PK - Earnings call transcript Q3 2024 | Park Hotels & Resorts Inc.

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Operator

Ladies and gentlemen, good morning, and welcome to the Park Hotels & Resorts Third Quarter 2024 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 VP, Corporate Strategy. Please go ahead, sir.

Ian Weissman

Thank you, operator, and welcome, everyone, to the Park Hotels & Resorts Third Quarter 2024 Earnings Call.

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

subject the in these cause could forward-looking or not to expressed, these filings [indiscernible] described those results risks with statements. from we As statements uncertainties our future are revise and to differ that to numerous and update SEC, are publicly

to forward-looking the results may filed differ from statements. statements. Actual Please the performance, differ in refer Form XX-K with most outcomes and Park identify and future the forward-looking XX-Q, could that from results recent documents cause factors on those by to materially contained specifically those which the expressed SEC, risk actual important reports in

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

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

on otherwise presented results stated, operating basis. comparable will all be unless Additionally, a

Chief additional This strategic of results a Sean Officer, performance Park's quarter quarter Chief Baltimore, and Chairman and color provide dividend. Financial on our fourth Officer, third review will our third Dell'Orto, will our morning, Executive Tom provide initiatives. and quarter

Following our prepared remarks, we call for will open questions. the

the to Tom. over to call With that, would turn like I

Thomas Baltimore

August business quarter, factors growth certain Ian, pleased remain and in and in solid transitory quarter report and We fundamentals third demand that despite you, delivered Thank welcome, September. in I'm X.X% the everyone. healthy. markets another disrupted a RevPAR to

proud our responding priorities our grateful. of the challenges our presented to while And themselves I'm operators strong also demonstrates to and team performance very and that, capabilities those for portfolio's quarter. that and during various adapting of business execute Our

our Orleans increase strength healthy the contributed convention and across several helped New and and solid driven by some and and the growth continued portfolio. an offset This markets, strong throughout growth including urban RevPAR which highlighted markets in business calendars leisure Boston, diversification trends to collectively including was quarter, experienced leisure Results a group quarter. of were demand the combined transient markets, moderating in in which We to RevPAR Diego, resort generated XX%. Miami which Orlando, several Chicago, during XX% San further complemented trends by of core

positioned the pleased the Best projects are We leisure group results both in Nast our from and healthy Choice Astoria Waldorf the our West, with its has renovated and Key ninth redevelopment trends XXXX well been particularly in by ranked Orlando Awards recently to World. recent from of in Orlando which Reader's Condé for and benefit are where prestigious Resorts Traveler

Park's design which within embedded These strategic anticipate remain and portfolio, projects generate a reshape unlock several as returns. and will best-in-class accolades our and development we years to over value significant continue and to ability strive strong for focus the portfolio Park our highlight next expertise to we the

the potential such Santa Hawaii, have deliver returns capital, and we opportunities to actively ahead, similar exploring to key development Looking as Miami, completed additional invested Key projects. our in attractive on West, Barbara recently markets which are

rooms allowed resulting history respectively. prior previous Park's XXXX In in high the in during revenue the and solid period the XX% by and QX in RevPAR group at Orlando, the complex our the layer driven group meeting larger XXXX, groups simultaneously, production XX,XXX growth Creek several Bonnet quarter witnessed incremental platform as room group watermarks hotel of and an the the property's complex, surpassing banquet representing in highest nights over to

prior lapped our Casa the period. for resort Marina West, RevPAR displacement renovation Key quarter In XXX% year by hotel growth was driven

from Casa Marina occupancy. increase due the our to pace comprehensive to ahead positive Looking while effects anticipated reach growth of renovation expected are of to hotels in West ahead with Key an the revenue to both XXXX achieve to see projected QX, mid-single-digit continuing

remained strong to group growth operating continue Miami, In RevPAR as over witness demand we trends up healthy X%. trends and with leisure

momentum the this gains the the hotel October into continue post transient to robust demand mid-single-digit strong schedule RevPAR quarter to with fourth forecasted a convention and leisure expect driven We season. holiday in during by

and In room none nearly at a in catering New market prior the Hilton revenues Riverside hotel our hosted of X increase during during to and occupancy. increase quarter, the contributing driving the compared $X Orleans, million in almost group to citywide quarter events $X million in year, banquet an X-point revenue

performance convention hotel the capitalized held In Democrat group surge to healthy with in-house increase quarter XX% on calendar, drive in a RevPAR the recording an the the led in and expectations XX% citywide impressive in a August, convention events exceeding as revenue. room Chicago, including for Chicago Hilton

hotel. Boston, in the which Hyatt events growth nights, compression XX drive from helped RevPAR Finally, translating into market X Boston at our citywide benefited during quarter, XX% Regency to

increasing segment, pickup quarter incremental revenue XXXX revenue nearly XX% year-over-year in in in XXX,XXX the $XX approximately third revenue million $XX group revenue with X% is catering quarter, the X%. a revenue coupled for group year and quarter, quarter. pace of million for during group the the to accounting over nearly up recognized fourth XXXX of million banquet room to the nights strengthen incremental year, this of reaching strong continued with As $XXX group improvement to anticipated

mid- group West pace our last in Hilton while XXXX, XX% revenue pace gains double-digit upper led Francisco, resort at continues range, to and [indiscernible] be Denver, same Orlando, is nearly by at up time Looking to year. single-digit San Key up in versus the

currently further pace the with XXXX encouraged extending into also are XX%. up the future, windows booking We

X% tough QX of declined labor at impacted negatively from with Hawaii. several multiphase including our factors, Village, disruption combined both Hilton renovations disruption comparisons RevPAR X results by at hotels. at room by a Hawaii strikes [indiscernible] to at Turning Waikoloa, hotels year-over-year

cancellations, we the Japanese travel from decline XX% of severe disruptions in the Japan averaging pace month. Overall, flight encouraged over through July. by been improvement year-to-date quarter widespread these of further prior weather across to was a XX% inbound travel storms, from the travel inbound events by Japan have led during addition, travel which and In August, Japan to hampered in during X

From priorities and remain to at through in we capital assets the value. portfolio ROI deep asset recycle dispose while laser embedded also historically our focused our a unlock core capital investments strategic to buying discounts stock accretive value on perspective, significant of net allocation to back opportunistically noncore

sale Torrey During generated nearly EBITDA. in our continue and our the Sale gross million of Jolla of reshape $XX over we long-term on third X pro the La Airport, XXx enhance quarter, gross profile. rata represented share the Oakland assets, Hilton noncore portfolio July Pines composed the and to closed a growth Hilton Torrey multiple of Pines, proceeds of XXXX

by $XX our helped further our common stock approximately of during transaction unconsolidated Additionally, quarter improve were fund $XX to sheet million, proceeds to debt net while third repurchase of shares partially balance the with reduced million. used our X.X of balance million

RevPAR basis With fourth $X hotel respect annualized $X in XX to less $XX. late reporting Airport lease. years to of than a during quarter to months, the very impact the noncore a just XX Closure points nominal million XX result EBITDA basis. while trailing the closed to Oakland asset million adjusted a hotel, and is expected remains Hilton the positive approximately on adding earnings remaining permanently in RevPAR $X an August, a ground with loss in we on challenged Oakland hotel recognizing over with the hotel, market

Orleans while third New addition, $XXX at iconic commenced Hilton XXXX, Tower Super ahead In comprehensive Rainbow Village, Orleans, for at of XXXX. over Bowl is Riverside. by Main the in X the X rooms during renovations Tower expected X the in guestroom expected year the the and quarter, completed Hawaii February Hilton both be Palace QX the at renovation renovations be of of in we Waikoloa, Tower Phase million at QX completed of to of the to Hawaiian New Hilton Phase this

reimagined impact excited especially our are about have Hawaii. expected to on We in results, particularly rooms are the potential

Our recent back types ADR once other was Hilton X,XXX-room Tower and compared a to resort premium of it Village online. successful room Hawaiian significant renovation delivered [indiscernible]

related a time. year operators this which on unions Due surrounding negotiations RevPAR to impacts are guidance, Turning full at and to our we in position results EBITDA prior operating XXXX not into to uncertainties guidance. not between labor and the our and guidance the update are continuing factored

to of on the understanding are Once best agreements the in of will appropriate all operators a interest we have earnings toward continue the parties. a that better work an we impacts, reasonable financial update solutions have Our including provide been ratified, update guidance.

and RevPAR towards up I be we with third the the quarter. X.X% want continue we of core the demand in challenges end the emphasize business leisure despite both throughout trends balance the some portfolio XXXX to of faced the year-to-date to of strength of confident that

to be stock our to and XXXX, aggressively our to As renovation pruning noncore continue back our portfolio, development expected expect we and we to proceeds ahead common buy fund growing pipeline. look used

than our into is for we believe create closing, In capital acquisition value returns shareholders. at reinvesting of simply it better there back to our far no yields exceed that long-term portfolio use

With that, call over will I to turn Sean. the

Sean Dell'Orto

$XXX, X.X of have QX for points growth of occupancy the with basis Hurricane for and would the adjusting approximately X.X%. disruption XX portfolio RevPAR for roughly Helene percentage $XXX. year-over-year from was flat growth representing strike year-over-year Tom. Thanks, points rates been RevPAR gaining X.X% and at labor activity, When quarter

headwinds month RevPAR were the the portfolios. resort and Adjusting RevPAR by Similar which growth Hurricane points. strike basis activity a with holiday we disrupted for stemming disruption, month, activity the and by of elsewhere from October solid will has despite calendar certain additional offset ongoing for at relatively in shift the anticipate by majority flat Milton be XX impacted urban hotels roughly performance this for

was quarter for X.X% addition million, as in and was $XXX in a nearly revenue mostly revenue adjusted catering Hotel increase RevPAR banquet by X%. driven in strike nearly million and increased of XX.X% revenue the hotel Total year-over-year EBITDA $XXX by during negatively margin. of was of the a increased resulting F&B comparison that last received group-driven by quarter, third the X.X% to and grants the margin quarter hotel benefits relief third adjusted million in year. labor this property $X million EBITDA $X Note hurricane year tax disruption nearly and nearly impacted

these margin comparable been Excluding EBITDA adjusted year-over-year. have would hotel items,

$X With EBITDA Key we fully Overall, minimal to and business of impact estimate Hurricane of $X and Miami in and respect interruption. adjusted West, the for to in impact hotels our the remain located both Helene occurring from million disruption with roughly damage account while hotel total million to QX. operational Milton, most hurricanes sustaining Orlando

share, to top-off annual to-be-determined $X.XX component a with our per dividend, typical practice per a XX, third $X.XX subject we respect to approval accordance paid dividend, which October quarter is Board XX% cash in of year meet full plus dividend on fixed to targeting paying of adjusted With target. our a component our of of share comprised anticipate quarter and XX% to our FFO quarterly fourth our

our concludes remarks. This prepared

line the We will we first the please? Operator, question, have may [Operator now open Instructions] for Q&A.

Operator

question Instructions] [Operator of The line Rose first comes Smedes from from Citibank. the

Bennett Rose

Hawaii. more wanted I to about a just bit probably ask little predictably

You down X across the saw X% properties. RevPAR

second I down quarter went that think mentioned like call, you on a on in And the about had X% things your half. the second in to quarter. maybe talked few you X% more

of and you're to Hawaii could little more what But an aside next talk kind putting over forward of sort about for it quarters, seeing on the bit and a sort several strike? how you about just demand underlying were thinking basis of maybe going the you leisure

Thomas Baltimore

going a observations, Maui. you have was there. happened Smedes. what in think benefit of were Obviously, about couple a as obviously, really make gotten lapping to we Hilton comp. knew, certainly that tough Waikoloa We be We I'd

to And we that choppy. expected so obviously be

in long given and the that obviously, very happened call. term. in mean, as not talked Japanese travel We related clearly expect Hawaii with last remain did it -- about bullish on weather I what we

look resort about the by while nearly I the of of you last XXX other is by kind XXX over years, basis and think growth exceeding I bps. RevPAR if U.S. points sort Oahu's XX outpaced think markets

I is the Oahu about CAGR north X%, U.S. is think So of X%. and

remarks. We other underlying is, So the matter, I've view, and our we've us my in in fundamentals. the temporary this addressed obviously, of that don't see alarms transitory. certainly in prepared -- Obviously, terms anything that

Bennett Rose

Okay.

concern like demand be weather in by kind to kind really to to you what for... of travel, mean, is the you're around I expectations the just your are it seeing anything the driven expectations prior not but of difference that impacted clear, sounds relative would So relative state U.S.-based that Japanese leisure Japan of events

Thomas Baltimore

not. are We

overall last Japanese the would about year be that expected of in last XXX,XXX, up XXX,XXX from We terms call visitation visitation.

I little think down a that's come now bit.

weather given related I think down largely and to the about cancellations, the XXX,XXX.

over So it's still year, still that's Smedes. below XX% about about last and XX% XXXX,

now. the current XXXX, to forecast expect to in pre-pandemic right get XXXX So we based probably on back

Sean Dell'Orto

would as I Smedes, Big And was that activity to more add, so Hurricane you hurricane and Island and August more in was I specific [indiscernible] talked came think well. but also we the impacted had that That about [indiscernible], disruptive Hawaii. through,

tracking at So average, year-over-year the inbound in in August. ultimately looked and we about flights XX% on Honolulu each at X% that dropped we're month least about

some see the can disruption that from you of that some So activity, market. weather of impacting

Operator

The next Van question Floris line Compass Point. from the is Dijkum of from

Floris Gerbrand van Dijkum

ask quickly that And on I the Village what online there know it in should estimate? how how bookings, little a up can elephant And the settled? limited But EBITDA is ramp come in room. going get to to taking I'm your talk maybe about starts bit quickly you about? Hawaii you're can about. hotel I'm talking best before the negotiations

Thomas Baltimore

guests. and to never has hotel first it's services continued all, Floris, to provide the of closed,

issue I uncertainty to continuing that position surrounding as update just a operators I hasn't in the this those an details our remarks, any we're And think all. not the negotiations or at said the time. in and provide so of labor obviously, to unions, prepared been due And between at guidance

the As and have update better Village provide that the we'll the that time. But at a Hawaiian of strike. ratified, certainly remained the impact soon appropriate during an negotiated and rest have has been as agreements open understanding assured Hilton

Floris Gerbrand van Dijkum

or as is follow-up your to those dispose does our how this hotels. And availability then, this the is, XX the accelerate that on call hotels? more buyers think markets financing still -- your your hotels? on evaluate guess, it, dependent based capital the Or of -- potential and plans you question noncore about activity XX XX you you of I Does have, estimates, top on -- focusing for make maybe some --

Thomas Baltimore

Yes, it's a Floris. great question,

we reshape I focused the are we've really portfolio. laser on continuing think demonstrated to

much disposed XX still XX aggressively listeners, portfolio, another or capital. remind for of And recycle minus, spin will assets assets, plus noncore. since we $X really work continue it's a to have stronger to now, or billion. but Just And we nearly see the I that sold obviously are that have we to

or remarks, year. the create And you at value view, can the of nothing pre-pandemic the as into an about Casa done And extraordinary than as as Marina, there's kind portfolio. $XX that's million, back really in example, minus. XX% said I the more think investing in that our our prepared And first and the EBITDA And year work about there, in about expecting is we're over plus watermark. this this high

Waldorf, is tower there, -- the the gotten given given Obviously, our potential remain Bonnet Hawaii just very Creek Hawaiian award we and we've Village. adding portfolio. at on And remain bullish growth regarding on certainly another core we the just bullish Hilton

Miami. Barbara and the which adding another entitled Santa to with minus, forward in look Hilton we're really do and and then already to Palm Hilton XXX transformation plus Waikoloa, additional keys, coupled adding supply We of or Royal complete at at a the product

think within and portfolio. to shareholders embedded this there's core just tremendous we value and created is be that all So for upside

Operator

the The line Evercore from ISI. from Duane question next Pfennigwerth of is

Duane Pfennigwerth

next detail Just that that you you key if on would driving you any types lag? composition group the year, the pace outperform, I could key on more And for markets groups markets of improvement? sense go think are of the for would wonder into think

Thomas Baltimore

well. up year, Waikoloa Clearly, about Chicago strong. Bonnet as in had seen, obviously, know, very have performance obviously, we've Orleans, and have Creek, been and been you X%. we really group New also this a obviously, strong As Obviously, strong what

now. out are we're digits, look to tentatives high said that's And so say I'd mid- of certainly the to number probably going think we single that in we X% There as we sort a improve. of X% of to year, next remarks, right as sort prepared

to think very out. about excuse we which I we're next As almost we year, obviously, those going -- looking this Village XX%, being as Hilton us be Waikoloa, group at is down look me, which very, markets, XX% pace for Hilton believe, Hawaiian year, encouraging up was

in Creek as to looks Bonnet strong. I Probably Waikoloa, be Denver the think, strong. continues mid-XXs. was

in growth looking overall, for there, to of mid- New think mid-single I pace teens at Midtown. York high terms probably we're digits

Square San in be the think as Union Even increase. looks to there, XX% we property Francisco, about XX% to the

very XX% And already XXXX, looking up at we're by very, a that's you still So encouraged about there. group pace think as also that. about

think our when real encouraged very So Duane. you about think and portfolio, portfolio, a I of our strength

Duane Pfennigwerth

that know versus the And maybe put be or pre-reno you to don't you're want a that pre-renovation help to maybe just don't seeing relative to frame baseline? XXXX? to RevPAR realizing on maybe Orlando, it I come back spot, improvement you index and handy, performance can the you have but you if like a may I

Thomas Baltimore

take about have kind that. of Perhaps And And let a RevPAR regarding has don't that. Orlando I'll me Sean stab. Yes. the I index, overall. just then talk

But mean, XX think, think visitors. million I I last Orlando, when you about you've got, year about

you mid-XX $X of If own spring probably plus in about Universal year. think next I range. investment And opening Vegas, record, you Epic a that's think billion in their of minus, and or about the think, the about it's

another has talked or years, billion the spending Disney $XX Obviously, minus. over next about XX plus

So term. bullish on very, long Orlando we are very

X.X this If you citywides, there for XX nights. about think citywides about million about room were year,

increase about in million, X% next room to think fewer while minus. about almost events, of nights I year, plus X.X an or

bullish. So very, very

simultaneously and of of adding with as obviously, we course both saw to allows quarter, in think, multifunction and Disney and golf space world-class we another given layer third a resort XXX,XXX Universal. amenities the groups space all to And multiple the other in proximate coupled the square feet size meeting and us and

the in and term. the both long very are very, term We bullish Orlando, on in near

Operator

Dany Bank The line next from Asad of of America. question comes from the

Dany Asad

large with are stronger can shaping any heading calling year. when from heard we XXXX, Sean, into airlines corporate your up? on large corporates insight how you accounts at We've share us next or Tom look out

So just are to what guys see hearing. curious you

Sean Dell'Orto

typical I of, right in doing We're say -- over a of increase driving that that dynamic just gone X% of or now, season mean a percentage Yes. it. think, such Dany. I historical this from more kind tricky. lot VAR let's it's ] [ a little always it's your I'll to time of hey, the also fix, have kind just more X% your pricing And contracts

we're about kind go as know so and obviously, we and of beginnings you in pinpoint exactly still of of discussions, could the throes next budget and think percent. And say certainly of think of hard to the I year, range -- kind where in kind it's up. rates

think you look an behavior And the outperformer this also, I the of negotiated when expectations. year at it's subsegment, versus corporate been

think X% plus year or the seen we so, so And we've or up about year. this minus, throughout

I XXXX. I from maybe group think -- other plays you that and into think likely continuing what of industries I So about -- performance kind think in for hear strong well, that bodes remaining

Dany Asad

and guys you Understood. expectations it edges, heard maybe to Curious November my right are owners that XX thinking, brands, we're for from days specifically. XX feels follow-up, see is just Hilton, the other November what the And some relative talking importantly, that elections period that ago? could we've especially your when about including of of softer from be kind and how to around or the demand more like and of --

Sean Dell'Orto

after I it is down would about is week think would the I say week general, impact. down having that around is XX%. say, that XX%. in an Yes, I even pace

and electing is I up So of. make any say that certainly would picking the travel plans think the to think positively. week I after are that not think week people I surprisingly, not

to be happens watch could election. that's depending that something So on post something what

which frame, seeing time then holiday get definitely we guys you're I'm as start will it. you get up And getting into you pick sure through you But as beyond shifts, election that.

on this than later is next Thanksgiving a week But different year year. week,

So some kind you're to you dig it. different have flip really of flops into as going weeks of

to a little quarter. November, month it But versus beneficiary I to of November obviously you on the of the average they'll weak weaker November, October. all you're combine December, together, the if a similar whole, to shifts But were Put is it's is I just of kind December. would December at a combine growth the them November. relative by of definitely offset some definitely comparable think say of looking on stronger kind between X

Thomas Baltimore

you similar think well if about XXXX. think framework election, Dany, And as I back I sort of last to occurred even think and XXXX the in

by it. So we're not overly alarmed

Operator

Capital question BMO of from the next from comes line Klein Aryeh The Markets.

Aryeh Klein

following Maybe question. on overlap the up just

aside a quarter? maybe I still this X%, is the think RevPAR fourth expectation? the the impact, based think previously, Setting you Or expecting growth the quarter X% were kind about on should in prior we performance how of [indiscernible] strike guide. that

Thomas Baltimore

hard the activity. to weather-related with obviously, what's decouple It's the other activities. also Yes. obviously, you've happening given And had

our we that any the a information agreements, can I'd wait the update operators provide once we when provide finalized unions So provide rather and and clear and update. have outstanding

as about I doubt, time. think probably divided the given less Sean probably going of to week see a election travel things of the said, No just during period think and that, the you certainly you're little that how November, as are, after given uncertainty,

real surprise. said if Dany back think And the don't think that was a we conversation as really XXXX, I that's experienced the and to what at of well. end look XXXX And as asked, that I you I

Aryeh Klein

what next growth to kind type of is looking do Understood. is need XXXX, expectation for X% we're you EBITDA? case, grow as would you reasonable X% RevPAR -- think the And then year? to about a think we of if at that maybe when expenses, what And

Thomas Baltimore

right. We're Yes. just process, beginning all budgetary the

guidance the as with So what's that's top line we as concerned going well -- another the we've we're done about And look will as forward provide corresponding we obviously, we -- mean, happen expenses. I historically. all as to

our This about to the is going solid about But on as We line. probably feel a third very a top portfolio. obviously quarter, think be among more we'll at have sector-leading information later date. still that good you

probably the if you and both activity it's some close obviously, out the weather-related, to a print. obviously, strike of And take X%

portfolio, selling capital shareholders. in our then the returning portfolio, going noncore, leverage about continue to reinvesting and feel reducing So focus to good on we we're and very back to

be $XXX over includes in think, to of million And last back probably buying XX.X the returned somewhere year. months. $XXX million, And million XX, million, we're north $XXX shares last that going year. this the million, We've XX I XX

feel So capital allocation performance good really about and decisions. our very our

Operator

line Katz Jefferies. The next the David of question from from comes

David Katz

and of to you more a bigger, broader wanted your potential question capital I that than whether think the certain in of how underwriting, are weather that's that ask others acquisitions about sort any the so road. about down kind of spending subject markets exposed in or for

whack-a-mole I apropos, think or on, degree it to event that the the maybe or where and Smedes we right, of used earlier through too. term about and underwriting I in be it's we which think thinking be should sort we it may looking recurring, nonrecurring should contemplate whether it, keep a

Thomas Baltimore

Yes. in a few question. would that we've certainly years, the it. we impacted direct Park, I And last been at think great haven't had if obviously, you by say back But over any fortunate obviously, been David, it's we've hit.

We as within ourselves. we A who credit And first to hours the think of our it's design -- and had construction Carl Mayfield, site on example, team. that heads separate Helene the responders event. storms, Milton of really you huge an as XX and area we an any about

in in to of insurance incredibly also and systems the you be and nourishment of can really sand proactive, grade those. Marina, reflected We've that we cost. at removing the see looked transformation We've the looked And building [indiscernible] as taking -- and were our that dams. at our what do below we've of how the buildings and things all part set tiger resiliency complete the up Casa

were seriously. also well, these could it we and measures tie members the as that extraordinary to report doubt that have And social And done our think down. we have many the in insurance costs see as I our it's say Sean take on responsibility that. Carl in and work team corporate I other job. can Smith proactive you our that. place, a very And peers an result, Emily of

so given very the our And particularly are. really demand is it portfolio generators important, where and

got be monitor that and it's to something proactive. to we've continue so And

We do investment assessment what into opportunity. think that part that underwriting. be our about may factor that it We that risk of is and of

vis-a-vis it really Park peers. has something So is our distinguished where themselves

Operator

Truist comes from The Scholes next from Patrick question Securities. of the line

Charles Scholes

a you Hawaii inbound can what expectations the give question, first for to for us traveler XQ -- about and Japanese look thoughts like My year for might potentially bit little that? your about next

Thomas Baltimore

Yes.

I demand. XXX,XXX. was X.X million. travel, of think Japanese is Obviously, and of this about if it about That you in about XXXX, XX% look sort historically, was was Patrick, pre-pandemic,

So about it's below pandemic. XX%

as issues XXXX, expecting of said been the be occurred, in the in I I the because the think Part it X as That's as XXX,XXX were of earlier, beginning revised about storms. that's of XXX,XXX. we probably downward. probably year, that to both to Japan well weather-related

now year. annualized at so about last looking we're and still And about above that's on an And about XX% XX% it's XXX,XXX basis, XX% to below XXXX levels.

individual we the sure fourth fourth probably are don't you We've make the pre-pandemic annualized think to XXXX the the quarter, with but and of in not have in you I that. quarter. up don't data. Where know frame. quarter on and more terms get to time follow -- we'll XXXX back we We it the got have whether I

Charles Scholes

My strikes? Hawaii, be dragging Hilton notifying Okay. seem strike to on, transient and this group at question, now pre-arrival guests especially in that is second about point, the

Thomas Baltimore

Yes. answer The I is, mean, disclosed. I look, think been publicly obviously, they've

important ongoing so that people their unions and And in through Obviously, discussions. think the it's to note, aware. it to I'm are not as I are they're obviously, our specifics. going Hawaii, channels, comment making do the on sure, operator relates I'm to sure

remain, bullish and And I've get very term. we remain we ratified, is that normal. as said it's We this reached Hawaii on when And long a back throughout when transitory ultimately we'll to and intermediate all matter. agreement the do the call, is believe that on

and with in later and agreement like also relates we in vote also to And operator union understand the has out our as for for San that Boston that also been that operator example, our a Jose, evening reached scheduled reached in Boston, ratified. point agreement agreement last week. has I'd markets it is other to this then

long ratified, we'll as as the So forward. these been when and and And operator the will process our process agreement have reached it's move obviously, last obviously, -- the unions lasts.

Operator

comes from from next question Woronka The Bank. the of Deutsche Chris line

Chris Woronka

So that Tom, in But your of it's you of moving X comments. back implied guess, maybe forward I kind ROI, I union those CapEx I are look kind and have list and all May, earlier markets. guys think but provided projects in think as all of, in your you to about

may So prioritization it's another? your settled from like market we are dollars cause shift I get comments deter these all assume it can said. to these going of does is, whatever things financially, happen, -- you Can not terms to you gets that from just any that to a you CapEx in And outcome at whatever before going projects? the

Thomas Baltimore

Yes. And Chris, it's the outpaced example, rate, as you an you if U.S. last the I said Oahu's I think Hawaii it's look as as over by earlier, great XX a nearly years, basis XXX RevPAR mean, about points. question. growth

difficulty move that the resolved And new remain and on of union given forward. given, get and this And adding supply, will to we're Hawaii. the barriers things confident bullish operator obviously, will those our entry, we

bull's term, Palace performed started Rainbow already to outlined But And the this that those started bullish. continue we expect real over long we is And at the renovation remain perform Hawaiian intermediate, the at Tower just priorities we've Hilton at has estate Hilton we the the well. of Waikoloa. Village. is Tower We've And we've renovation that that well. eye

at say X,XXX-room were I hotel, heard me than many today XXX-room which Waikoloa successful we a are Hilton as a think you've as We more hotel times.

we in to there's and Miami on had and the dissimilar to Palm of huge transform property, we and estate opportunity a both -- that really eye real what reach, not As just at look the which the of as there have Casa which Marina, did beach well, bull's Royal great success.

of to part returns really can it's in So investors. estate outsized to continue our high-quality real invest generate strategy that for

Chris Woronka

stages going Okay. you're follow-up we guidance A be question and Yes. Appreciate is, time the 'XX budgeting where won't at and until the know is giving of in maybe the I through any thoughts, year. are year. next the early I early of Tom. guess, this

been guidance to guidance when bit, of or it? the year, kind tutorial you and on obviously things, a us that we their the take you But maybe some quick how on were maybe give us impacts brand Because weather approach saw refresher give companies shouldn't RevPAR a and were a this can surprise. But you and refresher maybe tutorial -- there budgets I you them evolved formulate have into some on calendars guys then little a just how guidance? there think your can give annual

Thomas Baltimore

been obviously, long -- around we've time. I've Well, a Chris, been

cycles. calendar And So been this year. the I've you obviously, shifts through had

and owners It's It's a weather. operators. had obviously, the detailed You between, very process. thoughtful

those in work, lot And you the have a of try appropriate spread and quarters. you between to put

an sometimes than And as industry, we're right others. more

I weather had think calendar in had certainly this also that shift, impacted. dramatic swings year, the but you you

played a that So certainly role.

holding performing I think think true. XXX we well. would that's And the in we be holding to is And probably it and that peers. very up I probably overall I for of the year, renovation think well Park net disruption portfolio, said our earlier we expected premium

obviously, and so And And where other will good feel they're our we performance when very themselves we get matters are. resolved resolved. the about

Operator

line of Kornreich Wedbush Securities. comes Jay from the next from The question

Jay Kornreich

being market. that of mentioned thinking curious perform bullish you're first a X about the remaining quarters just -- can market long I'm term how great in You how XXXX? been It's Hawaii. on And

had this that issue further will lapping an kind down tough next We XQ opportunity year guess easier tough in I being of market from we before for the somewhat the the and with some resolved? first 'XX quarter comp RevPAR or should a X being it union have year upside think comps. about quarters fourth hopefully comp

Thomas Baltimore

to go I my earlier statement. Again, back

first over last of over If I that strongest time. period either second I years, the or think been look XX market mean, it's you

barriers I entry. think the to about

the airlift. think I about improved

extraordinary think I beauty. just the about

You the think about will Japanese international visitation. traveler The return.

And weddings a year about were a that and historically, small example. Hawaiian they We're XXX we averaging one were is at doing Hilton fraction Village doing today. of XXX, about

there segments are really to additional think the the with growing there coupled about haven't back So we when airlift. the piece, gotten and you of that fact sort international pre-pandemic

are in investment, remains of top I terms a for think markets high about as future So would still us. that we Hawaii market priority a

Jay Kornreich

at sure. then to I may And prepared mentioned want your Okay. follow-up, just of a have make the you as remarks, end

to to October are able is what within you a October as as close, the RevPAR coming kind range of Just to give a is? growth portfolio

Thomas Baltimore

in and were you -- if trending Yes, remarks. flat we down Sean were... we're that We the X%, to that's prepared -- provided --

Sean Dell'Orto

Yes. I mean, had you clearly case. -- October. ultimately, if And I mean, the that's Milton in

if adjust the hurricane that flat. for So you of zone disruption, kind you're probably in of being

in had again, outperformance of other some So portfolio. parts the we've

certainly kind people disruption range. ended. a But Tom noted, union few to the how we've we're days got strikes. activity of we'll readout And as ultimately, when of at left sense elsewhere Clearly, kind of October -- give people we're resolved, a in things and we with are general once that give looking other look we Clearly, month. the a have

Operator

The of Farley the comes Robin line question from UBS. next from

Robin Farley

I in as maybe think what [indiscernible] negotiations, help a EBITDA? from wonder about total added your represent us being of just we your disruption can EBITDA disrupted. could you about there's of When take that, percent forward here quantify. of And is terms we properties where what then if and they typically the percent labor thinking Boston

Thomas Baltimore

Yes. the basis was and But out Hilton from Village EBITDA Hawaiian you QX, Robin, drag away of XXX We'll to about of take it. Logan were on it portion just RevPAR. point stay, Boston if

closer minus. or so And instead I plus to probably of X.X, obviously, that X.X, think,

about And of as Sean of October, points about as we think sort basis XX got you've said, weather-related. really

flat essentially there. So you're

in of mean, or RevPAR, the Hawaiian Again, have If out but probably that Boston in in month -- Hilton would to over I range. sort out somewhere you take plus closed you X X% also hasn't probably were been Village, minus. the

Robin Farley

Okay.

XXXX, something is it is Or to tougher pace down for looking the [indiscernible]? impacting should group group QX. it just compared And bit then with about at that looked little pace that's as ticked year? Or that where we labor your Okay. And group comps for like next disruption think end the it a was at just just of do think that? maybe you

Thomas Baltimore

X you think got I things. Yes,

are Obviously, Orleans comps. Chicago, New tougher the got You having really strong years.

continue New into down. 'XX. Chicago Orleans, we expect drop will that to

look think Hilton XX% a year group it's about in to having XXXX. that's up down bullish. increase we XX%. soft obviously, We're as going about to pace as Waikoloa, We

we You've year. bullish at a very very, a Bonnet as having situation, look strong tentatives. this out obviously are Creek, which fluid but It's got year is we very

out expect going to years. We the year in continue that's next

we high XXXX. at we'll as in as it XX% to look up said, end So will at digits, we finish -- we're XXXX we begin single of -- up sort already and the out expect we'll year to sort of mid

as as for that strong really we see again segment move we Robin, So forward. us, growth a

Robin Farley

Great. your could If squeeze on sale just I plans. one thing final asset

could into of that maybe I heading know if Just don't terms little in of you things describe sort bit, a election were a that. slower the if assume little would I there's

other -- buyers, timing I asset cuts? Do for of labor for you how think rate when is some it maybe further we think and how I potential it both expectation waiting Is it waiting come the year conclude, about next to timing additional you about the for mean sales? think cuts? this then guess see waiting rate negotiations year? is to your

Thomas Baltimore

Yes.

are lower And and to really the has that Obviously, debt do catalyst. of lot and the a think positive that closing buyer with certainly, rates, be gap. will a markets open. I sellers just with

spin transaction as into disposed of trouble $X And as since of to XX nearly complicated think ventures. and tax, Many billion, I said legal can market XXXX, I as sold the international. sides both But we've including you or I now about no joint those think I through accelerate. we've earlier, expect you with think had assets, get the XX again, mean,

all, We've aggressively, seen not and we're got team we've very working who and a [indiscernible] seller. a distressed it are

for We're it. going thoughtful fair price. looking be we're So to about a

into capital But that us and clearly, is a our recycle core it continue strong markets. for to priority back to invest it

XX assets want to that's and the company, the where the of future. value XX% about for account we in Our really of growing be top

Operator

The line from of from Darling the next comes Green Chris Street. question

Chris Darling

Going of year. how this around pace the anticipated for would to point much a of for back to in on get sense the kind books the total next baked Just group of be better group trying typically time? year of some comments in in what's 'XX, at next revenue

Sean Dell'Orto

kind of put Chris, say we're probably at to about current -- this group. forecast year's about tracking Yes, relation in or in time. probably I XX% for our I'd looking so point this would at We're

we look the proxy closer are, end that about where certainly, to the So as now. where to we get for we of right a year. That's we improve are

Chris Darling

Okay. That's helpful.

Thomas Baltimore

as years, prior is with consistent be Sean out, would pointing That Chris.

not unusual. that's So

Chris Darling

you. for And Makes sense. Helpful comments then. then second a question

the are assets underwriting have market. in assets you're market, you coming I'm as to that still still as mentioned, Just you sure

frame you've of maybe it, to Any months the you've sort X these in any pricing ago? observed way another maybe days out spread to changes in changes in or relative bid-ask market observed and the X,

Thomas Baltimore

accelerate. but Yes. It's that's think narrowing, going I to

X I we rate X, think some were obviously, all at expecting cuts. looking X,

that it's sort another I XX expected. X -- basis are the think now and in points obviously, books probably that the we've X are or of

that bridge going no As that of of is down, shortage gap. clearly private capital to there's debt there. the help But out comes cost

estate real You've private funds. the billion equity $XXX just got probably on

You've got family offices.

You've got owner operators.

So in as market you know, secondary lodging. market very we've in always had active trading a

expect that's that, So going to accelerate. we fully only

the ticking them. funds, clock those is of for many And

to they've put capital that So got to start work. to

particularly will to So the we we normalize, transaction rates improve. expect 'XX, expect continue as for to begin market

Operator

Fargo. Kesten comes Wells question of The Dori from from next the line

Dori Kesten

The Royal project undertaken 'XX? likelihood Palm What's isn't the table. that renovation currently on the in your is

Thomas Baltimore

that There forward. is say, probability a, I'd than greater we move a high

We're window. We the are process. design. working trying a through through room. model permitting there's find We're also working a to Obviously, right

underneath, great But to very that [indiscernible] or Dori. the the bull's developed it's whether or and And XXX RevPAR are overall this It's sort not but level opportunity we being that that raise minus. keys, others, there's is assets we're the really eye bullish and real given an property. think estate, certainly performance opportunity plus really of at a on, the high-end

both dissimilar what success Casa, And the we're doing Bonnet, not both in we're excited demonstrated in again, to about at it. we've pretty So that Hawaii.

we're we move forward. excited as it pretty about So

right the find we'll But window.

really And We sort disruption. very I again, area sensitive our it's to team distinguished where an are think minimizing of has themselves.

Dori Kesten

And Okay. on Hawaiian Village. one then just more

or think for the strike that transient, about they is Are when policies hold ongoing? on XX% transient group. I property guests put XX% cancellation held

Thomas Baltimore

a very Hilton take But on-site would team the all to remained whether discount, those be be that up this can Village We've to Hawaiian continues It guest. leave despite call. Yes. got obviously, It be and team. rescheduling, whether there. we day every judgment of can leadership has the times, items, Many a a there's table. open talented on there's a matter

Operator

We question follow-up Point. Dijkum Compass from Van Floris have a from

Floris Gerbrand van Dijkum

whether XXX by know don't I basis outpacing Oahu you about answer hotel something have but points. mentioned handy U.S. not, market or the you the

of But... was I is think the in RevPAR. I it terms believe, said you what last decade,

Thomas Baltimore

but But said, that's I I XXX, memory, said think, a years. and I'm I'm -- XXX -- I And follow the and points But I it's fair as XX last Ian know. with can over Floris. I me the XX and with Sean pretty last think basis from think years fact-check up you. the I what going over is good numbers, you

Floris Gerbrand van Dijkum

Yes.

this -- because misspoke. you, been I rates again, then I'm than also, did to Sorry, assets interested was you've curious grow how is larger And long overall market. espousing Village for I probably -- Hawaii at the something as as higher in seeing your and relative as I that over period? most known I've think

XX see EBITDA assets the during assets curious that your it what you for your top -- or rest have over to your relative portfolio. market available, be the -- for to the overall been the Hawaii Hawaii also relative I'd to has and your where XX CAGR last And of years maybe

Thomas Baltimore

quality replicate about simple. have what X.X%, both -- here, there's Floris, about think of strong And situations. the in confirm real Hilton around for Hawaiian and you we But you we we'll memory, But the think get or it's that just back for when performers doubt it's Waikoloa, going They've generations. been that and to Village, can't envelope you think plus Yes, back minus. you. of no that, estate, really

Operator

and are further his hand over closing questions, for Baltimore, no Officer, Executive the comments. there Chief As would conference to Chairman I now Tom

Thomas Baltimore

you we everyone appreciate seeing NAREIT Las time really Vegas. We today, coming many of taking certainly at the forward and to in in and weeks look

and travels, safe be well. So

Operator

Resorts now your concluded. conference you Park has The & participation. you. of for Thank Hotels Thank

now may lines. disconnect your You

Park Hotels & Resorts (PK) 30 Oct 242024 Q3 Earnings call transcript