Welcome to Ryman Hospitality Properties Second Quarter 2025 Earnings Conference Call. Hosting the call today from Ryman Hospitality Properties are Colin Reed, Executive Chairman; Mark Fioravanti, President and Chief Executive Officer; Jennifer Hutcheson, Chief Financial Officer; Patrick Chaffin, Chief Operating Officer; and Patrick Moore, Chief Executive Officer of Opry Entertainment Group. This call will be available for digital replay at the number (800) 727-5306, with no conference ID required. I will now hand it over to Jennifer Hutcheson. 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 of 1995, including statements about the company's expected financial performance. Any statements we make today that are not statements of historical facts may be deemed to be forward-looking statements. Words such as believes or expects are intended to identify these statements, which may be affected by many factors, including those listed in the company's SEC filings and in today's release. The company's actual results may differ materially from the results we discuss or project today. 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. We reconcile each non-GAAP measure to the most comparable GAAP measure in exhibits to today's release. I'll now turn the call over to Colin.

Jennifer, thank you. Good morning, everyone, and thanks for joining us today. Before we start, I'd like to take a moment to acknowledge the families and communities affected by the catastrophic flooding in Central Texas. Managing through the devastating flood that we experienced here in Nashville in 2010 that directly impacted our businesses, our employees, and our city was, I can tell you, one of the most difficult experiences of my entire career. We're heartened to see how communities across Texas have wrapped their arms around their neighbors. While our assets were not directly impacted by the flooding, we have contributed to the relief efforts through our Texas-based properties and directly by making a donation to The Community Foundation of the Texas Hill Country. We will continue to engage in the recovery efforts as we learn more. The second quarter was an exciting one for our company, both strategically and operationally. Strategically, we announced, funded, and closed the acquisition of the JW Desert Ridge in Phoenix, Arizona, an asset that has long been at the top of our acquisition list and one that we have tried to acquire several times in the last ten years. Mark will talk about the acquisition in more detail in just a moment. In addition, we completed the presidential meeting space renovations at Gaylord Opryland, among several other projects smaller in scope, including food and beverage enhancements at the Gaylord Texan and the Gaylord National. The presidential meeting space, together with the recently renovated governor space, represents approximately 40% of the carpet meeting space at Gaylord Opryland today. Actually, we will be unveiling new names for these meeting spaces in the coming weeks. And for our entertainment business, the second quarter marks our first festival season with Southern Entertainment. Operationally, our businesses delivered record consolidated revenue and in our same-store hospitality segment, the second-highest adjusted EBITDA in the history of that business, trailing only the second quarter of last year. In fact, for the year-to-date period, same-store hospitality adjusted EBITDA came within $30,000 of our original operating plan for that part of the year, an incredible result given the complexities of the current operating environment. I said this on our last call, but it warrants saying again, we're living and operating in very unpredictable times. Throughout my 24-year tenure at this company, I cannot remember a period when there were so many different and complicated issues occurring at once. We and our customers are bombarded daily with the rhetoric around tariffs, inflation, interest rates, wars, and other issues that could have significant implications for our businesses. This level of uncertainty has caused some of our group and leisure customers to put activities on hold or at least proceed with caution. Since Liberation Day in early April, some of these near-term uncertainties have abated, and we've seen some improvement in meeting planner sentiment for '25. The in-the-year-for-the-year bookings activity has trended better than our expectations in early May. But given the complexities of the overall economy, our outlook still contemplates the potential for slightly higher group attrition and cancellations in the second half of this year. For the portfolio, our leisure business is, I would say, steady as she goes, with particular strength at the Gaylord Palms and Gaylord Rockies, behind our recent investments in those assets, particularly offset by softness at Gaylord Opryland. For several quarters now, transient occupancy trends in Nashville have lagged the top 25 markets and, in the second quarter, so did transient rate trends, both of which we view as a temporary side effect of the substantial influx of new hotel supply in this market. Visitation and tourism in Nashville remain robust. And in fact, rooms sold in the market in the second quarter increased year-over-year. We expect the transient occupancy and rate trends to begin to reverse as tourism grows and hotel demand catches up with the new supply. Our entertainment business continues to perform well. Demand for live entertainment remains robust and our recent capital investments in Cat 10, Block 21, and Ole Red Las Vegas are delivering strong results. Next month, the Opry heads to the Royal Albert Hall in London for its first-ever international performance, which we will also be broadcast in the UK. NBC will also be re-airing the televised Opry 100 special from earlier this year. And we just announced that the Opry will have a special performance at Carnegie Hall in New York City in the first quarter of '26. As we had anticipated through the marketing investments we're making behind Opry 100, we are reaching more fans than ever. Now before I hand over to Mark, I want to make one more comment. As a fairly large investor in this company, I'm, of course, very much interested in what's going on in the business on a daily basis. But my focus has always been on the long term. At our hotel business, which represents the lion's share of Ryman, our customers are making decisions 2 to 4 years out and, in some cases, much longer. What's really important is how strong our relationship with these folks is. Do they trust us? Do they recognize the superior proposition we're putting before them? Are we growing our share of their business? Do our advanced bookings for future years look strong? Will the large capital projects that are underway create meaningful growth for our shareholders? The simple answer to all of these questions is an emphatic yes. And Mark will now explain to you why Ryman and our hotel business, in particular, has never been in such a strong position.

Thanks, Colin, and good morning, everyone. Before I discuss the second quarter, I'll spend a moment on our acquisition of the JW Marriott Desert Ridge. As Colin mentioned, this is an asset that's long been at the top of our acquisition list. For us, the Desert Ridge property is an ideal acquisition target, a large Marriott-managed group hotel with significant leisure demand in a top 10 meetings market with opportunities to create value through inclusion in our portfolio and incremental capital investment. This acquisition unlocks incremental group rotation opportunities for our existing Gaylord hotel customers and, as the second JW branded asset in our portfolio, rotation within the JW brand. For our Gaylord hotels customer base, we estimate groups comprising approximately 25% to 30% of group room nights could rotate to one of our JW properties, with the limiting factors being group size and ADR. For our JW customer base, where those limitations don't apply, the opportunity is arguably more significant. We estimate the overlap in meetings today between the Desert Ridge and the Hill Country properties is approximately 5%. Our 2023 acquisition of the JW Marriott Hill Country provides a repeatable playbook for integration and subsequent value creation. And with the benefit of that experience, we're moving quickly on Desert Ridge. We've already aligned the resources within Marriott dedicated to our portfolio, and our design and construction team is on the ground completing the meeting space renovations that were initiated prior to our purchase. In addition, we're pursuing a handful of capital-light, high-return enhancements to drive better yield, including converting approximately 5,000 square feet of vacant office space to sellable carpeted breakout space and enhancing some of the event launches to support the addition of our ICE! programming for the 2026 holiday season. We expect many of these enhancements will be completed by the first quarter of 2026. Longer term, we believe the dynamics in the Phoenix-Scottsdale market will support a resort expansion, providing the ability to accommodate groups with over 1,000 room nights on peak all under one roof. Today, the only larger hotel by room count in that market is the 1,000-room Sheraton located in downtown Phoenix. Like the JW Marriott Hill Country, the more we learn about this property, the more we like it, and we look forward to sharing our progress over time. Now let me provide more color on the second quarter results. Our same-store hospitality segment delivered results at the midpoint of the color we provided on our first quarter earnings call. RevPAR was essentially flat compared to last year and total RevPAR declined 160 basis points. We estimate the timing of the Easter holiday was a 130 basis point headwind to RevPAR growth and higher association group mix, which came in with lower absolute banquet and AV revenue was a 270 basis point headwind to total RevPAR growth. As anticipated, association group room nights traveled in the second quarter were approximately 49,000 higher than last year and corporate group room nights traveled declined by a similar amount. 2024 had an unusually strong corporate mix of 59%, whereas 2025's mix is more consistent with historical trends. Typical historical patterns reflect corporate group mix in the low 50s as a percentage of total group room nights and association group mix in the mid-30s. In general, association group ADR is lower than corporate group ADR. However, ADR for both segments was higher year-over-year and supported higher total group ADR. Banquet and AV revenue declined approximately $16 million compared to last year driven primarily by the group mix shift and, to a lesser extent, lower in-the-year-for-the-year bookings for travel in the second quarter. As Colin noted, in-the-year-for-the-year bookings activity improved in the second quarter, but bookings for travel in the second quarter were adversely affected by the first quarter pause in meeting planner decision-making. Banquet and AV contribution per group room night or spend per attendee actually finished slightly ahead of our expectations. As we've seen in recent quarters, group outside-the-room spending levels, once attendees are on-site, continues to exceed our expectations. Leisure demand increased approximately 4% compared to last year driven by strong performance at Gaylord Palms and Gaylord Rockies, partially offset by softer demand at Gaylord Opryland due to the supply-induced challenges in the Nashville market. Over time, we've consistently demonstrated that our group-focused strategy, irreplaceable assets, and capital investment strategies drive superior growth, and our competitive position has continued to strengthen in 2025. For the year-to-date period through June relative to 2019, we've grown the STR RevPAR index for our Gaylord hotels portfolio by more than 7 points relative to both our primary national competitive set and the local luxury and upper upscale competitive sets in the markets in which our properties are located. Same-store hospitality segment adjusted EBITDA was $187 million, a decline of approximately $18 million year-over-year, but still the second-highest quarter of all time. Same-store adjusted EBITDA margin declined 280 basis points due to the timing of Easter, the group mix shift from corporate to association, the one-time franchise tax refunds received in the second quarter of last year, and the planned wage and benefit increases under the collective bargaining agreement for Gaylord National. Several properties delivered standout performances, including the Gaylord Rockies and the JW Marriott Hill Country, both of which achieved all-time monthly records for revenue and adjusted EBITDA in the quarter. Outlet spend per occupied room at Gaylord Rockies increased nearly 30% compared to last year as the repositioned Grand Lodge continues to perform ahead of our underwriting expectations. The recent renovation at Gaylord Palms continues to receive favorable feedback from our customers and recent guest and meeting planner satisfaction scores for the property are some of the highest in Marriott's convention resort network. These results confirm our capital deployment decisions are driving value for our customers and shareholders alike. Same-store group production trends were also strong, but last year's record second quarter created a challenging year-over-year comparison. Gross group room nights booked in the second quarter for all future periods were down approximately 15% from last year's record second quarter, which benefited from a handful of very large multi-year bookings at Gaylord Opryland. However, compared to the average quarterly bookings for the 2019 to 2023 period, this quarter's bookings were up high single digits. Given the uncertain near-term economic environment, lead volumes for the in-the-year-for-the-year period were down 16% year-over-year. However, closure rates were up meaningfully, and gross group room nights booked in the second quarter for the year were up 3%. As a result, year-to-date in-the-year-for-the-year group bookings demand recovered to flat to prior year levels with mid-single-digit ADR growth. These results are a testament to the quality of our portfolio, the loyalty of our customer base, and the strong execution of our Marriott sales teams. Looking beyond 2025, group demand remains strong and our book of business remains healthy. Group rooms revenue on the books for 2026 and 2027 is up 9% and 10% compared to the same time last year for 2025 and 2026, and ADR growth is in the mid-single digits. Lead volumes for all future years remain robust, and the sales funnel sits near-record levels. Our Entertainment segment delivered record revenue of $143 million and adjusted EBITDA of $34 million driven by our recent investments in Category 10, Block 21 and Southern Entertainment. Consistent with the color we provided on our first quarter call, Entertainment adjusted EBITDA margin declined year-over-year due primarily to our investment in Southern Entertainment as well as the one-time franchise tax refunds received in the second quarter of last year. Seasonality for the Southern Entertainment business is heavily weighted to the second quarter due to the timing of their largest festivals. And this year, some unfavorable weather conditions impacted festival attendance and margin performance in that business. We continue to be very bullish on the long-term potential of the festivals business given its customer demographics, capital-light growth potential, and artist reach. Before I turn it over to Jennifer, let me provide some color on our expectations for the rest of the year. Recall in early May, we lowered RevPAR and total RevPAR growth guidance ranges for increased conservatism around near-term group behavior. While in-the-year-for-the-year bookings activity has trended modestly better, we're maintaining our cautious outlook for higher group attrition and cancellations in the second half. In addition, the second half continues to present challenging year-over-year comparisons due to the unusually strong corporate mix in 2024. Market dynamics in Nashville for the transient segment are modestly softer than anticipated earlier this year. As Colin noted, transient demand in the market remains healthy. However, the significant influx of new hotel supply is pressuring room rates. While we continue to believe our hotels are well-positioned in the market, we have revised our outlook to account for these dynamics. Outside of Nashville, our leisure business continues to perform in line with our expectations. Our Entertainment business is well-positioned for the second half with strong Opry 100 programming ahead of the Opry's birthday month in October, a strong show calendar for the Ryman, and continued momentum behind our recent investments. Taken together, our business is in a terrific position. We're pleased to have the first half largely in line with our original plan for the year. Along the way, we picked up a premier asset in the JW Marriott Desert Ridge that's been on our wish list for a long time, and we're nearly halfway through our multiyear capital program. And at the midpoint, our adjusted EBITDA guidance revision is less than 1% of full-year profitability.

Thanks, Mark. Regarding our outlook for full year 2025, we adjusted our guidance ranges to include the acquisition of the JW Marriott Desert Ridge. For our period of ownership in 2025, we expect to generate adjusted EBITDA from Desert Ridge of $18 million to $22 million, which reflects the normal seasonality of that business and some construction disruption related to the meeting space renovation currently underway. We also lowered the top end of our adjusted EBITDA guidance range for the same-store hospitality business, which lowered the midpoint for that by $5 million to $690 million. This primarily reflects the flow-through impact of incremental transient rate risk for our Nashville-based hotel properties. On a consolidated basis, we now expect adjusted EBITDA for the full year 2025 in the range of $767 million to $813 million. Our revised guidance ranges for full year AFFO and AFFO per fully diluted share incorporate the adjustments to adjusted EBITDA as well as the financing activities we completed in the second quarter. We now expect AFFO for the year in the range of $505 million to $546.5 million and AFFO per fully diluted share in the range of $7.93 to $8.49. Let me also provide some additional color for how we expect the third and fourth quarters to play out. For the same-store hospitality business, in the third quarter, we anticipate RevPAR and total RevPAR to decline low to mid-single digits with lower adjusted EBITDA margin. In the fourth quarter, we expect those trends to reverse driven by greater rooms availability at Gaylord Palms this year and easier comparisons in our leisure business. And we anticipate RevPAR and total RevPAR growth in the low to mid-single-digit range with adjusted EBITDA margin expansion. On the contribution for JW Desert Ridge this year, the typical seasonality for the Desert Ridge results in approximately 40% of adjusted EBITDA generated in the first quarter and approximately 30% to 35% of its annual profitability in the back half. Finally, in our entertainment business, due to typical seasonality, we expect stronger adjusted EBITDA contribution in the fourth quarter than in the third quarter. Now turning to our balance sheet. We ended the first quarter with $421 million of unrestricted cash on hand and our revolving credit facilities both undrawn. Total available liquidity was approximately $1.2 billion, and we've retained an additional $30 million of restricted cash available for FF&E and other maintenance projects. During the quarter, we issued approximately 3 million shares and $625 million of senior unsecured notes to fund the acquisition of the JW Desert Ridge. The equity transaction represented the first marketed equity offering in the lodging REIT space since we last issued equity in 2023 to fund a portion of the Hill Country acquisition. Our current bond offering priced approximately 30 basis points better than the average yield for our credit rating category. Additionally, and related to the JW Desert Ridge acquisition, we received a same-day credit ratings upgrade from S&P from B+ to BB-. We also refinanced a $128 million Block 21 CMBS loan that was set to mature in January 2026 with an add-on to the existing OEG Term Loan B. As a result, at the end of the quarter, our pro forma net leverage ratio based on total consolidated net debt to adjusted EBITDA, assuming a full year contribution of adjusted EBITDA from the Desert Ridge, was 4.4x. And finally, let me comment on our anticipated major cash outflows for the year. Regarding our outlook for capital expenditures, in 2025, we are reiterating our expectations for $350 million to $450 million for the year based on our latest construction timelines for projects currently underway. This also includes modest incremental capital investment at the Desert Ridge, which Mark touched on earlier. Regarding our dividend, it remains our intention to continue to pay 100% of our REIT taxable income through dividends. With that, operator, let's open it up for questions.

Our first question will come from Aryeh Klein with BMO Capital Markets.

Maybe first, just on the lead volumes. I think they were down 16% year-over-year. Curious how that's trended, are you seeing kind of month-over-month improvement and how you just expect that to play out for the rest of the year?

This is Patrick. Yes, I mean, our lead volumes have definitely felt some pressure on the in-the-year-for-the-year, and we expect that to continue as we continue to move through the rest of this year. But our lead volumes look very good for 2026, 2027, and beyond. So we do believe that some of the pressures and headwinds that we've been seeing have thus far been relegated just to the 2025 calendar year.

Got it. And then maybe more of a strategic question. You talked a little bit about the potential for rotation within the JW brand now that you acquired Desert Ridge. Curious how you're thinking about JWs more broadly longer-term and creating something where you own more JWs, kind of replicate what you have within the Gaylord hotels that you own. Is that something you would potentially consider?

We definitely consider how to grow our portfolio by adding JWs in the right markets. This will enable us to create rotation, not just between JW and Gaylord, but also among the JWs themselves, which is a significant focus for us.

Aryeh, this is Colin. When we put the crosshairs on these two, it just happened to be JWs 10, 12 years ago, we did so because we like San Antonio as a market and we very much like Scottsdale as a market. And the reason we like those markets is because the large group meeting planner wants to frequent those markets. Those markets are both top 10 markets. These hotels were, in our opinion, leaders within those two markets. And both these hotels, in our opinion, have the ability for us to extend these assets from around 1,000 rooms to 1,250, 1,500 rooms over time. And of course, they're within the portfolio of Marriott. So we can aggregate and bring our sales structure into them. I think, Mark, the other benefit of JW is the rate structure of JW has been a little more favorable.

Well, certainly higher than Gaylord.

Than the Gaylord brand. And so picking these customers up that go there today and then rotating them into our infrastructure is a good thing. But the primary reason we like these assets is the market and the fact that our big group customers want to go to these markets. And in our opinion, this was a very efficient way to get into these businesses.

Our next question will come from Chris Woronka with Deutsche Bank.

Kind of a two-parter. The first one is it seems like the out-of-room spend is continuing to hold up really well even in cases where you're maybe having a little bit of attendance attrition or less pickup. But just curious as to what you think is driving that in the context of a little bit of softness you mentioned here and there. And then the second part is we talk a little bit about the D.C. market and what you're seeing there. There's a lot of noise in the market. We've heard some mixed things. Can you just talk about maybe your near- and medium-term outlook for National and how you can maybe offset some of the broader market hiccups, if there are any?

Chris, this is Patrick. Good to hear your voice. Let's start with your first question on out-of-the-room spend. Yes, we agree, it has been extremely resilient. And when you take into account the mix shift that we've seen in the second quarter and some of the other things we've seen for the remainder of the year, we're still very, very positive on how banquet and outside-the-room spend contributions per group room night are holding up. Groups continue to react to some of the things that they're seeing in the macro environment. But when they get on property, they continue to do very, very well. And that is a trend that we've been seeing for several years, and it continues to hold up, especially on the corporate side, but the association is definitely not underperforming on that side either. So we've been very encouraged by that. To your second question on the D.C. market, I would tell you that we're really pleased that the Gaylord National has been doing a really good job in a very challenging market and continues to move in a very positive direction. We've made some fundamental structural changes to that hotel in the wake of COVID when we reopened it, and those have continued to pay benefits for us long term. And so while there is some pressure from the government side, Gaylord National seems to have really found its space to operate in, in a very healthy way and continues to move in a positive direction. So we feel good about where it's heading.

Chris, it's Colin. I want to add just one more comment to Patrick's answer to the first question about average spend. When you step back and you look at what is really going on within the economy of the United States of America, things aren't all that bad. Yes, we had a rough first quarter for multiple reasons. But the second quarter GDP has just come out, 3% GDP growth. If you look at where the S&P 500 is trading, you look at where the market is trading, you look at underlying profits of corporations throughout this country, things are in pretty good shape. And so our thesis is, if interest rates do come down, the big beautiful bill takes effect where people, organizations, can invest in new infrastructure and claim 100% tax depreciation, our view as a company is over the next 1, 2, 3 years, this economy should be pretty decent. And so honestly, I think that's one of the reasons why the average spend is holding up. But it's very complicated because we're being bombarded every single day with things like what is going on with tariffs and wars, and the consumer is pulling their hair out trying to understand what things are going to be like 6 months from now. But I think my personal view is I think things could be decent for '26, '27, and '28.

Yes. I mean, in addition to the macro trends, Chris, the one thing I would add is that when you look over the last several years at how we've invested capital into these hotels in terms of food and beverage, carpeted breakout space, things like what we've done in Colorado, right, all those investments have been to drive outside-the-room spend and to attract a higher quality customer and a higher rate of customer. And I think that you're starting to see those investments pay off in some of the outside-the-room spending behavior that you're seeing in our hotels.

Our next question will come from Smedes Rose with Citi.

I wanted to ask a little bit more about your expectations at the Gaylord Opryland. Does that property do more transient business maybe relative to your other properties? Because I guess I was a little surprised to see that you brought down the guidance based on transient given the emphasis on group across your properties. And just on the room supply pressure that you mentioned, I maybe haven't been paying attention closely enough, but I feel like room supply in Nashville has been increasing fairly steadily for a long time now. And I'm just wondering why you think now you're starting to see the impact, whereas maybe you hadn't seen it as much in prior years.

Shall I start? Okay. Let's take a moment to understand what's happening in Nashville before we discuss Opryland. The city has a unique product known as country music, which is not found in any other city in America. Nashville's infrastructure supports this product, which has become global over the past 5 to 10 years. Many great artists live and perform here, and they are now playing in cities worldwide, creating significant demand for Nashville. Additionally, we've seen about 15,000 new hotel rooms added over the last decade, more than any other city in America. We also have around 7,000 Airbnb options that weren't available a decade ago. When you consider the demand generators in Nashville, such as the new Titan Stadium, a domed venue similar to the one in Las Vegas, we expect it to host 25 to 50 major concerts a year, with an audience of 70,000 people. This stadium will likely attract events like the Super Bowl and the Final Four, and it has already signed a deal with WWE, which was a significant draw for Las Vegas. There's also extensive development happening on the East Bank and exciting plans for the Bridgestone Arena in downtown Nashville, which is owned by former Governor Bill Haslam. There's a lot of activity in the city, including significant relocations, such as Oracle bringing its headquarters here with a $4 billion investment. Nashville is in a unique position. Regarding Opryland, it has 2,880 rooms. When Mark and I arrived here over 20 years ago, the hotel generated $40 million in EBITDA, and this year, it will approach $200 million. It stands as the most relevant convention resort in America. We have added attractions like SoundWaves to accommodate the increasing tourism. Opryland outperforms other hotels in terms of tourism business due to its size, with leisure making up 30% of its business, which is expected to continue growing. I also want to mention the airport, which has undergone two major expansions in the last decade, and the CEO has indicated we're 30 gates short of what the demand will be. Our outlook for Nashville is strong because of the unique product and consumer interest, leading to expected growth over the next ten years. Additionally, The Boring Company, founded by Elon Musk, has chosen Nashville for a project to connect the airport to downtown, potentially through Opryland, which could alleviate street congestion and further boost tourism. That's how we view the situation.

Okay. Well, maybe just if I could just ask a quick follow-up and just kind of just backing up a little bit. I mean, you obviously have improving visibility into '26 and '27. You talked about some of the positives there. So are you still comfortable with the EBITDA ranges on a same-store basis that you provided back in, I think, January of '24 in terms of being able to get to those levels in '27?

The short answer, Smedes, is yes. I think obviously, as you go through a period of looking at a 4-year time period, things that are going to be better. there's pluses, there's minuses, there's puts, there's takes. There's a lot of ways we can get to that answer, but the short answer is yes, we're as positive as ever on the portfolio of businesses that we have and how we're going to be able to get to that profitability.

I'm really, really glad, Smedes, you remember that because it's something that all of us sitting around this table focus on every single day. As we look out to '27 and we look out to what dividend should be, where the EBITDA ranges should be, as Jen said, there's going to be some ups and downs. But overall, our guide slope is well and truly intact.

Yes, Smedes, this is Patrick. I would just add to it that, to summarize what everyone is saying, this is a short-term phenomenon. You had a pretty significant increase in supply come into the Nashville market in the short term. A lot of our competitors got panicky and dropped their rates pretty dramatically. We tested that within our own hotel at Opryland to make sure that we were responding. But I'm proud to say that the hotel did a great job of holding their ADR share, and they grew their group base even as some of the transient occupancy pulled back a bit. But on the transient rate side, the entire market went down significantly, and the hotel did a great job of managing through that. But it is a short-term phenomenon. And you see it with some of the more price-conscious consumers that are going to places like Las Vegas, New Orleans, and Nashville, and it is a short-term phenomenon that we think we're going to move through. To your question earlier, just to build on Colin's point, Opryland does more absolute room nights of transient, but it is in line with what the rest of the brand does from a percentage basis of its total room nights.

Our next question will come from Shaun Kelley with Bank of America.

Colin or Patrick, wondering if we could branch kind of like branch out from the Nashville conversation and just maybe do a little walk around the transient side of the rest of the kind of Ryman portfolio. I think we've picked up a little softness across some Sunbelt markets. I'm wondering what your experience was. I think there's some unique demand drivers that might be good for Orlando, but I'm curious specifically for the Texan, just given what we've heard about the housing market there. And just more broadly, kind of where are you at, what do you think we're seeing on the ground from the consumer right now?

Yes. Pat, do you want to take that?

Sure. Yes. Let me lead with what's going on in Orlando. Everyone has been watching very closely to see what Epic Universe at the opening of that park would do, and it's been a very positive catalyst for the entire market. So we see Palms and the entire Orlando market continue to move in a very positive direction on the transient side. Gaylord Rockies has really hit the ground running and has found its sweet spot this year and last year and continues to perform really, really well, both on the group side as well as the transient side. And our investments at that property, obviously, are paying significant dividends on both sides of the segmentation of group and transient. So we're feeling really good about where Rockies is headed. Hill Country in the short term was impacted by the rainfall and some of the issues in that region. But again, we think that's a short-term issue. And when the weather has been very good, the hotel has performed very well. And so we don't see any kind of systemic issue from a transient perspective there. It's just really more related to what happened on the rainfall side. Gaylord National, that's a house that leans heavier towards group and continues to do very well, even though there are some headwinds, as I mentioned earlier, on the transient side, it's pretty much steady as she goes. Gaylord Texan, there's a lot of new supply and a lot of new competition as far as it goes in water parks and other summertime attractions, but we continue to invest long-term into that market and into that hotel and feel that it is well positioned for the future. We tried the Universal of Light with DC Comics at that hotel this summer. It was very well executed, and it was a concept that we just wanted to pilot and see how it did. It didn't resonate quite as much as we had hoped, but we continue to feel that the transient picture there is in really solid shape and moving in a good direction.

We have a little disruption there, too, with the room refurb, is that right?

Yes, that's right. In the short term, we have some renovation disruption that will mostly manifest on the transient side. But again, long term, that market is heading in a great place, and that hotel will continue to get investments to make sure it stays at the forefront of that.

But steady as she goes, right, Patrick?

Yes.

Our next question will come from Duane Pfennigwerth with Evercore ISI.

So as your future bookings improve, recover, when would you expect your corporate versus association mix to normalize? How long do you think we'll be in this higher association mix mode for group?

Yes. It goes from year-to-year. As it stands right now, on the books for 2026 shows a higher corporate mix. And so we knew we were going into '25 with a higher mix on the association side, that reverses and goes back in the other direction in '26.

That's helpful. And then just on cancellations, I wonder if you could just put a finer point on how that has evolved since this initial shock period of March, April. And maybe just speak to the underlying assumptions in the back half there. I know you touched on it in your prepared remarks, but I wonder if you could provide any more detail.

Sure. Most of the cancellations that we saw were in reaction to some of the tariff issues and macro concerns. And so that was more of the elevation that we saw in the first quarter. The second quarter, if you look at a 3-year average, really is in line with what we've seen. So a little bit more in the first quarter. We've seen groups not so much on the cancellation front, but just modifying their blocks and maybe showing up with fewer folks than they originally anticipated. That really is going to manifest mostly in the third quarter, but we feel like we're going to move in a positive direction. And as Colin mentioned, the next 6 to 9 months could be a very positive period for the hotels. So some short-term issues, we saw some of that manifest in the third quarter. The cancellation is a little bit higher in the first quarter, but no long-term issues from what we can see.

Most of that cancellation activity is around government and a lot of the large consultants that had significant government contracts that were canceled as a part of DOGE.

Our next question will come from Cooper Clark with Wells Fargo.

I wanted to touch on OEG. Could you just talk about the contribution from Southern Entertainment in Q2 and how we should be thinking about the seasonality of OEG going forward? Also, any color on further investments, timing around the spin, and just the general health of the entertainment consumer would also be great.

Well, I can kick this off and then let Patrick Moore kind of fill in on additional details on that. In terms of the OEG contribution for Southern Entertainment, we don't really give out separate numbers by business within OEG just given its relative significance of the overall portfolio. But certainly, this is a business that we fully consolidate. So the revenue changes year-over-year, certainly, in the second quarter, reflect the fact that the Southern Entertainment business is seasonally weighted pretty much entirely to the second quarter. So there's a few puts and takes compared to the second quarter last year as well. Also, keep in mind, outside of Southern Entertainment, primarily the franchise tax is on the expense side. So we can certainly help you reconcile some of those amounts. But again, we don't necessarily call out specific numbers on the individual business contribution within OEG. I think to the broader point about the festivals business, Patrick, we can talk about why and how and how we see it being a positive contributor.

Yes. To Jen's point, this is Patrick, we are very bullish about the festival segment as a market that we recently entered. Similarly to the amphitheater that we just won the contract for in Downtown Nashville. Both of those are market segments from an entertainment standpoint that we did not participate in before this year. So we're super bullish on both of those opportunities, providing us more service area for the Opry Entertainment Group business to grow. And to Jen's point, it's more seasonal just given the sort of summertime nature of those two business segments. Separately, from an entertainment and a live entertainment perspective at a more macro level, we're very excited about what's happening in the live entertainment space, and it continues to be a very robust demand for that. When you think about through-cycle demand for live entertainment and what people spend their time and their money on, live entertainment tends to be very, very stable relative to some other business segments in the world.

We're seeing good traffic at the Opry, Ryman, Austin. And most of our live entertainment venues outside of Nashville, the Ole Reds, and the one in National already, Category 10, they're all performing as we would anticipate.

Yes. And to Colin's point, we're also offering premium experiences in these markets with a set of distinctive capabilities that we believe set us apart. And so the entertainment business is sort of working very well. We're excited about the prospects for the future.

Yes. And hopefully, we'll have some more to talk about on the entertainment business here over the next couple of months. We've got a lot of things we're working on, and it's all pretty exciting.

Great. And just a quick follow-up on Desert Ridge. Curious if expectations have shifted at all since the closing of the acquisition and if you still expect that acquisition to be accretive to FY '26 results?

Our expectations haven't changed. We do anticipate it being accretive. I know that there were some questions about kind of the back half and timing, and it really comes down to the seasonality of that market and that business. They produce about 40% of their EBITDA in the first quarter. And obviously, with us picking it up in June, we missed the sweet spot of the year, but that couldn't be helped. We didn't buy it for 3 months.

I mean this is a great market and a great asset, and it's got a really good management team in place. And in my conversations with Patrick and Mark, these guys, Patrick has spent a lot of time at this hotel over the last 12 months and particularly since we've acquired it. And Patrick, I don't want to put words in your mouth, but I think you're delighted with what we're unearthing there and the opportunities.

Yes. We're encouraged. We think there's lots of upside, and we're continuing to pursue it. And I think what we can do on the ICE! and holiday programming front is a really, really solid contribution to the market. And there's a lot of low-hanging fruit that doesn't require a ton of capital. So that is nirvana for us.

Our next caller will come from Dan Politzer with JPMorgan.

Just a high-level one. Mark, Colin, last quarter, we sat here, and I think it was early May, you guys said with a tweet, things could change dramatically. As we sit here 3 months later, and I guess, arguably, we got that tweet, though probably a few others along the way. How do you think about your business and the level of uncertainty in this environment versus 3 months ago? And how do we reconcile that with what's changed in terms of lead volumes? And maybe as you look to group and leisure ex Nashville, how are you kind of reconciling the kind of outlook now versus 3 months ago?

Yes, Dan, I probably shouldn't discuss this on the call, but we have a Board meeting starting tomorrow afternoon and continuing on Thursday at our hotel in Aurora. One of our speakers will be the head economist for JPMorgan, who will talk to our Board and management about the current environment we are operating in. I invited him because there are many factors at play right now. Back in May, we had the promise of the Big Beautiful Bill and certain discussions around tax, but the bill hadn't been passed at that time. Now it has passed. While we haven't lowered interest rates, there is more clarity regarding the impact of tariffs, although that information changes frequently. My sense, and I won't speak for Mark, is that we could see the economy performing well for the rest of this year. I believe there will be increased capital investment in the U.S. economy and more certainty surrounding tariffs and their effects on businesses. Personally, I feel optimistic about the next 12 to 24 months. I serve on the Board of a sizeable regional bank, and the banking activity is stable. We are focused on many capital plans, including expansions in Colorado and our Hill Country and Desert Ridge assets. Your question is very relevant to us regarding the economic state of the country and its likely developments. Right now, I feel a bit more optimistic than I did in May. Mark and I had a conversation about this topic last night.

You were surprised I was optimistic. Look, you still wake up every day and don't know what could happen and what could get tweeted. But I would argue that the economy has been fairly resilient. The consumer has been fairly resilient, particularly at the higher end. Rates will come in eventually. That should be a tailwind. And our business, I think our business has proved to be very, very durable, both on the leisure side as well as on the group side. And look, it really comes down to the fact that the model that we have, the assets we have are incredibly unique, incredibly well positioned. When you look at the geographic distribution of our portfolio, I can't think of other markets I'd rather be in than how we're distributed when you think about what's happening more broadly economically with economic growth and population migration. So we're extremely well positioned. And when you look at '26 and '27, our on the books position remains very, very strong. And so we're really focused on the things that we can control, making sure that the capital we're deploying, we're doing it efficiently, the projects that we have underway, we're executing those and minimizing disruption and just really trying to control the things that we can control. And we'll keep watching Twitter and Truth Social for the next announcement.

And some of the stuff that Patrick talked about this morning, Patrick Chaffin, we are taking share. When you look at how our hotels are performing in their markets, we are taking share. Customers like us, and it bodes really well. And the other question that was asked earlier this morning about how do we think about the projections that we laid out back 18 months ago, whenever it was for '27 and '28, and our business looks really good in '27 and '28. And we have a 5% there or thereabouts dividend yield right now. If you look out '27 with the capital we're deploying, the growth, our dividend grows pretty well. And this should create a lot of value for our shareholders. So your question is a really good one. And I'm really happy that we have an analyst that focuses on the long term here, which is a really good thing because this is what's really important.

Our next question comes from John DeCree with CBRE.

This is Max Marsh on for John DeCree. Considering your expectation for softness in Nashville is really just isolated to that transient side. Could you talk a little bit about the resilience of your group business against new competition in that market and broadly?

You want to take that, Patrick?

Yes, absolutely. Yes, to your point, transient ADR is really the only challenge that's going on at Opryland right now. There's a lot of excitement at that hotel as groups are starting to come in and seeing what we're doing from a CapEx perspective into the hotel and the groups that are performing are performing well at the hotel. So we continue to move the mix towards a higher corporate mix as they're seeing the renovations and the improvements as well as the expansions coming to fruition and feel really good that we have a really solid product to offer to group guests against this downtown or any other downtown in the area. So we feel really good about where Opryland is positioned from a group perspective.

Our final question will come from Chris Darling with Green Street.

Just a couple of quick follow-ups on OEG for me. First, can you update us on where things stand in terms of building out the internal infrastructure there? I'm thinking about the management team, the Board, basically everything you need for OEG to stand alone from Ryman. And then second, do you have any indication that Atairos will exercise their purchase option this year? And how might that impact the timeline for a spin if it does at all?

Do you want to take it, Mark?

Well, in terms of Atairos and they're buying up, we don't really have any insight into that. That's kind of a year-end activity, starts in earnest in October as part of that process, we'll see kind of where they land and where they end up. I'll let Patrick talk a little bit about what he's doing on the management side, but we continue to focus on building the capabilities of the business, not only in terms of scale but also in terms of just broad capabilities to be a standalone business. And I would just say that there's nothing that requires us to spin this. We don't have any REIT compliance issues. We're really in the driver's seat in terms of determining when is the appropriate time to separate this business. And it's really on an eye of creating greater shareholder value. So that's really the end game here.

Yes. And from an organizational standpoint, I think about it in really three ways: leadership, capacity, and then capability and expertise. So from a leadership standpoint, which also adds that capacity and capability, we've added in the last year, a new Chief Operating Officer, recently added a new Chief Marketing Officer. And we've added some important capabilities in pricing and dynamic pricing as well as food and beverage and most recently in the festival and amphitheater space. So really excited about the ability to not only scale up the business on the top line and drive the growth of both the top and bottom, but scale the organization in a way that's differentiated relative to a lot of other entertainment companies, and we're now very sizable relative to the marketplace.

I'm showing no further questions at this time.

Okay. Katie, thank you. Thank you for chaperoning this meeting this morning. And we thank investors for their time and effort. And if you have any other questions, you know how to get hold of either Jen or Mark and our IR team. So thank you, and we'll be speaking with you soon.

Thank you, ladies and gentlemen. This concludes today's event. You may now disconnect.