TYSONS, Va., Aug. 02, 2023 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. (“Park” or the “Company”) (: PK) today announced results for the second quarter ended June 30, 2023 and provided an operational update.
Selected Statistical and Financial Information
References to Park's "Current" hotels and "Current" financial metrics include all 41 consolidated hotels owned as of June 30, 2023, including the 1,921-room Hilton San Francisco Union Square and 1,024-room Parc 55 San Francisco – a Hilton Hotel (collectively, the "Hilton San Francisco Hotels"). References to Park's "Comparable" hotels and "Comparable" financial metrics exclude the Hilton San Francisco Hotels.
(unaudited, amounts in millions, except RevPAR, ADR, Total RevPAR and per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2023 | 2022 | Change(1) | 2023 | 2022 | Change(1) | |||||||||||||||||||
| Current Hotels: | ||||||||||||||||||||||||
| Current RevPAR | $ | 183.46 | $ | 174.20 | 5.3 | % | $ | 171.33 | $ | 145.54 | 17.7 | % | ||||||||||||
| Current Occupancy | 74.4 | % | 70.5 | % | 3.9 | % | pts | 69.7 | % | 60.7 | % | 9.0 | % | pts | ||||||||||
| Current ADR | $ | 246.45 | $ | 247.05 | (0.2 | )% | $ | 245.94 | $ | 239.95 | 2.5 | % | ||||||||||||
| Current Total RevPAR | $ | 287.15 | $ | 273.43 | 5.0 | % | $ | 274.43 | $ | 230.32 | 19.2 | % | ||||||||||||
| Comparable Hotels: | ||||||||||||||||||||||||
| Comparable RevPAR | $ | 191.03 | $ | 181.45 | 5.3 | % | $ | 177.05 | $ | 154.32 | 14.7 | % | ||||||||||||
| Comparable Occupancy | 76.9 | % | 73.6 | % | 3.3 | % | pts | 72.2 | % | 64.4 | % | 7.8 | % | pts | ||||||||||
| Comparable ADR | $ | 248.33 | $ | 246.31 | 0.8 | % | $ | 245.38 | $ | 239.81 | 2.3 | % | ||||||||||||
| Comparable Total RevPAR | $ | 301.74 | $ | 287.38 | 5.0 | % | $ | 286.81 | $ | 245.75 | 16.7 | % | ||||||||||||
| Net (loss) income | $ | (146 | ) | $ | 154 | (194.8 | )% | $ | (113 | ) | $ | 98 | (215.3 | )% | ||||||||||
| Net (loss) income attributable to stockholders | $ | (150 | ) | $ | 150 | (200.0 | )% | $ | (117 | ) | $ | 93 | (225.8 | )% | ||||||||||
| Operating (loss) income | $ | (98 | ) | $ | 119 | (182.3 | )% | $ | (18 | ) | $ | 120 | (114.7 | )% | ||||||||||
| Operating (loss) income margin | (13.7 | )% | 17.1 | % | (3,080 | ) | bps | (1.3 | )% | 10.2 | % | (1,150 | ) | bps | ||||||||||
| Current Hotel Adjusted EBITDA | $ | 191 | $ | 202 | (5.7 | )% | $ | 341 | $ | 285 | 19.6 | % | ||||||||||||
| Current Hotel Adjusted EBITDA margin | 27.7 | % | 30.8 | % | (310 | ) | bps | 26.0 | % | 25.9 | % | 10 | bps | |||||||||||
| Comparable Hotel Adjusted EBITDA | $ | 192 | $ | 199 | (3.6 | )% | $ | 337 | $ | 294 | 14.6 | % | ||||||||||||
| Comparable Hotel Adjusted EBITDA margin | 29.9 | % | 32.6 | % | (270 | ) | bps | 27.7 | % | 28.2 | % | (50 | ) | bps | ||||||||||
| Adjusted EBITDA | $ | 187 | $ | 207 | (9.7 | )% | $ | 333 | $ | 289 | 15.2 | % | ||||||||||||
| Adjusted FFO attributable to stockholders | $ | 129 | $ | 139 | (7.2 | )% | $ | 221 | $ | 157 | 40.8 | % | ||||||||||||
| (Loss) earnings per share – Diluted(1) | $ | (0.70 | ) | $ | 0.66 | (206.1 | )% | $ | (0.54 | ) | $ | 0.40 | (235.0 | )% | ||||||||||
| Adjusted FFO per share – Diluted(1) | $ | 0.60 | $ | 0.61 | (1.6 | )% | $ | 1.01 | $ | 0.68 | 48.5 | % | ||||||||||||
| Weighted average shares outstanding – Diluted | 215 | 228 | (13 | ) | 218 | 232 | (14 | ) | ||||||||||||||||
| ________________________________________ | |
| (1) | Amounts are calculated based on unrounded numbers. |
Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer, stated, "I am very pleased by our second quarter results as we continue to benefit from ongoing improvements across our portfolio, especially in key urban and resort markets and the continued acceleration of group business. Comparable RevPAR for the second quarter of 2023 increased an impressive 5% compared to the second quarter of 2022, with Comparable Occupancy increasing 330 basis points and Comparable ADR increasing nearly 1% despite facing a difficult year-over-year comparison. Highlights during the quarter include a 14% increase in Comparable RevPAR across our urban portfolio driven by the New York Hilton Midtown where RevPAR increased over 26% and our Chicago and Washington D.C. hotels where RevPAR increased 23%, coupled with continued exceptional performance at our two Hawaii hotels with a RevPAR increase nearly 11% compared to the second quarter of 2022. Group performance also continues to accelerate, with Comparable group revenues for the second quarter of 2023 returning to 92% of 2019 levels, and forward bookings continue to increase, with 2024 Comparable Group Revenue Pace up 21% compared to the same time last year.
"During the quarter we continued to execute important strategic capital allocation initiatives, including the commencement of a comprehensive renovation and ROI repositioning of the Casa Marina Key West, Curio Collection, and the repayment of the $75 million W Chicago – City Center mortgage loan. Further, we made the difficult, but necessary, decision to cease making payments toward the $725 million non-recourse CMBS loan secured by our two Hilton San Francisco Hotels, a first step towards removing the hotels from our portfolio, which we believe is in the best interest of shareholders as it will meaningfully reduce our exposure to the city and strengthen our balance sheet considerably. We remain laser-focused on creating long-term value for our shareholders, and with over $1.7 billion of liquidity, we are better positioned to execute on our strategic initiatives, including reshaping our portfolio, investing in strategic ROI projects and opportunistically repurchasing stock and/or acquiring assets."
Additional Highlights
- In June 2023, ceased making debt service payments toward the $725 million non-recourse CMBS loan, which is scheduled to mature in November 2023 and secured by Park's two Hilton San Francisco Hotels ("SF Mortgage Loan"). As such, Park has received a notice of default from the servicer. Park is currently working in good faith with the servicer to determine the most effective path forward, which is expected to result in ultimate removal of the Hilton San Francisco Hotels from Park's portfolio;
- In June 2023, fully repaid the $75 million mortgage loan secured by the 403-room W Chicago – City Center;
- In June 2023, the ground lessor terminated the ground lease for the 182-room Embassy Suites Phoenix Airport hotel prior to its scheduled expiration in November 2031. Park received an early termination fee of approximately $4 million, and the hotel was removed from Park's portfolio upon termination. The Embassy Suites Phoenix Airport hotel contributed less than 0.2% of Park's 2022 Current Hotel Adjusted EBITDA; and
- In May 2023, suspended operations at the 311-room Casa Marina Key West, Curio Collection, for a full-scale renovation of its guest rooms, public spaces and certain hotel infrastructure, which is expected to be completed in the fourth quarter of 2023.
Operational Update
Changes in Park's 2023 Current ADR, Occupancy and RevPAR compared to the same periods in 2022, and 2023 Current Occupancy were as follows:
| Current ADR | Current Occupancy | Current RevPAR | Current Occupancy | |||||||||||||
| 2023 vs. 2022 | 2023 vs. 2022 | 2023 vs. 2022 | 2023 | |||||||||||||
| Q1 2023 | 6.7 | % | 14.1 | % | pts | 36.5 | % | 64.8 | % | |||||||
| April 2023 | 2.4 | 4.3 | 8.7 | 73.9 | ||||||||||||
| May 2023 | 0.7 | 6.1 | 9.8 | 73.2 | ||||||||||||
| June 2023 | (3.2 | ) | 1.3 | (1.5 | ) | 76.3 | ||||||||||
| Q2 2023 | (0.2 | ) | 3.9 | 5.3 | 74.4 | |||||||||||
| Preliminary July 2023 | (3.6 | ) | 3.2 | 0.7 | 75.9 | |||||||||||
Changes in Park's 2023 Current ADR, Occupancy and RevPAR for the three and six months ended June 30, 2023 compared to the same periods in 2022, and 2023 Current Occupancy for the three and six months ended June 30, 2023 by hotel type were as follows:
| Three Months Ended June 30, | ||||||||||||||||
| Current ADR | Current Occupancy | Current RevPAR | Current Occupancy | |||||||||||||
| 2023 vs. 2022 | 2023 vs. 2022 | 2023 vs. 2022 | 2023 | |||||||||||||
| Resort | (2.7 | )% | 1.0 | % | pts | (1.5 | )% | 79.8 | % | |||||||
| Urban | (0.1 | ) | 7.9 | 12.5 | 70.9 | |||||||||||
| Airport | 6.1 | (1.9 | ) | 3.5 | 76.1 | |||||||||||
| Suburban | 3.7 | 2.7 | 7.8 | 71.0 | ||||||||||||
| All Types | (0.2 | ) | 3.9 | |||||||||||||
