PK - Earnings call 3 2023 | Park Hotels & Resorts Inc.

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Operator

Greetings, and welcome to the Park Hotels & Resorts Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ian Weissman, Senior Vice President, Corporate Strategy. Thank you.

You may begin.

Ian Weissman

welcome, XXXX the Earnings and Resorts Hotels operator, Quarter Third Call. you, everyone, Park to & Thank

Before we considered begin, that federal many I laws. would like the securities made to comments today are forward-looking under of statements remind everyone

differ performance, update SEC, statements. and As subject and those statements obligated contained filed we could outcomes on that that identify from the cause in most SEC, expressed are to with materially which refer differ forward-looking Actual to publicly factors uncertainties are future and those reports to not these by results specifically cause described forward-looking statements. or statements. risks actual documents from may filings Form recent the forward-looking XX-Q risk Please in could XX-K our results future and revise Park the these numerous those to with results important from to expressed the differ

we such adjusted certain on discuss non-GAAP today's addition, information, call, EBITDA. financial In and will FFO as

find this in yesterday's You available website measure to our as financial as well the SEC directly release X-K supplemental at financial information in most our and reconciliations can information with GAAP earnings the comparable together on with filed pkhotelsandresorts.com. the

Hilton be otherwise basis with and a on stated, unless In Francisco on comparable hotel results we results San a X will hotels. all all will operating comparable current however, Additionally, excluding basis XX instances, a presented include some hotels. consolidated be the discussing view

and and color third balance as update Financial forward-looking results will allocation Officer, quarter an of liquidity. X capital review initiatives. our our morning, our guidance quarter Park's strategic hotels, Sean as Tom will Chairman provide status near-term and on the highlight This Chief update San additional on on Executive outlook our Chief performance provide our Baltimore, and well Francisco sheet Officer, third an and Dell'Orto,

the call will With to Tom. call prepared for turn the that, our over like would open to remarks, questions. we Following I

Thomas Baltimore

tremendous made very transformative allocation I'm including million at was for everyone. our our projects Marina and Creek Casa being progress $XX earnings and Ian, pleased the repurchasing Thank and third our you, solid entering stages productive quarter quarter. X.X QX and capital to against resorts shares and of ROI with expectations Park, another welcome, million final report during the Bonnet priorities exceeding

control But me court X nonrecourse on with operations, all related hotels pay our Francisco exclusive since CMBS be as the the the receiver appointed generated is the receiver the operating to begin to to income from all related hotels and expenses let payments completed The debt. operating trustee which full against of losses. week, has Last first has hotels. loan an the our cover update an used solely ceasing to well and for take a possession their of a debt the and San lawsuit all borrowers June filed Hilton as to

or losses the will operating operate additional between team. funds trust the Any required receiver and be hotels the addressed to

market and in receiver hotel's to the during has As interest, sell longer Park has or economic such, the the any receivership. operations. benefits hotels the The also burden power no

under of end contract by foreclosure XXXX. XXXX, hotels a in the by if conclude However, nonjudicial X, not will receivership the are the September

and its about me for let Now this be what means clear Park shareholders.

to First, payments will fund or Park be the while longer shortfalls loan. and or in no receivership capital foreclosure, working conclusion, stale its for a on for it through any obligated be

welcome will continue hotels Second, the to hotels Hilton operations guests, we to brand will continue in base. the at will line expect with employee services provide maintain which remain its standards intact. manage and all

but all throughout stakeholders with as a to no available or outcome continue make applications. timely receiver reasonable to ourselves committed the effectuate have special far, Third, request manner will thus to as financial for we servicer the receivership in we a

Fourth, adjustments details on our there which in will further guidance earnings provide his comments. will be some to Sean

that it exiting pay Therefore, determined am our of have of economic is appropriate Directors these gain to triggered by the Board a I and to interest pleased special we assets. Finally, that has the dividend taxable related October of XX, to January XXXX, XX, be as shareholders to per of declared report $X.XX dividend special as paid of a Board December the XXXX. on XXXX to XX, share record cash of

of XX% San the reduces just Francisco a leverage our removal As assets net materially from strengthens our X% balance metrics of with sheet our improving exposure a full and and from reminder, turn. to portfolio meaningfully these credit rooms nearly

we in firmly the still facing necessary X elongated of best but complicated exit, market this an and still these our interest Francisco San believe the is recovery, With hotels shareholders.

by our Now and Denver. strength a driven fundamentals, urban as resorts, mix results, favorable and ongoing such resorts quarter in Boston to group New accelerating third our key were at strong which York, markets Hawaii of turning

were comprehensive over a for year-over-year X% by in month, the increased hotel, solid driven facing suspended in results RevPAR operations which impressive excluding quarter produced a QX our an during September, renovation. July, Resort third XXXX increasing Casa, including portfolio August, were with where X.X%, Casa by in improvements and occupancy. increase comparisons followed difficult in throughout Marina our rate X.X% or a X.X% and both RevPAR, the X.X% increase Despite

quarter, in helped XX% while in strong million, portfolio to continued We performance. trends catering acceleration drive for year-over-year during improving to saw revenue $XX over the performance. comparable group to the banquet Turning group a results

pickup, adding or continue for revenue incremental room to XXX,XXX quarter. of over XXXX the third short-term approximately nights in solid see million $XX We

As XXX XXXX. to result, improved to period XXXX relative quarter, year a same the comparable nearly points group pace revenue XX% full during the basis increasing

period XX% Group track nearly group very on ADR to while XXXX. is trends remain exceed healthy, remains same comparable XXXX comparable pace XXXX group revenue the by demand to relative QX While X%.

by Performance trends. by key continues in few be exceedingly a demand, to once driven leisure and coupled strong strong group with in solid on Focusing Demand York. driven performance Hawaii again markets. New was Hawaii primarily domestic

to in generated resorts RevPAR X.X% last compared X Our the quarter growth year.

the by wildfires. not Fortunately, negatively hotels our were devastating Maui impacted

teams Waikoloa over delivered our of to XX% efforts difficult margins support X% hotel Maui. adjusted in the RevPAR given relief proud impressive and growth the hotel and their to on and the neighbors comparison. year-over-year Village, hotel provide At QX EBITDA and are year-over-year Island of We results Hilton

Overall, million in to incremental island. big including are to Village in business residents travelers Tower the completion to types. room from an quarter, the ADR to programs rooms the near multiphase the and in room premium fourth XXXX our report up a $X the the Hawaiian groups the wrap X,XXX newly Hilton $XX Tapa with expected commanding other pleased of December their during in quarter tower the renovation of Hotel, we the X moving At renovated

expected better accommodate to carrier And Honolulu into just inbound to in improving order travel sentiment XX% performance to as airlift, Delta during is of improving to launched our in Japanese X% recover strong more indicate the Conversations levels With first demand. from QX our Airlines trends internationally. to Hawaiian recent months daily airlift but from XXXX. the that in XXXX Airlines Japanese to a This with production partners travel even inbound X pickup also of while year. travel announced encouraging direct Japan to respect increase ANA Hilton and support with islands the and Village hotel service the willingness continues at

early Airbus seats from the expansion trips its record reaching XX. to starting has on pre-COVID a December, week in the levels. service weekly capacity increasing for and brought sets airline, XX between total over third aircraft Tokyo According to into seat this It AXXX XX,XXX round in route a and surpassing Honolulu per

forecasted, remain growth the strong ahead our year-over-year to growth we very quarter, fourth performing with RevPAR portfolio. of both top to expect Looking markets among hotels, ranking the our Hawaii low double-digit within across

our urban to performance. Turning

Our Hilton York hotel RevPAR comparable impressive results. urban delivered growth In during the particular, portfolio delivered our Midtown X% New quarter.

General XX% days quarter, X% a increase better-than-expected above a uplift into Assembly. at hotel sellout U.S. coupled during driven were open ADRs year-over-year achieved the fourfold the year's XXXX, with period. nearly the up strong or Overall, RevPAR compression group nights versus of XX% while Results this XX XXXX. prior translated trends, transient attendance group the by UN

York's helped very regulation have positive had the across impact city foreseeable short-term a the transient for In future. addition, count on positive supply New impact performance, has rentals down X% could trends reduced total with a on the strict across leisure city on room XXXX approximately in on also

the generate a fourth to anticipate on the QX the with ahead second solid in quarter, to we momentum Looking positive October pace hotel the revenues to revenue highest preliminary the with $XX history. gains million, continue property's monthly approximately of

macroeconomic briefly on Touching backdrop. the

any of transient witness impacting of economic the signs an We demand. yet Sunbelt of slowdown leisure to normalization demand have outside

double-digit by and markets, we improvement across D.C. in XXX very Hawaii. New trends comparable In the XXXX, several XX% from including into versus group heading revenue Chicago, backing San our nearly pace, group year, core XXXX point strong room convention basis Washington next Diego, quarter, Orleans, of are last by driven a fact, the nights encouraged increases

In to XXX,XXX citywide Chicago, a nights. XX% from to room nights record strong up expect we with calendar convention a benefit room

our year-over-year and While to nearly Hawaii in complex newly Peak slated in while and demand renovated expected of benefit easier international Bonnet convention build, a as will New room increase year are Marina or another Orleans, both comparisons to XXX,XXX XX%. West nights for reach Key year-over-year solid product. from Casa continues

of RevPAR Casa year. translating Marina EBITDA reminder, XXXX. a on million in point drag $XX for this performance basis XXX And As accounted to disruption

in Waldorf the to almost half at While the Orlando disruption second renovation of this rooms of $X million year. contributed

newly XX% We reopened December are Resort, of our room nearly introduce to to The renovated rooms in which and balance slated of thrilled Casa open its with partially XX. October. Marina upgraded inventory

$XXX year [ of group restaurant an facing meeting is offer experience renovation We square the refreshed and Bonnet throughout 'XX. spaces, books which will rate will our championship be to revenue 'XX, record newly include Which course. XXXX, an comprehensive public will of front in an nights The up we XXX,XXX are forecasted million additional complex. a El price introducing and renovation the guestrooms our mix feet even our golf dining on also complex, XXXX, of unparalleled the ocean island. Creek, At of wrap gains. new January for space, the Dorado resort on XX% February and in of the elevate average a revenue renovated comprehensive room ],

next portfolio positioned well group to In the our for about comparable with from benefit setup demand. and urban summary, year I'm improved optimistic

fully and with renovated ongoing coupled to Key in In Hawaii, from tailwinds West addition Orlando. in hotels expected both strength

addition, Hilton on We on effective X for growth track sector-leading In park the Francisco we and deliver year, exit earnings Hotels the to San changes meaningfully laser-focused the of the long-term executing remain for narrative. I remain our confident will to success. that, create value shareholder position With capital over priorities, internal turn growth and allocation will strategies Sean. we and call the are company our

Sean Dell'Orto

primarily driven with resulting X.X by occupancy are portfolio performance. $XXX, in RevPAR EBITDA third was our Hotel we the year. hotel was year-over-year XX.X% pleased of Overall, hotel approximately quarter quarter, QX the last while was above Tom. million, revenue a X% $XXX of adjusted representing points margin. gains $XXX during Thanks, percentage growth EBITDA adjusted for million

Margins on basis point Marina XX renovation accounted were natively factors, disruption including a the by impacted performance. for resort at which our a Casa over few drag portfolio

In addition which for additional to adjusted Hilton on drag an point hotel accounted Hotels, Francisco San our EBITDA basis margins. X XXX

margin hotel all approximately have XXXX EBITDA Excluding adjusted above quarter X levels. or the XX% basis results, exceeded XX for properties from points our would

of was million $XXX which per FFO both share $X.XX, adjusted EBITDA exceeded expectations. and our was QX adjusted

Hawaii preliminary RevPAR results by the above and month stands for up looks Overall, including growth once New to with comparable October urban Looking City, at the and with or strong, poor, driven results October XXXX. quarter, Boston be RevPAR $XXX of fourth our to X% X% preliminary Chicago. pace again on ahead York in

sheet. the Turning balance to

in XX-month end the Our cash. approximately Net current and $X.X debt was leverage basis is $XXX was billion of at $X.X a trailing net Xx. million billion, liquidity on QX including

these to X turn financial Hilton Excluding a leverage X.Xx. improved, has our half Francisco materially and metrics interest nearly over full a coverage Park turn improving from decreasing further with portfolio, assets, by just balance no under the by since with sheet net to San Hotels exposure X.Xx

of top quarterly special anticipate dividend QX cash dividend, approval per a paying XX, total midpoint Tom $X.XX $X.XX San Including and share subject annual respect we dividend our a expect paid to component we per quarter $X.XX share. which range to the share fourth of dividend, With Francisco of of is to share. earlier, $X.XX $X.XX $X.XX third the and on quarter our cash and per at in be share, October Board per an range. top-off of $X.XX the dividends per dividend the of discussed between off comprised

FFO which prior our share us $X.XX levels. Excluding with total guidance, yield The in on the to the of dividends special pandemic. per trading operations current midpoint ratio roughly the payout of adjusted to XXXX X/X per dividend, share we XX% XX% based will targeted dividend translates the line $X.XX back based bringing from between to to on

return and the repurchases $XXX In the for total, million XXXX year. to the $XXX Park executed is million in expected nearly shareholders of million dividend projected payments to in when capital million of XX $XXX nearly cumulative start of shares share considering since

Turning guidance. to

Let hotels San CMBS our to Francisco the me capture X in first address how expect debt financial we statements. and

As earlier, in the control Tom receivership will longer of noted the the we place, with operations hotels. no

upon. until Interest the be included The purpose the sold our fees data assets for placed and in Therefore, to were X are if P&L. the foreclosed hotel into this expense hotels operations receivership. continue or consolidated will assets not will they improved as sold. were be Treating

nonrecourse have when FFO. these we adjusted since we not will for financial add will obligations presenting back However, this debt, any expenses

this renovation EBITDA growth the for based $XXX RevPAR our portfolio comparable our to been of full adjusting projects, additional to comparable reflect to guidance of and Casa ranges year RevPAR with a expected to a has margin results both partially reflects disruption third range XXX With outlook Francisco respect $XXX we basis the X.X% to quarter Orlando and within guidance to year-end. fall are to adjustment $X a QX San X% are while range guidance Considering of treatment, on Marina from adjusted in when by an accounting or is of adjusted Waldorf adjusted EBITDA of range of to margin increased million an new XX.X% points million before hotels. $XXX for comparable offset XX.X%, expected $XXX which to improvement our and hotel of at our million better-than-expected conclude EBITDA, removal an year-over-year

CMBS to $X.XX by increase. of expense with $X.XX our new $X.XX per prepared Adjusted midpoint concludes This the increases buyback to of Francisco activity interest share guidance the QX contributing range add-back $X.XX a $X.XX FFO at of and San remarks. the

questions, We have for your to Q&A question, you and will please? now we the X open X may Operator, ask of follow-up. to we yourself that the line each first question address limit

Operator

Point. line coming the of [Operator question Dijkum first Instructions] is Van our from Compass Floris with

Floris Gerbrand van Dijkum

think I welcome this reports.

this on some little return of of here a Obviously, of think and the sort if you've bit but you maybe sitting on rest still already for beliefs comment plans guys. I cash. big you're validating some Tom, our could got a pile you capital outlined year, of

I Your position? in more Should we buybacks are handle particularly well balance sheet at capital now looking mean metrics are floor expect significantly the a you're better, you forward acquisitions looking we're and/or a if that as better of leverage. look at in terms market 'XX EBITDA, at going share

Thomas Baltimore

it's great Floris, a question.

Dell'Orto I eliminated you've think reiterate the Francisco not could say I us Sean believe I'd inside is June thing and that like San just the that. prouder counsel women want first right since and have Nancy we've to with and outside that really many I'll been to point differently, be and outcome, of General the made, it Counsel; we've find our I highlight noise and working and done and I men to around Wu, the the

both we glad NAV replacement discount So look for forward. Look, Park we and is as clear to significant costs. forward. as as at be There to path really trade we a to are tailwinds positive continue well a moving forward

forward, on us. So will to you a These sort tailwind find provide as can continuing renovations to look really we excellence. transformative operational of focus continue us for

about growth next strong a as year New having Chicago Hawaii, profile City, in year think There's York a citywides. record you

being And We're Hawaii record of again, record year. still with as a pointed we last Japanese another tailwind a optimistic have out strong. returning, year The Hawaii. year traveler sort year, a having we'll year had in as record out. look DC cautiously Orleans New this we but

So continue selling to we'll assets focus noncore well. as on

share those buybacks, today assets we're about reducing XX before. top better proceeds in at again, Our and in of But a for much value we'll for use And portfolio. we than account were X.Xx the ROI, leverage. position projects XX%

by and great that very problem answer Francisco. don't solved. this Park after very, has been a expect are to around San that proud, and the we there's changes team and question lot of work question every day That narrative done hopeful we on And been have

X no benefit moving San have the assets Over moving We of economic Francisco, We're finished. subject or burden forward. forward.

Floris Gerbrand van Dijkum

of sort That returning better can you Japanese than talked why seems some will will capacity that And you really well impact the softening and why Hawaii COVID -- on little is the outlook much your position also, when markets markets your on other you Florida. markets particularly going resort that in I that relative your your is Maybe pretty the South just in And mean a then But earnings to to tourists also portfolio some view? that the stabilize fact of and clear. talk the about of bit Hawaii, that forward? about Hawaii? of maybe other now, during maybe did remain be flight are how an

Thomas Baltimore

Hawaii certainly about Japanese. Japan, think XX% coming out visitors million out of to if itself XX% by you've U.S. inbound got improved, U.S. of million seeing of historically averaged you sort for XX% XX% us, and to but been about think of that speaks historically, XX you're the demand comes approximately it's about I anchored X to and that's growth international for

years the just There's and of in capacity that history. there, upscale, bit resort And particular travel it's Village, our certainly a pandemic more got not the it continues and in and ultra-luxury, Hilton upper little flight domestic U.S. XX-plus more Hawaiian out of been it's coming started afterwards. then

been And the vis-a-vis yen XX consistent So it's if visitation. where last look the was irrespective years, of a the over it's landmark. an you dollar, icon, it's

to last Japanese largely and increasing the a cited, you look the Tokyo what And And have were been can't replicate year. environment, with high-end years. XX,XXX adding there again, capacity. aircraft per week, city-like we X the again, capacity weddings ANA and in we're again, for exceeds we away having between now which traveler the sort about XXX averaging of having generally, COVID. Honolulu doing, encouraged third more AXXX that as adding is December, Delta, a as Japanese obviously, we early who irreplaceable out beaches particularly then Interesting again international,

think, the to in I I post think we've years of been X last couple kind COVID. X, of

see led have by And being just on all of who Bishop team, Debbie that Hilton find we an demand. we to a of right extraordinary continues tailwind. So mix the side, the

ultra mean it's So expect a we back certainly but we reversion a as well. the those different are about and without with believe what that excited of high-end size look acceleration it, visitation you other unique I that happened to all it's revenge be at And the see and luxury to even to positioning. of moderated some of you continue of sort the is the spend, And and we of given what U.S. if than that, visitors mean. Japanese

real didn't of We sort better. I now think modest looks off increases, but acceleration. for that were We get us lift that

Now we'll quarter. to if and fourth very here particularly the in low we accelerate. longer to stay as and traveler look we're Japanese more. beyond, digit continues They out spend the XXXX very, and double probably be But encouraged

look us of see in So forward. we for Hawaii another as leg that as growth we

Operator

from Smedes Citi. coming is question with next Rose Our

Bennett Rose

I Francisco. San from color incremental congrats. Great have guess, there. Congrats to

of million like combined looks pre-pandemic, the it Waldorf mid-$XX Creek, low kind did to EBITDA. Bonnet the of to in range kind back Going

maybe line EBITDA just get that expect where forward? that you Fair that and of would get to to think property of you talk the there? you kind to And about surpass kind time can at assume can going

Sean Dell'Orto

and work with pre-pandemic yes, right been this Sean. I Smedes, kind disruption floating doing. of would we've say, you're the I despite on that it's is some, would say, even been levels, through

So expect level. as clearly, level, I think, pre-pandemic we we that going think to forward, increases

touring facility fantastic. interest We've tremendous to Board the bring a our groups down last meeting them bit. tremendous from We've good amount of gotten there. site. were in We've week the amount added a actually around We there. of looks upgraded It with space

team D&C job design extra upgrading side. did the our has out job meeting incredible building the done Our of and really an a fantastic team the space wall

group team a the would the and moved going to say, from sort So great group we additional of there, with about certainly in generate more I forward about expect far house. XX%, business to product XX%

ultimately, And there. made a investment significant we

return. to expect We

So numbers you're specific you that I but there, won't imagine necessarily there. spending guide $XXX would million

would say, You're getting increase on growth. net a good I a good double-digit that and return EBITDA by,

Thomas Baltimore

Smedes, minus, would that the adding XXX,XXX I plus of space, feet other we the have groups. to square meeting comment the Bonnet manage on now by additional ability or thing capacity, multiple

course. X,XXX-room It's a it's Waldorf. championship a So XXX-room golf Hilton. a It's

the up, are got ballroom all to the space, over site, Again, ballroom, restaurants of We've new a and expanded might both add, the the large top renovation, a a amenities square guestrooms adjacent that a to ballroom I obviously, Waldorf, the a meeting, complete quite it on it's marvel is minus, plus site freshened XXX,XXX and extraordinary. public foot Waldorf. or quite is a which

And are we the trading confident. there, key or you a upside think at plus we have We're minus. about $XXX very that

I think Xx it's and in Four million fabulous not Seasons its that next that, $X.X a it's of door, at all better. key traded

we Sean that booking upside have gave are you, ahead pace bullish here we're very on as and of look as So are very anything And historically. far confident seeing seen forward. a we we the already

or So and we plus able because think of multiple XXX the be optionality tailwinds minus. it's be there'll acres, to real group to house

move the that story on again, bullish the we narrative growth see that, very So as of changing forward. another move as Park we forward, part and

Bennett Rose

moving forward Hawaii. positive of your kind Can before I comment like Any on some there It thoughts tower the just on to ask with new of there, of sounds going a a have you, and that's you forward. confidence on lot calls. Tom,

Thomas Baltimore

Yes.

and team extraordinary final Chief Morey, working an our entitlements are through Tom there. Officer continue job doing his We Investment the

for XX% mind, still when about keep adding excited X,XXX hotel a you rooms. are We Village, Hawaiian over And look occupancy Hilton XXX keys, in running another with it's minus. plus at or

went to will campus are excited we absorbed -- again, to Waikoloa, Hilton elevated continue the the we also worth clearly, noting think, and product another we as the half shrunk and X,XXX-room It's a than hotel it add to we're spin, that a and here. So be but that timeshare, hotel. HGV that today as as we more were of part profitable of XXX-room

to as keys We approximately well. XXX there add XXX to also ability the have

look So not the out being and minus when see but on to Hawaii, well. Oahu, we plus EBITDA, that XX% or current Island growth only Big as in we of also

for forward. part again, Park growth of So the as we story move

Operator

Our with is question next coming Evercore from the ISI. line Pfennigwerth of Duane

Duane Pfennigwerth

Maybe of were and out year. the year absorbed just to that renovation zoom the a work bit, ROI this all across portfolio, little kind and doing this you displacement you

the Sort be quantify across And the that in would what of total? XXXX? tailwind you how in would portfolio

Sean Dell'Orto

I say the Resort, our I'd the from cost when talked Bonnet and itself. about to think rebates million in a about disruptive to giving in with bucks Orlando think outlined more in think the earnings think away. disruption doing more standpoint, We we you staying million Creek going release guidance rooms, with Orlando in customers is just about few just on business Casa I we've specific a only but so that to just script the everything not the we're $XX noise

think easily we portfolio $XX you back disruption running or can So as for the an think of that kind year. million up we add so next of upwards think of to about in

we that which it. those assets. of have start expect renovations realizing of ahead we've great we I expectation into for and But we that growth the towards got I process, get folks ourselves, the on returns Clearly, we've said, outlined driving those on probably had double-digit but investment ramp seeing budgeting us like an would and to we've the made, I on forward think don't we got certainly again, too backdrop, want

Duane Pfennigwerth

And the you're you've not get walk but wildfires more to going since you the question, just of my forward. tragic seen guess trends Can is in Maui. ask another through them Hawaii going to

think kind some picked up away. you benefits you book from Do of Maui

quarter into year? characterize So you booking now down? fourth which was would there Like surge, patterns is next and how early settling a

Sean Dell'Orto

I Hawaiian mean, because in really wouldn't dislocation. so anything XX% couldn't say take I say we certainly we occupied. Village, wouldn't I -- were a dramatic. saw more We we

supply hundred a are we for for Big there a we did pick QX, about up group. could while groups from helped rooms, to that for of the So about of what Maui groups there. $X Island, couple hundreds We relocated looking which million

dramatic combined I markets seeing pace. other I'd just growth are X about XX%, into it wouldn't those And strong to assets think to that, that we continue we see go there it's necessarily say opting wouldn't be into And because I while Maui. a our up I in think Village Hawaii is you year next about organic talking people across besides XX% about about next go too, kind a group. the talk It's lot thing of traditionally box. is Hawaiian about year don't as say group, XX% It's

certainly well positive we they if and we of have think another the year. driver come through bring business. tailwind also next another the that demand revenue of from for channels into another that that as kind come and towers way marketing demand complex. of owners that that that their for parts timeshare as complex that is And So we that I'd say And having again, the in just stickiness generate through people are

Operator

coming is question from of next Our Asad Dany with America. Bank

Dany Asad

So with stabilized it's more looks it portfolio, out the a portfolio at lot San we're looking today. just now, of Francisco coming a like

portfolio know kind can would on I core much much left any yet, RevPAR read get early give operating leverage the in but that's growth we need how XXXX. of to So don't color on how you

Sean Dell'Orto

don't see the But process. year you're expenses at I stabilize. Yes. point. Danny, ourselves budgeting again, kind kind of to stabilize, looking things agree, this We're guidance we these for get getting want ahead, to next speaking of to any starting the to

range expenses you have at ranged year-over-year. couple you've look in X% last the to of quarters, X% If that the seen really

clearly, of that that operating be think, our through, as operators that we getting assume that kind itself are leverage. going with you we're make can I kind of really sure So works to just to working hard

cost the margins. of with growth, needs We well sure side are make we're of to as to growth the kind generation potential improve that as our matching revenue any continuing other any on kind of ideas rate

I think we've done an incredible job.

you team of job an feel we've terms in holding to And asset hold we line the Our XX% that flat we've wages. and realized down the kind a count, down still management of out, positions staffing really of levels of like taken good done of done I certainly we've XX% in holding if incredible think about job talked extensively. were

compares you the against about when I think there's past. of $XXX -- that discussed and in $XX we've look savings million the million

occupancy XX%, that still to that's we're in XX% there's pretty bit terms of I will a up. cost start occupancy to set of the range profitable again, a an you in where just think building get and and the to comes that zone that add. a at think bit little portfolio north But trying So you're a to some with of in occupy when back expense pretty of and profitable dealing be with little of variability I get

not margin HHV, case XXX over up ZIP above points. occupancy we is inflationary a I good. XXXX, So where it again study, the but well, great I in think is it's pretty Hawaii certainly Code about on is mean think up selling, I our rates basis where feel talking rates within was

in So the side. I been to manage cost speaks to done that work that's think, again, portfolio the the

Thomas Baltimore

rising impact sector in done team. costs expenses. profile, of as to And our as anybody side Sean's down you to at well other obviously to we've credit I way add think another help about the point, management our would is mitigate of asset I those when a lot think those of The that, Danny, keeping growth the

up strong with short-term again, of given month coming looks But when restrictions York down the the And front. best York New you've convention year New City, there. got with have second constraints XX%. record year looking And out, and Hawaii of different. again, next on history backdrop some York to in supply the demand going a on on New having rentals growth the Chicago very out in a City,

San New Orleans having Diego, a strong. D.C. near record being Boston, year,

as recover, to leisure And ultimately up none certainly to So and 'XX I know the look transient very of our business and where obviously we anchored in but as well. given have, beyond. resorts group positioning like portfolio strong as us the set diversified we continues to side on that's going obviously,

Dany Asad

the about completion. Creek are for to payouts. It we're and for Casa helpful. looks levels target talked we in then looking And Marina back Very prepared year-end dividend remarks, Bonnet pre-COVID like

look projects, So of should that, allocation, forward going think mix about how we ROI capital the just beyond needs capital afterwards?

Thomas Baltimore

historically We've million obviously, in $XXX-plus been that, say, pre-pandemic. range,

ramp little and payout Sean hope X/X. be can strategic a noted, this as as to And quite up are as that AFFO proud, see take advantage you ROI expect to well. we these that we We're shareholders pleased continue projects. obviously of in You'll

to for of we're is returning capital over as continuing $XXX forward. move you million value expect And return And year. on the focused laser that create this Park team in significant. we Sizable, it's can shareholders

Operator

Crow is Raymond from question with next Bill coming James. Our

William Crow

Couple of questions.

discussing guidance? that it First like of I don't tax looks of and of all, kind recall quarter. $XX back business property that benefited your to from benefits tune Was last prior assets the payments. in to Chicago million about

Sean Dell'Orto

prior guidance. I going No. Bill, in the be. are not what outcomes know certainly it to don't was

William Crow

Okay. And think? wondering, base. is I'm off question really challenges that philosophical then New XX% Orleans. group you Tom, just coming more that And cyclical but second is secular really, is low which facing of market, a And more up said a in next terrific, than is the that year, it's you

the Coast about and Miamis to just is X of it those of kind think Nashvilles markets as West whatnot. we and the markets, that's Austin something the new losing maybe the and And markets,

Thomas Baltimore

Bill. question, fair a It's

we based in points next XXX,XXX XXX,XXX, what of of New about nights in at on on and couple XXX,XXX citywides looking see XXXX a about is year. and Just clarification Orleans room

quarter, So I third no obviously, were citywide. a it's there base. as not say, would bad

was the softer it there. hence, reason So

complex It's market. a

Harrah's You to converting Caesars. do have the

around You investment done the there, have particularly water. being significant

always got, a about as You've market, been putting improvements. obviously, a million think, you the corporate in, convention It's in to new there, would been is leisure, in the center mall has its our $XXX convention the know, help. owner strong adjacent side. gap has certainly it's strong a been That historically, complex I

priced, But of you're we and that I referring not see have challenges is pro same labor I'm to. more encouraged it it's know other the doesn't in reasonably those growth as cities some

seeing optimistic. we're we don't long-term for see that's see, that hold in but we're cautiously we'll a us, I of certainly challenges whether the think So secular there the cities. And some other

William Crow

Yes.

for the think that, I've with said Okay. I this, Tom, congratulations been I'm ever this don't a on but default. while. I've doing And done.

Thomas Baltimore

appreciates. Bill, The team I appreciate that.

the working statement our get June I from prepared early November, in the As it June said right meetings it but necessary to outcome. to clock is and was where to and then around difficult follow-up just to to today get

take couldn't years And got Francisco wait and couldn't moving to just right know. X I to the and as Park, shareholders forward San hotels, Park recover. we our those It's to to will carry going many you continue outcome anymore, and for we afford think

Operator

Fargo. Dori next Wells question Kesten with The coming from is

Dori Kesten

you December the anything property Francisco just addressing to that EBITDA do and bridge guide you old then full Bill what Chicago EBITDA be the tax thought a November, new, Can just else? San noted, on would

Sean Dell'Orto

at we the San relative guidance the had to be prior gave about pretty So much August, we thought would in breakeven. Francisco

-- say around. impact wouldn't a for notable updating as this I it's really our impact go about we guidance an So think

In terms we not as I that not, did we of did our but guidance. Chicago, have in mentioned,

a certainly an up of 'XX of to was allowing us accruals that catch as our kind year well as appeal tax combination in year a this for prior property there. affected That

I which of the was the kind catch-up was to year, then $XX kind million Bill that about noted prior So -- total, of think of I about is was rest it tune million $X versus about and accurate. think

Dori Kesten

else nothing was there And then? Okay.

Sean Dell'Orto

No.

Dori Kesten

I engine and would you revenue leisure, growth And think it's transient between know business for your then be do Okay. next which 'XX, strongest group very early year? just but broadly

Sean Dell'Orto

with think mix -- was like I points about it addition, some less Again, us. now. our I pace mean, certainly, XXX for group we're We than is XX% basis about right 'XX. in

So I think, room improvement. again, for

from back Leisure, on are resort there. to Hawaii top Casa and coming strong a return the to that, looking given lot again, who back of of people the just discussions and excitement remains around

it. really kind set to of hard So

going I X in they're all think the right direction us. for

Thomas Baltimore

think of diversified X of a benefits it's Dori, I portfolio. the

group forward West, business recovering. again, Hawaii, and transient we a would say Key and the all for given urban through given I Orlando, given on So but strong outlined, to we've that also expect reasons bit to lean little be be leisure, the

be certainly X a little lag of slower. profile benefits So move would that think the little and But the I of growth that's a of real forward. perhaps bit Park we as

Operator

from question Markets. BMO next Klein Aryeh coming with is Our Capital

Aryeh Klein

your a CapEx the we Hotels. And next announced program year. has of CapEx for front, then in X for you? brand. future thinking alongside a about? broader many noted On peers notable you Is disruption headwinds anything that something should of Is the year the there be of the potential Park Hilton Obviously, this that

Thomas Baltimore

We great are good. program. programs with Hilton with behind Hilton CapEx in we about not Those them. front. well them, work any we broader are complexity that and a always Hilton of with partner, are discussions kind There's closely and show is on sound in discussions not and

will and Village. that as to Regarding sort design move wave forward. estate at that's X at ocean another spend of of Beach Hilton in South fabulous look we kind are looking Royal real We the of tower time construction are on our on Palm Hawaiian just next we ROI Resort Obviously, renovate that projects. beginning our additional team front,

to really in look right But very our of out basis anything be to I trying that there's disruption RevPAR minimize wouldn't points now. approximately. 'XX very material we XXX disruptive going careful that's We're as say the to

a little more, a Sometimes that be little will less.

to sure ROI that to but investments thoughtful tailwinds us to reinvest and very we continuing provide the communicated move making make great are we've as that But been we going where doubt these projects, we're for going have no forward strategic we're made be that money. the about

projects. at our keys also out as Santa in Barbara, there. property adding look for our looking great Hawaii certainly, And bigger expanding is our we a resort, example additional some We're of those

So portfolio years and significant, the next several opportunities that. excited over we're embedded about within pretty are the ROI the

Aryeh Klein

following up just And maybe on Hawaii.

Japan You Japan Are capacity translate going picking you noted that yet? bookings seeing [indiscernible] up seats forward. the into meaningfully pretty

Thomas Baltimore

we're low Again, quarter, fourth as Hawaii of kind double we digit. for looking being said, at

very answer also exciting. traveler team we be, comes back, So are of and the operators That with Hawaii another encouraged and works as yes, a will out. Japanese there we as look the and the is tailwind optimistic as again, tour for some

Operator

Our coming next from with question Barclays. Anthony is Powell

Anthony Powell

did that margins Question there York. which given on lot guess, of And out of pre is maybe I here. pandemic in get positive Shouldn't you can are you able that million property few, a about That exposure In of a reach with market? $XX more there, sort the cost property? exceed EBITDA New in be to mid-teens. any changes now that the structural savings of

Thomas Baltimore

'XX, will or I New pundits and the Yes, it's Anthony. year tell this York third back XX% largely great the thought, come be would be 'XX, quarter. back -- pandemic are in it think question, we 'XX. the up either back We're how right? 'XX, would a never you to we'll to pre-pandemic in

XX% the the probably think range. minus plus or is forecast in XX% I October to

in solid a fourth XX was in around or had sellout significant XX had we a it at but plus nights we're the year. And last year looking what and think the I quarter, increase Looking at third we for quarter, XXXX, minus. Xx

very encouraged. So we're

the said in of $XX was I which about as revenue south remarks had XXXX. think earlier, $X of in all-time I about May is think October have million, which Sean may I his prepared million about of high,

again, when to then at regulations, rental down And from about you you an X,XXX short-term reduction, supply I causing units. look Airbnb contracting, XX% in at look think, XX,XXX

different. very looks York New

asset Now XXXX is XXX%, 'XX again, we only But we we own market. encouraged in out. about very of is that Group for are believe, levels. as X look there I pace

there's you've cautiously business. we to York asset, it is X group continue big to optimistic, only improve opportunity an and and continue got can do and that We're New think that assets retool given to -- So handle efficiencies.

our outlook So is there encouraging.

Anthony Powell

other Are properties? few have markets. in Boston, dispositions then been view just you Francisco what's And this And year for on deals marketing next? There a asset some and on sales. maybe and San your

Thomas Baltimore

on disciplined easier under disciplined X not not and Morey, next $XXX pricing Yes. talented are this hard, by put certainly we'll done year. Tom Officer, we'll Investment Chief We're are confident on his and going early our on our we focus closed the here if on of to again, but selling to remain desperate transactions Those team that sale. it. board year, we're points seller. noncore, backdrop, but a working we're about million into be some end expectations. We've execute continue the certainly have And with Obviously, to

same billion, and but continue with But Francisco we including that's assets international playbook may to disposed now, $X.X laundry continuing the the see facilities. us now XX including Listeners for reshape and San sold to about forget portfolio. you'll have

the work And since that's We team cleaned reshaped up proud and significantly really been done. this great portfolio the spin. have the and of

Operator

next from Wedbush. question coming with is Kornreich Our Jay

Jay Kornreich

to back moment. a capital going allocation for Just

to it's internal had growth a maybe what an acquire a there's now guess, bit growth made story, the Francisco at to a while little you San And assets, desire removal Can lot story profile the is I demand and with from about and if provide and from a ROI. maybe looking market. an [indiscernible] to since be this as your been away you out comments talked a look any smooth desire external Hawaii so? and for You acquisition the ability just you'd stage? of

Thomas Baltimore

would high. be desire The ability and

at right price trading in at question these of where discount, the obviously, both we're the sort time. NAV. this point, is to huge at right cost think replacement given the I and

and assets are we or that, best Having buying reinvesting capital portfolio. our noncore selling The allocation in be actively said would decision our looking. back stock

a certainly there us, interest where to us. area more in of certainly of certainly, we're Lauderdale, would Clearly, is represented. market Nashville would we, pockets less and adding see for geographies I be You'll too, Florida, Miami

our be Scottsdale open what's work but certainly given happening and term the probably convention Phoenix is Austin well. the as near that's done, on would an in that that's list area we being center not certainly with the in to

think but high, that also is area Sunbelt I remains moderating. So

a up. a to And with reversion quite It's that run back the had mean. obviously,

But team grow if opportunity give priced situation. the the better do something are we right to doubt, this something is no in will pricing. the have And right deal to we for I think participate, hopefully, our that and capacity continues the business. in to underwrite,

Jay Kornreich

is you a a coming range your to get to? just And that you Appreciate I set that now that is comfortable guess you'd specific commentary. down mentioned, that leverage eyes leverage number like have with? low or level you're as do then follow-up, to on Or a as X.Xx, around

Thomas Baltimore

that for over Obviously, we were given from what But had in we said the of in us. we Xx. to getting certainly go that, As a X certainly target to the always happened. is spin, the obviously, pandemic Xx

are a outlook given as narrative next But the better. lot beyond as recent certainly we we And and to year feel EBITDA. net will we see growth actions Xx whole now the EBITDA think with and change we the move the and where for And the forward. change should in we low debt in

Operator

Bank. Our from is Chris coming next Woronka Deutsche question with

Chris Woronka

a drill people resort bit, I that Congratulations on could. how pricing of on a on happened group to kind lot and good that stuff mobilized. little leisure rates down are we past of focus mean wanted if this quarter. I

what of I -- about we like 'XX for groups, where pricing absorb are think able do -- to of [indiscernible] are that 'XX. I 'XX, more groups group before willing being the see 'XX, on world higher you we're to in you looks 'XX, and it's mean, the before. not on end optimistic to price

get as momentum a to to might more trying Just broad there. be sense how much

Thomas Baltimore

Yes.

I little the question think but you -- breaking about. got me Chris, Let a bit, were I up of your gist

'XX. in example, XXX% and to just probably range at look probably XXX% 'XX 'XX. XX% in look look that you ranges, room of give I'll at if of if if you So But at you to group, approximately as XX% nights rate, your the it's an

bring we're strong is the spend group people their evolving where sort need And hesitation. and or and are things not of celebrations, this more, willing are that's any hybrid incentives and look together. importance seeing rate world of getting to in whether meetings for So to the people

business of anything, we're see certainly hesitation. better flow-through better properties. of If seeing utilization our So that and lines is not we and another

a time group -- given get very large the last often. the not a group, you that hotel happening when and was constructed, saw So fact you

move the benefit that for see Park a real also as We portfolio forward. as we

Operator

from Green is coming Chris Darling question with Street. next Our

Chris Darling

how trended seen sense your the can that that's Labor momentum transient Tom, dig demand, what's happening past corporations? then Have what's move into any we Day? in positive you of And with you larger business as regard?

Sean Dell'Orto

Chris, better-than-expected this have I Labor think Sean. is out coming I results seen would mean, Day. we of

the of some of in kind negotiated stages of QX. do expectations I transient that of continue we'll coming outperformed think, business as being and get key ultimately early QX, corporate into components again, to I think we

XX% kind see dominated corporates come by now that Part certainly I think bigger to bigger down would looking think, corporate is, XX% negotiated understanding that's lived go That a of we're that wouldn't operators of it's and and still to relative said, back, smaller those that I to just 'XX. businesses to of some groups, they businesses of the more balance. just after just of they're now better larger if off attention this. pay focus our finding the They now by to subsegment really

to this to kind of move this kind of And so is this type that we're okay, of trying Or demand? permanent out through strategic shift to balance kind understand, just more is read of those of secular a really of segments.

seeing I travel the ultimately, I good through see quarter still rest So of end, the it as in we the think well. going think we're and

Chris Darling

very And maybe switching That's gears. Okay. helpful. then

to seller financing appetite Just asset use curious effectuate the to any sales? incremental what's

Thomas Baltimore

are it. grow, debt there. Obviously, if probably banks we don't the be of continues there's little that's you the regulatory Look, change. a to more it's out and going expect not have capital Could market, going at the credit them. But look right to it's accelerate to Look, be on pressure and ideal, to private but certainly in situation, pricey. open plenty we'd

done to a has able to We have down certainly more to But right that able it most over been asset. ability fair haven't particularly to a try and They even put got deal necessary. were had the be all any the necessary. going the who move problem of buyer recent were Boston, have find capacity. buyers point, that take that in or and you if larger to ability done the cash equity if necessary our it's and we getting to certainly deals But if have equitize find

Operator

this no at We time. have questions further

like closing remarks. over the to to pass Baltimore floor I'd So back for Tom

Thomas Baltimore

I time Well, all And hope changed for regarding narrative taking that Park. can today. you the thank we

We seeing forward many the There forward and not are excited look noise excited is for as profile behind of to Francisco to you move out We're us. a have we Maui. the about future. if San strong growth of of all you, Park in

Operator

and participation, Thank this for lines conclude you. and may teleconference. We today's thank you your disconnect gentlemen, Ladies your you time. at this does

Park Hotels & Resorts (PK) 2 Nov 232023 Q3 Earnings call transcript