Park Hotels & Resorts Q2 Earnings Call Highlights

Park Hotels & Resorts exceeded second-quarter expectations, with comparable RevPAR up nearly 7% year over year, hotel adjusted EBITDA rising nearly 9% to $204 million, and adjusted FFO reaching $0.70 per share. Strong group and leisure demand, especially in Hawaii, Florida and Key West, drove the performance. The company raised its full-year outlook, now expecting RevPAR growth of 3% to 4.5%, adjusted EBITDA of $617 million to $637 million, and adjusted FFO of $1.90 to $2.00 per share. July RevPAR increased 8.5%, supporting expectations for third-quarter growth near the upper end of guidance. Park reopened the redeveloped Royal Palm South Beach and expects its EBITDA to potentially double after stabilization, while continuing to sell non-core assets. The company has disposed of 10 of 19 targeted hotels for nearly $200 million and plans to refinance major debt, including the $1.27 billion Hilton Hawaiian Village mortgage. Park Hotels & Resorts reported second-quarter results that exceeded its expectations, driven by stronger group and leisure demand, particularly at resort properties in Hawaii, Florida and Key West. The company raised its full-year RevPAR, adjusted EBITDA and adjusted funds from operations guidance following the performance and a strong start to the third quarter. Chairman and Chief Executive Officer Thomas Baltimore said comparable RevPAR rose nearly 7% year over year excluding the Royal Palm South Beach, which was under redevelopment for much of the period. Growth accelerated through the quarter, from about 4% in April to 5% in May and more than 11% in June, he said. Resort RevPAR increased more than 9% excluding Royal Palm, while the urban portfolio posted nearly 4% growth. Baltimore attributed the results to group demand, higher-rated leisure travel and the company's investments in renovating and repositioning assets. Hawaii RevPAR rose about 9% year over year, supported by leisure demand and in-house group activity. Hilton Hawaiian Village was a standout, with RevPAR increasing nearly 12% and EBITDA rising more than 13%. The property ended June with a RevPAR index of 117, a four-point improvement from June 2024, Baltimore said. Hilton Hawaiian Village recorded 98% occupancy in July, nearly 700 basis points above the prior year, while preliminary July RevPAR rose more than 6%. Baltimore said recently renovated Rainbow and Palace Towers have generated stronger guest demand and rate premiums. The company plans to begin a roughly $100 million renovation of the 348-room Ali'i Tower at Hilton Hawaiian Village during August, with completion expected early next year. In Florida, RevPAR rose 13% at the Bonnet Creek complex and 10% at the company’s Key West properties. The Waldorf Astoria Orlando and Signia by Hilton Orlando Bonnet Creek posted RevPAR growth of nearly 15% and 12%, respectively. Waldorf Astoria Orlando food-and-beverage revenue exceeded the prior year’s record by 24%, according to Baltimore. Casa Marina in Key West led its market with RevPAR growth of more than 14%, while food-and-beverage revenue increased 36%. Baltimore said the property’s repositioning and restaurant enhancements helped lift its RevPAR index by more than eight points to above 120. Among urban hotels, Washington, D.C., posted nearly 17% RevPAR growth on higher government-related demand. Chicago RevPAR increased nearly 12% on group and transient demand, while Hyatt Regency Boston recorded nearly 9% Rev.