Playa Hotels & Resorts N.V.

good morning and welcome to the playa hotels and resorts first quarter 2023 earnings conference call all participants will be in a listen only mode should you need assistance please signal a conference specialist by pressing the star key followed by zero after today's presentation there will be an opportunity to ask questions to ask a question you may press star then one on a touchstone phone to withdraw your question please press star then two please note this event is being recorded I would now like to turn the conference over to Ryan Hemo with the company. Please go ahead.

Thank you very much, Ms. Navi. Good morning, everyone, and welcome to Playa Hotels and Resorts' first quarter 2023 earnings call. Before we begin, I'd like to remind participants that many of our comments today will be considered forward-looking statements and are subject to numerous risks and uncertainties that may cause the company's actual results to differ materially from what has been communicated. Forward-looking statements made today are effective only as of today, and the company undertakes no obligation to update forward-looking statements. For discussion of some of the factors that could cause our actual results to differ, please review the risk factors section of our quarterly report on Form 10Q, which we filed last night with the SEC. We've updated our investor relations website at investors.plyoresorts.com with today's recent releases. In addition, reconciliations to GAAP of the non-GAAP financial measures we discussed on this call were included in yesterday's press release. On today's call, Bruce Radinsky, Playa's Chairman and Chief Executive Officer, will provide comments on the first quarter demand, trends, and key operational highlights. I will then address our first quarter results and our outlook. Bruce will wrap up the call with some concluding remarks before we turn it over to Q&A.

With that, I'll turn the call over to Bruce. Great. Thanks, Ryan. Good morning, everyone, and thank you for joining us. I would like to wish everyone a happy Cinco de Mayo and say personally, I'd much rather be at one of our resorts in Mexico than in our office in Fairfax, but I hope people are enjoying it wherever they are. Our first quarter results exceeded our expectations as the momentum in our business continued through the remainder of the high season with broad-based strengths shown across all of our markets. One housekeeping item before we begin, the fundamental, before we begin the fundamental review of the quarter. We will be sunsetting comparisons to 2019 and resuming traditional year-over-year commentary exclusively for today's discussion. Playa's owned resort EBITDA of $109.4 million in the first quarter was the highest in the company's history, despite the significant negative impact from the two jewel resorts in the Dominican Republic that transitioned to Playa Management and foreign currency headwinds. The better-than-expected EBITDA was driven by year-over-year ADR growth in our legacy portfolio of nearly 17%, bringing the reported ADR growth for the quarter to approximately 27.4%. As a reminder, our expectation was that the first quarter would represent the highest year-over-year ADR growth for 2023, as we lapped the impact from Omicron last year. Additionally, our operations teams executed extremely well at the resort level, delivering 50 basis points of resort margin expansion on a reported basis, despite an approximate 180 basis points FX drag from the appreciation of the Mexican peso. The core legacy portfolio resort margins, excluding the jewels, improved 160 basis points year over year, inclusive of 180 basis point foreign currency drag. As I mentioned, fundamental strength during the quarter was broad-based. with our core legacy portfolio surpassing 80% occupancy for the first time post-pandemic, and all geographies reporting double-digit year-over-year ADR gains. Jamaica had another strong quarter, reporting the highest year-over-year ADR and resort margin expansion among our segments, aided by a significant increase in mice revenue during the first quarter as the recovery and normalization of that market continued. In Mexico, the Yucatan once again led the way on occupancy rate for playa, while growing ADR double digits year over year. And the Pacific Coast reported its best occupancy rate during the post-pandemic period as well. As I mentioned, both segments were negatively impacted by the sharp move in the Mexican peso during the quarter, and both would have seen improved margins year over year, excluding the impact of FX. In the Dominican Republic, our legacy DR resorts excluding the Jewel Palm Beach and Jewel Punta Cana Resorts, which we are attempting to sell, also achieved their highest occupancy rate in the post-pandemic period, while driving approximately 22% year-over-year ADR growth, yielding nearly 300 basis points of resort margin expansion year-over-year. The two Jewel Resorts in the DR segment results were in line with the expectations we laid out on our last earnings call, representing an approximate 10 million year-over-year EBITDA drag. However, we expect the profit drag from these resorts to improve during the second quarter. We do not have any information to share with respect to the timing of the disposition of the two resorts, but hope to have more to share on that in the future. On the booking front, demand has remained strong despite the broader macroeconomic concerns, and we have achieved our goal of increasing Playa's transient consumer direct revenue mix of bookings, excluding the DR jewels, to at least 50% by 2023. In aggregate, during the first quarter of 2023, 51.4% of Playa-owned and managed transient revenues booked were booked direct, up 160 basis points year-over-year, growing year-over-year for the third straight quarter. During the first quarter of 2023, PlayaResorts.com accounted for approximately 10% of our total Playa-owned and managed room-night bookings, continuing to be a critical factor in our customer sourcing and ADR gains. Taking a look at who is traveling, roughly 36% of the apply, own, and manage room night stays in the quarter came from our direct channels, down 100 basis points year over year, as our group mix improved significantly year over year by 460 basis points. Our OTA mix has remained the most depressed channel compared to pre-pandemic levels. Geographically, the biggest change in our guest mix during the first quarter was the continued recovery of our Canadian guest mix. which was up approximately 400 basis points year-over-year, as well as our Mexican source guest mix, which was up 300 basis points. Our European source guest mix was down significantly again year-over-year, but in line with pre-pandemic levels. Our Asian source guest mix improved modestly year-over-year, but remains the most depressed, as it is only approximately 75% to 80% recovered. Our visibility remains a critical factor of our success, as our booking window remained at just over three months. Once again, I would like to thank all of our associates that have continued to deliver world-class service in the face of pandemic-related challenges and rising operating costs. Their unwavering passion and dedication to service from the heart is what truly sets Playa apart. Finally, on the capital allocation front, We purchased approximately $41 million worth of Playa stock during the first quarter and an additional $20 million thus far in the second quarter, bringing our total repurchases since resuming our program in September 2022 to just over $107 million. We continue to believe that our stock provides a tremendous value relative to the fundamentals, and share repurchases are a phenomenal use of capital for a free cash flow. With that, I will turn the call back over to Ryan to discuss the balance sheet and our outlook.