PK — Park Hotels & Resorts Inc.

Summary of Park Hotels & Resorts Inc. Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• RevPAR: Increased by 5.5% year-over-year, excluding the Royal Palm South Beach hotel, which is undergoing renovation. Core RevPAR rose 5.4% to nearly $216.
• Total Hotel Revenues: $591 million, up nearly 2% year-over-year.
• Hotel Adjusted EBITDA: $152 million, with a margin of approximately 26%.
• Earnings: EBITDA of $143 million and adjusted FFO per share of $0.45.
• Liquidity: Approximately $2 billion, including $156 million in cash and $1.8 billion available under a revolving credit facility.

2. Strategic Updates and Business Highlights

• Capital Allocation: Continued focus on enhancing portfolio quality through the sale of noncore assets, with $31 million in sales year-to-date.
• Royal Palm Renovation: Progressing well, expected completion by early June 2026, with anticipated EBITDA doubling from $14 million to $28 million upon stabilization.
• Strong Performance in Key Markets: Notable RevPAR growth in Bonnet Creek (16%), Key West (9%), and Southern California (23% at Hilton Santa Barbara).
• Group Demand: Portfolio group revenue increased 5% year-over-year, with strong performance in Puerto Rico, New York, and Bonnet Creek.

3. Forward Guidance and Outlook

• Q2 Expectations: Anticipated RevPAR growth around the midpoint of guidance, with a projected $3 million loss from the Royal Palm in Q2.
• Full-Year Guidance: RevPAR growth forecast increased to 0.5% to 2.5%, adjusted EBITDA guidance raised to $587 million to $617 million, and AFFO guidance increased to $1.74 to $1.90 per share.
• Long-Term Outlook: Cautiously optimistic about demand trends, supported by macroeconomic factors and events like the World Cup.

4. Bad News, Challenges, or Points of Concern

• Royal Palm Impact: The ongoing renovation is expected to continue dragging on operating results until fully ramped up.
• Geopolitical Tensions: Concerns about the impact of rising oil prices and geopolitical issues on consumer spending and travel demand.
• Transaction Market Challenges: The disposition of noncore assets is progressing but remains challenging, with some assets facing legal and operational hurdles.

5. Notable Q&A Insights

• Disposition of Noncore Assets: Management is actively working on selling the remaining 12 noncore hotels, which account for a small portion of overall EBITDA but are seen as a drag on operating metrics.
• World Cup Demand: While there is cautious optimism about the potential boost from the World Cup, management has not included any contributions from the Royal Palm in guidance, indicating a conservative approach.
• Hawaii Market Recovery: Management expressed confidence in Hawaii's recovery, emphasizing limited supply growth and ongoing renovations as key drivers for future performance.
• Group Demand Trends: Notable improvements in group bookings were attributed to shifts in demand from other regions affected by geopolitical issues.

Overall, Park Hotels & Resorts Inc. reported a solid first quarter with positive revenue growth and strategic initiatives aimed at enhancing portfolio quality, despite facing challenges related to renovations and external market conditions.