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Playa Hotels & Resorts (PLYA - Free Report) is coming off its best year ever in 2022 with bookings remaining red hot to start 2023. This Zacks Rank #1 (Strong Buy) is leaving the pandemic behind.
Playa Hotels & Resorts develops and operates 25 all-inclusive resorts in Mexico, Jamaica and the Dominican Republic with 9,352 rooms. If you've ever been to the beach destinations in those three countries you know their resorts.
In Mexico, Playa owns and manages Hyatt Zilara Cancún, Hyatt Ziva Cancún, Wyndham Alltra Cancún, Wyndham Alltra Playa del Carmen, Hilton Playa del Carmen All-Inclusive Resort, Hyatt Ziva Puerto Vallarta, and Hyatt Ziva Los Cabos. In Jamaica, Playa owns and manages Hyatt Zilara Rose Hall, Hyatt Ziva Rose Hall, Hilton Rose Hall Resort & Spa, Jewel Grande Montego Bay Resort & Spa and Jewel Paradise Cove Beach Resort & Spa.
In the Dominican Republic, Playa owns and manages the Hilton La Romana All-Inclusive Family Resort, the Hilton La Romana All-Inclusive Adult Resort, Hyatt Zilara Cap Cana, Hyatt Ziva Cap Cana and Jewel Punta Cana. Playa owned one resort in the Dominican Republic that was managed by a third-party until January 6, 2023 but is now managed by Playa.
It also manages 8 resorts on behalf of third-party owners.
A Big Beat in the Fourth Quarter
Analysts have underestimated the consumer demand for travel. On Feb 23, Playa Hotels & Resorts reported its fourth quarter and full year results and blew by the Zacks Consensus by $0.14. Earnings were $0.13 versus the Zacks Consensus of a loss of $0.01.
It was the fourth earnings beat in a row.
Playa had the best year in the company's history and saw acceleration in recovery in the important Jamaica market.
Net Package RevPAR was up 21.8% in the fourth quarter to $262.73 from $215.66. For the full year, Net Package RevPAR jumped 67% to $266.93 from $159.88, as Caribbean destinations like Jamaica fully reopened to visitors and COVID testing was eliminated.
Fourth quarter comparable portfolio occupancy was up 9.7 points to 75.8% from 66.1% in Q4 2021. This did not include Hilton La Romana, Hyatt Ziva and Hyatt Zilara Cap Cana which were closed for a portion of the quarter due to impacts of Hurricane Fiona and subsequent clean-up.
Full year comparable occupancy was up 21.7 points to 74.9% from 53.2% as the Caribbean reopened fully from the pandemic restrictions.
"Demand has remained robust so far in 2023, with our weekly bookings for our Playa owned and managed resorts reaching new highs," said Bruce Wardinski, CEO.
"Our revenue on the books for the first half of 2023 at our Playa owned and managed resorts, excluding the recently repositioned Jewel Punta Cana and Jewel Palm Beach, is up over 30%, with ADR growth driving roughly one-third of the increase. Early indications for the summer also look fantastic, with ADR continuing to show year-over-year growth," he added.
Estimates for 2023 Raised
After the bullish guidance for 2023, analysts raised earnings estimates for the full year. The 2023 Zacks Consensus Estimate has jumped to $0.49 from $0.44 just 60 days ago. However, this is still a penny under 2022's earnings of $0.50.
But analysts see 2024 as even more bullish, with earnings expected to grow 22.5% to $0.60.
Shares Soar in 2023
Shares of Playa Hotels & Resorts were originally a pandemic winner in 2021 as the trends in travel improved off the COVID pandemic lows. However, shares sold off again in 2022. The company, however, thought they were attractive and undervalued. The Board of Directors authorized a $100 million share buyback in Sep 2022.
As of Jan 31, 2023, there was $43.6 million remaining on that authorization. But on Feb 9, 2023, the Board of Directors authorized a new $200 million share repurchase, replacing what was left on the Sep 2022 authorization.
Shares have soared 44.6% year-to-date and are near new 52-week highs. It's not as cheap, on a P/E basis, as it once was. It trades with a forward P/E of 19.3.
Image Source: Zacks Investment Research
But for investors who believe the travel trend is going to stick around for the next few years, you might want to keep an all-inclusive player in the Caribbean, like Playa Hotels & Resorts, on your short list.
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Bull of the Day: Playa Hotels (PLYA)
Playa Hotels & Resorts (PLYA - Free Report) is coming off its best year ever in 2022 with bookings remaining red hot to start 2023. This Zacks Rank #1 (Strong Buy) is leaving the pandemic behind.
Playa Hotels & Resorts develops and operates 25 all-inclusive resorts in Mexico, Jamaica and the Dominican Republic with 9,352 rooms. If you've ever been to the beach destinations in those three countries you know their resorts.
In Mexico, Playa owns and manages Hyatt Zilara Cancún, Hyatt Ziva Cancún, Wyndham Alltra Cancún, Wyndham Alltra Playa del Carmen, Hilton Playa del Carmen All-Inclusive Resort, Hyatt Ziva Puerto Vallarta, and Hyatt Ziva Los Cabos. In Jamaica, Playa owns and manages Hyatt Zilara Rose Hall, Hyatt Ziva Rose Hall, Hilton Rose Hall Resort & Spa, Jewel Grande Montego Bay Resort & Spa and Jewel Paradise Cove Beach Resort & Spa.
In the Dominican Republic, Playa owns and manages the Hilton La Romana All-Inclusive Family Resort, the Hilton La Romana All-Inclusive Adult Resort, Hyatt Zilara Cap Cana, Hyatt Ziva Cap Cana and Jewel Punta Cana. Playa owned one resort in the Dominican Republic that was managed by a third-party until January 6, 2023 but is now managed by Playa.
It also manages 8 resorts on behalf of third-party owners.
A Big Beat in the Fourth Quarter
Analysts have underestimated the consumer demand for travel. On Feb 23, Playa Hotels & Resorts reported its fourth quarter and full year results and blew by the Zacks Consensus by $0.14. Earnings were $0.13 versus the Zacks Consensus of a loss of $0.01.
It was the fourth earnings beat in a row.
Playa had the best year in the company's history and saw acceleration in recovery in the important Jamaica market.
Net Package RevPAR was up 21.8% in the fourth quarter to $262.73 from $215.66. For the full year, Net Package RevPAR jumped 67% to $266.93 from $159.88, as Caribbean destinations like Jamaica fully reopened to visitors and COVID testing was eliminated.
Fourth quarter comparable portfolio occupancy was up 9.7 points to 75.8% from 66.1% in Q4 2021. This did not include Hilton La Romana, Hyatt Ziva and Hyatt Zilara Cap Cana which were closed for a portion of the quarter due to impacts of Hurricane Fiona and subsequent clean-up.
Full year comparable occupancy was up 21.7 points to 74.9% from 53.2% as the Caribbean reopened fully from the pandemic restrictions.
"Demand has remained robust so far in 2023, with our weekly bookings for our Playa owned and managed resorts reaching new highs," said Bruce Wardinski, CEO.
"Our revenue on the books for the first half of 2023 at our Playa owned and managed resorts, excluding the recently repositioned Jewel Punta Cana and Jewel Palm Beach, is up over 30%, with ADR growth driving roughly one-third of the increase. Early indications for the summer also look fantastic, with ADR continuing to show year-over-year growth," he added.
Estimates for 2023 Raised
After the bullish guidance for 2023, analysts raised earnings estimates for the full year. The 2023 Zacks Consensus Estimate has jumped to $0.49 from $0.44 just 60 days ago. However, this is still a penny under 2022's earnings of $0.50.
But analysts see 2024 as even more bullish, with earnings expected to grow 22.5% to $0.60.
Shares Soar in 2023
Shares of Playa Hotels & Resorts were originally a pandemic winner in 2021 as the trends in travel improved off the COVID pandemic lows. However, shares sold off again in 2022. The company, however, thought they were attractive and undervalued. The Board of Directors authorized a $100 million share buyback in Sep 2022.
As of Jan 31, 2023, there was $43.6 million remaining on that authorization. But on Feb 9, 2023, the Board of Directors authorized a new $200 million share repurchase, replacing what was left on the Sep 2022 authorization.
Shares have soared 44.6% year-to-date and are near new 52-week highs. It's not as cheap, on a P/E basis, as it once was. It trades with a forward P/E of 19.3.
Image Source: Zacks Investment Research
But for investors who believe the travel trend is going to stick around for the next few years, you might want to keep an all-inclusive player in the Caribbean, like Playa Hotels & Resorts, on your short list.