• Q4 RevPAR: $179, a decline of 1.4%; excluding strike impact, increased 3.1% year over year.
• Q4 Occupancy: 69.9%.
• Q4 ADR: $256.
• Q4 Hotel Revenue: $600 million.
• Q4 Hotel Adjusted EBITDA: $147 million; margin of 24.6% or 28.1% excluding strike impact.
• Q4 Adjusted EBITDA: $138 million.
• Q4 Adjusted FFO per Share: $0.39.
• Full Year RevPAR: Up 2.9% versus 2024; adjusted for strike disruption, increased 4.2%.
• Full Year Hotel Adjusted EBITDA Margin: 27.5%, down 70 basis points; improved by 30 basis points excluding strike impact.
• Full Year Adjusted EBITDA: $652 million, inclusive of $32 million strike impact.
• Full Year Adjusted FFO per Share: $2.06.
• 2024 CapEx: Approximately $230 million.
• 2025 RevPAR Guidance: $187 to $192, growth of 0% to 3%.
• 2025 Hotel Adjusted EBITDA Margin Guidance: 26.1% to 27.7%.
• 2025 Adjusted EBITDA Guidance: $610 million to $670 million.
• 2025 Adjusted FFO per Share Guidance: $1.90 to $2.20.
• 2025 Expected EBITDA Displacement: $17 million due to Royal Palm renovation.
• 2025 Expense Growth Guidance: 3% to 4% increase in comparable hotel operating expenses.

• Warning! GuruFocus has detected 6 Warning Signs with PK.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Park Hotels & Resorts Inc (NYSE:PK) achieved sector-leading results in 2024, exceeding expectations for both top-line and bottom-line performance.
• The company strategically divested non-core hotels, improving RevPAR by $3 and increasing EBITDA margin by over 30 basis points.
• Recent redevelopments at Bonnet Creek and Casa Marina resorts delivered exceptional performance, with significant increases in RevPAR and EBITDA.
• Plans to reposition the Royal Palm resort in South Beach with a $100 million investment are expected to significantly elevate the property's quality and guest experience.
• The company has a robust ROI pipeline exceeding $1 billion, with an estimated incremental value creation potential of over $300 million.

Negative Points

• The Hilton Hawaiian Village hotel was negatively impacted by a 45-day labor strike and renovation disruptions, affecting overall portfolio RevPAR.
• The company expects a challenging first quarter in 2025, with RevPAR anticipated to be slightly negative due to tough year-over-year comparisons.
• There is uncertainty regarding the impact of the new administration's policies on business momentum and the broader economic environment.
• The Royal Palm renovation will require the hotel to suspend operations into Q2 of 2026, resulting in expected EBITDA displacement.
• The company faces a wide range of adjusted EBITDA guidance for 2025, reflecting operational uncertainties and potential market fluctuations.

Q & A Highlights

Q: Can you discuss the disposition target of $300 million to $400 million and how you plan to deploy that capital? A: Thomas Baltimore, CEO: We have consistently shown our ability to recycle capital, having sold or disposed of 45 hotels for about $3 billion. We plan to invest in our core portfolio, pay down debt, and opportunistically buy back shares, as we continue to trade at a significant discount to NAV.

Q: How are you planning to address the $1.4 billion CMBS debt on Hawaiian Village maturing in 2026? A: Sean Dell'Orto, CFO: We have access to various debt capital markets and are weighing options considering cost, tenure, and timing of asset sales. We may address a portion of the CMBS debt earlier if market conditions compel us. Hawaiian Village's improved performance supports a higher level of debt, providing us with multiple scenarios to consider.

Q: What are your expectations for Hawaii's performance in 2025, and how does group pace translate to EBITDA growth? A: Thomas Baltimore, CEO: We expect a soft Q1 but significant growth in Q3 and Q4, with both properties achieving low to mid-single-digit RevPAR growth. Sean Dell'Orto, CFO: Group pace is strong, contributing to a better total RevPAR profile, but it displaces transient demand. We anticipate positive RevPAR and revenue growth, with expense management being key to EBITDA conversion.

Q: Can you elaborate on the Royal Palm renovation and its intended positioning within Miami? A: Thomas Baltimore, CEO: The $100 million investment will elevate the property's quality, positioning it as an upper upscale lifestyle hotel. We aim to significantly increase rates and double EBITDA by enhancing public spaces, food and beverage outlets, and adding 11 new rooms. The renovation will allow us to compete with premium lifestyle resorts in the market.

Q: What are your expectations for New York, specifically the Hilton Midtown, in 2025? A: Thomas Baltimore, CEO: We expect low single-digit RevPAR growth, with group pace up about 10%. New York has seen little supply increase, and our hotel continues to gain market share. We remain cautiously optimistic about New York's performance, supported by strong group demand and limited new supply.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.