Park Hotels & Resorts Inc. Reports Third Quarter 2024 Results
TYSONS, Va., Oct. 29, 2024 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. ("Park" or the "Company") (NYSE:PK) today announced results for the third quarter ended September 30, 2024 and provided an operational update.
Selected Statistical and Financial Information
(unaudited, amounts in millions, except RevPAR, ADR, Total RevPAR and per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
Change(1)
2024
2023
Change(1)
Comparable RevPAR
$
189.73
$
183.64
3.3
%
$
188.08
$
180.33
4.3
%
Comparable Occupancy
78.1
%
75.6
%
2.5% pts
75.7
%
73.5
%
2.2% pts
Comparable ADR
$
242.88
$
242.89
—
%
$
248.57
$
245.34
1.3
%
Comparable Total RevPAR
$
294.65
$
283.82
3.8
%
$
300.83
$
287.74
4.5
%
Net income (loss)
$
57
$
31
83.9
%
$
153
$
(82
)
286.6
%
Net income (loss) attributable to stockholders
$
54
$
27
100.0
%
$
146
$
(90
)
262.2
%
Operating income
$
95
$
85
12.3
%
$
308
$
67
358.9
%
Operating income margin
14.6
%
12.5
%
210 bps
15.6
%
3.3
%
1,230 bps
Comparable Hotel Adjusted EBITDA
$
170
$
173
(1.9
)%
$
539
$
512
5.2
%
Comparable Hotel Adjusted EBITDA margin
27.2
%
28.8
%
(160) bps
28.3
%
28.2
%
10 bps
Adjusted EBITDA
$
159
$
163
(2.5
)%
$
514
$
496
3.6
%
Adjusted FFO attributable to stockholders
$
102
$
108
(5.6
)%
$
350
$
329
6.4
%
Earnings (loss) per share - Diluted(1)
$
0.26
$
0.13
100.0
%
$
0.69
$
(0.42
)
264.3
%
Adjusted FFO per share, Diluted(1)
$
0.49
$
0.51
(3.9
)%
$
1.67
$
1.52
9.9
%
Weighted average shares outstanding, Diluted
208
212
(4
)
210
216
(6
)
______________________________________________
(1) Amounts are calculated based on unrounded numbers.Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer, stated, "I am very pleased with our third quarter results, with Comparable RevPAR increasing over 3% compared to the third quarter of 2023, driven by accelerating demand trends at our hotels in Chicago, New Orleans, and Boston coupled with strong performance at our Key West and Orlando hotels, which continue to benefit from recently completed transformative renovations. Group demand continues to improve with 2024 Comparable Group Revenue Pace up over 9% compared to the same time last year, driven by improvements in business demand, an increase in citywide events and strong convention calendars benefiting our Chicago, New Orleans and New York hotels, as well as in-house group events benefiting our Florida hotels. Our Florida hotels sustained minimal damage and business interruption from Hurricanes Helene and Milton and remain fully operational. I am grateful to our teams for navigating these hurricanes that have impacted many communities in the Southeast.
Additionally, during the third quarter, we continued to execute our capital allocation strategies by disposing of non-core assets, including the Hilton Oakland Airport, repurchasing an additional 2.5 million shares of our common stock for $35 million at a significant discount to our estimated net asset value, and investing in our portfolio, commencing over $200 million of comprehensive guestroom renovations at the iconic Rainbow Tower at the Hilton Hawaiian Village Waikiki Beach Resort, the Palace Tower at the Hilton Waikoloa Village and the Main Tower at the Hilton New Orleans Riverside. With current liquidity of over $1.4 billion, we remain laser-focused on creating long-term shareholder value by further strengthening our balance sheet through non-core asset sales and investments back into our core portfolio with value-enhancing ROI projects and returning capital to shareholders in the form of dividends and leverage neutral share repurchases."
Additional Highlights
In July 2024, the unconsolidated joint venture that owns and operates the Hilton La Jolla Torrey Pines sold the hotel for gross proceeds of approximately $165 million, and the Company's pro-rata share of the gross proceeds was approximately $41 million, which was reduced by Park's portion of debt of approximately $17 million;
In August 2024, repurchased 2.5 million shares of common stock for a total purchase price of $35 million at an average purchase price of $13.85 per share;
In August 2024, permanently closed the 360-room Hilton Oakland Airport, which incurred an EBITDA loss of nearly $4 million for the trailing twelve months, and subsequently terminated its ground lease, returning the property to the ground lessor;
In October 2024, paid its third quarter 2024 cash dividend of $0.25 per share to stockholders of record as of September 30, 2024; and
In October 2024, the Waldorf Astoria Orlando was ranked 9th in the world by Condé Nast Traveler in its prestigious 2024 Readers' Choice Awards for the Best Resorts in the World.
Operational Update
Results for Park's Comparable hotels in each of the Company's key markets are as follows:
(unaudited)
Comparable ADR
Comparable Occupancy
Comparable RevPAR
Hotels
Rooms
3Q24
3Q23
Change(1)
3Q24
3Q23
Change
3Q24
3Q23
Change(1)
Hawaii
2
3,507
$
312.86
$
322.09
(2.9
%)
87.0
%
92.0
%
(5.0% pts)
$
272.29
$
296.29
(8.1
%)
Orlando
3
2,325
201.39
188.44
6.9
65.1
60.2
4.9
131.18
113.54
15.5
New York
1
1,878
304.42
302.44
0.7
91.1
92.2
(1.1
)
277.19
278.78
(0.6
)
New Orleans
1
1,622
173.42
157.49
10.1
64.3
56.4
7.9
111.44
88.82
25.5
Boston
3
1,536
281.13
267.12
5.2
87.6
86.1
1.5
246.23
230.03
7.0
Southern California
5
1,773
250.89
263.09
(4.6
)
85.0
79.6
5.4
213.29
209.58
1.8
Key West
2
461
362.17
409.71
(11.6
)
65.3
25.1
40.2
236.53
103.07
129.5
Chicago
3
2,467
237.93
227.83
4.4
77.1
69.4
7.7
183.56
158.20
16.0
Puerto Rico
1
652
264.86
269.92
(1.9
)
68.5
67.2
1.3
181.39
181.41
—
Washington, D.C.
2
1,085
181.93
173.20
5.0
75.1
77.3
(2.2
)
136.56
133.77
2.1
Denver
1
613
204.78
202.05
1.4
74.4
81.8
(7.4
)
152.25
165.19
(7.8
)
Miami
1
393
185.86
177.55
4.7
72.9
71.3
1.6
135.57
126.59
7.1
Seattle
2
1,246
182.67
187.14
(2.4
)
86.0
82.5
3.5
157.16
154.39
1.8
San Francisco
2
660
234.95
255.48
(8.0
)
74.9
78.6
(3.7
)
176.00
200.81
(12.4
)
Other
9
2,850
179.45
181.78
(1.3
)
72.8
70.1
2.7
130.58
127.50
2.4
All Markets
38
23,068
$
242.88
$
242.89
—
%
78.1
%
75.6
%
2.5% pts
$
189.73
$
183.64
3.3
%
______________________________________________(1) Calculated based on unrounded numbers.
Changes in Park's 2024 Comparable RevPAR for the three and nine months ended September 30, 2024 compared to the same periods in 2023, by hotel type were as follows:
Three Months Ended September 30,
Nine Months Ended September 30,
2024 vs 2023
2024 vs 2023
Resort
1.5
%
4.0
%
Urban
5.4
3.9
Airport
0.5
4.9
Suburban
8.6
7.5
All Types
3.3
4.3
Park continued to see improvements in group demand from ongoing strength at its urban hotels and certain resort hotels, with Comparable group revenues for the third quarter of 2024 increasing by approximately 13% year-over-year. Comparable RevPAR growth for the third quarter was driven by increases at its urban and resort hotels of approximately 5% and 2%, respectively, year-over-year. Park's urban hotels benefited from increased group business and citywide events, including the Hilton New Orleans Riverside and the Hilton Chicago where group revenues increased nearly 56% and over 36%, respectively, compared to the third quarter of 2023, which drove increases in RevPAR of approximately 26% and 20%, respectively. Park's Orlando hotels continued to benefit from an increase in group demand following the transformative renovation at the Bonnet Creek Orlando complex in early 2024, with group revenues increasing nearly 92% and 41% at the Waldorf Astoria Orlando and Signia Bonnet Creek hotel, respectively, compared to the third quarter of 2023, which drove increases in RevPAR of approximately 46% and 9%, respectively.
At the end of September 2024, Comparable Group Revenue Pace and room night bookings for 2024 increased over 9% and 4%, respectively, as compared to what 2023 group bookings were at the end of September 2023, with 2024 average Comparable group rates projected to exceed 2023 average Comparable group rates by approximately 5% for the same time period. Additionally, at the end of September 2024, Comparable Group Revenue Pace and room night bookings for 2025 increased over 5% and nearly 2%, respectively, as compared to what 2024 group bookings were at the end of September 2023, with 2025 average Comparable group rates projected to exceed 2024 average Comparable group rates by over 3% for the same time period.
Hurricane Update
Park's hotels located in Key West, Miami and Orlando, remained fully operational while sustaining minimal damage and business interruption from Hurricanes Helene and Milton, which impacted the Southeast in September 2024 and October 2024, respectively. Park expects approximately $2 million of Hotel Adjusted EBITDA disruption from the hurricanes, with minimal financial impact in the third quarter of 2024.
Balance Sheet and Liquidity
Park's current liquidity is over $1.4 billion, including approximately $950 million of available capacity under the Company's revolving credit facility ("Revolver"). As of September 30, 2024, Park's Net Debt was approximately $3.5 billion, which excludes the $725 million non-recourse CMBS Loan ("SF Mortgage Loan") secured by the 1,921-room Hilton San Francisco Union Square and 1,024-room Parc 55 San Francisco, a Hilton Hotel (collectively, the "Hilton San Francisco Hotels").
As of September 30, 2024, the weighted average maturity of Park's consolidated debt, excluding the SF Mortgage Loan, is 3.4 years.
Park had the following debt outstanding as of September 30, 2024:
(unaudited, dollars in millions)
Debt
Collateral
Interest Rate
Maturity Date
As ofSeptember 30, 2024
Fixed Rate Debt
Mortgage loan
Hilton Denver City Center
4.90%
March 2025(1)
$
53
Mortgage loan
Hyatt Regency Boston
4.25%
July 2026
125
Mortgage loan
DoubleTree Hotel Spokane City Center
3.62%
July 2026
14
Mortgage loan
Hilton Hawaiian Village Beach Resort
4.20%
November 2026
1,275
Mortgage loan
Hilton Santa Barbara Beachfront Resort
4.17%
December 2026
157
Mortgage loan
DoubleTree Hotel Ontario Airport
5.37%
May 2027
30
2028 Senior Notes
Unsecured
5.88%
October 2028
725
2029 Senior Notes
Unsecured
4.88%
May 2029
750
2030 Senior Notes
Unsecured
7.00%
February 2030
550
Finance lease obligations
