Park Hotels & Resorts(US:PK)2026-02-20 18:02Financial Data and Key Metrics Changes - In Q4 2025, RevPAR was approximately $182, reflecting a nearly 1% year-over-year increase, or nearly 3% when excluding the Royal Palm [20] - For the full year, RevPAR declined 2% versus 2024, while hotel adjusted EBITDA margin was 26.5%, a reduction of 130 basis points from the prior year [21] - Core hotel adjusted EBITDA margin improved by 230 basis points to 30%, contrasting with a 280 basis point contraction in the non-core portfolio [20][21] Business Line Data and Key Metrics Changes - The core portfolio delivered a RevPAR increase of 6% to nearly $216, significantly outperforming the non-core portfolio by nearly 1,500 basis points [20] - Fourth quarter group revenue for the core portfolio increased 13% year-over-year, with double-digit growth in banquet and catering revenues across key markets [11] - The Royal Palm renovation is expected to generate a 15%-20% return on invested capital, with projected EBITDA doubling from $14 million to nearly $28 million once stabilized [16] Market Data and Key Metrics Changes - The core portfolio outperformed the non-core hotels by an average of 480 basis points in 2025, reinforcing the company's strategic focus [10] - Hawaii is expected to be a significant contributor to earnings growth, with a multiyear recovery anticipated as demand trends improve [12] - New York delivered its highest fourth quarter group revenue in hotel history, up over 8% year-over-year, indicating strong market performance [14] Company Strategy and Development Direction - The company is focused on reshaping its portfolio by concentrating ownership in 21 core hotels with superior growth prospects and aggressively exiting non-core assets [6][8] - Over $120 million in non-core sales were executed at a blended multiple of 21x, with a strong track record of successfully recycling capital [7] - The company aims to complete its transition to a streamlined portfolio of high-quality hotels located in premium gateway cities and resort markets [18] Management's Comments on Operating Environment and Future Outlook - The U.S. economy remains on firm footing, with modestly higher growth expectations and easing inflation, which should support consumer demand [16] - The company remains cautious in its guidance due to potential geopolitical or macroeconomic volatility impacting booking decisions [17] - Management is optimistic about the setup for 2026, with anticipated demand boosts from major events like the World Cup [17] Other Important Information - The company invested nearly $300 million across the portfolio in 2025, with a planned reduction in capital investment for 2026 to $230 million-$260 million [22][24] - As of year-end 2025, liquidity was approximately $2 billion, including $200 million in cash and $1 billion in available capacity under the revolver [25] - The company returned a total of $245 million of capital in 2025, including $200 million in dividends and $45 million in share repurchases [32] Q&A Session Summary Question: Earnings trajectory for Hawaii properties - Management indicated that Hawaii properties should see mid-single-digit EBITDA growth, with RevPAR growth expected to be on the higher end of the 2% range [36][38] Question: Sequential change in Hilton Hawaiian Village performance - Management noted a 37% decrease in group pace for Q1, impacting expected performance despite a strong Q4 [45] Question: Non-core asset sales and potential for core hotel sales - Management emphasized a focus on non-core asset sales, with core hotels accounting for 90% of EBITDA and value, making them less likely to be sold [70][72] Question: Impact of World Cup on Miami property - Management expressed confidence in capturing demand from the World Cup, with the Royal Palm expected to open in early June [49][75] Question: Future growth and potential acquisitions - Management is optimistic about transitioning to an offensive strategy post non-core asset sales, with potential for acquisitions in the future [81][82]