Park Hotels & Resorts (PK) Q3 2024 earnings summary

Executive summary

• Portfolio consists of 41 premium-branded hotels with over 25,000 rooms, 86% luxury/upper upscale, in major U.S. markets and resorts as of September 30, 2024.

• Q3 2024 delivered 3.3% RevPAR growth, driven by strong group and business transient demand in core urban and resort markets, despite labor strikes and weather disruptions.

• Group segment revenue increased nearly 13% year-over-year, with 2024 group revenue pace up over 9% and 2025 pace in the mid to upper single digits.

• Disposed of Hilton La Jolla Torrey Pines and Hilton Oakland Airport, generating over $40 million in proceeds and reducing debt, with proceeds used for share repurchases and portfolio reinvestment.

• Exited economic interest in two San Francisco hotels after receivership, improving balance sheet and portfolio quality.

Financial highlights

• Q3 2024 total revenues were $649 million, down from $679 million in Q3 2023; net income attributable to stockholders was $54 million, up from $27 million.

• Q3 2024 RevPAR was $189.73, up 3.3% year-over-year; occupancy was 78.1%, up 2.5 percentage points; ADR was $242.88, flat year-over-year.

• Adjusted EBITDA for Q3 2024 was $159 million, down from $163 million in Q3 2023; Comparable Hotel Adjusted EBITDA margin was 27.2%.

• Adjusted FFO per diluted share for Q3 2024 was $0.49, compared to $0.51 in Q3 2023.

• Paid a Q3 cash dividend of $0.25 per share; dividends totaled $0.75 per share YTD.

Outlook and guidance

• No update to full-year 2024 outlook due to ongoing labor negotiations; revised guidance will be provided after agreements are ratified.

• Management remains confident in core business and leisure demand, with year-to-date 2024 RevPAR up 4.3%.

• Expect continued positive momentum for the remainder of 2024, driven by demand trends, city-wide events, and improving international travel.

• Targeting a Q4 dividend in the range of 65%-70% of full-year adjusted FFO per share.