PK — Park Hotels & Resorts Inc.

Summary of Park Hotels & Resorts Inc. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Fourth Quarter RevPAR: Approximately $182, a nearly 1% year-over-year increase (3% excluding Royal Palm).
• Core Portfolio RevPAR: Increased by 6% to nearly $216, outperforming the non-core portfolio by approximately 1,500 basis points.
• Adjusted EBITDA Margin: Core portfolio margin improved by 230 basis points to 30%, while non-core margin contracted by 280 basis points to 10%.
• Full Year RevPAR: Declined 2% versus 2024, with hotel Adjusted EBITDA margin at 26.5%, down 130 basis points year-over-year.
• Capital Expenditures: Nearly $300 million invested in 2025, with $110 million in Q4. Planned CapEx for 2026 is expected to be between $230 million and $260 million.

2. Strategic Updates and Business Highlights

• Portfolio Restructuring: Sold over $120 million in non-core assets at a blended multiple of 21 times, with a goal to reduce non-core exposure by year-end 2026.
• Redevelopment Projects: Launched a $108 million renovation of the Royal Palm South Beach and made significant upgrades to properties in Hawaii and New Orleans.
• Operational Performance: Core portfolio showed strong performance, particularly in group revenues, which increased 13% year-over-year in Q4, driven by convention demand in key markets.

3. Forward Guidance and Outlook

• 2026 RevPAR Growth: Guidance set at flat to up 2%, with low single-digit expense growth expected.
• Adjusted EBITDA Forecast: Projected between $580 million and $610 million for 2026.
• Challenges in Q1 2026: Anticipated to be the weakest quarter due to difficult year-over-year comparisons, particularly in New Orleans and Miami, which are expected to drag RevPAR down by 450 basis points.

4. Bad News, Challenges, or Points of Concern

• Royal Palm Renovation Impact: The ongoing renovation is expected to create disruptions, contributing to a 300 basis point RevPAR impact in the first half of 2026.
• Geopolitical and Economic Uncertainty: Potential risks from macroeconomic volatility and international travel recovery, particularly from Canada, could affect booking trends.
• Labor Cost Pressures: Anticipated mid-single-digit growth in labor costs due to upcoming union negotiations in New York, which may impact overall operating expenses.

5. Notable Q&A Insights

• Hawaii Properties: Despite challenges from the convention center closure, management expects mid-single-digit EBITDA growth for Hawaiian properties, with some recovery anticipated in Japanese visitation.
• World Cup Impact: Estimated to contribute 30-35 basis points to overall RevPAR growth, primarily benefiting the Hilton Midtown in New York.
• Asset Sales: Management remains committed to selling non-core hotels, with a focus on expediting these transactions to reduce leverage and improve financial flexibility.
• Future Capital Allocation: Emphasis on deleveraging through non-core asset sales, with potential for future acquisitions if leverage targets are met.

Overall, Park Hotels & Resorts Inc. demonstrated solid operational performance in Q4 2025, with strategic initiatives focused on portfolio optimization and redevelopment. However, challenges remain, particularly regarding renovations, economic uncertainties, and labor costs, which could impact performance in 2026.