Playa Hotels & Resorts (NASDAQ: PLYA) reported Q3 EPS of ($0.23), $0.07 worse than the analyst estimate of ($0.16).

Three Months Ended September 30, 2019 Results

• Net Loss was $30.5 million compared to a Net Loss of $5.4 million in 2018
• Adjusted Net Loss was $30.2 million compared to $9.8 million in 2018
• Net Package RevPAR decreased 3.2% over 2018 to $169.58, driven by a 370 basis point decrease in Occupancy and partially offset by a 1.4% increase in Net Package ADR
• Comparable Net Package RevPAR decreased 2.7% versus 2018 to $174.28, driven by a 0.7% decrease in Net Package ADR, and a 160 basis point decrease in Occupancy
• Owned Resort EBITDA decreased 26.5% versus 2018 to $25.9 million
• Owned Resort EBITDA Margin decreased 5.1 percentage points versus 2018 to 20.5%
• Adjusted EBITDA decreased 39.2% versus 2018 to $15.8 million
• Adjusted EBITDA Margin decreased 6.4 percentage points versus 2018 to 12.5%

“The fundamental actions we have taken in areas within our control are continuing to bear fruit as evidenced by the ongoing strength in Jamaica, robust Group performance in the Pacific Coast and stabilizing trends in the Yucatán. Strategic imperatives are also gathering momentum as demonstrated by our accelerating capital return to shareholders and increasing direct customer sourcing.

Unfortunately, the lack of a clear resolution as to the cause of the Dominican Republic incidents has continued to weigh on consumer perception for the market as a whole, resulting in the recovery for the broader slowing in late September.

That being said, the relative out-performance of our branded properties, enhanced selling ability post project completion, an increased focus on tangible operational efficiencies and recent positive commentary ruling out a key concern as it pertains to the Dominican Republic incidents, give us a sense of optimism as we move into a pivotal year for Playa.”

Guidance

Our 2019 outlook is predicated on the following assumptions:

• Comparable revenue growth: low single digit decline;
• The change to our full year Adjusted EBITDA forecast primarily reflects the change in our outlook for the Dominican Republic, and the write-off of receivables associated with the bankruptcy of Thomas Cook;
• $25 - $30 million of forgone EBITDA owing to the rebranding and renovations at the Hilton La Romana All-Inclusive Resort and the Hilton Playa del Carmen All-Inclusive Resort;
• $1 - $2 million in incremental property-level environmental taxes and minimum wage related increases;
• A full year contribution from the Sagicor portfolio, which we acquired in June of 2018; and
• Potential future acquisitions, dispositions, or management agreement changes are explicitly excluded from our outlook.

For earnings history and earnings-related data on Playa Hotels & Resorts (PLYA) click here.