Park Hotels & Resorts Inc. Stock Price: Quote, Forecast, Splits & News (PK)

Perplexity Finance

Park Hotels & Resorts Inc.

Overview

Financials

Historical Data

$10.19

-$0.15

1.45%

At close: Jun 17, 4:00:02 PM EDT

$10.21

+$0.02

0.2%

After hours: 6:36:50 AM EDT

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice.

Market Cap: $2B
IPO Date: 1/4/17
CEO: Mr. Thomas Jeremiah Baltimore Jr.
Fulltime Employees: 91
Sector: Real Estate
Industry: REIT - Hotel & Motel
Country: US
Exchange: New York Stock Exchange

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Park Hotels & Resorts Inc. Stock Price: Quote, Forecast, Splits & News (PK)

Change

-$0.15

1.45%

Financial Profile

Prev Close

$10.34

Market Cap

$2.04B

Day Range

$10.12 - $10.41

Open

$10.26

P/E Ratio

17.3

52W Range

$8.27 - $16.23

24H Volume

$28.56M

Dividend Yield

13.74%

EPS

0.59

Key Issues

Latest Price Movement

Jun 18

Earnings

Report Date

May 5, 2025

Reported Revenue

630M

Miss -7.36%

Avg 1d Change

0.92%

Report Period

Q1 2025

Reported EPS

0.46

Beat +12.2%

Implied Move 1d

6.84%

Transcript

11m 10s

In addition, on today's call, we will discuss certain non GAAP financial information such as FFO, and adjusted EBITDA. You can find this information together with reconciliations to the most directly comparable GAAP financial measure. In this morning's earnings release, as well as in our eight ks filed with the SEC and the supplemental financial information available on our website at pkhotelsandresorts.com. Additionally, unless otherwise stated, all operating results will be presented on a comparable basis. This morning, Tom Baltimore, our Chairman and Chief Executive Officer will provide a review of Park's first quarter performance strategic initiatives, as well as update on our 2025 outlook. Sean Dell'Orto, our Chief Financial Officer, will provide additional color on first quarter results and 2025 guidance. Following our prepared remarks, we will open the call for questions. With that, I would like to turn the call over to Tom. Thank you, Ian.

12m 16s

And welcome, everyone. I'm pleased to report that we delivered better than expected performance in the first quarter with RevPAR essentially flat [indiscernible] a tough comparison to last year. When our portfolio significantly outperformed in almost every market resulting in nearly 8% RevPAR growth, compared to the first quarter of twenty twenty three.

12m 41s

Our Bonnet Creek complex in Orlando and Casa Marina Resort in Key West continue to lead the portfolio following their transformative renovations with first quarter RevPAR increasing by 14%, and 12% respectively, And we were very pleased to see broad based strength in several of our core markets. With Miami, New Orleans, Puerto Rico, Washington DC, and San Francisco, reporting above industry average RevPAR gains. Results from our Hilton Hawaiian Village Hotel which continues to recover from the labor strike last fall, offset these gains causing a four twenty basis point drag on our first quarter results. From a capital allocation perspective, it was another productive quarter as we remain laser focused on allocating capital to unlock the embedded value in our portfolio and maximize shareholder returns. We initiated over $80,000,000 of capital improvements during the quarter, while we plan to execute the second phase of renovations at both of our Hawaii hotels, during the third quarter, alongside with the second phase of Main Tower guest room renovations at the Hilton, New Orleans Riverside. We're also excited to announce the upcoming $100,000,000 transformative renovation of the Royal Palm South Beach, Miami, with the hotel having recently suspended operations Construction is expected to begin within the next few weeks.

14m 25s

The renovation will include a complete refurbishment of all three ninety three guest rooms, along with the addition of 11 new rooms. All public spaces will be reimagined including a new lobby bar, reconcepted food and beverage outlets, and expanded meeting spaces designed to enhance the overall guest experience. Forecasted returns are in excess of 15% to 20% with the expectation of doubling the hotel's EBITDA. Once stabilized. In 2025, we expect to invest a total of $310,000,000 to $330,000,000 on capital improvements as we continue to reinvest in our iconic portfolio with the confidence that we can generate higher development yields, compared to acquisition yields. We also achieved a major milestone in the entitlements process for the planned five fifteen room tower and related campus expansion Hilton Hawaiian Village. Mid April, the City Council of Honolulu approved our discretionary entitlement applications for the project, subject to certain conditions which we expect to be able to satisfy. We also expect to receive final administrative approval of the project by the end of this year. Additionally, given the historically wide disconnect between public and private market valuations, We remain active in repurchasing shares during the quarter, at a material discount to net asset value.

16m 6s

Having bought back approximately 3,500,000.0 shares, for a total purchase price of $45,000,000 and approximately 11,500,000.0 shares over the past year. Finally, despite a very challenging transaction market, we continue to make progress toward our strategic initiative of selling 300 to $400,000,000 of non core hotels this year, We have several assets in various stages of the marketing and disposition process. Including a pending sale of a non core hotel at very attractive pricing, However, given the current market uncertainty, we make no assurances as to whether or when the transaction will close. As a reminder, since 2017, we have sold or disposed of 45 hotels for over $3,000,000,000 an effort that is materially reshaped our portfolio and strengthened our long term growth path. Turning to operations. We are very pleased with the performance of our Bonnet Creek complex in Orlando, following our $220,000,000 comprehensive renovation and meeting space expansion project. Results for the complex continue to come in well ahead of expectations with a 32% RevPAR increase in Q1, at the Waldorf Astoria driven in large part by a surge transient revenues of nearly 65%, While the hotel grew market share by nearly 30%. Looking ahead, the outlook for our our Orlando hotels remains very strong.

17m 52s

With group revenue pace up 9%, while the overall market is expected to witness tailwinds from the opening of Universal's new Epic Theme Park which is anticipated to accelerate leisure transient demand into the market after its expected opening this May. EBITDA for the complex is currently forecasted to exceed $90,000,000 in 2025, a $30,000,000 increase over 2023. In Key West, Casa Marina delivered another strong quarter. With RevPAR up 12%, driven by a six eighty basis point increase in occupancy, nearly 4% growth in ADR. Despite lapping an impressive first quarter performance last year when RevPAR growth was over 34%. [indiscernible] to 2023. Hotel also continued to outperform its competitive set posting a RevPAR index above one hundred and twelve, At the reach, RIVPAR held steady year over year, following a 7% increase in the first quarter of last year, over 2023, The hotel continued to outperform achieving an impressive RevPAR index of 119. Exceeding its competitive set in March by nearly 300 basis points in occupancy and nearly $100 in rate. As we move through the second quarter, we are seeing continued solid performance from both Key West properties with RevPAR expected to trend up low single digits fueled by Casa Marina's continued momentum.

19m 40s

Strong group booking patterns, and the favorable timing of the Easter holiday shift into April. Turning to Hawaii. Prep Park across our two properties declined by 15% during the quarter, as our Hilton Hawaiian Village Hotel continues to ramp up following the labor strike in Q4, Marginally softer inbound travel from abroad also weighed on results. With arrivals from Japan down 6% and Canada down 1.5%. However, we were very encouraged that US domestic visitation remained flat year over year, supported by increased airlift from major US carriers, including new domestic routes into Honolulu announced by both Delta and American earlier this year, which continues to drive healthy inbound travel from the Mainland. At our Hilton Waipaloa Village Hotel on the Big Island, RevPAR declined just 2.5% during the quarter, while Q2 RevPAR growth is expected to accelerate to mid single digit range, driven by the nearly 90% increase in group revenue pace during the quarter. Additionally, we continue to see benefits from our recent capital investments at both of our Hawaii hotels. At Hilton Hawaiian Village, we completed phase one of the Rainbow Tower renovation in February, which included a full upgrade of three ninety two guest rooms in the addition of 12 new guest rooms.

21m 22s

At Waikoloa Village, phase one of the Palace Tower, [indiscernible] was finalized. Upgrading 197 guest rooms and expanding the inventory with six new guest rooms. We were pleased to see meaningful rate premiums of 25% to 30% for the renovated rooms at both resorts, in the first quarter, a clear reflection of the quality and impact of the investments made at both resorts. We plan to kick off the final phase of both the Rainbow Tower and Palace Tower guest room room renovations during the third quarter. While the project with the project extending into early next year. Looking ahead, the long term outlook for Hawaii remains very favorable. Supported by limited new supply, expected through at least 2029 and the anticipated improvement of inbound travel from Japan as the dollar yen exchange rate normalizes. Hawaii is one of the most dynamic and resilient resort markets in the country. With over 3,500 these simple guest rooms. At a huge discount to replacement cost Park remains well positioned to deliver above average long term growth for shareholders. With respect to fundamentals over the balance of the year, the near term outlook for US lodging fundamentals remains uncertain. As the ongoing global trade war continues to delay decision making, and amplify geopolitical tensions causing booking windows across most segments to narrow significantly and disrupting cross border leisure travel.

23m 19s

April results have been mixed with preliminary RevPAR growth of 1.6% driven by double digit gains in New York, Orlando, and San Francisco, which benefited from exceptionally strong group trends while preliminary RevPAR in Puerto Rico increased by 25% offset by weaker performance in Hawaii, Chicago, Seattle, New Orleans, and Washington, D. C. Despite the modest decline in a select few markets we continue to see pockets of strength in many of our resort and urban hotels. While concerns persist about a significant slowdown in both the international and government related demand, neither has had a meaningful impact on our performance. International demand represents just 10% of total room nights, Of government related business accounts, were only 3% of overall roommates. Based on our current forecast, Q2 RevPAR growth is expected to be relatively flat year over year, or approximately two ninety basis points lower than initial forecast, with Hilton Hawaiian Village representing roughly 80% of the reduction. Despite ongoing macro uncertainty, we remain laser focused on factors within our control and continue to work closely with our operators as they develop contingency plans for managing operating expenses in the event of further demand softening, Additionally, while the transaction market remains episodic, we will remain prudent capital allocators.

25m 14s

Advancing our strategic objective of selling non core hotels to further deleverage the balance sheet, and support our robust ROI pipeline. Sean will provide greater details about guidance in his remarks, Overall, I am incredibly proud of the progress we've made in elevating the overall quality of our portfolio, positioning the company for sustained long term growth, and returning capital to shareholders. Our targeted capital investments are delivering strong results, reinforcing the overall quality of our portfolio, and the significant embedded value within our real estate. And with that, I'd like to turn the call over to Sean. Thanks, Tom. Overall, are pleased with our first quarter results. With Q1 RevPAR exceeding expectations with reported results of $178 representing a modest 70 basis point decline over the prior year period. Difficult year over year comparisons were the primary driver of the decline following last year's nearly 8% growth rate, with occupancy falling by two ten basis points during the quarter although offset by continued rate strength. With ADR up over 2.3%. Total hotel revenues for the quarter were $6.00 $8,000,000 and hotel adjusted EBITDA was $151,000,000 resulting in a nearly 25% hotel adjusted EBITDA margin. Total expenses were up 3.3% during the quarter with the majority of the increase related to nearly $10,000,000 of employment tax credits and other relief grants received in Q1 of last year.

26m 56s

Excluding these items, total comparable operating expenses increased just 1% over the prior year period.

27m 2s

Adjusted EBITDA for the quarter was $144,000,000 and adjusted FFO per share was $0.46 With respect to our dividend, on April 15, we paid our first quarter cash dividend of $0.25 per share and on April 25, we declared our second quarter cash dividend of $0.25 per share to be paid on July 15 to stockholders of record as of June 30. The dividend currently translates to an annualized yield of approximately 10%. Turning to guidance, as we navigate the increasingly complex global economic landscape, and evaluate the impact of the escalated trade war on global travel, we have revised our full year outlook to reflect a modest slowdown in demand. As a result, we are lowering our RevPAR growth forecast by 100 basis points at the midpoint to a new range of negative 1% to positive 2%. Maintaining a wider than normal range to account for the ongoing uncertainty. Note that most of this adjustment reflects a slower than expected recovery at Hilton Hawaiian Village coupled with modestly weaker transient demand over the next quarter or two. Hilton Hawaiian Village along with the overall portfolio will benefit from easier year over year comparisons in November and December following last year's labor strike there and in a few of our other markets.

28m 21s

This along with an 18% increase in Q4 group revenue pace for the portfolio, should help to support low to mid single digit RevPAR gains during the fourth quarter. With respect to earnings, we are lowering our adjusted EBITDA forecast by just 3% at the midpoint to a new range of $590,000,000 to $650,000,000 while hotel adjusted EBITDA margin range is now 25.6% to 27.2%. Or down just 50 basis points from our initial range. And finally, FFO per share was reduced by point one one dollars at the midpoint to a new range of $1.79 to $2.09 per share. Additionally, as a reminder and included in our original guidance, renovation related displacement at the Royal Palm South Beach Hotel expected to reduce RevPAR growth by approximately 110 basis points for the year. This concludes our prepared remarks. We will now open the line for Q and A. To address each of your questions, we will ask that you limit yourself to one question and one follow-up. Operator, may we have the first question, please?

29m 26s

Certainly. We'll now be conducting a question and answer session. Our first question today is coming from Floris Van Dykem from Compass Point. Your line is now live.

29m 52s

Hey, good morning guys. Thanks for taking my question.

29m 56s

Tom, maybe if you could comment a little bit on the the planned asset sales and how confident you are in the current market environments and being able to achieve decent prices as well as having willing buyers.

30m 12s

It's a great question, Floris. And look, we've got tremendous uncertainty right now for all the reasons that we all know. [indiscernible] obviously, tariffs, obviously leading to trade wars and uncertainty is the enemy of decision making. I think for many business leaders, men and women, they're probably hesitant. They're probably pausing in many situations. And certainly being cautious. No difference than what certainly we're seeing and probably a lot of our peers hence the reason that I think everybody has been sort of a little more cautious on forward guidance. I would say that this team has really separated itself in being able to transact even in even under the worst of circumstances If you think back since the spin, as we pointed out, we have sold or disposed of 45 hotels, including 14 international, for north of $3,000,000,000 We do have one asset under contract very attractive pricing and look we are cautiously optimistic but we're not going to comment and give any details and until it closes. We just think that's the prudent thing to do. But we also have a number of other assets that are at various stages of the marketing process. There's plenty of liquidity.

31m 38s

There's plenty of equity capital. There's plenty of debt capital And if I'm a small family office [indiscernible] These periods of dislocation I think can be a really unique opportunity certainly buy assets. So we are being very targeted We're being very focused and I think we've again demonstrated every year that we've been able to sell assets We've raised the bar a little higher this year. But we're still working our butts off to to get as many sales done this year as we can. And we are confident that we will achieve our objectives.

32m 20s

Thanks Tom. Maybe in my follow-up maybe if you can comment a little bit more on Hawaii. Obviously, RevPAR was down think, 15% in the quarter. You said it dragged for the overall Hawaii village was a four twenty basis point drag on overall results. How is the ramp [indiscernible] the strike disruption in the fourth quarter, but also the renovations that have just occurred how quickly will it ramp up in your view? And how depending dependent are you on the international tourist for some of that ramp?

32m 55s

Well, listen, ramp is taking a little longer as we come out of the strike. Obviously, the strike was forty five days. It certainly had an impact and we are seeing sequentially improvement We were down obviously Hilton Hawaiian Village about 15%, obviously in the excuse me 18% in the in Q1. As we look at April, we're down about 7% and we're probably going to be down we think for the quarter probably high single digit, low double digit So certainly seeing improvement there. Feel very good about third quarter probably mid single digit positive as we think about RevPAR and as Sean pointed out in his remarks, we've got really favorable and easy comp in Q4.

33m 48s

So overall, we think it's going to be a solid performer long intermediate and long term Floris, we could not be more confident about any market than Hawaii. Just given the limited supply growth given the historic nature of the market where it has its RevPAR growth rate RevPAR growth rate is outpaced The U. S. By 120 basis points over the last twenty years. So feel very good about it over the intermediate and long term and as it relates to to the renovations that we've been very strategic, very thoughtful about it. Karl Mayfield and his team on our design and construction are best in class, best in the industry. And so we think there's really minimal disruption, particularly since you're lapping disruption from the previous year. We're completing and carefully phasing and staging our renovations there. And And we don't have any issues in terms of supplies. We have what we need and are confident that we'll be able to get them done sort of on time, on budget as I think we've done as well as anybody in this sector, particularly given the nature of our our portfolio. [indiscernible] [indiscernible] Thank you. Next question is coming from David Katz from Jefferies.

35m 9s

Your line is now live.

35m 13s

Hey, Hey, good morning, everybody. Thanks for taking my question. Look, I I wanted to just follow-up on the prior conversation about asset sales. And the market will be what it will be.

35m 26s

But you know, it does look like you've sort of trimmed your core hotels to to a smaller number, right, 25 to 20? If I'm seeing that correctly.

35m 38s

Maybe we should just talk about that and sort of what the you know, what's what's going on with the the the five and of how we're thinking about those, that change. Please.

35m 51s

It's a great question, David. We have as a team, again, back to the earlier comment I made, we have worked our tails off and I know you know this and really looking to reshape the portfolio. Based on additional work and as we've looked at capital allocation do we want to be allocating capital it's really those top 20 assets that really account for about 8590% of the value of the company. And so we've made the decision that those are the core assets, the other remaining assets we want to work really hard to recycle that capital to sell those assets and take those proceeds and pay down debt reinvest in strategic ROI projects as we're talking about in in Hawaii and New Orleans and obviously Miami. And then obviously in periods of dislocation, be prepared to buy back stock and look, we have we bought back 26,500,000.0 shares over the last two point five years. So I think we've been as prudent as anybody from a capital allocation standpoint [indiscernible] very confident in those 20 hotels being sort of our core and then working as aggressively as we can to to sell the non core. And that can be different combinations.

37m 11s

You saw in Oakland last year, non performing difficult market, we closed the hotel. You've seen other situations, there are short term ground leases. We'll work to figure out a solution for those situations. But we really want to get the core portfolio down to those core 20 hotels where the real embedded value of the company lies.

37m 38s

Understood.

37m 39s

And if I can just follow-up quickly, with respect to the CapEx, that's planned, notably Miami, which is important, over the course of a year. [indiscernible] It seems to me that you've sort of embarked on that. Maybe you could talk about how much of that cost is really and timing is sort of locked in at this point just given you know, the the limited visibility in the marketplace. Thank you. Yes. It's another great question, David. I would say you heard me make this the earlier comment, you've you've been down, you've seen obviously what we've done in Orlando with the Bonnet Creek and how well that's performing and the complexity of that. And I say this respectfully, there's not another team in the lodging REIT landscape that has that experience and has that ability to be able to handle it Miami, this is what we do. Carl Mayfield and the team have studied the situation carefully over the last year. We've We've bought out many of the subs. We have the GC. We have the permits. We have suspended operations, we will be preparing and fencing around and we're confident that we will deliver before June of year for the World Cup.

39m 4s

And we're excited. I mean, is a complete transformation of guest rooms public space, lobby, the pool area, food and beverage outlets, And we think, obviously, we said, we think there's a great opportunity not only for 15% to 20% on 25% unlevered returns, but the ability to really double EBITDA as well. And in a market where you've got such high end, the Aubert's coming, Rosewood, the Amman, the Andaz obviously will open at some point. And the ability for us to tuck underneath that and be able to really significantly increase rates and given the quality of that location, Mid Beach, right next to the Lowe's, we're really excited about this project as we move forward. We realize there's some near term disruption but we think for intermediate and long term and for real value creation for shareholders, it's the right decision for us to make. We also believe passionately that we can deliver higher development yields than we can acquisition yields. And that really plays to our strength as a team. Appreciate it. Thanks very much. Good luck.

40m 23s

Thank you. Our next question today is coming from Duane Pfennigwerth from Evercore ISI. Your line is now live.

40m 30s

Hey, Duane.

40m 31s

Hey. Thank hey. Good morning.

40m 33s

Just wonder if you could give us your updated views on markets that you expect to lead this year and the underlying demand drivers and correspondingly the markets that you expect will lag in your portfolio And has that pecking order changed since one quarter ago? Well, look, we've talked about Hawaii. We think obviously Hawaii is going to continue to to ramp up the Hilton Hawaiian Village obviously is on that given the post strike. Hilton Waikoloa, we still are are very bullish on that. We've obviously got significant increase in group business there. What's happening in Orlando and the double digit increase that we've seen at Bonnet Creek, we expect that's obviously going to continue to be a really strong performer Key West obviously, again, given the transformative renovations there and what we're doing, and how well they did last year, we still continue to be very encouraged New York City, I mean, York is up April 16%, 17% and we feel good about it in the second quarter and it continues. Obviously, you've had very little supply added in New York and continue to be cautiously optimistic there. Caribe has been on fire and continues to perform very well for us.

42m 1s

There. We're expecting obviously Denver, given the management changes that we've made there. Certainly to see sequential improvement there as we sort of look out. [indiscernible] [indiscernible] overall, if you think about the first quarter, taking out Hilton Hawaiian Village from that standpoint and given the tough comp, I mean, would have been obviously a very strong nearly 4% increase in RevPAR for us. And given the fact that we've been so disciplined and I give a huge credit to our asset management team, to Sean's leadership, as well as we look on the cost side. I mean, we were up about 3.3% in expenses but when you take out the onetime anomalies, we were only up about one a little over one % So I mean it's not just the top line in those markets, but it's [indiscernible] discipline as well on the cost side. And so I think we've done a really good job on that front and you'll see that kind of energy and effort to continue as we move forward.

43m 5s

Thanks, Tom. And if I could just follow-up on one of those on New York. There's been so much intense media focus on potentially softer international inbound. Less Canadian travel, etcetera. And so what do you think some of that media might be missing in terms of demand drivers to a market like New York And thanks for taking the questions.

43m 31s

Yes, listen, New York one of the great cities of the world as we all know and there's no doubt you think about the frustration, the energy around the tariffs right now, they're there are going to be some. Obviously, we saw a little bit of decline in the Japanese coming into Hawaii. That's still ramping up, but still certainly still a little over 50% below where we were in 2019. International accounts for about 10% of our business overall you think about pre pandemic, inbound into The U. S. Was about 79,000,000 I think we're back to somewhere between 70,000,000 and 72,000,000 about half of that comes from Canada and Mexico. Mexico has been pretty consistent. It hasn't seen a fall off. You've seen a little bit of fall off in in Canada and we're all hopeful just given the strong alliance and relationship that that will get resolved and that will sort of resume. But certainly in the near term that is a little dilutive But again for us it's less than 2%. So it's really not that significant to Park and to our portfolio. Thank you.

44m 52s

Thank you. Next question today is coming from Patrick Scholes from Truist Securities. Your line is now live.

44m 59s

Thank you, operator.

45m 1s

Hi. Good morning, everyone.

45m 4s

Question for you on the group pace.

45m 6s

On the prior earnings release, it had been tracking 6%, now it's percent. Plus one for the year. I'm wondering if you can kind of give us an an apples to apples for 2Q to 4Q. I know or suspect that 1Q benefited from the Easter shift. So when you take that out, you sort of naturally, the rest of your might have been softer. But how does that plus one for 2Q to 4Q, compare to your prior projection. Thank you. Hopefully, that makes sense.

45m 36s

Yeah, Patrick, I believe so. Hopefully, we'll get you a response that aligns with your thinking. But in the end, as we look at [indiscernible] for, I would say, Q2, Q3, pace is roughly just slightly down. 0% to 1%. For Q2 And then Q3 is little bit it's weaker, it's down 10% Hawaiian Village, a big driver of that. As well as New Orleans and Chicago, are both lapping strong Q3 performance on the group side last year, recall, obviously, Chicago had to DNC. So it's lapping that. But other than those, I would say the markets are are pretty pretty healthy. For group pacing in Q3. And then Q4 is a very strong quarter for us. Up 18% A lot of big drivers of positive pace and pretty much across the board, not too many properties dragging down the performance. For group expected in Q4. So that's kind of how the pace goes. I would say that I don't think we've seen much decline in the near term I think the definition we've had on the books, which represent about at this point, about 90% of the forecast have held. Occasional cancellation, a little bit of maybe wash, but then offset by revalve, positive revalves and other areas.

47m 2s

So it's generally held. So I think the the group story for the year for us as we look at it and place into the guidance is just confidence in the year for the year bookings, which probably is not unique to us. Just kind of thinking through the ability to pick up what's remaining in our reach for the rest of the year. I think we're the sales teams feel good. But as Tom mentioned, with the uncertainty out there, you're just kind of seeing hesitancy in decision making right now?

47m 31s

Okay. When you said confidence, you mean do you mean your is confidence or more sounds like there's not confidence?

47m 40s

I just want to be clear. Thank you.

47m 41s

I think there's confidence out there that kind of pick pick up the remaining reach in the portfolio. We've obviously hedged a little bit of that in our guidance forecast, but anything I think the teams are generally positive on potentially transient side of to kind of cover for some of that.

47m 59s

Okay.

48m

You. I mean, I could slip in one more. What are you seeing for a twenty six and twenty seven group trends? And how is that changed since you last reported? Thank you. And then I'm all set.

48m 13s

I would speak to 27. For 26, we have seen a drop off, like Again, I think as you think through some of the decision making issues we're dealing with, I think you're seeing that play into it right now. I think it's more kind of the early parts of 2026 you. Next question today is coming from Smedes Rose from Citi. Your line is now live. Hi. Thanks. Hey, Steve. I just wanted to circle back Hi.

48m 42s

On the Hilton Hawaiian Village.

48m 44s

Sounds like sort of quite a few moving pieces there. And I'm sorry, mean, you think real estate you could come in ahead of what you did in 2024 there on an EBITDA basis I think you did a little over 160,000,000 It seems like from what you're saying that might be hard to achieve, but I just kind of want to maybe I'm not reading what your remarks are.

49m 4s

Yeah. We had trouble reading or hearing you, Smedes. Just say your question one more time.

49m 10s

For the Hilton Hawaiian Village. Do you think it's realistic that you can do EBITDA this year that's ahead of what you did in 2024?

49m 21s

Yeah. It's I mean, it's it's hard to say right now, Smedes. Could we get close to it I think that's possible, but I think again it goes back to the the macro uncertainty. Mean if you get better visibility and better clarity [indiscernible] confidence resumes at a higher level, I see no reason to that we don't get back closer to sort of more normalized behavior. If we end up in an all out trade war or something along those lines and God forbid, we had [indiscernible] a more softer and sort of recessionary type environment, which we are not seeing that at all. This isn't nineeleven. This is not the great financial crisis. This is not obviously the global pandemic, but assuming things sort of normalize or as close to normal, then we're certainly well positioned whether we get back exactly this year, we are we are very bullish on Hawaii over the intermediate and long term. Fee simple, the barriers to entry, you can't replicate what we have. Obviously, supply growth over the last twenty years obviously, outperformance from a RevPAR standpoint, versus other resorts over the last twenty years. So it's where if if you're going to be over indexed, from our standpoint, you want to be over indexed in Hawaii.

50m 54s

Okay. Thank you. And then I just wanted to ask you the looks like you took a $70,000,000 impairment in the quarter. Can you just talk about what that was related to? Yes, it's related to and an asset obviously is our accounting and as we've as our team has looked at what we think to be the true value of that subject asset, We made the decision that it was appropriate to to write it down and have recognized that accordingly. [indiscernible] can say which one, I guess. Yeah. Not not at this point.

51m 37s

Okay. Alright. Thank you.

51m 39s

Thank you, Smedes.

51m 41s

Thank you. Next question today is coming from Chris Woronka from Deutsche Bank. Your line is now live. Chris. Good morning. Hey, Tom. Good morning. Good morning. Good morning. So just circle back to the asset sales for a second.

51m 56s

I think everybody's curious.

52m

For in terms of good outcome for pricing, what's kind of your Tom, what's your kinda definition of that? I assume it's kinda based on some kind of NOI or EBITDA and maybe plus save CapEx that might have been required I mean, I assume that's the right way to look at it and not some other metric, be it per room or something. But any thoughts you have there would be be great. Thanks.

52m 23s

Yeah. It's a great question, Chris. I mean, look, it's it's a the assets we're looking to sell are non core. And so embedded in that obviously we're looking for attractive pricing certainly at multiples greater than where we're trading And obviously, we trade at a ridiculous multiple. So we're confident we can be selling at a at higher multiple. That gives some price discovery for the market as well. Saving also CapEx and then being able to reallocate that that capital strategically back to our core portfolio and or pay down debt and or buy stock. When and where it makes sense. Obviously, the dislocation, we've been active on all fronts. Continuing to manage the balance sheet, continuing to invest back in the portfolio, as well as buying back stock.

53m 19s

We're very confident as we start printing and showing certainly some of the transactions that are in the pipeline that they will be very and they'll certainly be accretive from where we're currently trading.

53m 36s

Okay. That's great to hear, Tom. And then as a follow-up, I think Sean may have mentioned that your comparable OpEx kind of ex the noise last quarter was just up. 1%. We know that several of your hotels had some labor resets late last year that would have pushed that number up. So where are you finding the offsets to savings? And can that continue? And kind of implementing any kind of contingency plans with your operators? Thanks.

54m 9s

Yeah, Chris, I'll take that. I mean, as we're going through those processes last year, I mean the challenges to the teams you come in and budget and whatnot are ultimately defined savings. Across the board. So I think the teams have been successful in doing that. I I'll get I mean, say part of the play here too is you think through the mix. I mean, occupancy, higher ADR certainly has helped with the flow through in the first quarter and I think that's part of what you see there. And so as you think through contingency planning as we think in the future, I mean, we're doing those things with the operators. But in an environment where you might see some uncertainty, ninety days out, we're certainly out outperformance in the near term. So it's definitely a tricky situation for the teams on the property to think about staffing as they try to react to that dynamic But in the end, think they're doing an incredible job of of of staffing and being efficient knowing that they've got the challenge coming off of some of the labor contracts we renewed last year. I would say, as we look forward to, we certainly expect to see some other offsets going forward on the fixed cost side, namely insurance, certainly is a positive market for the insurers going to market.

55m 23s

And so we go to we go to renew on June 1. We're confident we'll get a good outcome there. So I think that plays into how we think about maintaining the expenses and keeping it within reason. That said, I mean in the end, you still have 45% wage growth. And so we're working to find the offsets where we can.

55m 45s

Chris, I also just want to say it's strong leadership from from Sean our asset management team, the men and women there who are who partnering with our operators It is also basic blocking and tackling [indiscernible] with a relentless focus on how do we mitigate and how do we manage around Remember, as you think back through the pandemic and what we were faced with as dire situation as anybody in the sector. And we got through it. We got through it as well as anybody given those facts and circumstances. The team is experienced. There isn't anything we haven't seen Those that sort of write and have comments we're a little more union focused and that our cost structure is always going to be higher They're just wrong. And if they did a little bit of work, they'd realize the discipline and talent within this team and you see how we continue to deliver and continue to work So really proud of them and and we'll see even more of that when you start seeing the insurance when that turns around and what we print versus what our our peers print. [indiscernible] Really appreciate your comment and your question.

57m 6s

Thank you.

57m 7s

Thank you. Next question today is coming from Jay Kornreich from Wedbush Securities. Your line is now live.

57m 13s

Hi, thanks. Good morning.

57m 15s

Wanted to first just drill down a little bit further in Orlando, which continues just to perform exceptionally well. And just curious if you can provide just further details as to what's driving the strength there?

57m 25s

How much of a positive tailwind the opening of Epic Theme Park can produce?

57m 29s

And if there's any opportunity for Bonnet Creek Complex produce even more than the $90,000,000 you forecasted?

57m 37s

Yes, we certainly expect that we will exceed the $90,000,000 It's just if you think about Orlando, people often think about Vegas that has a about 45,000,000 visitors You've got 74,000,000 visitors plus or minus into Orlando. You have obviously Epic where Universal has put in $6,000,000,000 or more I think is publicly disclosed number. The excitement around that, the first park to open in decades You've also got Disney coming on the heels talking about another $60,000,000,000 plus or minus. Now I'm not sure all that's theme park that's going to be some some shifts. And but with that kind of backdrop and given it's a strong hub or convention as well. We are very, very bullish on Orlando. Bonnet Creek, in particular, now given the additional meeting space that we added at both the Waldorf as well as the Signia we have the ability to be able to layer in groups that we didn't have the ability before and then also having a championship golf course. And of course, being a Conde Nast winner last year, a top 10 performer, we're getting rave reviews. And the on-site management team is just continues to do an exceptional job. So we're we very, very bullish both near term and over the intermediate and long term in Orlando.

59m 11s

And certainly, again, if you look over the last twenty years in sort of RevPAR growth over the national average, there are several markets, obviously led by Hawaii, Key West, Orlando, Miami, all markets that Park is anchored and where Park has a great footprint. We would encourage investors and listeners to do a little bit more work on that front and see that You'll see that there's I think, a real competitive advantage for Park as we look out.

59m 45s

I appreciate all the color. And then just one more follow-up, just going back to more of the macro landscape and just given the uncertainty right now. Are you seeing any change in behavior from your transient customers since April? Whether I used to be corporates pulling back on visit travel? Or business transient travel or changes in leisure customers traveling to or spending a resource Or are you really just not seeing much change at all at this point?

1h 10s

We were down 3% in March. Obviously, you've got the shift of Easter We're we expect we're going to end April above the number we have. We have preliminary where we think the final numbers will be above the 1.6 Obviously, York, very strong as I mentioned earlier, up 18%. Bonnet Creek, up 8%, Caribe up mid-20s, Casa up another 1415%, So we're not seeing this is this is not in a recessionary environment. There's certainly some caution There's certainly pockets of softness. There's certainly concern We all share it. And there's a lot of uncertainty right now. I think we'd all prefer that we get better visibility, but certainly despite that and even the jobs report last last week. Things still are good. Would like to see some of that uncertainty in some of these trade deals if they're going to occur, the sooner the better. Because I think that that will help, I think, provide more confidence as we all move forward. Okay. Thanks very much.

1h 1m 32s

Thank you. Next question today is coming from Robin Farley from UBS. Your line is now live.

1h 1m 38s

Great. Thank you. My question was really kind of similar to the last question. In your intro remarks you mentioned, I think you used the phrase modestly weaker transient. And then you talked about some of the challenges with group, maybe some tougher comps later in the year. I guess if you had to sort of rank where the strength or softness is between group and leisure transient and business transient, how would you sort of break down? I mean, it sounds like obviously there's a lot going on in the world and maybe they're all a little bit softer than you thought or you know I guess if you were ranking the three.

1h 2m 13s

Thanks. [indiscernible] Robin, on the group side, again, as I mentioned, the the pace and the definites on the books and that holding, I think, a strength It's certainly providing that solid base for the business and that to be able to not to worry about [indiscernible] base as much as I think kind of gives it in this environment. Kind a top billing for me. From the leisure side, what you saw in April, I mean, ultimately, [indiscernible] Tom talked a little bit to Hawaiian Village, but absent Hawaiian Village, on the resort side, it's up call it, 8% or so for the month And this was a month where we came in and had dropped the forecast a little bit and now outperformed it by about 160 basis points. You're seeing a lot of so much like people are thinking through like this is still like a little bit like coming out of COVID where a lot of the drive to markets are benefiting and a lot of short term transient and leisure side. So I kind of feel like leisure to me ranks second right now and the possibilities as you think about the summer time frames transient in a lot of places you might think might be a challenge, but I think we're seeing plenty of markets that have leisure pace up in the summertime.

1h 3m 31s

So I'd put leisure second and I think business transient I think what's captured in that is government and some other elements, so I think are certainly pressured. But I think business transient, corporate negotiated, still shows a very narrow booking window short term but very solid performance so far.

1h 3m 51s

Thanks. Just to clarify, April, of course, would have a April in a lot of the leisure markets with the benefit of Easter. Is there anything when you sort of when you look out to kind of May and June where there's not as much of a pronounced calendar shift, would you say that leisure is still pacing up outside of the Easter shift?

1h 4m 18s

Yeah.

1h 4m 18s

I would say when I look at I think June is healthier than May right now, Robin. And so May, I think, is just kind of a month where I think we don't have to I think the group strength at this point. And so I think May is a little bit softer month for us. In the quarter, softness of the quarter. And then and I think June is stronger with some group backdrop and I think better leisure profile.

1h 4m 43s

Okay, great. Thank you.

1h 4m 45s

Yep.

1h 4m 47s

Thank you. Next question is coming from Chris Darling from Green Street. Your line is now live.

1h 4m 53s

Thanks. Good morning. Tom, I wanted to go back to the discussion around capital allocation.

1h 5m

Just curious how you think about pursuing incremental share repurchases relative to perhaps bolstering your position? Obviously, a more certain economic outlook today and you think about some of the debt maturities coming due next year.

1h 5m 16s

Chris, it's a great question. Sean and I spend a lot of time and the team really studying it. I mean, obviously, we'd like to the extent possible [indiscernible] if we're buying back stock, want to do it on a neutral on a leverage neutral basis. We clearly want to continue investing back into the core portfolio as we've talked about it. And obviously continuing to to manage carefully the balance sheet. I mean, we've got over $1,200,000,000 in liquidity Please keep in mind, obviously, the CMBS loan for Hilton Hawaiian Village matures in November, December of next year. We have a plan and we have optionality. Remember, during the pandemic, we did three bond deals. We pushed out maturities. We paid off all the banks. All the banks made fees. We have great banking relationships. We're not reliant on the banks. And we are carefully studying it and you'll see significant progress made on that on that maturity this year. And we're confident that we'll get it addressed. So no fear or concern from that standpoint. Having said that, when you're trading at at this kind of pricing, we certainly think buying back stock at these levels certainly among the best investment decisions that we can make.

1h 6m 55s

Buying back into this core portfolio at this kind of pricing. So it's a balancing act. I think we've demonstrated it and we'll be careful and thoughtful about it. And I think we've demonstrated that over time.

1h 7m 12s

That makes sense.

1h 7m 14s

Thank you.

1h 7m 14s

Alright. Thank you.

1h 7m 16s

Thank you. Next question is coming from Danny Asad from Bank of America. Your line is now live. [indiscernible] maybe one more question on leisure if you don't mind.

1h 7m 29s

Are you seeing any different patterns of behavior from your consumers staying at your higher end properties relative to non luxury resorts?

1h 7m 40s

Not in particular, Danny. Clearly, certainly see [indiscernible] better pricing out of the luxury side You are certainly seeing places like Hawaiian Village where we are opening up channels to obviously drive more volume there. Because we try to recover, which is attracting a little more of a discount leisure. But I think outside of that, I don't think the patterns have really changed much.

1h 8m 4s

And the behavior.

1h 8m 6s

Okay.

1h 8m 7s

And then one more, just your non rooms revenue grew about 200 basis points ahead of RevPAR for the quarter. Was there anything unique to Q1 that would drive this? And just how should we think about RevPAR versus out of room spend for the balance of the year with the updated outlook?

1h 8m 27s

Yes. We had some strong group catering contribution up 9% in Q1. I think as we think about the contribution to overall RevPAR, about I'd say about 500 to 100 basis points added to RevPAR As you think as we discussed group pace is a little bit weaker as we go into Q3. So I think I think what's driving it overall for the year though and a little strength certainly in Q1 is just the mix between in house kind of corporate in house and convention has shifted more in the favor of in house group this year. So you're just going to get better better F and B production on the catering side. Obviously with convention business, you're just mostly getting room blocks off of that. And they're eating elsewhere. So think that's kind of a dramatic more of a significant shift for us this year.

1h 9m 19s

Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over for any further or closing comments.

1h 9m 27s

We really appreciate everybody taking time today and we look forward to seeing you all at upcoming conferences. You. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Key Insights

PK delivered better than expected Q1 performance, with RevPAR essentially flat despite tough comps, and strong results in key markets like Orlando (Bonnet Creek up 32% RevPAR), Key West, Miami, New Orleans, Puerto Rico, Washington DC, and San Francisco; Hilton Hawaiian Village recovery lagged, causing a drag on results.
The company remains focused on capital allocation, initiating over $80M in capital improvements in Q1 and planning $310M–$330M in capex for 2025; a $100M renovation at Royal Palm South Beach is expected to double the hotel's EBITDA with forecasted returns of 15–20%.
PK continues to pursue its strategic initiative to sell $300M–$400M of non-core hotels in 2024, with one asset under contract and several others in the marketing process; proceeds are targeted for debt reduction, ROI projects, and share repurchases (3.5M shares bought back in Q1 for $45M).
Full-year 2024 guidance was revised downward: RevPAR growth forecast now -1% to +2% (100 bps lower at midpoint), adjusted EBITDA range $590M–$650M (down 3% at midpoint), and FFO per share $1.79–$2.09; Q2 RevPAR expected to be flat YoY, with Q4 group revenue pace up 18%.
Despite macro uncertainty and softer transient demand, PK sees continued strength in group bookings (Q4 up 18%), robust performance in Orlando and Key West, and long-term confidence in Hawaii; cost discipline remains a focus, with comparable OpEx up just 1% YoY (ex one-time items), and a 10% annualized dividend yield maintained.

Recent Transcripts

Q1 RevPAR exceeded expectations despite tough comps; guidance lowered amid macro uncertainty.

Park Hotels delivered sector-leading 2024 results, advancing strategic asset sales and ROI projects.

Earnings

Report Date

May 5, 2025

Reported Revenue

630M

Miss -7.36%

Avg 1d Change

0.92%

Report Period

Q1 2025

Reported EPS

0.46

Beat +12.2%

Implied Move 1d

6.84%

Transcript

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26m 56s

Excluding these items, total comparable operating expenses increased just 1% over the prior year period.

27m 2s

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29m 26s

Certainly. We'll now be conducting a question and answer session. Our first question today is coming from Floris Van Dykem from Compass Point. Your line is now live.

29m 52s

Hey, good morning guys. Thanks for taking my question.

29m 56s

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35m 9s

Your line is now live.

35m 13s

Hey, Hey, good morning, everybody. Thanks for taking my question. Look, I I wanted to just follow-up on the prior conversation about asset sales. And the market will be what it will be.

35m 26s

But you know, it does look like you've sort of trimmed your core hotels to to a smaller number, right, 25 to 20? If I'm seeing that correctly.

35m 38s

Maybe we should just talk about that and sort of what the you know, what's what's going on with the the the five and of how we're thinking about those, that change. Please.

35m 51s

37m 11s

37m 38s

Understood.

37m 39s

39m 4s

40m 23s

Thank you. Our next question today is coming from Duane Pfennigwerth from Evercore ISI. Your line is now live.

40m 30s

Hey, Duane.

40m 31s

Hey. Thank hey. Good morning.

40m 33s

42m 1s

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43m 31s

44m 52s

Thank you. Next question today is coming from Patrick Scholes from Truist Securities. Your line is now live.

44m 59s

Thank you, operator.

45m 1s

Hi. Good morning, everyone.

45m 4s

Question for you on the group pace.

45m 6s

45m 36s

47m 2s

47m 31s

Okay. When you said confidence, you mean do you mean your is confidence or more sounds like there's not confidence?

47m 40s

I just want to be clear. Thank you.

47m 41s

47m 59s

Okay.

48m

You. I mean, I could slip in one more. What are you seeing for a twenty six and twenty seven group trends? And how is that changed since you last reported? Thank you. And then I'm all set.

48m 13s

48m 42s

On the Hilton Hawaiian Village.

48m 44s

49m 4s

Yeah. We had trouble reading or hearing you, Smedes. Just say your question one more time.

49m 10s

For the Hilton Hawaiian Village. Do you think it's realistic that you can do EBITDA this year that's ahead of what you did in 2024?

49m 21s

50m 54s

51m 37s

Okay. Alright. Thank you.

51m 39s

Thank you, Smedes.

51m 41s

51m 56s

I think everybody's curious.

52m

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53m 36s

54m 9s

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55m 45s

57m 6s

Thank you.

57m 7s

Thank you. Next question today is coming from Jay Kornreich from Wedbush Securities. Your line is now live.

57m 13s

Hi, thanks. Good morning.

57m 15s

57m 25s

How much of a positive tailwind the opening of Epic Theme Park can produce?

57m 29s

And if there's any opportunity for Bonnet Creek Complex produce even more than the $90,000,000 you forecasted?

57m 37s

59m 11s

59m 45s

1h 10s

1h 1m 32s

Thank you. Next question today is coming from Robin Farley from UBS. Your line is now live.

1h 1m 38s

1h 2m 13s

1h 3m 31s

1h 3m 51s

1h 4m 18s

Yeah.

1h 4m 18s

1h 4m 43s

Okay, great. Thank you.

1h 4m 45s

Yep.

1h 4m 47s

Thank you. Next question is coming from Chris Darling from Green Street. Your line is now live.

1h 4m 53s

Thanks. Good morning. Tom, I wanted to go back to the discussion around capital allocation.

1h 5m

1h 5m 16s

1h 6m 55s

1h 7m 12s

That makes sense.

1h 7m 14s

Thank you.

1h 7m 14s

Alright. Thank you.

1h 7m 16s

Thank you. Next question is coming from Danny Asad from Bank of America. Your line is now live. [indiscernible] maybe one more question on leisure if you don't mind.

1h 7m 29s

Are you seeing any different patterns of behavior from your consumers staying at your higher end properties relative to non luxury resorts?

1h 7m 40s

1h 8m 4s

And the behavior.

1h 8m 6s

Okay.

1h 8m 7s

1h 8m 27s

1h 9m 19s

Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over for any further or closing comments.

1h 9m 27s

Key Insights

PK delivered better than expected Q1 performance, with RevPAR essentially flat despite tough comps, and strong results in key markets like Orlando (Bonnet Creek up 32% RevPAR), Key West, Miami, New Orleans, Puerto Rico, Washington DC, and San Francisco; Hilton Hawaiian Village recovery lagged, causing a drag on results.
The company remains focused on capital allocation, initiating over $80M in capital improvements in Q1 and planning $310M–$330M in capex for 2025; a $100M renovation at Royal Palm South Beach is expected to double the hotel's EBITDA with forecasted returns of 15–20%.
PK continues to pursue its strategic initiative to sell $300M–$400M of non-core hotels in 2024, with one asset under contract and several others in the marketing process; proceeds are targeted for debt reduction, ROI projects, and share repurchases (3.5M shares bought back in Q1 for $45M).
Full-year 2024 guidance was revised downward: RevPAR growth forecast now -1% to +2% (100 bps lower at midpoint), adjusted EBITDA range $590M–$650M (down 3% at midpoint), and FFO per share $1.79–$2.09; Q2 RevPAR expected to be flat YoY, with Q4 group revenue pace up 18%.
Despite macro uncertainty and softer transient demand, PK sees continued strength in group bookings (Q4 up 18%), robust performance in Orlando and Key West, and long-term confidence in Hawaii; cost discipline remains a focus, with comparable OpEx up just 1% YoY (ex one-time items), and a 10% annualized dividend yield maintained.