Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE:PK)
today provided an update on fourth quarter operating trends. Unless
otherwise stated, all operating results are presented on a
Comparable hotel basis.
“I am incredibly pleased with the strength of our portfolio as
we end the year with preliminary November 2024 RevPAR pacing ahead
of expectations and preliminary full-year 2024 RevPAR trending
towards the upper end of our previously disclosed guidance range.
Specifically, preliminary November 2024 RevPAR is expected to be
just 3.9% lower over the prior year period, however, excluding the
impact of recently resolved strike activity in Honolulu, Boston,
and Seattle, November 2024 RevPAR growth would have improved by 510
basis points to 1.2%. Preliminary fourth quarter 2024 RevPAR is
expected to be 2.7% lower, or up an impressive 2.3% when excluding
the impact from recently resolved strike activity, translating to
full-year 2024 RevPAR growth of approximately 2.5%, or 3.9% when
excluding strike activity, as compared to the prior year
periods.
Results continue to be driven by strong group and leisure
trends, particularly at our recently renovated Bonnet Creek Orlando
complex and Casa Marina Resort hotel in Key West where we witnessed
double-digit RevPAR growth in November 2024 compared to the prior
year period. Furthermore, solid group and business transient demand
drove double-digit RevPAR growth in November 2024 in Chicago and
high-single-digit RevPAR growth in our suburban portfolio, compared
to the prior year period. On the capital allocation front, we
remain laser-focused on selling non-core hotels and allocating
capital within the portfolio through accretive return on investment
projects and leverage neutral stock repurchases, as exemplified by
the recent sale of a consolidated joint venture asset for $35
million and $26 million of stock repurchases thus far during the
fourth quarter,” said Thomas Baltimore, Jr., Chairman and Chief
Executive Officer.
Capital Recycling:
• On December 4, 2024, the consolidated joint venture that owns
the 375-room DoubleTree Hotel Spokane City Center in Spokane, WA
sold the hotel for gross proceeds of $35 million, or approximately
$93,000 per key. When adjusted for Park’s anticipated capital
expenditures (“capex”), the sale price represents a 6.2%
capitalization rate on trailing 12-month net operating income (9.2%
excluding capex), or 13.0x trailing 12-month EBITDA (8.7x excluding
capex). Proceeds from the sale will be used to repay the $13.5
million mortgage on the property, with Park's pro rata share of the
remaining net proceeds to be used for general corporate purposes;
and• Year-to-date, Park has sold or disposed of 3 hotels for total
gross proceeds of approximately $76 million, or 12.2x trailing
12-month EBITDA when including anticipated capital expenditures
(9.0x excluding capex). Since spinning out of Hilton in 2017, Park
has sold, or disposed of 45 hotels for a total of $3 billion as the
company works to aggressively reshape its portfolio.
Capital Return Highlights:
• On November 26, 2024, Park's Board of Directors declared a
fourth quarter dividend of $0.65 per share of common stock which
includes Park’s regular quarterly dividend of $0.25 coupled with a
$0.40 top off dividend based on 2024 operating results. This
dividend will be paid in cash on January 15, 2025 to stockholders
of record as of December 31, 2024. The fourth quarter dividend,
together with the regular cash dividends declared for the first
three quarters of 2024, represent an annual yield of 8.9% based on
the closing stock price as of December 4, 2024; • During the
fourth quarter, Park repurchased a total of 1.8 million shares of
common stock for a total purchase price of $26 million at an
average purchase price of $14.43 per share, bringing its full-year
stock repurchase total to 6.0 million shares for a total purchase
price of over $85 million at an average purchase price of $14.31
per share; and• In 2024, Park has returned nearly $375 million of
capital to shareholders in the form of common stock dividends and
stock repurchases.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, but are not limited
to, statements related to the effects of Park's decision to cease
payments on its $725 million non-recourse CMBS loan ("SF Mortgage
Loan") secured by two of our San Francisco hotels – the 1,921-room
Hilton San Francisco Union Square and the 1,024-room Parc 55 San
Francisco – a Hilton Hotel (collectively, the "Hilton San Francisco
Hotels") and the lender's exercise of its remedies, including
placing such hotels into receivership, the ultimate impact of
recent labor activity on Park (including the potential that group
events that have been cancelled will be rebooked for a future
period) or any future labor activity, as well as Park’s current
expectations regarding the performance of its business, financial
results, liquidity and capital resources, including anticipated
repayment of certain of Park's indebtedness, the completion of
capital allocation priorities, the expected repurchase of Park's
stock, the impact from macroeconomic factors (including inflation,
elevated interest rates, potential economic slowdown or a recession
and geopolitical conflicts), the effects of competition and the
effects of future legislation or regulations, the expected
completion of anticipated dispositions, the declaration, payment
and any change in amounts of future dividends and other
non-historical statements. Forward-looking statements include all
statements that are not historical facts, and in some cases, can be
identified by the use of forward-looking terminology such as the
words “outlook,” “believes,” “expects,” “potential,” “continues,”
“may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,”
“intends,” “plans,” “estimates,” “anticipates,” “hopes” or the
negative version of these words or other comparable words. You
should not rely on forward-looking statements since they involve
known and unknown risks, uncertainties and other factors which are,
in some cases, beyond Park’s control and which could materially
affect its results of operations, financial condition, cash flows,
performance or future achievements or events.
All such forward-looking statements are based on current
expectations of management and therefore involve estimates and
assumptions that are subject to risks, uncertainties and other
factors that could cause actual results to differ materially from
the results expressed in these forward-looking statements. You
should not put undue reliance on any forward-looking statements and
Park urges investors to carefully review the disclosures Park makes
concerning risk and uncertainties in Item 1A: “Risk Factors” in
Park’s Annual Report on Form 10-K for the year ended December 31,
2023, as such factors may be updated from time to time in Park’s
filings with the SEC, which are accessible on the SEC’s website at
www.sec.gov. Except as required by law, Park undertakes no
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
About Park Hotels & Resorts
Park is one of the largest publicly-traded lodging REITs with a
diverse portfolio of iconic and market-leading hotels and resorts
with significant underlying real estate value. Park's portfolio
currently consists of 40 premium-branded hotels and resorts with
approximately 25,000 rooms primarily located in prime city center
and resort locations. Visit www.pkhotelsandresorts.com for more
information.
PARK HOTELS & RESORTS
INC.DEFINITIONS
Comparable
The Company presents certain data for
its consolidated hotels on a Comparable basis as supplemental
information for investors: Comparable Hotel Revenues, Comparable
RevPAR, Comparable Occupancy, Comparable ADR, Comparable Hotel
Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin. The
Company presents Comparable hotel results to help the Company and
its investors evaluate the ongoing operating performance of its
hotels. The Company’s Comparable metrics include results from
hotels that were active and operating in Park's portfolio since
January 1st of the previous year and property acquisitions as
though such acquisitions occurred on the earliest period presented.
Additionally, Comparable metrics exclude results from property
dispositions that have occurred through December 4, 2024 and the
Hilton San Francisco Hotels, which were placed into receivership at
the end of October 2023.
Revenue per Available Room
Revenue per Available Room (“RevPAR”)
represents rooms revenue divided by the total number of room nights
available to guests for a given period. Management considers RevPAR
to be a meaningful indicator of the Company’s performance as it
provides a metric correlated to two primary and key factors of
operations at a hotel or group of hotels: Occupancy and ADR. RevPAR
is also a useful indicator in measuring performance over comparable
periods.
For more information, contact: Ian Weissman
Senior Vice President, Corporate Strategy 571-302-5591
iweissman@pkhotelsandresorts.com
For additional information or to receive press
releases via e-mail, please visit our website at
www.pkhotelsandresorts.com
Park Hotels and Resorts (NYSE:PK)
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Park Hotels and Resorts (NYSE:PK)
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