On July 31, 2024, Park Hotels & Resorts Inc (PK, Financial) released its 8-K filing for the second quarter ended June 30, 2024. Park Hotels & Resorts Inc (PK) owns upper-upscale and luxury hotels with 23,428 rooms across 39 hotels in the United States. The company also has interests through joint ventures in another 2,665 rooms in four U.S. hotels. Park was spun out of narrow-moat Hilton Worldwide Holdings at the start of 2017, so most of the company's hotels are still under Hilton brands. The company has sold all its international hotels and many of its lower-quality U.S. hotels to focus on high-quality assets in domestic gateway markets.
Performance Overview
Park Hotels & Resorts Inc (PK, Financial) reported a net income of $67 million for Q2 2024, a significant improvement from a net loss of $146 million in Q2 2023. The company achieved an earnings per share (EPS) of $0.30, surpassing the analyst estimate of $0.28. However, the reported revenue of $692.98 million matched the estimated $692.98 million.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Comparable RevPAR | $194.90 | $191.03 | 2.0% |
| Comparable Occupancy | 77.1% | 77.0% | 0.1% pts |
| Comparable ADR | $252.90 | $248.33 | 1.8% |
| Net Income (Loss) | $67 million | $(146) million | 145.9% |
| Adjusted EBITDA | $193 million | $187 million | 3.2% |
Operational Highlights
Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer, stated,
I am pleased with our second quarter results as the strategic investments we made in Key West and Orlando continued to bolster our performance, coupled with strong group and leisure demand trends at our hotels in Boston, Miami and New York, resulting in Comparable RevPAR growth of 2% compared to the second quarter of 2023."
Park Hotels & Resorts Inc (PK, Financial) saw improvements in demand as business travel accelerated and group demand continued to witness ongoing strength at its resort hotels and certain urban hotels. The company reported a Comparable RevPAR growth of 2% year-over-year for Q2 2024, driven by increases at its resort hotels of over 2% year-over-year.
Balance Sheet and Liquidity
Park's current liquidity stands at nearly $1.4 billion, including approximately $950 million of available capacity under the company's revolving credit facility. As of June 30, 2024, Park's Net Debt was approximately $3.6 billion. The company successfully refinanced its $650 million of senior notes due in June 2025 with proceeds from the issuance of $550 million 2030 Senior Notes and a $200 million 2024 Term Loan.
Capital Investments and Dividends
Park expects to incur approximately $270 million to $290 million in capital improvement costs during 2024, with $51 million spent during Q2 2024. Key upcoming renovations include projects at Hilton Hawaiian Village Waikiki Beach Resort and Hilton Waikoloa Village.
In June 2024, Park repurchased nearly 1.7 million shares of common stock for a total purchase price of $25 million. The company also declared a third quarter 2024 cash dividend of $0.25 per share, to be paid on October 15, 2024.
Conclusion
Park Hotels & Resorts Inc (PK, Financial) demonstrated a strong financial performance in Q2 2024, with significant improvements in net income and EPS. Despite matching revenue estimates, the company's strategic investments and strong demand trends have positioned it well for future growth. Investors and stakeholders will be keenly watching how Park continues to navigate the evolving market conditions and leverage its high-quality assets for sustained profitability.
Explore the complete 8-K earnings release (here) from Park Hotels & Resorts Inc for further details.
