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Jun 30, 2023
Park Hotels Q2 2023 Earnings Report
Park Hotels' Q2 2023 results were reported, demonstrating improvements across the portfolio driven by key urban and resort markets and group business acceleration.
Key Takeaways
Park Hotels & Resorts reported a Comparable RevPAR increase of 5% compared to Q2 2022, driven by a 330 basis point increase in Comparable Occupancy and a nearly 1% increase in Comparable ADR. The company ceased payments on the $725 million non-recourse CMBS loan secured by the Hilton San Francisco Hotels and repaid the $75 million W Chicago – City Center mortgage loan. They have over $1.7 billion in liquidity.
Comparable RevPAR increased by 5% compared to the second quarter of 2022.
Comparable group revenues returned to 92% of 2019 levels, with forward bookings continuing to increase.
Strategic capital allocation initiatives included the commencement of a comprehensive renovation of the Casa Marina Key West and the repayment of the $75 million W Chicago – City Center mortgage loan.
The company ceased making payments toward the $725 million non-recourse CMBS loan secured by the two Hilton San Francisco Hotels.
Revenue by Segment
Forward Guidance
Park Hotels is revising its full-year outlook due to the continued underperformance of the two Hilton San Francisco Hotels.
Positive Outlook
- Ongoing strength in Park's Hawaii market
- Acceleration of group business
- Adjusted FFO excludes an incremental $15 million of default interest and late payment administrative fees associated with default of the SF Mortgage Loan, which is required to be recognized in interest expense
- Fully diluted weighted average shares are expected to be 217 million
- Includes $14 million of Hotel Adjusted EBITDA disruption from a full-scale renovation at the Casa Marina Key West, Curio Collection, which is expected to be completed in the fourth quarter of 2023.
Challenges Ahead
- Uncertainty surrounding macro-economic factors, such as inflation and increases in interest rates
- Supply chain disruptions
- Possibility of an economic recession or slowdown
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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