Park Hotels & Resorts Inc (PK) Q3 2025 Earnings Call Highlights: Navigating Challenges with ...

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RevPAR: $181, representing a 6% decline year-over-year, or 5% excluding Royal Palm South Beach. Total Hotel Revenues: $585 million. Hotel Adjusted EBITDA: $141 million, with a margin of 24.1%. Adjusted EBITDA: $130 million. Adjusted FFO per Share: $0.35. Liquidity: Total liquidity increased to $2.1 billion. Capital Investments: Over $325 million deployed across best-performing assets with returns approaching 20%. Dividends: Fourth quarter cash dividend of $0.25 per share, annualized yield of approximately 9%. Full-Year RevPAR Growth Guidance: Expected to be down around 2% at the midpoint. Full-Year Adjusted EBITDA Guidance: Revised to $608 million at the midpoint, within a range of $595 million to $620 million. Full-Year Adjusted FFO per Share Guidance: Expected to be $1.91 at the midpoint, within a range of $1.85 to $1.97 per share.

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Release Date: October 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Park Hotels & Resorts Inc (NYSE:PK) successfully extended and upsized its corporate credit facility, increasing total liquidity to $2.1 billion, which addresses 2026 debt maturities. The company is focused on high ROI reinvestments, deploying over $325 million across its best-performing assets with returns approaching 20%. Several major renovation projects are underway, including a $103 million renovation of the Royal Palm in Miami, expected to generate a 15% to 20% IRR. Park Hotels & Resorts Inc (NYSE:PK) has a strategic plan to divest its remaining 15 noncore hotels, concentrating ownership across 20 high-quality assets. The company reported strong performance in some core markets, such as Orlando and Key West, with RevPAR growth and strong group demand.

Negative Points

Third-quarter results were impacted by a decline in group demand and softer leisure and government demand, leading to a 6% decline in RevPAR. The extended government shutdown has negatively impacted group and transient demand, particularly in Hawaii, DC, and San Diego. Full-year RevPAR growth guidance has been adjusted to a decline of around 2% at the midpoint, reflecting weaker-than-expected third-quarter results. The company does not expect to declare a top-off dividend for 2025, reserving over $50 million based on the midpoint of updated FFO guidance. Hawaii's performance remains challenged, with slower recovery in Japanese visitation and ongoing renovation disruptions affecting results.

Story Continues

Q & A Highlights

Q: Can you discuss the expense performance given the lower outlook on 4Q RevPAR? How are you managing expenses to offset this? A: Sean Dell'Orto, CFO, explained that Park Hotels is aggressively managing expenses through productivity improvements, staffing adjustments, and procurement efficiencies. They have conducted deep dives into over a dozen properties to identify cost-saving opportunities. Additionally, they have benefited from a 25% reduction in insurance premiums and successful tax appeals in certain markets.

Q: Regarding the dividend, you mentioned not paying a special dividend in Q4. Is the quarterly $0.25 dividend just to meet tax requirements, or is there flexibility to adjust it for cash retention? A: Thomas Baltimore, CEO, clarified that the decision to maintain a 9% to 10% dividend yield was strategic, allowing Park Hotels to reinvest in strategic initiatives and pay down debt. The company has significant liquidity and no issues with cash flow, having returned $1.3 billion to shareholders over the past three years.

Q: What is your confidence level in selling noncore assets, and what needs to happen to accelerate these sales? A: Thomas Baltimore expressed confidence in selling noncore assets, noting that Park Hotels has disposed of 47 assets for over $3 billion since its spin-off. The company is actively marketing several noncore assets and has two under letter of intent. The challenging environment requires better visibility and less volatility to facilitate sales.

Q: How is the group booking pace for 2026, and are there any specific markets showing significant strength or weakness? A: Thomas Baltimore stated that excluding Hawaii and Royal Palm, group pace for 2026 is flat, with 2027 up about 4.1%. Strong markets include Signia Bonnet Creek, Hyatt in Boston, and Santa Barbara. The company is optimistic about 2026 due to expected lower interest rates, deregulation, and major events like the World Cup and Super Bowl.

Q: Can you provide insight into the impact of the government shutdown on your guidance and expectations for Q4? A: Thomas Baltimore noted that the guidance includes the impact of the government shutdown through October, which reduced room revenue expectations by approximately $2.5 million. The company believes the lower end of their guidance range accounts for the potential continuation of the shutdown, although they expect it to be resolved soon.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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