Ryman Hospitality Properties CEO Hosts Investor and Analyst Day Conference Transcript

Ryman Hospitality Properties CEO Hosts Investor and Analyst Day Conference Transcript

Colin Reed Chief Executive Officer

Well, good morning everyone. And I think I know basically everybody in this room, but for those on the phone, my name is Colin Reed. I am the CEO of Ryman. And with me this morning are I have few of our leadership team, Mark Fioravanti, our Chief Financial Officer, where is Mark? Mark is there; Patrick Chaffin, our Senior Vice President and Head of Asset Management for our company; Todd Siefert, our Treasurer; and Grant Jarnigan who is the Planning and Analysis and Investor Relations Director, and Brian Abrahamson, who is sitting in the back, he is our Vice President of Corporate Communications. I want to thank you all for being with us today, and welcome to folks that are on the webcast.

And what I want to do today, obviously we have got the Safe Harbor, which I am not going to read. What I want to do today is there is a lot of folks that are sort of circling our equity and are trying to understand our company. And so I am going to go into a little bit of detail about our company. And then what I am going to do is I am going to talk and focus really on the future and try and convince all of you that this is a company that is in fact quite different. This is a company that has extraordinary assets and generates and has the capability of generating very high levels of future cash flow. And thats what I want to do this morning, but initially what I would like to do for those folks that dont know too much about our business, if you go next one please, I wanted to start basically in early 2004, because this is really when this company started to take traction. I came to Gaylord back in 2011. It was pretty much a mess at the time. We had 15 businesses most were losing money and we spent the first year and a half, two years ripping the guts out of the company really repositioning it.

And in early 04, the brand Gaylord did not exist. In fact, it existed we launched it about April of 04. From 05 to 07, we really built a very strong service culture in this company and the meeting planning community really started to take notice of this brand and our business started to really take hold and we did some really good things from a revenue perspective. Late 07, two things were going on in the company. At first, we were ready in this business, this hotel, typical average Hilton right or typical average you pick it brand, but we were already in this hotel for opening and we were also under contract to purchase a hotel in San Antonio called La Cantera as stock had just hit $59 a share and life was good, we loved it. It was a great time. But as we got into the early part of 08 it became very clear to me and to members of our board that things were falling off a cliff economically. And as some of you know, we pulled on the La Cantera deal and we got a lot of flack on that from the investment community, but I have got to tell you I am actually pretty pleased that we have the fortitude to walk on that deal, because in hindsight going into what we all went into, I am glad we went into that with a balance sheet that wasnt stressed in anyway shape or form.

By the summer of 2008, as stock have gone from $59 a share down into the mid 20s, and this is when we attracted, what I call, our competitor shareholder from Texas, TRT who came in, in a period of a week, the owner of Omni and bought 13% of our company. Now, I know some of you this is for some of you this is what I am about to say is sort of toxic and thats when we decided to put it in the shareholder rights plan after Bob came in and bought. And the simple reason we did that was because we wanted to make sure that if he was going to come and take the company that he would have to pay a fair price. I mean, thats the reason we did all of that. We then had what we call a hospital phase with Bob which all sort of cleaned up by the early part of 09. We made love and peace in the early part if 09. And then 2010 came about and we then endured a massive flood in Nashville, a 500 year flood that killed 26 people in that town and it was shocking, but by and our stock by the way by 09 by the early part of 09 had declined from $59 in 07 to $5 a share, which was quite extraordinary now.

Now, I am going give you a piece of data and Ill show you this in a minute here. But in 10, our business dramatically outperformed the 09 when the world was falling off a cliff. Our business dramatically outperformed the industry. Ill show you some statistics on that in a second. By the November of 10, stock had recovered to $37 and then by September of 11 it had declined again to $18 of share. 2011 for our company was a record year. Opryland had produced $87 million of cash flow, its the best year ever had in its 25, 30 year history and our hotel in Texas accomplished almost $70 million of profitability, but our stock was doing this all the time.

By mid August of 11, the economic crisis in Europe that we sit and read about surfaced again and our friend from Texas came in and bought another 8% of the company. And so our tools due to expire two days after he brought the stock so we opt the tool for 12 months and basically said to ourselves we got 12 months to figure this out. So, in November of 11 I went to our board and said board we got five options here and I am not going to go through them, but we got essentially five options, and we got to look at this, because we cannot subject our shareholders to this extraordinary volatility. We got to do something about this. And the board said okay, going out and look at the five options, came back in February of 12 and said we are going to focus on two of them which was converting to a real estate investment trust, and frankly Ill be very kind of you guys. That wasnt my first choice. And I think the reason it wasnt my first choice was because I knew we were going to put ourselves through in a tremendous amount of emotional friction in this company, because so many of the people that we had recruited to build the brand. We were going to have to find any something that I was hoping that, that wouldnt be the right answer.

The other thing that we looked at back in early part of last year was whether we should sell the company. So, our board said okay, go do these two, go check these two things out on a parallel basis, which we did. We had our bankers go out and talk to handful of PE companies who had came and talk to us in the past. And we explored the real estate investment trust idea. Now, I want to give you one piece of information back in early 11, because of the position that TRT had in our company, we bought McKenzie in and asked McKenzie to help us figure out, if we were going to merge our business with a relatively small hotel company, what would be the synergies and the benefits that the merged companies could get and what would be similarly the synergies that we would get, if we were to merge our business with a bigger company.

And what we were trying to understand is what would be the value transfer to the acquiring business? And what was interesting was that the data that McKenzie help us put together back in early 11 correlated very, very strongly to the results we came to when we were going through the RFP process with the big operators that wanting to operate these hotels. And so the reason I tell you this is that the cost savings that we have been articulating to you folks back from May of 2012 and since that time, they have been basically validated twice back in 11 and also through this process that we have been going through.

In terms of the activity with PE having said this publicly before, but we received two verbal office for the company, the price range was between $32 and $37 a share. Lord knows how many conversations in this period of time with our friend Bob, our friend TRT. And Bob have made the comments to me on multiple occasions that he really loved the business, he would love to own the business, and every time he said this to me I said to him. Well, you know where we are, you just got to come and make an offer for the company. And as you all know that never ever came about. So, we decided the real estate investment trust idea was by far the best idea. And so as you all know after a very aggressive, very detailed RFP process, we have selected Marriot. This wasnt a heads Marriott wins, tails Hyatt loses or heads Marriott wins, tails Starwood loses, we literally spent three months understanding their delivery systems, their cost structures, their culture. And so I feel very good about the analysis that we did.

Looking back at that phase, I would tell you I think the change of strategy that we have undertaken is the right thing for our shareholders. I have been very I have become very, very, very much convinced that this is the right structure for this organization. And as I told our board yesterday when we had our meeting here, I have no hesitation that this was the correct decision for the company, it clearly was. So, thats the history.

What I want to do now is shift gears and talk about first the assets of the company. Some of you I know quite a lot of you this is the first time youve seen this hotel and you are going to get a tour off too, its massive and its beautiful. But I want to just talk to you quickly about the assets. These hotels and the entertainment attractions we own the wonderful assets. They are very, very large, I am on page eight, they are very large. They have enormous convention and meeting space. These assets are very fresh. We have lots of food and beverage outlets, massive retail outlets, and they are just very, very different. The conditions of these assets, I dont know you will travel and you will go from city to city, but there is a lot of assets that are in the hands of real estate investment trust that have essentially been start of capital from 2008 forward. These hotels are not in that situation. The only refurbishment that we have remaining to be done is in Texas, where we have a room refurbishment that is scheduled to start later this year, but everything else in these hotels are in great shape.

These are just quickly on page 10. This is some of the meeting space, which is quite different, I guess, bedrooms are quite nice. I hope those of you who have stayed in the hotel last night, stayed in decent bedroom in decent rooms and they were cleaned and serviced well. The environments that we have in these hotels, we put a lot of entertainment in these hotels. And some of you have heard me say this before, but let me just tell you, I really feel very passionately about the way the meeting planner thinks about convention assets. When meeting planners make decisions to go places invariably they go to places where they have fun when they take their big groups there. And so for us when we build these hotels and we theme them and we put the culture into these places, great room product, great food and beverage product, and great entertainment. People dont go to places for big conventions that are starchy, they want to go to places that they have fun. So, we put a lot of theming in these assets.

The group hotels in the United States, the big ones these are the top 10 group hotels in the United States from size of meeting space and size of hotel rooms and now to hotel rooms, and we our company owns 4 of the 10 big hotels in this country. Now, I want to switch gears now and talk a little bit about the customer, because forgive me being very direct like this, but so many of you really dont understand truthfully or truly, the niche that we go after, because I get so many questions from the investment community and the analyst community to say well, a convention hotel is opening up here in Washington, isnt that a major competitive threat. And here is why it isnt. The customers, this chart that we are going to show up, put it all up, thank you, Todd, so I want you to look at the green in the middle, these are the 400, these are the hotels that have between 400 and 799 rooms and there is a bunch of those in this country.

Then on the outside, youve got the customers that want these are the customers that are 3,000, 4,000, 10,000 at a time. And these are the customers that tend to want to go to large convention centers that are space hogs. And they have to then be diffused around into 10, 15 hotels and the customer has a hard time with transporting their goods around to get them to convention center. But because of their size they have to go to this massive City Convention Center Hotels. The group that we primarily this company has been primarily focused on is the group that typically are 600 peak plus up to about 1500, 2000. And these customers want this all under one roof experience this crazy group that we have in town for the next two to three days all these kids to dress up in funny stuff those of you here last night know what I am talking about, those of you arrived this morning have no clue when you do your tour be ready. But these folks want to be under one roof and are prepared to pay for it $200 a night they are here for three days over weekend in cold wet Washington in March. And this group is not a group that wants to be diffused around they want to be cocooned so they can communicate and do business. If you look at the part over here, our advantage is we have far more meeting space per a guest bedroom than the competitors in REIT land and thats very important and its important for the attraction of the group customer.

I want to share you this slide, the next slide please, Todd. Okay, so what this is 1000 room hotels that owned by a real estate investment trust in the 19 states. Host has 13 hotels over 1000 rooms and they control 1.8 million square feet of meeting space, 1.6 million we changed the numbers on the overnight. We own four hotels for 1.9 million square feet of meeting space. And then all the rest of the other REITs these four hotels that essentially have 300,000 feet of aggregated meeting space. And the point of this is in REIT land we are the big dog in the group sector by far and I dont think thats an important statistic.

Next one, so, this is the basic summary of the first section about these assets, these hotels of us are we believe a very unique the conditions of these hotels are great. The supply of meeting space we basically have the majority of the meeting space in the REIT sector and then we believe these assets are pretty good. So, now lets talk about visibility and volatility, because I think this is a very important part. So, first of all I want to give you on this slide, I want to give you snapshot of the way our business works. So, the fall part of it, we had of all the customers that walk through our doors every year. Approximately 77% of our customers are group customers and about 23% this is historical our trends in customers.

When we take the group side of it, its broken down essentially about 40 40 20, 40% are corporate, 36% are association and 21% are other. And other would be religious government groups stuff like that. Now I want to tell you something that middle analysis is very, very, very important and here is why. Back in 09 when the world was falling off the cliff, we had about 125,000 room nights that were cancelled and paid for by different customers. But 95% of those customers were corporate customers. The association market turned up in the worst recession this country seen since in 1930s. We like association business and the reason we like it, we think it is essentially almost like an annuity for us.

Now, the booking window of these customers as you will see from this slide. Corporate customers tend to book about one and a half years ahead of time. Associations book a long time ahead of time. So, once they make their commitment 4.5 years on average, 4.4 years on average ahead of time, these boys and girls turn up and turn up very well. The other groups, the religious groups, the government groups tend to be shorter term.

The other statistic I will give you just drop back a second, I am going to give you one other statistic on this. In that middle section over here, that is the group profile broken down between Corporate, Association and Other. 80% of our groups are large, I beg your pardon 80% of our business comes from large groups, but they only represent 10% of the groups, 80% of the revenue comes from about 10% of these large blocks of groups, 80% of the 10% of the groups generating about 80% of the revenue.

So, now let me if we could go on to this next one, and I am going to show you something in a minute, I dont think youve seen before. But on the revenue mix typically what tends to happen is that about 40% of our revenue comes from room revenue and the rest of it comes from outside of the room revenue. And that is and we make a lot of money on that outside the room revenues bit like the gaming industry. This is what happened, this bar chart on the right side if you look at it this is actually what happened to our occupancy and to our fee collection as we went through this recession. As you will see, our occupancy was up in the high 70s in 07. We didnt collect a lot of cancellation fees. Our occupancy started to decline as we went into 08. This was the association market. I beg your pardon the corporate market there was cancelling and not turning up $14.6 million of cancellation fees than in 09. In fact those cancellation fees jumped to $27.7 million. And this is very important because if you go into this next slide, this is where I touched on a second ago.

If you look what we have done here, if you look at the average booking window, if you look at the other REITs, mix of revenue that we estimate thats and Smith Travel has helped us with this estimated 35% growth, 65% leisure. The average booking window for all hospitality REITs tends to be about seven months and the average booking window for our company tends to be 2.1 years. Now in 09, this is the important slides I think one of the important slides Id ask you to look at we opened Washington here in April of 08. So, what we did in order to do an apples for apples we assumed this hotel was in business January, February, March, April. And so the true results of our company restated for 09 was our revenue was down 10% and our profitability was off 9%, and as you can see other REITs in this period of time, 22% in revenue and then almost 40% in profitability. Our business just behaves very different to the rest of re planned.

Go on to the next one, Todd, thank you. This shows that we think we have some good days ahead of us in terms of rate, group room rate. The red line is the trends in ADR. And as you can see trends in ADR has recovered a little bit more so than the group ADR. And so we think obviously over the next one to three years, we believe we can grow with Marriotts leadership, the group ADR of this business which is good.

Now, let me touch on supply, this is another important slide. As we were going into this massive recession in 09, supply was growing fairly aggressively in this country. We saw supply growing 6% from 5% in 08 and 09. Supply has fallen off a cliff. New supply has fallen off a cliff. There is a little bit in 14 which is the convention hotel here in downtown Washington and the Omni in downtown Nashville. The very small levels of supply are in the planning stage here for hotels that compete for these large groups. The Smith Travel estimates on the in the green color there are the estimates of ADR. So, in our opinion, this is a good situation that we are coming into. I want to show you this slide; this is Smith Travels RevPAR premium performance. This is as compared to all those hotels in each market, Smith Travel compares to. In 08, when the world was in decent shape before, we had about 129% total RevPAR premium and about 110% RevPAR premium and then wha

How to Make a DIY earring holder

How to Make a DIY earring holder<br /><br />This video shows how to make an earring holder. You will need a canvas and some acrylic paint. Paint the entire canvas including the sides. You can paint it a solid color, or paint any design you like. Use glue to attach some glitter, or use puffy paint or glitter glue to decorate the earring holder. When the paint is dry it is ready to use. Simply push your earrings through the canvas. If you have earrings that are delicate, you may want to use a nail to form a hole in the canvas before placing the earring through so that you dont bend the jewelry. If you are using a wooden canvas you can add nails on the side of the canvas that you can use to hang earrings that dont fit on the front like hoops or necklaces and bracelets.<br /><br />Who knew that that mess of random old clothes and knick knacks piled on your bedroom floor that makes it seem like a tornado just rolled on through could actually help you clean up the mess? Often when we see such clutter and actually decide to do something about it the natural and easy thing to do is simply to pick up the junk and toss.<br /><br />But before you throw your clutter away next time, check for two items: 1. Pantyhose, and 2. A box lide. You sure to have both and if not, both are easily found, which is great because these two materials are all you need to create a jewelry organizing.<br /><br />In this video you learn to make earrings out of guitar picks. You will need round nose and regular pliers, wire cutters, 2 regular picks, bead reamer, earring hooks, jump rings, and long silver strands. Use the bead reamer to make a nice clean hole on the top edge of the guitar pick. Use the jump ring through the hole you just made to attach the silver strand. This makes the earrings dangle. On the other end of the silver strand connect the earring hook with another jump ring. This completes your first earring, do the same series of steps to finish your pair and play around with what picks you.

How to Dress Up Summer Styles

How to Dress Up Summer Styles<br /><br />Summer is the perfect season for floaty dresses and casual shorts, but how to dress up these styles for more formal occasions? Here are some easy ways to add some elegant details to summer outfits.<br /><br />Dress Up a SundressThe classic summer dress is a lightweight sundress. Styling a sundress for a party, picnic, or festival is a matter of choosing the right accessories:<br /><br />Belts. Wearing an unstructured sundress doesnt mean having to look sloppy. Accessories go a long way toward making a summer outfit more formal. Avoid flip flops for dressy summer occasions. Leave the oversized tote or hobo bag at home. Opt for a daintier clutch or wristlet for evening events.<br /><br />Tops. A t shirt with shorts is as casual as one can get in the summer. Shoes dictate a lot when it comes to summer outfits. Ward off an evening chill by tossing on a silk or linen scarf.<br /><br />Tops.<br /><br />Sarongs. These long stretches of fabric can be worn around the waist with a swimsuit during the day, and can easily be turned into a strapless dress for evening. A wardrobe of neutral summer staples and the right accessories will take anyone from day to night without sacrificing comfort or great summer style.

How to Dress Up Summer Styles

How to Dress Up Summer Styles<br /><br />Summer is the perfect season for floaty dresses and casual shorts, but how to dress up these styles for more formal occasions? Here are some easy ways to add some elegant details to summer outfits.<br /><br />Dress Up a SundressThe classic summer dress is a lightweight sundress. Styling a sundress for a party, picnic, or festival is a matter of choosing the right accessories:<br /><br />Belts. Wearing an unstructured sundress doesnt mean having to look sloppy. Accessories go a long way toward making a summer outfit more formal. Avoid flip flops for dressy summer occasions. Leave the oversized tote or hobo bag at home. Opt for a daintier clutch or wristlet for evening events.<br /><br />Tops. A t shirt with shorts is as casual as one can get in the summer. Shoes dictate a lot when it comes to summer outfits. Ward off an evening chill by tossing on a silk or linen scarf.<br /><br />Tops.<br /><br />Sarongs. These long stretches of fabric can be worn around the waist with a swimsuit during the day, and can easily be turned into a strapless dress for evening. A wardrobe of neutral summer staples and the right accessories will take anyone from day to night without sacrificing comfort or great summer style.

How to Care for a Labret Piercing

How to Care for a Labret Piercing<br /><br />Use a new, soft bristled toothbrush after you get your lip pierced. According to the Association of Professional Piercers, you can expect swelling, bleeding, bruising and pain for up to five days after you get a labret piercing. While you go through the healing process, exercising proper care is important to avoid infection and other medical complications.<br /><br />Step 1<br /><br />Rinse your mouth for 30 to 60 seconds with an alcohol free, antibacterial mouthwash or packaged saline solution after you eat and before you to to sleep. However, rinsing too often or using a strong, alcohol based mouthwash while your labret piercing heals can irritate your mouth and the piercing site. Baton Rouge based Deja Vu Tattoo Body Piercing studio suggests rinsing with a solution no more than four or five times per day.<br /><br />Step 2<br /><br />Brush your teeth gently with a soft bristled toothbrush and fluoride toothpaste. Have a new toothbrush on hand after you get your labret piecing so bacteria from your old brush wont enter your mouth. After your piercing heals, you can brush your teeth, as well as the jewelry inside your mouth, more vigorously to prevent plaque build up.<br /><br />Step 4<br /><br />Cleanse the exterior of the piercing site no more than two times per day. Use a small amount of fragrance free, antimicrobial cleanser in the shower or bath, allowing it to remain on the exterior piercing site for no more than 30 seconds. Rinse well with water to make sure no soapy residue remains.<br /><br />Step 5<br /><br />Pat the skin dry gently with paper towels. Cloth towels not only snag the jewelry, but they may also be a source of bacteria.<br /><br />Step 6<br /><br />Do not touch or remove jewelry during the healing period. The only time your fingers should touch it is during the cleaning process. Be careful when donning and doffing clothing, so it doesnt become entangled with the jewelry.<br /><br />Step 7<br /><br />Watch for infection. Its common to notice a thin, light yellow liquid to ooze from a new labret piercing, says the APP.<br /><br />To reduce swelling and pain right after you get a labret piercing, the APP advises sucking on small ice chips and taking over the counter pain relievers, such as ibuprofen or naproxen.

How to Care for a Labret Piercing

How to Care for a Labret Piercing<br /><br />Use a new, soft bristled toothbrush after you get your lip pierced. According to the Association of Professional Piercers, you can expect swelling, bleeding, bruising and pain for up to five days after you get a labret piercing. While you go through the healing process, exercising proper care is important to avoid infection and other medical complications.<br /><br />Step 1<br /><br />Rinse your mouth for 30 to 60 seconds with an alcohol free, antibacterial mouthwash or packaged saline solution after you eat and before you to to sleep. However, rinsing too often or using a strong, alcohol based mouthwash while your labret piercing heals can irritate your mouth and the piercing site. Baton Rouge based Deja Vu Tattoo Body Piercing studio suggests rinsing with a solution no more than four or five times per day.<br /><br />Step 2<br /><br />Brush your teeth gently with a soft bristled toothbrush and fluoride toothpaste. Have a new toothbrush on hand after you get your labret piecing so bacteria from your old brush wont enter your mouth. After your piercing heals, you can brush your teeth, as well as the jewelry inside your mouth, more vigorously to prevent plaque build up.<br /><br />Step 4<br /><br />Cleanse the exterior of the piercing site no more than two times per day. Use a small amount of fragrance free, antimicrobial cleanser in the shower or bath, allowing it to remain on the exterior piercing site for no more than 30 seconds. Rinse well with water to make sure no soapy residue remains.<br /><br />Step 5<br /><br />Pat the skin dry gently with paper towels. Cloth towels not only snag the jewelry, but they may also be a source of bacteria.<br /><br />Step 6<br /><br />Do not touch or remove jewelry during the healing period. The only time your fingers should touch it is during the cleaning process. Be careful when donning and doffing clothing, so it doesnt become entangled with the jewelry.<br /><br />Step 7<br /><br />Watch for infection. Its common to notice a thin, light yellow liquid to ooze from a new labret piercing, says the APP.<br /><br />To reduce swelling and pain right after you get a labret piercing, the APP advises sucking on small ice chips and taking over the counter pain relievers, such as ibuprofen or naproxen.

How to Care for a Labret Piercing

How to Care for a Labret Piercing<br /><br />Use a new, soft bristled toothbrush after you get your lip pierced. According to the Association of Professional Piercers, you can expect swelling, bleeding, bruising and pain for up to five days after you get a labret piercing. While you go through the healing process, exercising proper care is important to avoid infection and other medical complications.<br /><br />Step 1<br /><br />Rinse your mouth for 30 to 60 seconds with an alcohol free, antibacterial mouthwash or packaged saline solution after you eat and before you to to sleep. However, rinsing too often or using a strong, alcohol based mouthwash while your labret piercing heals can irritate your mouth and the piercing site. Baton Rouge based Deja Vu Tattoo Body Piercing studio suggests rinsing with a solution no more than four or five times per day.<br /><br />Step 2<br /><br />Brush your teeth gently with a soft bristled toothbrush and fluoride toothpaste. Have a new toothbrush on hand after you get your labret piecing so bacteria from your old brush wont enter your mouth. After your piercing heals, you can brush your teeth, as well as the jewelry inside your mouth, more vigorously to prevent plaque build up.<br /><br />Step 4<br /><br />Cleanse the exterior of the piercing site no more than two times per day. Use a small amount of fragrance free, antimicrobial cleanser in the shower or bath, allowing it to remain on the exterior piercing site for no more than 30 seconds. Rinse well with water to make sure no soapy residue remains.<br /><br />Step 5<br /><br />Pat the skin dry gently with paper towels. Cloth towels not only snag the jewelry, but they may also be a source of bacteria.<br /><br />Step 6<br /><br />Do not touch or remove jewelry during the healing period. The only time your fingers should touch it is during the cleaning process. Be careful when donning and doffing clothing, so it doesnt become entangled with the jewelry.<br /><br />Step 7<br /><br />Watch for infection. Its common to notice a thin, light yellow liquid to ooze from a new labret piercing, says the APP.<br /><br />To reduce swelling and pain right after you get a labret piercing, the APP advises sucking on small ice chips and taking over the counter pain relievers, such as ibuprofen or naproxen.