The St. Joe Company Highlights Record-Breaking Results for Its Hospitality Segment for the Second Quarter 2024 and Releases Video Tour of Diverse Hospitality Offerings

Rhea-AI Summary

The St. Joe Company (NYSE: JOE) reported record-breaking results for its hospitality segment in Q2 2024. Highlights include:

- Hospitality revenue increased 38% to $62.3 million (vs $45.1 million in Q2 2023)
- Gross margin improved to 39.2% (vs 26.2% in Q2 2023)
- Opened 6 new hotels since 2023, now owning 12 hotels with 1,298 rooms
- Watersound Club membership grew to 3,571 (vs 2,853 in June 2023)

The company attributes success to new property openings, operational efficiencies, and increased visitation to Northwest Florida. St. Joe's diverse portfolio now includes high-end boutique inns, resorts, select-service hotels, golf courses, marinas, and restaurants.

Positive

• Record-breaking hospitality revenue growth of 38% year-over-year
• Significant gross margin improvement from 26.2% to 39.2% in hospitality segment
• Expansion of hotel portfolio with 6 new openings since 2023
• 25% growth in Watersound Club membership year-over-year

Negative

• None.

Insights

Financial Analyst

The St. Joe Company's Q2 2024 results for its hospitality segment are indeed impressive. The 38% increase in hospitality revenue to $62.3 million and the substantial improvement in gross margin from 26.2% to 39.2% are clear indicators of strong performance. This growth can be attributed to several factors:

• Expansion of hotel portfolio: The addition of six new hotels since 2023, bringing the total to 12 hotels with 1,298 rooms, has significantly increased the company's capacity to generate revenue.
• Diversification of offerings: The range of accommodations now caters to various market segments, from high-end boutique inns to select service hotels, allowing St. Joe to capture a broader customer base.
• Operational efficiencies: The improved gross margin suggests better cost management and operational streamlining across properties.
• Growing Watersound Club membership: With a 25% increase in club members year-over-year, this segment is contributing to recurring revenue streams.

The company's strategic focus on the Northwest Florida market appears to be paying off, capitalizing on increased visitation to the region. However, investors should consider the cyclical nature of the hospitality industry and potential risks such as economic downturns or natural disasters that could impact tourism in the area.

Looking ahead, St. Joe's vast land holdings provide significant potential for further expansion and diversification of its hospitality assets. This could lead to continued growth in the segment, but also requires careful capital allocation and market timing to ensure optimal returns on investment.

Market Research Analyst

St. Joe's record-breaking Q2 2024 results in its hospitality segment reflect broader trends in the travel and tourism industry post-pandemic. The company's success can be contextualized within several key market dynamics:

• Pent-up travel demand: As restrictions have eased, there's been a surge in domestic leisure travel, benefiting destinations like Northwest Florida.
• Shift towards diverse accommodations: Travelers are seeking varied experiences, from luxury resorts to more budget-friendly options, which aligns with St. Joe's diverse portfolio.
• Rise of 'bleisure' travel: The blending of business and leisure travel is driving demand for properties that can accommodate both needs.
• Preference for drive-to destinations: Northwest Florida's accessibility for regional travelers has likely contributed to increased visitation.

The growth in Watersound Club membership (3,571 members as of June 30, 2024) aligns with the trend of consumers seeking exclusive, high-end experiences and community belonging. The planned expansion of club amenities, including a new golf course, suggests St. Joe is positioning itself to capitalize on the luxury lifestyle market.

However, it's important to monitor potential headwinds such as inflationary pressures on consumer discretionary spending and any signs of economic slowdown that could impact travel patterns. Additionally, the company's concentration in a single geographic region, while currently advantageous, could pose risks if regional tourism trends shift.

Overall, St. Joe's strategic alignment with current market trends and its ability to diversify within its core region position it well for continued growth in the hospitality sector, barring any significant macroeconomic disruptions.

PANAMA CITY BEACH, Fla.--(BUSINESS WIRE)-- The St. Joe Company (NYSE: JOE) (“St. Joe” or “The Company”) recently released its second quarter 2024 results, which showed record-breaking performance for its hospitality segment. Hospitality revenue increased by 38% to $62.3 million in the second quarter of 2024 as compared to $45.1 million in the second quarter of 2023. Similarly, gross margin for the hospitality segment increased to 39.2% for the second quarter of 2024 as compared to 26.2% for the same period in 2023. St. Joe attributes these results to several factors including new property openings in 2023, enhanced operational efficiencies at existing properties and continued increased visitation to Northwest Florida.

Camp Creek Inn and Watersound Club amenities in Walton County, Florida. (Photo: Business Wire)

The Company has opened six hotels since the start of 2023 and now owns, either individually or through joint ventures, 12 hotels with 1,298 rooms. These new openings included the Embassy Suites by Hilton Panama City Beach Resort, Camp Creek^SM Inn, The Lodge 30A, Home2 Suites by Hilton Santa Rosa Beach, Hotel Indigo Panama City Marina and Residence Inn Panama City Beach Pier Park. These properties add to and complement St. Joe’s existing portfolio of hotels which includes WaterColor^® Inn, Watersound Inn^® and The Pearl Hotel along the Scenic Highway 30A corridor as well as Homewood Suites by Hilton Panama City Beach, Hilton Garden Inn Panama City Airport and TownePlace Suites by Marriott Panama City Beach Pier Park. Collectively, these hotels offer a wide range of accommodations, experiences and amenities for every individual, family and budget.

The growth of the Watersound Club^® membership program also contributed to the record-breaking quarterly results. As of June 30, 2024, the Company had 3,571 club members as compared to 2,853 club members as of the same date in 2023. In addition to Shark’s Tooth and Camp Creek^® golf courses, a new 18-hole golf course, named The Third, is currently under construction with other club amenities in the planning stages to service the growing membership. A collection of marinas, restaurants, recreational activities and retail locations complete the Company’s hospitality portfolio.

“Seeing this level of success from our hospitality operations, particularly with so many new property openings, is incredible,” said Patrick Murphy, Senior Vice President of Hospitality for St. Joe. “I believe this success is a result of our ability to now service a variety of travelers with a range of products from high-end boutique inns and expansive resorts to select service hotels. With our vast land holdings, we are positioned to continue to seek new opportunities to expand and further diversify our portfolio of assets to capture more travelers, club members and customers in the future.”

In addition to celebrating the success of its hospitality segment, St. Joe today releases a video tour of its diverse hospitality assets in Walton, Bay and Gulf Counties. Click here to view the video.

To view all of St. Joe’s videos, visit www.joe.com/video-gallery.

Important Notice Regarding Forward-Looking Statements

The video included in this press release contains “forward-looking statements,” within the meaning of Section 21E of the Exchange Act. These forward-looking statements are qualified in their entirety by cautionary statements and risk factors set forth in St. Joe’s filings with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2023, and subsequent filings as well as the interests of club members and prospective guests in St. Joe’s portfolio of hospitality assets.

About The St. Joe Company

The St. Joe Company is a real estate development, asset management and operating company with real estate assets and operations in Northwest Florida. The Company intends to use existing assets for residential, hospitality and commercial ventures. St. Joe has significant residential and commercial land-use entitlements. The Company actively seeks higher and better uses for its real estate assets through a range of development activities. More information about the Company can be found on its website at www.joe.com.

©2024 The St Joe Company. “St. Joe^®,” “JOE^®,” the “Taking Flight” Design^®”, “St. Joe (and Taking Flight Design)^®,” “Camp Creek^®,” “Camp Creek^SM,” WaterColor^®,” “Watersound Inn^®,” and “Watersound Club^®,” are registered service marks of The St. Joe Company or its affiliates.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725744672/en/

St. Joe Investor Relations Contact:

Marek Bakun

Chief Financial Officer

1-866-417-7132

marek.bakun@joe.com

St. Joe Media Relations Contact:

Mary Beth Lovingood

Corporate Director of Marketing

850-231-6583

marybeth.lovingood@joe.com

Source: The St. Joe Company

FAQ

What was St. Joe Company's (JOE) hospitality revenue in Q2 2024?

St. Joe Company's hospitality revenue in Q2 2024 was $62.3 million, a 38% increase from $45.1 million in Q2 2023.

How many hotels does St. Joe Company (JOE) now own after recent openings?

St. Joe Company now owns, either individually or through joint ventures, 12 hotels with a total of 1,298 rooms.

What was the Watersound Club membership count for St. Joe Company (JOE) as of June 30, 2024?

As of June 30, 2024, St. Joe Company had 3,571 Watersound Club members, compared to 2,853 members on the same date in 2023.

What was the gross margin for St. Joe Company's (JOE) hospitality segment in Q2 2024?

The gross margin for St. Joe Company's hospitality segment increased to 39.2% in Q2 2024, compared to 26.2% in Q2 2023.