Ryman Hospitality Properties Inc (RHP) 2014 Q4 法說會逐字稿

Welcome to the Ryman Hospitality Properties' fourth-quarter 2014 earnings conference call. Hosting the call today from Ryman Hospitality Properties are Mr. Colin Reed, Chairman and Chief Executive Officer; Mr. Mark Fioravanti, Executive Vice President and Chief Financial Officer; Mr. Patrick Chaffin, Senior Vice President of Asset Management; and Mr. Scott Lynn, Senior 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 73087325. At this time all participants have been placed on listen only mode. 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, including statements about the Company's expected future financial performance.

Any statements we make today that are not statements of historical fact may be deemed to be forward-looking statements. Words such as believes, expects or similar ones are intended to identify these statements, which may be affected by many factors including those listed and SEC filings and in today's release.

The Company's actual results may differ materially from the results we discuss or project. 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 which we've reconciled to the most comparable GAAP financial measure in an exhibit to today's release. I will now turn the call over to Colin.

Thanks, Scott, and thanks to everyone for being on the call with us today. 2014 was by many measurements the very best year this Company has had and our strong fourth quarter capped the year off extremely well.

I will walk you through the quarterly and full-year results as well as some of the driving factors behind our performance. And then I will close by touching on how we are thinking about our 2015 guidance and, more broadly, the future of and opportunities for this business moving forward. But first of all I want to take a moment to remind you all how we got to this point where we are today.

For those of you who have followed our Company for some time, you will know the transition process from a C Corp to a REIT was not without its challenges. In fact, there's been an exceptional amount work from both our operator, Marriott, and our team over the past two years that has gone into ensuring that the right systems, strategies and personnel were put in place to allow our unique properties to perform as well as they are capable of.

It is fair to say we are very pleased with the collaborative relationship that we have built with our operator and have reached the point where we are comfortable with the state of the key issues such as sales and sales processes and cost management at our properties.

The synergies that we and Marriott discussed when we initially announced the transaction are also being realized more fully, as you can see in the material improvements in our margin and revenue performance both for this last quarter and for 2014 as a whole.

As with any good marriage, there will always be things we have a healthy dialogue on and continually working at to improve each and every day. But that said, we are pleased with how this relationship has evolved and I'm very excited for what it can mean for both of our companies moving forward.

Now turning to our fourth-quarter results. This was an excellent quarter for our hotel segment as we solidly exceeded our expectations for the quarter. Starting with the top line, we delivered a record fourth quarter from a revenue perspective. We reported a RevPAR increase of 10.3% driven by a nearly 4 percentage point increase in occupancy and a 4.4% lift in ADR.

We also saw total RevPAR growth of 9.4% for the second consecutive quarter. A key driver of these results was the increase in overall group room nights as we recorded approximately 21,000 more corporate room nights than in the prior year fourth quarter, which also contributed to the lift in the outside of the room spend last total RevPAR.

The transient side of our business was also an extremely positive story this quarter, as transient room nights were up just under 8% compared to the fourth quarter last year and transient rate was also up $7.25 or almost 4%.

There were a number of contributing factors here. The fourth quarter is always our strongest from an event demand perspective. And our Ice! events performed very well this quarter, particularly lifted by an increased focus on sales training and incentives of the reservation call centers.

We have mentioned previously that there had been a bit of a learning curve on the sales side in terms of effectively marketing and selling these holiday packages. But our results this quarter offer us confidence that the issues we had in 2013 are largely behind us.

And finally, external elements were in our favor this period as we saw generally favorable weather conditions in December as well as lower gas prices.

Now turning to the bottom line, this was also a watershed quarter for profitability, with our Company posting both record adjusted EBITDA and adjusted EBITDA margin results. Our hospitality adjusted EBITDA increased 15.4% with margin up 150 basis points.

These strong top- and bottom-line performances in the fourth quarter helped contribute to a record full-year revenue and adjusted EBITDA results as well. Total RevPAR for 2014 was up 8.6% compared to the full year 2013 and RevPAR was up as well, 7.5%. We also saw increases in occupancy, ADR and adjusted EBITDA margin in 2014 compared to 2013.

Now, switching subjects to Washington DC. We continue to be encouraged by the momentum of the National Harbor development. And in December we completed an agreement with Marriott for the 192 room property we acquired there to become reflagged under their new AC brand.

From a synergies perspective this is a notable development; it makes the property a natural overflow destination for the Gaylord National as the two properties will be overseen by the same management team. The AC Hotel is currently closed as we undertake some renovations and repositionings of the property to deliver great service with reopening expected by the end of the first quarter. We will provide some more detail on what we see the financial impact of this property being when we discuss guidance.

Now turning to sales production. We were very pleased with our room night performance this quarter. As we shared with you last quarter, our bookings pattern is cyclical and the second and fourth quarters typically being our best. Now we also told you that we are entering the fourth quarter with a particularly healthy funnel of tentative and prospect bookings and we are pretty confident it will be a strong production period.

Now as you will have seen from our release this morning, this was indeed the case as we booked approximately 870,000 gross room nights for all future years and a 12.7% increase from the fourth quarter of last year. Now these gross room nights translated into nearly 775,000 net room nights which was a 21.6% increase compared to the fourth quarter of last year.

Now one other piece of news which may come as a surprise to you, December of 2014 was our best production month on record and contributed to this quarter being our best booking fourth quarter since 2005.

Now here is the really good news -- in addition to the overall increase in advanced group bookings due to the quarter we were also able to drive solid growth in rate. The rate increase on gross group bookings during the quarter was up approximately 5% over prior year -- over the prior year quarter, while rate on net group bookings increased almost 7% over the prior year quarter.

For the year the brand booked approximately 2.3 million gross room nights for all future periods, translating into the best annual production total since 2007. Now when you look at this bookings performance and the fact that we are hitting levels we haven't seen since before the Great Recession, it tells you a couple of things.

Certainly as it applies to us the group sector is the healthiest it has been in a long time. And while we always want to be cautious since unforeseen macro events can occur without warning, this is very encouraging. And two, the transition related issues that negatively impacted our sales production has receded and the work that we have done with Marriott to refine this process is now paying dividends.

In addition, we are confident that there are areas of the sales process where we can continue to refine or where we haven't yet seen the full results of our efforts bear fruit yet, such as the regional sales office. And to remind you, from an aspirational standpoint our goal at our hotels always has been to see occupancy levels approach 80% across our properties.

So there is room for us to grow while continuing to refine the booking strategies and focusing on the high-value groups that help us drive top-line and bottom-line improvement, which from our standpoint is a very exciting place to be.

Now last quarter I spent a few moments discussing the performance of the Gaylord Opryland Hotel here in Nashville; I'm going to do the same again today.

In the third quarter we really saw Opryland operating at high levels and that momentum continued into the fourth quarter. Occupancy for the quarter was a hair above 80%, which I just mentioned is really where we aim our properties to operate at. Revenue was up nearly 13% over the prior year quarter driven by rate increase of more than $10 and a lift in outside-of-the-room spend.

The hotel's bottom line was a great story as well as adjusted EBITDA rose $5.7 million and margin increased 330 basis points. The fourth-quarter performance helped contribute to Gaylord Opryland ending the year with just over $310 million in revenue and the property crossing the $100 million mark for adjusted EBITDA for the first time in its history.

Now that said, for a hotel to cross the $100 million profit threshold is truly extraordinary and reflects the continued explosion of the Nashville market as an international tourist and convention destination of choice, a phenomenon that we are in the center of.

On that note, our Nashville entertainment businesses had another excellent quarter capping a record setting year in 2014 for both revenue and profitability. We also look forward to creating additional demand for these attractions in 2015 when the Ryman Auditorium renovation and tour experience is open to the public. We are on target to unveil the finished product in the spring of 2015 in time to capture the full benefit of the summer tourism season.

As we've reminded you all now for several quarters, the continued booming popularity of the interconnected Nashville music and tourism scenes directly translates into the attractiveness of our brands and the performance of our Nashville based businesses.

We continue to work with our advisors and consultants to find ways to further grow this business and unlock its value for our shareholders and we are working on a number of exciting opportunities.

Now rest assured that as our strategies for this business unfold we will provide an update at the appropriate time. And in the meantime we continue to take great pleasure of what is going on in Nashville and what it has already and can mean for the future of our business.

Now let's turn to guidance. 2015 will be another strong year for our Company. We entered 2015 with slightly more group room nights on the books than we had in 2014, and we anticipate the group segment to continue to perform well. As such we anticipate RevPAR growth of 4% to 6% versus 2014.

Now a number of recent analyst notes on some of our peers' results have expressed some concern regarding the slowdown in group trends. Now let me spend a moment detailing what we are seeing that gives us confidence in the group segment.

Now there are a number of indicators that we use to assess the health of the group trends going forward. First, group bookings performance improved through 2014 in addition to having the second best booking quarter on record in Q4. Our rate for all future years increased 6.9% year over year.

We're also entering 2015 with 49 points of group occupancy on the books and the funnel for future business remains robust. At year end prospects are up 8% and tentatives are up 10% with the rate for these potential bookings reflecting year-over-year growth of 12%.

Now assuming these trends continue we expect them to have a material impact on 2016 and 2017 as we expect to book approximately 50% of our group room nights for these years in this improving pricing environment. In fact, our group rooms' revenue already on the books for 2016 reflects a 5% increase over the same time last year for 2015.

We believe the transient segment will also remain healthy barring any unexpected geopolitical issues impacting travel on the overall economy. Strong demand growth coupled with favorable supply dynamics in the markets in which we operate should allow for improved pricing power and higher average daily rates for both transient and in the year for the year group bookings.

Turning to total RevPAR, we are guiding between 3% to 5% over 2014. As mentioned in our release, this is adversely impacted by the recent accounting changes enacted for the hospitality industry in 2015, and Mark will provide more specifics, but we estimate and impact of approximately 60 basis points.

In developing total RevPAR guidance we examined the contracted outside-of-the-room spending for each of the groups on the books in 2015. While we expect spending to remain healthy our guidance does not anticipate the same level of growth year-over-year that we saw in 2014.

Driven by the improving economic conditions we were able to raise menu pricing in 2014. Additionally, many of our groups opted to exceed their contracted spending outside of the room, particularly in banquets, which happens when the economic tide is rising.

Now due to these factors total RevPAR increased 8.6% last year representing the strongest growth we have seen in several years. Therefore as we look to 2015, it is difficult to predict group behavior beyond their contracted spending commitments outside of the room and that has been the basis for estimating our total RevPAR guidance.

Now as we discussed earlier, we saw adjusted EBITDA margins in our hotels improve throughout the year in 2014. We expect continued growth in this area throughout 2015 as well, with hospitality adjusted EBITDA margins to increase between 100 and 200 basis points.

Now before I hand over to Mark I want to draw your attention to our first-quarter 2015 dividend our Board of Directors declared today. We announced this morning that our quarterly dividend will increase nearly 20% to $0.65 per share for the first quarter.

We will continue to evaluate throughout the year what the appropriate dividend level is for our Company driven of course by our dividend policy and REIT rules. But suffice to say, we are pleased to be able to take this action and return cash to our shareholders at one of the highest yield levels in our sector.

Now on the subject of returning cash to our shareholders, several years back when we decided to convert from a C Corp to a REIT, we told you all that we believed our stock was not properly valued. And rather than do what most other hospitality REITs do, which is issue equity and buy things, we were going to create value by buying in our undervalued stock and settling our convertible notes for cash.

Well, in the fourth quarter of last year, and so far in 2015, this is what we have been undertaking and Mark will give you some color on this in a minute.

Now in conclusion, this was a strong quarter and year for our Company. As our record results across the board demonstrate, our Company is performing at a high level. And it is fair to say that we have achieved, and even in some cases surpassed, the high expectations for value creation that we had when we decided to conduct the REIT transition and partner with Marriott.

Moving forward we are truly excited about the potential for further growth within the business as we simultaneously remain focused on constantly evaluating how we can best return value to the shareholders and prudently manage our balance sheet. And with that let me hand over to Mark to give a little bit more color. Mark?

Thank you, Colin. Good morning, everyone. In the fourth quarter the Company generated total revenue of $291.6 million, up 9.6% from the prior year quarter. For the full year total revenue increased 9.1% to $1.048 billion.

During the quarter the Company generated net income available to common shareholders of $62.2 million or $1.21 per fully diluted share. This includes an income tax benefit of $1.1 million, a gain of $1.8 million on warrant settlements and a gain of $26.1 million related to the previously announced sale of the Company's rights to pursue a letter of intent with The Peterson Companies.

For the full year net income available to common shareholders was $121 million or $2.17 per fully diluted share. The Company continues to grow -- continued to grow profitability in the quarter. During the quarter the Company generated $77.7 million in adjusted EBITDA, improving the EBITDA margin by 50 basis points. For the full year the Company's adjusted EBITDA margin increased 200 basis points generating $291.1 million, a nearly $43 million increase versus 2013.

For the quarter the Company generated $54.1 million in AFFO or $1.05 per fully diluted share. For the full year the Company generated $199.9 million in AFFO or $3.58 per fully diluted share.

Now turning to the hospitality segment, we finished the year strong with full-year RevPAR and total RevPAR above our guidance range increasing 7.5% and 8.6% respectively. While we saw modest increases in attrition and cancellations during the quarter, annual trends in 2014 continued to be favorable with attrition down 50 basis points to 10.6% and in the year for the year cancellations declining 52.4% to 32,000 group room nights.

Attrition and cancellation fees collected during the quarter totaled $2.3 million and full-year fees totaled $8.9 million. Compared to the prior year quarter, hospitality segment adjusted EBITDA increased 15.4% to $77.9 million. Solid expense controls drove a hospitality adjusted EBITDA margin increase of 150 basis points to 28.9%. Full-year hospitality segment adjusted EBITDA increased 16.7% to $285.9 million representing a 210 basis point margin improvement.

Our entertainment segment generated revenue of $21.7 million in the quarter, up 12.5%. The segment's fourth-quarter adjusted EBITDA increased 47.2% to $6.2 million. Full-year revenue increased 14.2% to $86.8 million while adjusted EBITDA increased 37% to $27.5 million.

Corporate and other adjusted EBITDA totaled a loss of $6.4 million in the fourth quarter compared to a loss of $2.3 million in the fourth quarter of 2013. It is important to note that the 2013 corporate and other adjusted EBITDA was positively impacted by $3.4 million due to a one-time change to our Board of Director's deferred compensation plan. Full-year corporate and other adjusted EBITDA totaled $22.3 million compared to a loss of $16.8 million in the prior year.

Moving on to the balance sheet -- as of December 31 we had total debt of approximately $1.340 billion and unrestricted cash of $76.4 million resulting in net debt outstanding of approximately $1.3 billion including $984.5 million of borrowings drawn under the Company's credit facility, leaving $411.2 million of availability undrawn.

During the quarter we continue to purchase the remaining outstanding warrants related to the convertible notes that matured on October 1 of last year. In November the Company agreed to cash settle 2.4 million warrants.

We settled this repurchase in the quarter for $65 million funded by cash on hand and draws under the Company's revolving credit facility and recorded a $5.2 million loss on the change in fair value of the warrants between the modification date and the settlement date, which is included in the other gains and losses line of our financial statements.

In addition, in December we entered into agreements to cash settle the remaining 4.7 million outstanding warrants. The Company recorded a similar $7.1 million gain on the change in fair value of these warrants between the modification date and December 31, which is also included in the other gains and losses line of our financial statements.

The final repurchase is well underway and as of February 20 we had cash settled approximately 3.4 million of the warrants for approximately $104 million and we are on pace to complete the remaining warrant repurchases by the end of the first quarter.

At the conclusion of this transaction no warrants will remain outstanding, eliminating any potential equity dilution associated with the warrants. The Company is funding this repurchase through cash on hand and continued draws under the Company's revolving credit facility.

Prior to outlining our 2015 guidance I want to mention a modification to our definition of AFFO. Since our conversion to a REIT in 2013 we have defined AFFO slightly differently than other hospitality REITs in that we've reported AFFO after maintenance capital. Based on discussions with analysts and shareholders we realize that this difference in our AFFO definition negatively impacts our Company's results when screened against other REITs.

To ensure comparability to our hospitality REIT peers we're modifying our definition of AFFO and are no longer deducting capital expenditures. Beginning with 2015 AFFO will be calculated pursuant to the revised definition as outlined in our earnings release issued this morning.

In consideration of this change the Company's dividend policy for 2015 has been modified. The new dividend policy reads: the Company plans to pay a quarterly cash dividend to shareholders in an annualized amount equal to at least 50% of adjusted funds from operations less maintenance capital expenditures or 100% of re-taxable income, whichever is greater. Please note that this policy change simply accounts for the change in the AFFO definition and does not represent a change in dividend policy.

A detailed reconciliation of our current guidance from net income to adjusted EBITDA and AFFO can be found as a supplement schedule to our earnings release.

As Colin mentioned, as of January 1 the lodging industry adopted a new uniform system of accounts referred to as the Eleventh Revised Edition, which changed the way certain revenues and expenses are recorded on the hotel's income statement.

While there is no net impact to EBITDA the Eleventh Edition does change the composition of certain line items impacting previously reported hotel revenues, expenses and margins. While these changes impact several areas of the hotel income statement, the most notable impact to our financial statements is the revenue treatment for outsourced parking services.

Prior to this accounting change our hotels reported both revenue and expenses associated with income generated through outsourced parking services. However, the accounting standard now requires the hotels to record net revenue from our third-party vendor, which is essentially the profit from this activity.

While the net impact to adjusted EBITDA is neutral, the decrease in parking revenue adversely impacts total RevPAR. We estimate this accounting change reduces our year-over-year total RevPAR growth by approximately 60 basis points. As Colin mentioned, with these changes we anticipate RevPAR growth of 4% to 6% and total RevPAR growth of 3% to 5%.

We are providing full-year 2015 adjusted EBITDA guidance for our hospitality segment of $305 million to $320 million. For comparability purposes, we have not included the recently acquired 192 room AC Hotel in our hospitality RevPAR and hospitality total RevPAR guidance.

We anticipate the AC will open by the end of the first quarter and our partial year adjusted EBITDA guidance for this property is $2 million to $3 million. Our 2015 adjusted EBITDA guidance for the entertainment segment is $29 million to $32 million and corporate and other guidance for adjusted EBITDA in 2015 is a loss of $22 million to $23 million.

On a consolidated basis the Company will generate adjusted EBITDA of $313 million to $333 million and AFFO of $255.5 million to $275.5 million, or $4.96 to $5.34 of AFFO per fully diluted share.

While we don't provide quarterly guidance, I would note for modeling purposes, based on our current on-the-books room nights and 2015 operating plan, the fourth and second quarters are projected to share the strongest year-over-year growth in both revenue and adjusted EBITDA.

In addition, our first-quarter results will be negatively impacted by a norovirus outbreak in January and early February at Opryland and recent ice storms in both Nashville and Dallas. When considering these events we anticipate first-quarter total RevPAR will be flat with prior year.

It is important to note that we anticipate the profitability impact in the norovirus outbreak will be covered by our business interruption insurance and we expect to receive those proceeds from our claim later this year.

Let me close by saying that after a terrific 2014 our Company enters 2015 very well-positioned, benefiting from strong group momentum, improving operating margins, a quality balance sheet and a growing sustainable dividend. And with that I will turn the call back over to Colin for any closing remarks.

Thanks, Mark. No closing remarks other than we have been at this now for 30 minutes and it is a little long. But it is the end of the year and we wanted to be very transparent about what we -- how we are looking at 2015 and 2016 and how the group segment is appearing to us.

So with that let's, Lori, open up the lines for questions if there are any. And look forward to hearing from the investor group.

(Operator Instructions). Chris Woronka, Deutsche Bank.

One of the things we've heard from some of the other REITs, and even the hotel operators, this earnings season is that they are looking to limit some of their group room nights in favor of some higher rated transient business. Are you guys seeing a -- I would think that might have some favorable effect on you guys and are you seeing any benefit from that yet in your conversations with the meeting planners?

Do you want to take that, Patrick?

Sure. Hey, Chris, this is Patrick. It is a good question. And I will tell you that one of the things that we're focused on from an asset management perspective this year is working with the sales teams to make sure that we leave open weekend opportunities for transient business, which is when we see the transient strength come into our hotels.

We are not going to be limiting any group room nights during the week when those patterns typically perform, but we are making sure that we leave the weekends open and the holidays open so that we can bring in and really drive the rate on the transient business. So a little bit different for us, but we are addressing that.

Okay, thanks, Patrick. And then I guess, Colin, you have talked a lot about the growth that Nashville continues to see as a market. And you have been I think spot on in your comments and your forecasts. Is there anything -- I mean you guys have a lot of expertise there in that market. Are there other hospitality, whether it is properties or ventures, that you think you guys might get into and be able to add value to?

That is something that we think about every day. I have no doubt that this market, providing the world stays sane and America -- the United States of America stays sane, I have no doubt that this market will continue to grow. Because the product that people are seeking out is unique to this market.

And through things like the Nashville TV show and technology it is literally being exported to people all across the planet. And so, this market demand is going to continue to grow for this market and it is a very exciting thing to do.

The answer to your question is, I am not sure at this stage whether we will put more Hotel product downtown. Remember, we own probably, I don't know, getting on just under 10% of the hotel supply in this market. Opryland is quite a special place and quite unlike anything else you see in the southern United States of America.

But the entertainment side of the opportunity is something that really does intrigue us and this is why we invested $[15] million in capital. And I suppose I can say this, we bought a building nine months ago-ish downtown Nashville, one of the best located buildings on Broadway and 3rd Avenue. And what we are looking at is potentially converting that building into a high-quality entertainment venue.

And I'm sure I'm going to read about this tomorrow morning in the local newspaper. But it's something that we really are focused on and we think that could be an exciting thing. We are also looking at revamping the Wildhorse that we own downtown as well on 2nd Avenue to take advantage of what is going on here.

So, yes, we will selectively deploy more capital to take advantage of this tremendous surge in business that we are seeing here in Nashville.

Okay, very good. Thanks.

Patrick Scholes, SunTrust.

Just a quick question here. Can you tell us what your advanced group booking pace quarter to date for your Dallas property is? Thank you.

Actually, (inaudible), you have got all that detail?

Yes, which property --?

Patrick Chaffin For Dallas.

Just as far as what is on the books for that property.

What has been the pace so far in this quarter year over year.

Yes, do you have another question. I can come back and answer that, just give me a second to get to the data.

That is actually my only question, but if you want to come back later on the call that is fine.

We will. And, Patrick, just FYI, that hotel, notwithstanding the fact that we had a Super Bowl there a couple of years back, but this hotel this year is going to have the best year it has ever had -- in 2015.

Yes, just to give you a sense, Patrick, that property for all year currently has about 66,000 more room nights on the books for all years going forward. For 2015 it was positioned with about 17,000 more on the books --.

Than this time last year?

Than this time last year. And their production has been increasing in line with some of the pace improvements that we've seen across the brand from a 3% perspective. We do expect 2015 to be a really strong year given that the property is coming off of a renovation. And so, you put all those together and it is very well positioned.

Yes, to the point that our operator and our Company are looking at long-term what we do here in this market, because it is clear to us that this market will continue to grow. And the question is, what do we do to take advantage of that? And actually to stimulate more growth? And that is work that is underway right now.

Thank you, that's it.

(Operator Instructions). Shaun Kelley, Bank of America.

Just needed to follow up on that last question. Could you give us a little bit more color on what you are seeing at your Orlando and DC properties in terms of sort of the group and citywide calendars for those places? Just generally what you are thinking about the outlooks for those markets in 2015 specifically?

Sure. So Orlando and what was the other property you were asking about?

DC.

DC.

DC. So as we look at DC for 2015 I would -- I guess I would start by saying that we are coming off of 2014 with our property outperforming the general market as well as the comp set. We've seen our hotel continue to pace ahead even with the Marriott Marquis opening this past year.

As we look to 2015 we feel that the property will continue that momentum. It is well-positioned, good room nights on the books going into the year and we don't see any of that steam slowing down, if you will.

The National Harbor development continues to further develop along and the property itself, with our sales teams sort of back where they need to be, continues to move in the right direction.

Lead volume looks good, we had a very good fourth quarter. One of the best fourth quarter's we've had in a long time in Washington.

That's right. And the location of the property allows us to really take advantage of the resurgence that we have seen in pharma business and some of the Northeast corridor type corporate groups that function and are located in that area.

As you look at Orlando, we feel good about where the property is heading. The Orlando market continues to sort of just hum along, has fully absorbed the supply that came into the market a few years ago. So as would look at that market and look at that property specifically we do see some growth year over year, expecting that property to be a little bit more -- just more of a slight growth year over year.

Helpful. And then my other question is I think, Colin, in the prepared remarks you mentioned a little bit about your view towards capital return and buying your own stock as sort of undervalued. But you have seen a really significant improvement in your share price over the last year.

And so, as you look back -- or as you look out from today, does that kind of pecking order of thinking about capital return versus growth capital or acquisitions, does that change at all? And how are you thinking about the M&A landscape?

Well, you know, the simple math is this, right, when we were -- my comments, I think if you listen to them, they were talking about our posture two years -- one year ago was that our stock was materially undervalued and that is why we have been undertaking what we have been undertaking.

The math is that as we were looking forward and doing our long-range plans that you guys -- you are not privy to, when we look at that and we look at our stock price we sort of say, hmm, we are trading at this multiple. And then the question becomes can you go out and buy assets, quality assets to increase distribution at the multiple that we believe we are trading at? And historically the answer has been emphatically no.

I mean we can go buy assets but they are poor assets. And we are not going to dilute the quality of the property portfolio that we have. And you're right, I mean we have seen a material increase in our stock price here over the last few months. And so, the question then becomes, are there assets that you can purchase below where we are -- where we believe our equity is trading at on a long-range planning perspective.

And obviously as your equity goes up it changes the answer to some extent. Now I'm not telling you that we are going to embark on an asset purchase strategy and we still think there is a lot of runway in our equity price. But the question becomes, what multiple can you buy quality assets at and add them to your portfolio in an accretive manner?

And so we look at this stuff, we look at it every month because we get our doors knocked a lot on asset A, asset B and we look at assets and we look at the multiples compared to where we think we are trading at and we make determinations based on that on that time. So, this is something that we will look at going forward.

Thank you very much.

(Operator Instructions). At this time there are no further questions. I will now return the call to Colin Reed for any additional or closing remarks.

Lori, thank you. Well, thanks, everyone, for joining us today. And if you have any further questions you know how to get hold of either Mark, Patrick or me. And look forward -- I know we are at the Citi conference next week and the JPMorgan conference next week, so hopefully we have the opportunity of communicating with a number of you. Thanks very much indeed for your time this morning.

Thank you for participating in the Ryman Hospitality Properties' fourth-quarter 2014 earnings conference call. You may now disconnect.