Playa Hotels & Resorts N.V. Financial Performance Overview

Playa Hotels & Resorts N.V. is a leading owner, operator and developer of all-inclusive resorts in popular vacation destinations in Mexico, Jamaica, and the Dominican Republic. As of March 31, 2025, Playa owned and/or managed a total portfolio of 22 resorts (8,342 rooms) across these regions.

For the three months ended March 31, 2025, Playa generated net income of $43.1 million, Total Revenue of $267.3 million, Net Package RevPAR of $433.20 and Adjusted EBITDA of $99.9 million. This represents a decrease compared to the same period in 2024, when the company reported net income of $54.3 million, Total Revenue of $300.6 million, Net Package RevPAR of $427.17 and Adjusted EBITDA of $113.5 million.

The decrease in financial performance was primarily driven by:

• Reduced demand in Playa’s Jamaica segment, which was impacted by a travel advisory issued by the U.S. government.
• Renovation work at the Hyatt Ziva Los Cabos resort.
• A 2.6 percentage point decrease in Occupancy across the portfolio.
• A 2.3% decrease in Net Non-package Revenue, driven by the sale of the Jewel Paradise Cove Beach Resort & Spa and Jewel Palm Beach resorts.

These factors were partially offset by a 4.6% increase in Net Package ADR.

Segment Performance

Playa organizes its operations into four geographic business segments: the Yucatán Peninsula, the Pacific Coast, the Dominican Republic, and Jamaica.

The Yucatán Peninsula segment saw a 2.9% decrease in Owned Net Revenue and a 2.7% decrease in Owned Resort EBITDA compared to the prior year period. This was driven by a slight decrease in Occupancy and Net Package ADR, as well as higher labor and related expenses, partially offset by the favorable impact of Mexican Peso depreciation.

The Pacific Coast segment experienced a 20.9% decrease in Owned Net Revenue and a 26.7% decrease in Owned Resort EBITDA. This was primarily due to a 19.7 percentage point decrease in Occupancy resulting from ongoing renovations at the Hyatt Ziva Los Cabos resort.

In contrast, the Dominican Republic segment saw an 8.6% increase in Comparable Owned Net Revenue and a 10.5% increase in Comparable Owned Resort EBITDA. This was driven by higher Occupancy, Net Package ADR, and Net Non-package Revenue.

The Jamaica segment was the weakest performer, with a 12.5% decrease in Comparable Owned Net Revenue and a 28.2% decrease in Comparable Owned Resort EBITDA. This was primarily due to the impact of the U.S. government’s travel advisory on demand.

Liquidity and Capital Resources

As of March 31, 2025, Playa had $265.4 million of available cash and $225.0 million available on its Revolving Credit Facility. The company’s net cash provided by operating activities for the three months ended March 31, 2025 was $78.1 million.

Playa’s expected material cash requirements for the remainder of 2025 and beyond consist of:

1. Contractually obligated expenditures, including debt service payments.
2. Other essential expenditures, such as operating expenses and resort maintenance.
3. Opportunistic expenditures, including potential property developments, acquisitions, and discretionary share repurchases.

The company believes its sources of cash, including available cash, cash from operations, and borrowing capacity, will be adequate to meet its cash requirements over the next 12 months and beyond.

The Proposed Hyatt Transaction

On February 9, 2025, Playa entered into a purchase agreement with Hyatt Hotels Corporation, under which Hyatt’s wholly-owned subsidiary will commence a tender offer to acquire all of Playa’s outstanding ordinary shares at $13.50 per share.

Upon completion of the transaction, Playa will no longer be a publicly traded company, and Hyatt will own all of Playa’s ordinary shares. The transaction is subject to various closing conditions, including the tender of a minimum number of shares, shareholder approvals, and regulatory approvals.

The announcement of the Hyatt transaction has created some risks and uncertainties for Playa, including:

• The potential for the transaction to be terminated if certain conditions are not met.
• Disruption to management’s attention and the company’s operations during the pendency of the deal.
• Potential impact on Playa’s relationships with key partners, such as other hotel brands.
• Uncertainty around Playa’s strategic plans and ability to respond to competitive pressures.
• Potential legal proceedings related to the proposed transaction.

Strengths and Weaknesses

Playa’s key strengths include:

• Diversified portfolio of well-positioned all-inclusive resorts in popular vacation destinations.
• Relationships with globally recognized hospitality brands like Hyatt, Hilton, and Wyndham.
• Experienced management team with expertise in all-inclusive resort operations.
• Strong liquidity position and access to capital markets to fund growth and investments.

Weaknesses and challenges include:

• Exposure to macroeconomic and geopolitical factors that can impact travel demand, such as the Jamaica travel advisory.
• Reliance on the popularity of the all-inclusive resort model, particularly in the luxury segment.
• Susceptibility to increased competition, changes in consumer preferences, and supply of rooms from competing resorts.
• Potential for significant cost increases in areas like labor, utilities, and construction.
• Risks associated with resort acquisitions, expansions, and renovations not being completed on time or within budget.
• Exposure to natural disasters and other disruptions that can impact resort operations.
• Cybersecurity and information technology risks.

Outlook and Future Prospects

The proposed acquisition by Hyatt presents both opportunities and risks for Playa’s future. On the one hand, being part of a larger, well-capitalized hospitality company could provide Playa with greater resources and stability to invest in its portfolio and pursue growth opportunities.

However, the transaction also introduces uncertainty around Playa’s strategic direction, relationships with other hotel brands, and ability to respond to competitive pressures as a privately-held entity. The company’s performance will also continue to be influenced by broader macroeconomic and industry trends that impact travel demand and resort operations.

Overall, Playa has demonstrated the ability to navigate challenging operating environments, but faces ongoing risks and competitive pressures that will require careful management and execution to maintain its position as a leading all-inclusive resort operator. The proposed Hyatt transaction, if completed, could provide a path forward, but also introduces new uncertainties that will need to be carefully navigated.