Park Hotels & Resorts Inc. Q4 FY2024 earnings call

• Portfolio Performance: 2024 portfolio exceeded top-line and bottom-line expectations, with divestment of 3 non-core hotels improving 2024 RevPAR by $3 and EBITDA margin by over 30 basis points. - Capital Allocation: Plan to be more aggressive with disposition efforts targeting $300 to $400 million in non-core asset sales to improve portfolio quality and pay down debt. - ROI Projects: Bonnet Creek and Casa Marina redevelopments delivered strong results, with plans to reposition Royal Palm Resort in Miami with a $100M investment, expected to double EBITDA once stabilized. - Operations: Ended Q4 on a solid note with strong demand pickup post-presidential election, and operational transitions at 6 hotels, including converting 3 to franchise models.

Orlando: Bonnet Creek Resort saw RevPAR increase 17% in 2024, with Q4 RevPAR up nearly 30% driven by strong group and leisure transient demand. Key West: Casa Marina Resort had RevPAR increase almost 29% since 2019, with Q4 RevPAR up 77%, and a $120 ADR premium in December. Urban Markets: New York Hilton had Q4 RevPAR up 3.5% with group room nights up 17%, and Hilton Chicago saw RevPAR growth nearly 15% with EBITDA margin improvement. Hawaii: Hilton Hawaiian Village was negatively impacted by a 45-day labor strike and renovation, while Hilton Waikoloa expected a sharp rebound in group production in 2025 with group revenue pace up nearly 70%.

• RevPAR: 2025 guidance is 0% to 3% top-line comparable RevPAR growth, excluding Miami improves to 2.6% at midpoint. - Adjusted EBITDA: Forecast to be in the range of $610 million to $670 million. - CapEx: $75M for second phase of guest room renovations in Hawaii and $31M for phase two in New Orleans. - Dividend: $0.25 per share declared for Q1, with a 7.5% to 8% yield at current trading levels.

• Market Uncertainty: Impact of new administration policies on hotel demand. - Disposition Execution: Challenges in selling non-core assets as targeted. - Renovation Disruption: Impact on operations and RevPAR during the Royal Palm Resort renovation, with expected $17M EBITDA disruption in 2025.

Q: Floris Van Dijkum asked about deploying capital from non-core asset sales, including ROI projects vs share buybacks.

A: Tom Baltimore said they'll use proceeds for core portfolio investment, debt paydown, and opportunistic share buybacks.

Q: Duane Pfennigwerth asked about Hawaii's performance and EBITDA conversion from group pace.

A: Tom Baltimore discussed Hawaii's demand recovery and Sean Dell’Orto explained group pace translating to EBITDA with offsetting transient impacts.

Q: David Katz asked about Royal Palm Resort's positioning in Miami.

A: Tom Baltimore explained it's an upper upscale lifestyle hotel to tuck under high-end competitors.

Q: Smedes Rose asked about Bonnet Creek's stabilization and upside.

A: Tom Baltimore expressed bullishness on Bonnet Creek with continued growth.

Q: Chris Woronka asked about Chicago W Hotels rebranding and transaction market.

A: Tom Baltimore said rebranding gives optionality and expects improved transaction market.

Q: Jay Kornreich asked about 2025 EBITDA range and Q1 performance.

A: Sean Dell’Orto said it's based on operational potential and conservatism in the slower Q1 start.

Q: Robin Farley asked about Royal Palm renovation disruption and Q1 Easter shift.

A: Sean Dell’Orto explained renovation disruption and Easter shift impact.

Q: Dori Kesten asked about Hawaii renovations offsetting RevPAR and operating cost growth.

A: Sean Dell’Orto said renovations lap each other and operating costs are mid-single digits offset by other factors.

Q: David Hargreaves asked about debt access and leverage policy.

A: Tom Baltimore said no immediate debt access need and leverage goal is 3-5 times.

Q: Ari Klein asked about Royal Palm disruption reconciliation and 2025 guidance conservatism.

A: Sean Dell’Orto explained disruption as carrying costs and guidance as realistic due to early year predictability.