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Park Hotels & Resorts Inc. (PK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered mixed results: Comparable RevPAR fell 1.6% YoY to $195.68 (down 0.6% ex-Royal Palm renovation), total revenue declined 2% YoY to $672M, Adjusted EBITDA was $183M, and Adjusted FFO/share was $0.64; GAAP diluted EPS was -$0.02 . Management cited strong urban markets and several resorts offset by Hawaii softness and the Royal Palm shutdown .
  • Versus S&P Global consensus, revenue was a small beat (+~$3M*), while EPS missed materially (consensus primary EPS +$0.18* vs GAAP diluted -$0.02); Adjusted FFO/share outperformed consensus ($0.64 vs $0.57*) as cost controls offset softer top-line . Values retrieved from S&P Global.
  • 2025 outlook: RevPAR guidance lowered by 150 bps at the midpoint; however, Adjusted EBITDA midpoint was raised by $2M and hotel EBITDA margin midpoint lifted 30 bps, reflecting expense discipline and lower insurance premiums . Group pace: Q3 down ~14% but Q4 up ~18%, setting up a stronger exit to year-end .
  • Strategic actions: Sold Hyatt Centric Fisherman’s Wharf for $80M at 64x 2024 EBITDA; permanently closing Embassy Suites Kansas City Plaza (insignificant EBITDA); CEO reiterated focus on disposing of non-core assets and reinvesting in core ROI projects (Royal Palm $103M renovation; Hawaii and New Orleans room upgrades) . CFO expects to secure commitments in Q3 to address 2026 maturities (HHV CMBS $1.275B; Hyatt Boston $123M) .

What Went Well and What Went Wrong

  • What Went Well
    • Urban strength and select resort outperformance: JW Marriott San Francisco Union Square RevPAR +17%; Hilton New York Midtown RevPAR +~10%; Waldorf Astoria Orlando RevPAR +~24%; Caribe Hilton Puerto Rico RevPAR +~18% .
    • Expense discipline: total expense growth just 40 bps YoY in Q2; insurance premiums down 25% annually (incremental ~$5M savings through year-end); asset management “deep dives” drove ~$24M bottom-line benefits YTD (GOP and taxes/insurance) .
    • Capital allocation: $80M Fisherman’s Wharf sale (64x 2024 EBITDA) and continued progress on non-core dispositions to fund high-ROI reinvestments like Royal Palm (target 15–20% ROI) .
  • What Went Wrong
    • Hawaii headwinds: Hawaii Comparable RevPAR -11.6% YoY (occupancy -830 bps) as inbound international travel lags; HHV still recovering from 2024 strikes, with combined Hawaii RevPAR expected to improve sequentially but remain soft in Q3 .
    • Q3 outlook: group pace -14% and softer leisure transient demand given macro uncertainty; July RevPAR preliminarily down ~4% including Royal Palm renovation impact; Q3 RevPAR expected to decline 4–5% .
    • Margin compression YoY: operating margin fell to 9.6% (-790 bps YoY) and Comparable Hotel Adjusted EBITDA margin declined 80 bps to 29.6% on lower Hawaii contribution and renovation disruption .

Financial Results

Results vs prior periods (oldest → newest)

MetricQ2 2024Q1 2025Q2 2025
Total Revenues ($M)686 630 672
Diluted EPS ($)0.30 (0.29) (0.02)
Adjusted EBITDA ($M)193 144 183
Comparable Hotel Adjusted EBITDA Margin (%)30.4% 24.9% 29.6%
Comparable RevPAR ($)198.93 177.67 195.68
Comparable Occupancy (%)77.4% 69.2% 76.5%
Comparable ADR ($)256.88 256.62 255.76

Q2 2025 vs S&P Global consensus (company-reported actuals vs consensus*)

Metric (Q2 2025)Consensus*ActualSurprise
Revenue ($M)669.0*672 +$3.0
Primary EPS ($)0.18*(0.02) -$0.20
FFO / Share (REIT) ($)0.57*0.64 +$0.07

Values retrieved from S&P Global.

Market/type segment snapshot (Comparable RevPAR)

SegmentQ2 2024 RevPAR ($)Q2 2025 RevPAR ($)
Urban190.83 196.45
Resort234.01 223.64
Airport161.27 151.89
Suburban153.05 151.30

KPIs and balance sheet

KPIQ2 2024Q1 2025Q2 2025
Comparable Total RevPAR ($)319.11 297.30 316.50
Adjusted FFO / Share – Diluted ($)0.65 0.46 0.64
Liquidity ($B)—~1.2 ~1.3
Net Debt ($B)—~3.76 ~3.67

Guidance Changes

MetricPeriodPrevious Guidance (June 2, 2025)Current Guidance (July 31, 2025)Change
Comparable RevPARFY 2025$185–$191 $184–$187 Lowered (midpoint -$3)
Comparable RevPAR ex-Royal PalmFY 2025$186–$192 $185–$189 Lowered (midpoint -$2)
Operating Income ($M)FY 2025$243–$304 $212–$263 Lowered
Operating Margin (%)FY 20259.5–11.6 8.4–10.2 Lowered
Adjusted EBITDA ($M)FY 2025$588–$648 $595–$645 Raised midpoint (+$2M)
Comparable Hotel Adj. EBITDA Margin (%)FY 202525.7–27.3 26.1–27.5 Raised midpoint (+30 bps)
Adjusted FFO / Share – Diluted ($)FY 20251.79–2.09 1.82–2.08 Raised midpoint (+$0.01)
Dividend ($/share)Q3 2025—$0.25 declared (payable Oct 15) Maintained run-rate

Assumptions include ~$17M Hotel Adj. EBITDA impact from Royal Palm renovation and exclusion of $54M default interest related to SF Mortgage Loan in Adjusted FFO .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Group demand & pacing2025 group pace up nearly 6% YoY exiting 2024 ; at end of Mar-25, 2025 group revenue pace +>1% and rates +4% Q3 pace -14%, Q4 pace +18%; rates +5% vs 2024; expecting stronger Q4 Near-term dip then improving into Q4
Cost controls & insuranceN/AExpense growth +0.4% YoY; insurance premiums -25% annualized; ~+$24M bottom-line benefits YTD from ops/taxes/insurance Positive operating leverage
Portfolio reshape/dispositions45 assets >$3B sold by 2024 Fisherman’s Wharf sold for $80M (64x); pursuing 18 non-core exits (ground lease givebacks noted) Active; de-risking
Hawaii recoveryQ4 2024 strike impact (Hawaii) with minimal 2025 expected impact Hawaii RevPAR -11.6% YoY; HHV regaining share; strong Q4 expected as comps ease; constrained supply supports LT outlook Sequential improvement, LT constructive
Capital investments/ROIRoyal Palm $100M planned; Hawaii & NOLA phases Royal Palm $103M underway (15–20% ROI); Hawaii/NOLA phase 2 in 2H25 Execution on plan
Balance sheet/maturitiesAddressed 2025 notes; liquidity ~$1.4B YE’24 Expect Q3 commitments to address 2026 HHV CMBS ($1.275B) and Hyatt Boston ($123M); optionality focus Proactive financing
Macro/tariffs/inboundN/ATariffs/inflation/geopolitics weigh on Q3 leisure; inbound Japan still below pre-COVID Mixed macro

Management Commentary

  • CEO: “I was encouraged by our second quarter results… urban portfolio generating a 3% increase in Comparable RevPAR… Waldorf Astoria Orlando RevPAR increased nearly 24%… Caribe Hilton… nearly 18%… offset softness at the Hilton Hawaiian Village…” .
  • CEO on dispositions/ROI: “Successful closing on the sale of the Hyatt Centric Fisherman’s Wharf for total proceeds of $80 million, representing a 64.0x multiple on 2024 EBITDA… investing this capital in our iconic portfolio, like the Royal Palm… transformative renovation… With liquidity of approximately $1.3 billion…” .
  • CFO: “Adjusted EBITDA for the quarter was $183 million and adjusted FFO per share was $0.64 both exceeding expectations… We are lowering our full year RevPAR forecast by 150 basis points at the midpoint… increasing our adjusted EBITDA forecast by $2 million at the midpoint to $620 million… FFO per share increases by $0.01 at the midpoint to $1.95” .
  • CFO on cost savings: ~$10M GOP benefits from asset management initiatives; ~$5M property tax benefits and $1M Q2 + $5M 2H insurance savings from 25% premium reduction .

Q&A Highlights

  • Guidance bridge and flow-through: Asset management deep dives, tax appeals, and insurance drove ~$24M bottom-line benefits to offset softer revenue; additional hotel-level deep dives ongoing in Q3 .
  • 2026 maturities plan: Park pursuing commitments in Q3 (banks plus potential Bonnet Creek mortgage in a second phase) to address ~$1.4B of 2026 maturities; objective is optionality and minimizing cost while keeping Hawaii unencumbered .
  • Dispositions pipeline: Despite a challenging market, management remains confident in achieving $300–$400M of 2025 non-core asset sales; $80M Fisherman’s Wharf completed; active discussions on several assets .
  • Hawaii recovery and demand: HHV recovering share; domestic/Canada offset some Japan weakness; combined Hawaii RevPAR down in Q2 but expected to improve sequentially and accelerate in Q4 as strike comps ease .
  • Royal Palm ramp: Opens May 2026; not expected to fully contribute in 2026 given timing; EBITDA expected to double to ~$27–$28M when stabilized (target by 2027) .

Estimates Context

  • Q2 2025 vs S&P Global consensus: revenue beat by ~$3M*, GAAP diluted EPS missed by ~$0.20 vs primary EPS consensus*, Adjusted FFO/share outperformed by ~$0.07* . Values retrieved from S&P Global.
  • Coverage depth: Q2 revenue consensus based on ~12 estimates*; primary EPS consensus based on ~5 estimates* (suggests limited EPS visibility). Values retrieved from S&P Global.

Key Takeaways for Investors

  • Expense discipline is the story: Despite lowering RevPAR guidance, Park raised the Adjusted EBITDA and hotel margin midpoints—evidence of sustainable cost actions (insurance, taxes, operating) that can support downside protection .
  • Near-term setup: Expect Q3 softness (group pace -14%, softer leisure) but Q4 reacceleration (group pace +18%, easier comps), a potential catalyst path into year-end if realized .
  • Hawaii is improving sequentially with strong Q4 ahead; longer-term, constrained supply and inbound normalization underpin a constructive multi-year recovery for HHV and Waikoloa .
  • Portfolio quality upgrade continues: Non-core dispositions (including ground-lease exits) and reinvestment in high-ROI assets (Royal Palm, Hawaii, NOLA) should lift blended RevPAR/margins and reduce structural volatility over time .
  • Balance sheet: Management targeting Q3 commitments to address 2026 maturities; successful execution would remove a key overhang and enhance flexibility for asset recycling/buybacks .
  • Trading lens: The quarter’s EPS miss vs consensus alongside improved EBITDA/margin guidance suggests investors should prioritize FFO/EBITDA and hotel-level KPIs over GAAP EPS, which is pressured by higher D&A and receivership interest that don’t reflect core cash earnings .
  • Watch catalysts: Q3 booking/RevPAR trajectory vs guide, Q4 group realization, disposition announcements toward the $300–$400M goal, Hawaii mix and share gains, and financing execution for 2026 maturities .
Notes: 
- S&P Global consensus values are marked with an asterisk (*) and “Values retrieved from S&P Global.”

Citations:

  • Q2 results, KPIs, guidance:
  • Q2 press release detail:
  • Q2 call remarks and Q&A:
  • Q1 2025 comparatives and trend:
  • Q4 2024 baseline and group set-up: