Park Hotels reports strong Q4 growth in Hawaii and Cities maintains 2023 outlook

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Today, Park Hotels & Resorts Inc. (referred to as “Park” or the “Company”), listed on the NYSE under the symbol PK, shared an update on its operating trends for the fourth quarter.

“I am incredibly pleased with the strength of our portfolio as operating trends remained very solid in both October and November. Results were once again driven by improvements across our urban portfolio which delivered year-over-year 10% Comparable RevPAR growth during the first two months of the quarter. Business travel accelerated in Boston, Chicago, New York and Denver, in addition to continued upside from group and leisure business at our Hawaii hotels with year-over-year RevPAR gains exceeding 9% in October and 14% in November. Additionally, we are near completion on our transformative renovation projects including at our Bonnet Creek and Casa Marina Key West, Curio Collection, properties which we expect to drive solid performance in 2024. And finally, we remain laser focused on creating long-term value for shareholders as evidenced by the over $630 million of capital we are returning to shareholders in 2023, including over $350 million, or $1.70 per share, of dividends declared during the fourth quarter. As we look ahead to 2024, we are excited about our growth prospects. Our reduced market exposure to San Francisco helps to change the narrative for the company and we remain well positioned to execute on our strategic growth priorities with $1.3 billion of liquidity expected to be available following the payment of our fourth quarter and special cash dividend,” said Thomas J. Baltimore, Jr., Chairman and CEO of Park.

Operational Highlights:

• Park’s hotels in Hawaii continue to show strong performance, with a 9.3% increase in RevPAR in October over the previous year, and a 14.5% increase in November.
• The urban portfolio of Park is on a robust recovery path, with a 9.1% rise in Comparable RevPAR in October and an 11.2% increase in November compared to the previous year. Notably, New York and Chicago led the performance in urban markets for November, with RevPAR increases of 15.1% and 14.4% respectively, followed by Boston, Denver, San Francisco, and Washington, D.C., all registering over a 10% increase on a Comparable basis compared to last year.
• The net income from hotels was $39 million in October 2023 and $17 million in November 2023.
• The Comparable Hotel Adjusted EBITDA margin for October 2023 saw a slight decrease of 35 basis points from the previous year to 32.6%, but showed an improvement of 53 basis points to 25.0% in November 2023.
• Park maintains its outlook for the full year 2023 concerning Comparable RevPAR, Comparable Hotel Adjusted EBITDA margin, Adjusted EBITDA, and Adjusted FFO per diluted share as previously announced on November 1, 2023.
• Third quarter of 2023, October 2023, and November 2023 saw the following in Comparable Occupancy, ADR, and RevPAR compared to the same periods in 2022:
• Q3 2023 vs. Q3 2022 showed a Comparable Occupancy increase of 2.7 percentage points, a slight decrease in Comparable ADR by 0.9%, and a 2.8% increase in Comparable RevPAR.
• October 2023 saw a 1.9 percentage points increase in Comparable Occupancy, a 2.3% increase in Comparable ADR, and a 4.9% increase in Comparable RevPAR compared to October 2022.
• November 2023 experienced a 2.7 percentage points increase in Comparable Occupancy, a 2.0% increase in Comparable ADR, and a 5.9% increase in Comparable RevPAR compared to November 2022.

Capital Expenditure Highlights:

• The nearly $230 million expansion and renovation of The Waldorf Astoria Orlando and Signia by Hilton Orlando Bonnet Creek at Bonnet Creek is set to complete in January 2024. With a 35% increase in 2024 Group Revenue Pace as of November 30, 2023, compared to last year and against a market experiencing a 5% decline, these hotels are poised for improved group business with an over 10% increase in ADR through 2025.
• In Key West, the Casa Marina Key West, Curio Collection’s renovation nearing completion, with all guest rooms available since December 6th and the new oceanfront restaurant, Dorada, expected to open in the first quarter of 2024. The hotel’s Group Revenue Pace is up 9% compared to 2019.
• The phased renovation of the 1,021-room Tapa Tower at the Hilton Hawaiian Village Waikiki Beach Resort is concluding this week.

Capital Return Highlights:

• On October 27, 2023, a special cash dividend of $0.77 per share was announced by Park’s Board of Directors following the exit from two San Francisco hotels. This dividend is payable on January 16, 2024, to shareholders of record as of December 29, 2023.
• A fourth quarter dividend of $0.93 per share, which includes the regular quarterly dividend of $0.15 plus a $0.78 top-off dividend based on 2023 results, was declared on November 30, 2023. Payable on January 16, 2024, to shareholders of record as of December 29, 2023, this dividend represents an annual yield of 8.4% as of December 19, 2023.
• No stock repurchases have been made by Park in the fourth quarter to date.

Forward-Looking Statements:

This press release includes forward-looking statements related to Park’s business performance, financial outcomes, liquidity, capital resources, and other non-historical facts. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Important factors that could cause actual results to differ materially are detailed, including but not limited to those in Park’s SEC filings. These forward-looking statements are not guarantees of future performance, and investors are cautioned not to place undue reliance on them.

Non-GAAP Financial Measures:

Park utilizes certain non-GAAP financial measures, such as Hotel EBITDA, Hotel Adjusted EBITDA, and Hotel Adjusted EBITDA margin, to provide a clearer understanding of its operating performance. These measures