Park Hotels & Resorts(US:PK)2024-02-28 20:03Financial Data and Key Metrics Changes - In Q4 2023, RevPAR growth was 4.1%, with full-year growth at 8.7%, exceeding guidance by 50 basis points [10][21] - Total RevPAR for Q4 increased nearly 5%, supported by an 8% rise in food and beverage spend, contributing an additional $3.5 million to EBITDA [10][11] - Adjusted EBITDA for Q4 was $163 million, with adjusted FFO per share at $0.52 [41][21] Business Line Data and Key Metrics Changes - Urban hotel portfolio saw RevPAR growth of nearly 16% versus 2022, with notable performance in New York, Boston, Denver, and Chicago [8][10] - Group revenues for Q4 were up nearly 9% year-over-year, with a sequential improvement of 12% over Q3 [34] - Hawaii's Hilton Hawaiian Village achieved a RevPAR increase of 5%, driven by group room nights and ADR improvements [12][15] Market Data and Key Metrics Changes - New York experienced a nearly 9% decrease in hotel supply since 2019, leading to increased compression room nights and a 30% RevPAR growth compared to 2022 [11] - Total air available seats into Oahu grew by 11% over 2022, with domestic seats up 5% and international seats increasing by nearly 30% [36] - Group revenue pace for 2024 is up 13% year-over-year, with expectations to exceed 2019 levels [34] Company Strategy and Development Direction - The company plans to sell non-core hotels with expected proceeds of $100 million to $250 million to reduce debt and reinvest in core properties [9][21] - Capital allocation remains focused on high-return investments, with nearly $300 million invested in 2023 [32] - The company aims to maintain a leverage ratio of 3x to 5x, targeting closer to 4x [116] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2024, citing a healthier U.S. economy and strong group demand in key markets [9][16] - The company anticipates continued strength in Hawaii, with inbound tourism from Japan expected to improve significantly [15][39] - Management noted that renovations in Hawaii will impact RevPAR but are expected to yield long-term benefits [45][20] Other Important Information - The company has over $1.3 billion in liquidity, including approximately $350 million in cash, and net debt has decreased by over $500 million year-over-year [17][41] - S&P Global upgraded the company's corporate credit rating from B to BB- [43] - The company plans to spend approximately $230 million to $250 million on capital expenditures in 2024, focusing on guest-facing areas [44] Q&A Session Summary Question: Insights on Hawaii's performance and future potential - Management is bullish on Hawaii's performance, noting strong leadership and ongoing demand, with plans for a sixth tower at Hilton Hawaiian Village [25][69] Question: Clarification on wage and benefits expectations for 2024 - Wage increases were in the 4% to 5% range last year, but specific forecasts for 2024 are uncertain due to ongoing negotiations [56] Question: Strength in group bookings and spending tendencies - Groups are getting larger, with a notable increase in convention bookings, and there is a strong propensity to spend outside of room rates [60][62] Question: Expectations for 2025 bookings - Group revenue pace for 2025 is currently at 97% of 2019 levels, with strong rate increases anticipated [83] Question: Market assessment and acquisition opportunities - The company is cautious about the current market, noting a bid-ask spread issue but remains open to opportunistic acquisitions [95][96]