Nashville-based Ryman Hospitality Properties Inc. estimates it has lost about $40 million in revenue over fears of the coronavirus.
In a statement Sunday, Chairman and CEO Colin Reed said Ryman had experienced about “14,000 cancelled net room nights,” including group bookings.
“During the investor conferences the Company attended early last week, we indicated that our hospitality business had incurred approximately 14,000 cancelled net room nights which we believed were attributable to COVID-19. During the course of the last week, our hospitality business has witnessed an increase in group room night attrition and cancellations which we believe also are attributable to COVID-19. For the week ended March 7, 2020, our hospitality business experienced total attrition and cancellations of approximately 77,000 net room nights (which is inclusive of the 14,000 net room nights described above), representing approximately $40 million of revenue. Approximately 75% of this impact is for March 2020 and approximately 25% is for April 2020.
The company is best known for operating the Grand Ole Opry, Ryman Auditorium (the original site of the Opry), iconic country radio station WSM and the Gaylord Opryland Resort & Convention Center, all in Nashville, but it also has properties around the country. In November 2017, it announced plans to develop a mixed-use site near Opryland Resort with offices, residences and retail space.
For its hospitality business, Reed said the company focuses on group bookings, which are about 70 percent of its total room nights annually. The cancellation of big bookings means big losses, but he expressed optimism some groups may rebook later.
“In this regard, the estimated amount of attrition and cancellation fees owed to the Company for the attrited/cancelled groups is approximately $19 million. Several groups who have cancelled their event have expressed a desire to rebook their event later this year at one of our hotel properties. In addition, we are working with Marriott to implement cost containment strategies at each of our properties to reduce operating expenses in light of the short-term revenue losses we are experiencing.
“To put these attrition and cancellation figures in context, the typical volume of attrition and cancellations in the first quarter of a given year (based on a three-year average and excluding the Gaylord Rockies) is approximately 18,000 net room nights.
“While the Company currently maintains a strong level of contracted group bookings for the May to December period, and the levels of attrition and cancellation incurred to date would not result in our failure to achieve our previously provided full-year Total RevPAR and Hospitality Adjusted EBITDAre guidance, the recent pace of cancellation activity associated with COVID-19 creates a great deal of uncertainty regarding our operating performance for the remainder of 2020. Therefore, the Company is not able to accurately assess the potential impact on its full-year operating results. Given this rapidly evolving environment, the Company’s full business performance outlook for 2020 previously provided on February 25, 2020 is withdrawn, and investors should no longer rely upon this guidance.
Reed said the company has seen little change in its leisure business and business at its entertainment segments.
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Jason M. Reynolds has more than 20 years’ experience as a journalist at outlets of all sizes.
Photo “Ryman Auditorium” by Daniel Schwen. CC BY-SA 4.0.
Yes, there is indeed risk involved in any business. That is why the top company officials are paid the big bucks. If they fail to manage risk well then they get the boot.