Park Hotels & Resorts Inc. Q4 FY2025 earnings call

2025 was productive year with progress on strategic priorities, reshaping and upgrading portfolio, exiting non-core assets. Core portfolio outperformed non-core in RevPAR. Fourth quarter core portfolio RevPAR up 3.2%, group performance strong. Hilton Hawaiian Village was strong performer. Royal Palm renovation making progress. 2026 outlook has macro factors supporting lodging environment, but guidance cautious due to potential volatility. Completed non-core sales in 2025, ongoing work on remaining non-core dispositions. Reinvesting in core portfolio to unlock embedded value.

Fourth quarter RevPAR was approximately $182, nearly 1% year-over-year increase, nearly 3% excluding Royal Palm. Core portfolio excluding Royal Palm had RevPAR increase of 6% to nearly $216, core hotel Adjusted EBITDA margin expanded 230 basis points to 30%. Core hotel Adjusted EBITDA increased 13% over prior-year period. Full year RevPAR declined 2% versus 2024, hotel Adjusted EBITDA margin was 26.5%. Royal Palm renovation was primary headwind. 2025 capital investment across portfolio was nearly $300,000,000, including ~$110,000,000 in fourth quarter. 2026 capital investment planned at $230,000,000 to $260,000,000, including completing Royal Palm redevelopment and Hilton Hawaiian Village Ali'i Tower renovation.

Full-year 2026 RevPAR growth range flat to up 2%, expense growth low single digits. Adjusted EBITDA forecast $580,000,000 to $610,000,000, Adjusted FFO per share $1.73 to $1.89. Q1 most challenging due to tough comps. Double-digit RevPAR growth expected at Bonnet Creek, Puerto Rico, San Francisco; low single-digit at Hawaii hotels. Royal Palm grand opening targeted for early June, but guidance doesn't assume World Cup benefit. Guidance excludes impact from potential 2026 non-core dispositions outside closed ones. Refinancing impacts included in guidance.

Geopolitical or macroeconomic volatility could drive uncertainty around booking decisions and impact short-term group pickup trends and international inbound demand, particularly from Canada. Some non-core asset dispositions may be uneven or face disputes. Labor costs could be a flex point in expense guidance with union renegotiations in New York.

Q: How think earnings could roll out over course of year at Hawaii properties?

A: Sean said Hawaii properties should be on higher end of RevPAR growth guide, mid-single digit EBITDA growth. Tom added about Japanese visitation green shoots.

Q: Comment portfolio-wise on pace of group revenues for 2026?

A: Thomas said portfolio-wide excluding certain areas up about 3% in 2026, core portfolio alone 4%-4.5% in 2027.

Q: Sequential for Hilton Hawaiian Village?

A: Sean said group pace down in Hawaiian Village in Q1.

Q: Refinement on Miami reopening estimate and World Cup demand?

A: Thomas said confident in Miami reopening in June, but World Cup makes selling and committing challenging.

Q: Color on quarterly cadence of growth in 2026?

A: Sean said Q1 weaker, Q2-Q3 higher end of range, Q4 closer to bottom due to group pace down.

Q: Flex on OpEx guidance and union renegotiation in New York?

A: Sean said low single-digit OpEx growth, labor growth mid-single digits offset by other factors.

Q: Level of interest in non-core asset sales and consideration of selling core hotels?

A: Thomas said there are buyers, core hotels generate higher EBITDA, goal to sell non-core in 2026.

Q: How quickly start to take bookings for Miami and pathway to stabilized EBITDA?

A: Thomas said confident in Miami opening in June, stabilized EBITDA to $28,000,000, couple years to get there.

Q: 2027 could be year of playing offense?

A: Thomas said would be excited to pivot to offense once non-core sold.

Q: Bucket type of buyers for non-core assets and labor contract in New York?

A: Thomas said plenty of equity and debt capital, buyers include various types; labor contract expected to get done.

Q: RevPAR range conservatism and areas of conservatism?

A: Sean said conservatism in Q4, Thomas added macro and market risks.

Q: Capital allocation and leverage target?

A: Sean said focus on deleveraging with non-core sales proceeds, investments in core projects.

Q: RevPAR uplift from World Cup and America 250 and RevPAR disruption from renovations?

A: Sean said 30-35 basis points RevPAR uplift, renovation disruption in 2026.

Q: Color on Hawaii renovation project and Ali'i Tower?

A: Thomas said committed to Hawaii, Ali'i Tower renovation with minor disruption, potential elevated price point.

Q: Out-of-room F&B spend growth?

A: Sean said out-of-room F&B spend strong, banquet and catering driving growth