Playa Hotels & Resorts N.V. (NASDAQ:PLYA) Q3 2018 Earnings Conference Call Transcript
Nov 07, 2018 • 10:00 am ET
Good morning. My name is JP and I'll be your conference operator today. At this time, I would like to welcome everyone to the third quarter earnings for Playa Hotels & Resorts. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) I'd now like to turn today's call over to Mr. Ryan Hymel. Sir, you may begin.
Thanks, JP. Good morning, everyone, and welcome to Playa Hotels & Resorts third quarter earnings conference call.
(Forward-Looking Cautionary Statements)
We've updated our IR website at investors.playaresorts.com with today's presentation and recent releases. Also as we discuss certain non-GAAP measures, it may be helpful to review the reconciliations to US GAAP located in our press release. On today's call, Bruce Wardinski, Playa's Chairman and CEO will provide some comments on the quarter and key operational highlights including our recent strategic alliance with Hilton and the first full quarter of performance from the Sagicor portfolio. I will then address our third quarter results and other financial matters. And Bruce will conclude the call by providing some perspective on Playa's strategy and capital allocation priorities. We will then take your questions.
With that, I'll turn it over to Bruce.
Great. Thanks, Ryan. Good morning, everybody, and thanks for joining us on today's call. As Ryan mentioned, I'll begin by reviewing a number of our accomplishments in the third quarter and provide an update on the flagship Hyatt Ziva and Zilara developments in Cap Cana. I'll then turn it over to Ryan to discuss our third quarter results and our fourth quarter outlook and then briefly touch on our capital allocation priorities before turning to the Q&A. The third quarter of 2018 was a pivotal quarter for Playa as we accomplished several meaningful strategic objectives; increasing our brand partners, reducing customer acquisition costs and once again demonstrating that we are a capable consolidator in the all-inclusive segment.
We greatly increased our total addressable market via a new strategic alliance and branding partnership with one of the most recognized brand leaders in the world, Hilton, and the subsequent rebranding of two of Playa's resorts to Hilton all-inclusive resorts totaling 1,269 rooms. We discontinued our costly sales and marketing agreement with Mark Travel following their acquisition by Apple Leisure Group and are successfully backfilling the business with more direct and lower cost channels, which should lead to higher revenues over time. We captured 20 times the number of room nights booked on playaresorts.com for 9.8 million in total volume, which was up from 850,000 in the third quarter of 2017 and we completed our first full quarter of operations at our recently acquired Sagicor portfolio diversifying us from both a geographic and source market standpoint and the projects continue to meet or exceed our underwriting criteria.
Before we dig into the details of the third quarter results and our full year outlook, let's take a few minutes to explore each of these key achievements