Park Hotels & Resorts (PK) Q2 2024 earnings summary

Executive summary

• Portfolio consists of 42 premium-branded hotels with approximately 26,000 rooms in prime U.S. markets as of June 30, 2024, focusing on luxury and upper upscale segments.

• Achieved solid RevPAR results and benefited from value-enhancing ROI projects, with continued progress on balance sheet repositioning and non-core asset sales, including the JV sale of Hilton Torrey Pines.

• Net income attributable to stockholders was $64 million for Q2 2024, compared to a loss of $150 million in Q2 2023, driven by improved hotel performance and derecognition of San Francisco hotels.

• Repurchased 1.7 million shares for $25 million at a discount to NAV; operational strength in Key West, Orlando, and Miami, with group and business transient demand improving in urban markets.

• Hilton San Francisco Hotels remain in receivership following default on a $725 million non-recourse loan.

Financial highlights

• Q2 2024 total revenues were $686 million, down from $714 million in Q2 2023, primarily due to the removal of the San Francisco hotels from results.

• Comparable hotel revenues rose 3.2% to $664 million; hotel-adjusted EBITDA was $199 million (30% margin), up 3.4% year-over-year.

• Net income for Q2 2024 was $67 million, compared to a net loss of $146 million in Q2 2023.

• Adjusted FFO per share was $0.65, up from $0.60 in Q2 2023; comparable hotel adjusted EBITDA margin for Q2 2024 was 29.9%.

• Comparable RevPAR for Q2 2024 was $194.90, up 2% year-over-year, with occupancy at 77.1% and ADR up 1.8% to $252.90.

Outlook and guidance

• Full-year 2024 Comparable RevPAR growth forecasted at 3.5%–4.5% ($185–$187), reflecting Q2 softness and expected moderation at Hilton Hawaiian Village.

• Full-year adjusted EBITDA guidance maintained at $660M–$690M; adjusted FFO per share guidance raised to $2.10–$2.26.

• Hotel adjusted EBITDA margin forecast increased to 27.3%–28.1%; operating income margin projected at 15.6%–16.5%.

• Guidance includes $9 million EBITDA disruption from renovations, mainly in Hawaii, and excludes $60 million in default interest from the SF Mortgage Loan.

• Net income guidance for 2024 is $155M–$185M.