR during the three months ended December 31, 2021, the opening of Hyatt Ziva and Hyatt Zilara Cap Cana in the fourth quarter of 2019, and the renovation of the Hilton La Romana All-Inclusive Resort.

Jamaica

• Owned Net Revenue for the three months ended December 31, 2021 increased $21.0 million, or 195.6%, compared to the three months ended December 31, 2020.

  Compared to 2019, which included the Jewel Dunn's River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, our Comparable Net Package ADR for the three months ended December 31, 2021 increased $77.65, or 30.4%.

• Owned Resort EBITDA for the three months ended December 31, 2021 increased $12.7 million, or 265.1%, over the prior year. Compared to 2019, Comparable Owned Resort EBITDA increased $0.5 million and Comparable Owned Resort EBITDA Margin increased 6.8 ppts, driven by a recovery in Occupancy and the increase in Comparable Net Package ADR during the three months ended December 31, 2021.

^{(1)        For the three months ended December 31, 2021, the comparable portfolio excludes the following resorts: Capri Resort, which was sold in June 2021, and Dreams Puerto Aventuras, which was sold in February 2021.}

Highlights

All of our segments benefited from our resorts being open for the entirety of 2021 as compared to the year ended December 31, 2020, during which time we closed all of our resorts for the second quarter and experienced severely reduced occupancy during the third and fourth quarters as a result of the COVID-19 pandemic.

Yucatán Peninsula

• Comparable Owned Net Revenue for the year ended December 31, 2021 increased $93.3 million, or 98.9%, compared to the year ended December 31, 2020, primarily as a result of pent-up customer demand following COVID-19 related travel restrictions and vaccine availability, and our strategic decision to focus on pricing discipline to coincide with investments in guest satisfaction at our resorts. Other contributing factors:
  • a $10.15 favorable Comparable Net Package ADR impact as a result of a change in billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP; and

  • a $2.43 favorable Comparable Net Package ADR impact driven by a favorable $1.1 million VAT adjustment to Comparable Owned Net Revenue following OECD guidelines for Transfer Pricing for Multinational Enterprises as a result of the economic impact of the COVID-19 pandemic.

Excluding the aforementioned adjustments, Comparable Net Package ADR would have been $324.57 for the year ended December 31, 2021.

Compared to 2019, Comparable Net Package ADR for the year ended December 31, 2021 increased by $60.61, or 21.9%. Excluding the aforementioned adjustments, the increase would have been $48.03, or 17.4%.

• Comparable Owned Resort EBITDA for the year ended December 31, 2021 increased $42.3 million or 227.4% over the prior year.

Pacific Coast

• Owned Net Revenue for the year ended December 31, 2021 increased $43.7 million, or 132.3%, compared to the year ended December 31, 2020, primarily as a result of pent-up customer demand following COVID-19 related travel restrictions and vaccine availability, and our strategic decision to focus on pricing discipline to coincide with investments in guest satisfaction at our resorts. Other contributing factors:
  • a $11.44 favorable Net Package ADR impact as a result of a change in billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP; and

  • a $0.85 favorable Net Package ADR impact driven by a favorable $0.2 million VAT adjustment to Owned Net Revenue following OECD guidelines for Transfer Pricing for Multinational Enterprises as a result of the economic impact of the COVID-19 pandemic.

Excluding the aforementioned adjustments, Net Package ADR would have been $349.99 for the year ended December 31, 2021.

Compared to 2019, Net Package ADR for the year ended December 31, 2021 increased by $77.29, or 27.1%. Excluding the aforementioned adjustments, the increase would have been $65.00, or 22.8%.

• Comparable Owned Resort EBITDA for the year ended December 31, 2021 increased $19.5 million or 455.4% over the prior year.

Dominican Republic

• Owned Net Revenue for the year ended December 31, 2021 increased $99.9 million, or 200.2%, compared to the year ended December 31, 2020.

  Compared to 2019, Net Package ADR for the year ended December 31, 2021 increased by $72.22, or 37.9%. This increase was driven by the ongoing recovery from the COVID-19 pandemic, the opening of Hyatt Ziva and Hyatt Zilara Cap Cana in the fourth quarter of 2019, the renovation of the Hilton La Romana All-Inclusive Resort, and our strategic decision to focus on pricing discipline to coincide with investments in guest satisfaction at our resorts.

• Comparable Owned Resort EBITDA for the year ended December 31, 2021 increased $44.8 million, or 669.8%, over the prior year.

Jamaica

• Comparable Owned Net Revenue for the year ended December 31, 2021 increased $38.7 million, or 66.4%, compared to the year ended December 31, 2020.

  Compared to 2019, Comparable Net Package ADR for the year ended December 31, 2021 decreased by $3.32, or 1.0%. This decrease is due more stringent COVID-19 related travel restrictions in Jamaica compared to the other regions where we operate.

• Comparable Owned Resort EBITDA for the year ended December 31, 2021 increased $17.1 million, or 624.4%, over the prior year.

^{(1)         For the year ended December 31, 2021 the comparable portfolio excludes the following resorts: Capri Resort, which was sold in June 2021, and Dreams Puerto Aventuras, which was sold in February 2021, Jewel Dunn's River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, which were sold in May 2020.}

SOURCE Playa Management USA, LLC