Park Hotels & Resorts Inc. Elevates 2024 Earnings Forecast

Park Hotels & Resorts Inc. Updates Earnings Guidance

Park Hotels & Resorts Inc. is thrilled to share its reinstated earnings guidance for 2024. This update comes after successful negotiations between hotel operators and labor unions, which have reached a resolution at four key properties. These include the Hilton Hawaiian Village Waikiki Beach Resort, Hilton Boston Logan Airport, DoubleTree Hotel Seattle Airport, and the Hilton Seattle Airport & Conference Center. With these agreements finalized, Park Hotels is eager to return its operations to normalcy.

Positive Reaction from Leadership

Thomas J. Baltimore, Jr., the Chairman and CEO, expressed his satisfaction, stating that the management's efforts to negotiate with the labor unions were fruitful. The resolution comes at a perfect time as the holiday season approaches, piquing interest and optimism around increased travel and demand for rooms. Despite the disruptions earlier in the year, the company expects strong momentum that could set the stage for an impressive performance in 2025.

Operational Insights and Market Performance

Preliminary reports for October show that Park Hotels' Comparable RevPAR dipped by 1.3% compared to the same month last year. However, without the influence of the four hotels affected by the labor activity, Comparable RevPAR would have posted a notable increase of approximately 3.5% year-over-year. This reflects solid recovery trajectories at various properties, particularly those in New Orleans and Miami, where strong convention traffic has driven double-digit gains in RevPAR.

Diverse Financial Metrics and Predictions

While analytically richer, the performance for the fourth quarter of 2024 may experience volatility, especially from the four impacted hotels that may see a decrease of 600-700 basis points in year-over-year Comparable RevPAR. Park Hotels remains optimistic about generating strong group and business transient revenues, particularly within its properties in New York and Washington, D.C., indicating robust market demand.

Financial Outlook: Clarity Through Change

In light of the recent labor agreements, Park Hotels has revised its outlook for 2024. The initial hesitations shared during tense negotiations in late September have shifted, allowing for a clearer projection of financial performance. Although certain group events had been canceled or postponed earlier, there’s potential for these to be rescheduled, smoothing the path forward.

Financial Assumptions and Projections

Key factors in developing the 2024 outlook include an anticipated impact of around $30 million related to hotel-level EBITDA disruptions from recent hurricanes and labor activities. Additionally, Park's management removed the Hilton Oakland Airport from their comparable portfolio, which should enhance their overall financial metrics, improving expectations for both revenue and EBITDA margins.

Dividend Considerations and Future Payouts

Regarding dividends, Park Hotels plans to announce its fourth-quarter distribution shortly. Expectations are set for a total dividend within the range of $0.60 to $0.66 per share, highlighting the company's commitment to providing returns to shareholders even amidst operational turbulence. The anticipated annualized dividend yield stands at 9.6%, reflecting good yield potential for investors looking at 2024.

Company Background and Investor Communications

Park Hotels & Resorts Inc. operates one of the largest portfolios of premium-branded hotels and resorts, focusing primarily on urban and leisure destinations. With a firm commitment to high standards of service and operational excellence, the company continues to navigate through challenging times with innovative strategies and strong leadership. Investors should remain engaged with the company's updates as it prepares for a promising 2024.

Contact Information

For any investor-related inquiries, please contact Ian Weissman at Park Hotels & Resorts Inc, located at 1775 Tysons Boulevard, 7th Floor, Tysons, VA 22102, or reach out via phone at +1 571 302 5591.

Frequently Asked Questions

What changes in operations contributed to the updated earnings guidance?

Recent labor agreements at four major hotels removed the uncertainty around operations, leading to a reinstatement of the company's earnings projections.

How do labor agreements affect the hotel's performance?

These agreements allow operations to normalize and enable Park Hotels to recover demand and scheduling from previously canceled events.

What financial metrics are expected in 2024?

The company anticipates growth in Comparable RevPAR, supported by strong transient demand and ongoing renovations.

What is the impact of external factors like hurricanes?

Park expects an approximate $30 million impact on EBITDA due to weather-related disruptions but anticipates a recovery from such events.

What is Park's outlook on dividend distributions for the future?

Park Hotels aims to maintain strong dividend payouts, planning for a return range of $0.60 to $0.66 per share for the upcoming quarter.

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