Hospitality company Playa Hotels & Resorts (NASDAQ:PLYA) beat analysts' expectations in Q4 FY2023, with revenue up 15% year on year to $242.5 million. It made a non-GAAP profit of $0.04 per share, down from its profit of $0.13 per share in the same quarter last year.

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Playa Hotels & Resorts (PLYA) Q4 FY2023 Highlights:

• Revenue: $242.5 million vs analyst estimates of $222.9 million (8.8% beat)

• EPS (non-GAAP): $0.04 vs analyst estimates of $0.02 ($0.02 beat)

• Adjusted EBITDA guidance for 2024 of $263 million vs analyst estimates of $262.5 million (in line)

• Gross Margin (GAAP): 47%, up from 45.7% in the same quarter last year

• Market Capitalization: $1.22 billion

Sporting a roster of beachfront properties, Playa Hotels & Resorts (NASDAQ:PLYA) is an owner, operator, and developer of all-inclusive resorts in prime vacation destinations.

Hotels, Resorts and Cruise Lines

Hotels, resorts, and cruise line companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying "things" (wasteful) to buying "experiences" (memorable). In addition, the internet has introduced new ways of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with innovation.

Sales Growth

A company’s long-term performance can give signals about its business quality. Any business can put up a good quarter or two, but many enduring ones muster years of growth. Playa Hotels & Resorts's annualized revenue growth rate of 9.6% over the last five years was weak for a consumer discretionary business.

Within consumer discretionary, a long-term historical view may miss a company riding a successful new property or emerging trend. That's why we also follow short-term performance. Playa Hotels & Resorts's annualized revenue growth of 35.2% over the last two years is above its five-year trend, suggesting some bright spots.

We can dig even further into the company's revenue dynamics by analyzing its revenue per available room, which clocked in at $301.47 this quarter and is a key metric accounting for average daily rates and occupancy levels. Over the last two years, Playa Hotels & Resorts's revenue per room averaged 51.7% year-on-year growth. Because this number is higher than its revenue growth, we can see its room bookings outperformed its sales from other areas like restaurants, bars, and amenities.