Park Hotels & Resorts Inc. Q1 FY2026 earnings call

• Capital allocation: Productive quarter with disposition of non-core assets, continued execution of capital recycling strategy. Progress on Royal Palm Miami renovation with target completion in early June. - Operations: Core portfolio performance strong with various properties exceeding expectations. Bonnet Creek delivered 16% RevPar growth and 20% increase in hotel-adjusted EBITDA. Key West properties saw RevPar increase nearly 9%. Southern California properties had strong RevPAR growth. Hawaii seeing steady rebound post-renovations. - Dividend: Paid first quarter cash dividend of 25 cents per share, board approved second quarter cash dividend of 25 cents per share. - Balance sheet: Liquidity at end of first quarter was approximately $2 billion. Made progress on refinancing, expect to execute partial draw under delayed draw term loan in June and fully draw proceeds in September, with aim to repay maturities and enhance financial flexibility.

Core rev par increased 5.4% during the quarter, excluding Royal Palm South Beach Hotel which suspended operations. Leisure demand at resort properties drove RevPAR up 7.6% excluding Royal Palm, and corporate group demand helped urban hotels generate over 2% RevPAR growth. Non-core asset sales totaled $31 million for the year. Royal Palm South Beach Hotel in Miami is on track for early June completion with expected EBITDA to more than double upon stabilization. Hawaii resorts saw combined rev par increase of 2% across two resorts, with Waikoloa Village delivering 6% growth and Hilton Hawaiian Village REVPAR increasing 1% or over 4% when adjusting for storm disruption. Group revenue increased 5% year-over-year, excluding Royal Palm, with 2027 pace up 5.5% for the core portfolio.

• Q2 REVPAR expected to come in around midpoint of guidance range with roughly a 100 basis point drag from Miami. - For the year, increased REVPAR growth guidance by 50 basis points at midpoint to 0.5% - 2.5%, adjusted EBITDA guidance by $7 million at midpoint to $587 million - $617 million, AFFO increases by a penny at midpoint to $1.74 - $1.90 per share. - April REVPAR expected to be flat, but up 3% excluding Miami, with performance led by Hawaii, Bonnet Creek, Key West, and solid spring break leisure transient demand in Santa Barbara. - June looks very strong driven by strong group demand up nearly 10% in favorable year-over-year comparisons across key markets.

• Geopolitical tensions in the Middle East and potential impact on consumer discretionary spending and business investment sentiment. - Higher oil prices potentially impacting business and leisure travel. - Uncertainty around the World Cup impact on demand, especially in Miami.

Q: Update on disposition of non-core assets, status and market pushback; A: Remaining 12 non-core assets, 3 with Safehold dispute, work streams underway.

Q: Impact of World Cup on Royal Palm Miami; A: Target mid-June opening, no contribution in current guidance.

Q: Expense expectations move up; A: Outperformance top line led to higher expense growth.

Q: Hawaii assets trend; A: Expected to trend towards upper end of guidance range.

Q: Recovery in Hawaii, building blocks; A: Limited supply growth, investment in renovations, repositioning.

Q: Group pace improvement, markets with sequential improvement; A: New York, Hawaii benefited from disruptive forces.

Q: Hawaii market rotation, oil price impact; A: Potential rerouting, Hawaii could benefit.

Q: Transactional market, buyer pool; A: Smaller assets attractive to owner-operators, experienced investors.

Q: Royal Palm Miami EBITDA composition; A: Excited about ADR and guest experience.

Q: Long-term repositionings, next ones; A: Santa Barbara, Hilton Waikoloa, Doubletree in Crystal City, New York.

Q: Second quarter RevPAR, May tracking; A: May weakest, June strong.

Q: World Cup demand impact across portfolio; A: Mixed, two big markets in New York and Boston.

Q: Hilton Hawaiian Village REVPAR index share; A: Tracking 95 - 100, aiming for 110 - 115.

Q: OpEx guide building blocks; A: Labor and wage growth, insurance offsets.

Q: Hilton Seattle sale impact on REVPAR guidance; A: No impact.

Q: Ali'i Tower in Hawaii, returns and REVPAR; A: Expected 15 - 20% returns, aim to reposition and change customer mix