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An artistic rendering of the St Regis Cap Cana Resort and Residences slated to open in 2023 in the Dominican Republic (Photo: Marriott International)

Playa reports Caribbean surprise as airlift recovers

An artistic rendering of the St Regis Cap Cana Resort and Residences slated to open in 2023 in the Dominican Republic (Photo: Marriott International)

Bruce D Wardinski, chairman and chief executive officer (CEO) of Playa Hotels & Resorts NV reported this week that the improvement in his company’s performance in the Caribbean “far exceeded expectations”.

The company posted a positive EBITDA (earnings before interest, taxes, depreciation, and amortisation) driven by sequentially higher occupancy levels and airlift into these destination, as the breadth of the recovery from the novel coronavirus pandemic improves.

Playa is owner, operator, and developer of all-inclusive resorts in beachfront locations in popular vacation destinations in Mexico and the Caribbean. The company owns and/or manages a total portfolio consisting of 22 resorts (8,366 rooms) located in Mexico, Jamaica, and the Dominican Republic.

An aerial view of Hyatt Regency in Punta Cana, Dominican Republic (File photo)

As of mid-July, management stated that revenue on the books for Q3 2021 was nearly 30 per cent above Q3 2019 levels for owned and managed resorts with ADRs (average daily rates) driving the bulk of the gains.

However, results from operations indicated a net loss of US$7.8 million compared to a net loss of US$87.5 million in 2020 for the June quarter.

For the six months ended June 30, 2021 net loss was US$77.5 million compared to a net loss of US$110 million in 2020. Over the six months, owned resort EBITDA increased 4.8 per cent to US$38.6 million.

Management stated that the second quarter saw a continuation of the fundamental momentum experienced during the first quarter and that key performance indicators materially improved.

Jewel Grande Montego Bay is a Playa Resorts-managed property. (Fil

Wardinski, chairman and CEO, commented, “Segment performance benefited from the recovery in airlift into our destinations, pricing discipline in a rising demand environment, and exceptional cost controls.”

He added, “Results at our Mexican resorts led the way on an absolute basis once again, as the airlift recovery into our Mexican destinations has shown the best relative progress of our operating regions as compared to 2019 levels.”

Wardinski said that, looking ahead, he is “optimistic as we near our high season and prepare for 2022”.

Bruce Wardinski, chairman and chief executive officer (CEO), Playa Hotels & Resorts NV (File photo)

As of June 30, 2021, the company held $237.7 million in cash and cash equivalents, excluding $25.6 million of restricted cash. Total interest-bearing debt was $1,150.9 million, consisting of senior secured term loan due 2024 and property loan due 2025.

Effective March 29, 2018, Playa entered into two interest rate swaps to fix LIBOR at 2.85 per cent on a US$800 million variable rate term loan. As of June 30, 2021, there was no balance outstanding on a US$85.0 million revolving credit facility.