Welcome to the Ryman Hospitality Properties Third Quarter 2019 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Chairman and Chief Executive Officer; Mr. Mark Fioravanti, President and Chief Financial Officer, Mr. Patrick Chaffin, Chief Operating Officer and Mr. Scott Lynn, Executive Vice President and General Counsel. This call will be available for digital replay. The number is 800-585-8367 and the conference ID number is 4888901. [Operator Instructions].It is now my pleasure to turn the floor over to Mr. Scott Lynn, sir, you may begin.

Good morning. Thank you for joining us today. This call may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the company's expected financial performance. Any statements we make today that are not statements of historical facts, may be deemed to be forward-looking statements. Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release.The company's actual results may differ materially from the results we discuss or project today. We will not update any forward-looking statements whether as a result of new information, future events or any other reason. We will also discuss non-GAAP financial measures today. We reconcile each non-GAAP measure to the most comparable GAAP measure in an exhibit to today's release.I will now turn the call over to Colin.

Thank you Scott, and good morning everyone. Now, those of you that have read our press release will no doubt have concluded that our company had a very solid quarter. One that in fact, and tone is quite different from the other companies in our sector that we often are compared to. Now, over the last few weeks Mark and I have undertaken several non-deal roadshows meeting many current and prospective shareholders, both in the US and in Canada. Now, one question we constantly get asked is, why is our performance so different with the follow-up, is it just where we are in the cycle.Now, the question sounds simple enough, but the answers are a little bit more complex. The fact is, unlike the rest of our sector, we have built a business or in our case, a brand that is customer focused, not bricks and mortar focused. Years ago, before we handed the brand over to Marriott, we identified the customers we wanted to build a long-lasting relationship with.They are the groups who want an all under one roof experience and that by and large rotate market-to-market each year. Then we went out and built a portfolio of world-class hotels that physically offers these customers, what they want; great product and a great entertainment backed by great service in spaces tailored to each customer's individual needs. And these hotels then operate together moving customers year-by-year from hotel to hotel.The consequence of this predetermined strategy is that our current results and I suspect the results you'll see from us over the next year or two will be driven much less by a cycle, than by this strategy and its execution, which has helped us build this tremendous book of forward business from these loyal customers of ours.Furthermore, we've been expanding…

Thanks Colin. Good morning everyone. In the third quarter, the company generated total revenue of $379.8 million, an increase of 30% in the prior year. This was driven by a strong 5.6% revenue growth at our same-store hotel, double-digit organic growth in our Entertainment segment, plus the new contributions of Gaylord Rockies and Ole Red Gatlinburg.Income available to common shareholders which excludes the minority interest attributable to our partners in the Gaylord Rockies declined 1% in the third quarter to $22.3 million or $0.43 per fully diluted share. The small decline in net income is due to the increase in interest and depreciation expenses from the consolidation of the Gaylord Rockies, the write-off of deferred financing costs, in association with our refinancing activity and a modest increase in our effective tax rate.In terms of adjusted EBITDAre, the company generated $119.1 million on a fully consolidated basis or $108.1 million after exclusion of the minority interest in the Gaylord Rockies, these results represented growth rates of 40.6% and 27.7% respectively. Excluding the Gaylord Rockies, our same-store Hospitality segment generated $79.6 million of adjusted EBITDAre, an increase of 2.1% year-over-year. Attrition in the third quarter was 14.2%, a slight increase over the third quarter of 2018, but below the third quarter of 2017, and within our recent range.Likewise in the year for the year cancellations of approximately 8,700 room nights ticked up slightly from the third quarter of 2018, but recall that the third quarter of last year was a very low level and was itself down over 42% against the third quarter of 2017.So, all in all our attrition and cancellation levels remain in a stable range and we see no patterns emerging. Moving to AFFO available to common shareholders, the company generated $78 million in the third quarter or an…

I'm going ask Tammy to open up the lines, but let me just say this, we've taken 35 minutes here this morning it's a little bit longer. I suppose if we'd have had a lousy quarter, we'd have done it in a much abbreviated mode, but we have so much going on as a company right now, which is driving these numbers that we felt that we need to give you a little bit more color as to what is going on. So, Tammy, let's open up the lines for questions, please.

Thank you. [Operator Instructions] Your first question comes from the line of Smedes Rose with Citi.

Hi, good morning. I wanted to follow up on, actually with the -- Patrick last quarter you talked a little bit more about some of the trends within group booking, specifically to contract terms, space being taken and kind of banquet spend and I was wondering if you could maybe just provide some incremental color on those three pieces relative to our last call?

Sure. Good morning Smedes. So, given the volatility that's kind of been going on in the market and to Colin's point earlier, the questions around where we are in the cycle and how that's impacting our business we've spent a lot of time putting a little bit more diligence than normal into group booking trends, and also attrition and cancellation.And I guess, I would say from the outset that we're comfortable that there is nothing really systemically going on in the group space and our additional diligence is really just proven back to us that there are groups that cancel time to time, there are groups that attrite but there is nothing going on that gives us any pause or concern.From a group bookings perspective, we knew that the third quarter would be strong for us and that's exactly how it played out. We are facing the challenge, which is a good challenge to have of the fact that we have very little availability for the next two years or three years out, but we still have strong leads. Colin mentioned earlier that our leads were up 13% and we see our prospects, continuing to grow as well. Tentatives are down just a little bit, just simply from the fact that we had a good finish to the quarter and sort of emptied out some of the funnel there, but the booking trends continue to build in a positive way.From a banquet spend perspective, as you can see in the quarter, we had a little bit of a mix shift, which drove less margin for us, because we had lot more groups that are of association or lower-rated, what we call smurf groups and therefore they use the outlets more than they do banqueted functions, but that's just the lumpiness of how a year plays out and we expect fourth quarter to be pretty good.But from a perspective of what they're booking for the future; minimums on banquet spend continue to move in a healthy direction, and we feel comfortable that there is no concern or systemic issues going on there. And then, from a space perspective, obviously one of the hallmarks of our brand is that we are very disciplined and our sales team is very disciplined, in making sure that we don't give away more space than we need to, so that we have additional space to sell to other groups; that discipline continues to pay off for us.And as you can see, both in 2019 and our expectations for 2020, our space is very highly occupied for the next few years and we're finding ways to fit more and more groups into the space to really maximize the utilization of that space. So, across the board, very favorable trends continuing for us.

And we're not seeing any -- Patrick this is a rhetorical really a question, we're not seeing any easing in the standards of our contracts across our portfolio. We're very diligent about this Smedes, and we wouldn't -- we reported the 5% increase in room rate for a reason, right and that is -- the reason is that when things start going off the cliff, like they did in 2009 and 2010 -- back in 2019-2010, you saw rooms being booked but rates under pressure, and we're not seeing that. So, the quality of our contracts are very good today.

Yeah, I mean Colin raised a great point that I'll just add onto. We do a lot of research with our customers, and one of the customer concerns are just satisfiers that we get with group sometimes is that we're a little bit less willing to budge on some of our contractual terms, and that's something that we continue to manage the relationship with our customers, but I see that as a positive sign that we do have a little dissatisfaction out there, from time to time because we are not willing to compromise on our attrition and cancellation policies and clauses. We have to make sure, we protect ourselves in case the economy moves in a different direction.

Thanks, I appreciate the detail. I wanted to ask you two. So, the Rockies has obviously had a really successful first year of operations.I think it's probably fair to say these large properties tend to ramp over kind of a multi-year period. So, but just as we think about year two of the Rockies; I mean, would you say this property is kind of generally reaching its run rate potential maybe faster in year one than you had initially anticipated?

Well, the thing that I would say surprised us is the amount of new business from companies that haven't booked into the Gaylord system before that we're picking up essentially from the West Coast. We had a sense -- we did a lot of research here prior to pulling the trigger on this deal. We had a sense that it was going to be good, but it is really good, and that's evidenced by the continued build in the amount of room nights that were booking. So look, what I've said to the team internally here, when you think about the positioning of Opryland in Nashville and you think about where Opryland in Nashville was as a city five years, ten years back, right now, we get 15 million de-planements, I think that's going to grow the forecast for next year is pushing 18 million tourists into this town next year.And, if you look at the size of the Nashville Airport and you compare that to what's going on in Denver, with 65 million deployments three hubs, 10 international flights and no competitive supply in that market, my sense is that this hotel -- the hotel in Aurora can over time evolve to a hotel as big as and as dominant as Opryland and so when you say about maturation, the hotel will see very, very, very good jump next year in RevPAR.I mean, it will be a really big jump in RevPAR, next year, simply because we've got 10 more points of occupancy on the books as of the end of September. For next year, as we did this time last year, for this year and so -- but we are going to not let a shortage of capacity impede the growth of this business. So, I sort of see this business evolving here over the next 5 years to 10 years to Opryland like, but the difference is, unlike Opryland gets no tax rebates. This hotel will get tax rebates for the next 25 years to 30 years.So, I see this is a really world-class opportunity that we have to continue to as demand increases to continue to expand this hotel, create more jobs, more economic impact of the State of Colorado. So, we're very excited about this hotel.

Thanks a lot.

Thanks Smedes.

Your next question comes from the line of Shaun Kelley with Bank of America Merrill Lynch.

Hi, good morning everybody. Colin, I just wanted to maybe stick with the Rockies to start and I'm going to try and ask I think Smedes question slightly different way, which is on just trying to kind of get our arms around how much of -- how far this property is outpacing sort of your own expectations of its productivity, meaning like the gains this year can continue into future periods versus how much you're just able to fill up a little bit more this year than kind of where you thought?I mean, again as we compare to the overall portfolio with, let's call it 60 points on the books versus closer to 50 points for the overall. It would seem like there is a really encouraging second year ramp story still on top of this base. But, just how much of that is true versus getting us too excited about just demand that's really being pulled forward a little bit?

I don't know how to answer that question; other than we expect -- we will guide -- we will let you know our guidance here -- early part of next year when we finish all of our planning processes with Marriott. But, I'm expecting to see RevPAR growth in this hotel next year, well north of 10% and I expect to see really good EBITDA ramp, and we're not going to let it sort of peak next year, we're not going to do that. And Patrick, I don't know what other color we can give at this stage.

Yeah, I mean the only thing I would add that I think we're comfortable saying at this point is that, we've had better pickup in banquet than we anticipated. The groups have really bought in on the banquet side and we have a high mix of corporate groups in-house, so that makes sense and that's very encouraging. The second is transient has built better than we expected. It takes time to build the transient base of customer loyalty, that's doing better than we anticipated. And apart from a productivity and efficiency perspective, we're on target and continuing to make the improvements that the team there, to their credit. We ask them to focus on labor, they did that and it's paying dividends for us.

Now, the other thing is that, whenever you open hotels like this and we are a unique management team in the sense that we built five of these things, and we've opened them. And so, we don't go out and just buy an operating business -- we open these things, and there are some things that we are going to do to refine this hotel here over the next 12 months.I'm not talking about adding more rooms. I'm talking about refinements in the existing core hotel to make that hotel a better hotel, to compete more fiercely in sort of the nation here. So, there will be refinements that we will do. We will probably pull the trigger on the expansion after we have finished dialoging with our partner here, and we expect this hotel to see continued good growth over the next two years to three years.

Great, thanks. Thanks for the color. And then, just as my kind of follow up on, obviously there are a few call-outs and Colin you went into some detail in your prepared remarks about the labor cost environment and also sort of why you are investing the way you are. Can, you just help us think about and again this is also going to point toward 2020 so I'll apologize in advance, but like, can you just help us think about, can you get -- if we think about these investments and the margin profile of this year, can we still expect and/or get operating leverage next year despite having an elevated level of labor investment, can you just kind of help us think about that?

Yeah. That's -- Shaun that's a good question. The answer is yes. The reason we're doing it as we went into great pains on this is that we want to make sure that we send the signals to our people that we care about, and even though they're under Marriott payroll, we pay for it and we look at these people as our people. I mean, we're not the typical traditional owner in the REIT space. We look at these people as people we know and care about and love and so, the answer is we've done this because we think it's the right thing, but we believe with the revenue growth that we anticipate getting next year, there will be operating leverage in this business.

Great. Thank you very much.

Thank you.

Your next question comes from the line of Chris Woronka with Deutsche Bank.

Hey, good morning guys. Promise I won't ask about 2020, initially anyway, but wanted to kind of explore the downtown, you guys have had a lot of success with your entertainment assets over the years, and we see a lot of kind of boutiquey modern hotel supply down there, which probably is overall beneficial, but the question is do you guys -- do you see any -- is there any desire to be a part of that hotel development downtown, given the success you've had with your other assets over the years?

No. And we love all of that, supply being built, we love all these Airbnb's opening up and operating 5,000 of them in Nashville, because they are the provider of accommodation for people who come here to listen to great music and eat and drink and have fun, and ultimately subscribe to our OTT platform that we will be launching in the middle of next year. So, we don't feel like we have to be in the hotel market, downtown here, at this stage and so that's how we feel about it.

Yeah. Any hotel investment we'd make here, we'd want to leverage the investments we made in SoundWaves and Brett, the other

That's a good point Mark. So, that's how we think about it, Chris.

Okay. Actually that was the answer, I was kind of hoping to hear. So, good job on that. Second question was shifting to the Rockies, and as we look at the kind of early success, not just financially for you guys but for the city and the property and the employees and such. I mean, does that maybe for other municipalities where you might have had conversations, do you think that seeing what's happening, and maybe getting an expansion there, which creates more jobs and economic interest. I mean, does that maybe make another municipality closer to coming over to the finish line to the extent that you are in discussions. Is that helpful at the margin?

Well, there is a big difference between talking about something and actually doing it, right. And so, what we now have is -- we now have two photographs. So, one of the Gaylord National and National Harbor and we have a photograph now of the success of the Rockies. And so, if you go back and read the script that I know we said, a lot of stuff in this 35 minutes, but it was a paragraph or two, where I talked about the success of the Rockies has emboldened us to look at other municipalities, and we are working on that as a company, because you're right, this is -- what's happened here is extraordinarily compelling.And so, it would be in the right market, in the right -- probably on the other side of the railroad tracks, not in a downtown environment, but in a right market that something like this could be replicated for the benefit of all, and it's something that we are looking at and pursuing.

Okay. Makes sense. Very good. Thanks Colin.

Thanks Chris.

And there are no further questions at this time, I will now turn it back to our speakers for any closing remarks.

Tammy, thank you and thanks again everyone for joining the call and taking an interest in our company. If you have any further questions, you can get hold of our IR folks or I think most of you have Mark's number or my number, and we'd be happy to communicate, and thanks a lot. And have a good day everyone.

Ladies and gentlemen, that concludes today's conference call. Thank you for participating. You may now disconnect.