TYSONS, Va., Dec. 05, 2024 (GLOBE NEWSWIRE) — 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
[email protected]
For additional information or to receive press releases via e-mail, please visit our website at www.pkhotelsandresorts.com
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