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Park Hotels & Resorts (PK) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Real Estate· Aug 7, 2026

Source: earnings call transcript

Executive summary

Park Hotels & Resorts Q2 FY26 — Strong RevPAR Growth and Capital Recycling Progress

Park Hotels & Resorts delivered an outstanding second quarter, exceeding expectations with robust RevPAR growth driven by strong group and leisure demand, particularly in Hawaii and Florida. The company successfully advanced its capital recycling strategy, disposing of additional non-core assets and completing transformative renovations, notably the Royal Palm South Beach. Management remains optimistic about future earnings growth, fueled by strategic capital investments and continued portfolio optimization, despite anticipated increases in variable operating costs.

Highlights

5

  • RevPAR increased nearly 7% year-over-year, excluding Royal Palm South Beach.

  • Hotel adjusted EBITDA increased nearly 9% to $204 million, with margin up 80 basis points year-over-year.

  • Full-year RevPAR outlook raised by 225 basis points at the midpoint to a new range of 3% to 4.5%.

  • Adjusted EBITDA guidance increased by $25 million at the midpoint to $617 million to $637 million.

  • Completed 3 additional non-core asset dispositions, generating $47 million in proceeds.

Concerns

2

  • Assumed increase in expenses of 3% to 4% for the full year, driven by higher occupancy and variable costs.

  • Nine non-core hotels remain, accounting for less than 5% of the portfolio's value, with efforts to materially reduce exposure by year-end.

Guidance & targets

CategoryTargetConfidence
Full-year RevPAR outlook
3% to 4.5%
high materiality
High
Full-year Adjusted EBITDA
$617 million to $637 million
high materiality
High
Full-year Adjusted FFO per share
$1.90 to $2.00 per share
high materiality
High
Full-year Capital Expenditure
$230 million to $260 million
medium materiality
Medium
Third quarter RevPAR growth
trend toward the upper end of our revised guidance range
medium materiality
High
Royal Palm South Beach EBITDA contribution
modest earnings contribution
low materiality
Medium
Royal Palm South Beach EBITDA upon stabilization
$28 million
medium materiality
High
Hawaii EBITDA gap recovery
narrow the approximately $60 million EBITDA gap
high materiality
High
Full-year 2026 group revenue pace
up nearly 6%
medium materiality
High
Third quarter group pace
up over 15%
medium materiality
High
2027 group revenue pace (core portfolio)
up over 6%
medium materiality
High
Full-year expenses
increase of 3% to 4%
medium materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Hawaii Portfolio
Strong leisure demand and in-house group activity, offsetting the partial closure of the Honolulu Convention Center. Both Hilton Hawaiian Village and Hilton Waikoloa Village are benefiting from recent capital investments.
Hilton Hawaiian Village RevPAR growth: 12%Hilton Hawaiian Village EBITDA growth: 13%Hilton Hawaiian Village RevPAR index (June): 117 (up 4 points vs. June 2024)Hilton Hawaiian Village Occupancy (July preliminary): 98% (nearly 700 bps improvement YoY)
—9%——
Florida (Bonnet Creek Complex)
Achieved record second quarter rooms and food and beverage revenue for the third consecutive year, validating significant investments.
Waldorf Astoria Orlando RevPAR growth: 15%Signia by Hilton Orlando Bonnet Creek RevPAR growth: 12%Waldorf Astoria Orlando F&B revenue growth: 24% (surpassed prior year record)
—13%——
Florida (Key West Portfolio)
Record second quarter rooms and food and beverage revenue, supported by strong leisure demand and continued group business growth. Casa Marina led performance due to repositioning and enhanced offerings.
Casa Marina RevPAR growth: 14%Casa Marina RevPAR index: >120 (up 8 points in Q2)Casa Marina F&B results growth: 36%
—10%——
Urban Portfolio
Washington D.C. led by government-related demand. Chicago supported by strong group and transient demand, and banquet/catering results. Hyatt Regency Boston benefited from group, citywide business, and events like the Boston Marathon and World Cup.
Washington D.C. RevPAR growth: 17%Chicago RevPAR growth: 12%Hyatt Regency Boston RevPAR growth: 9%
————

Orderbook & backlog

Remaining non-core assets 9 hotels Q2 FY26

Less than 5% of portfolio value

Committed to materially reducing exposure by year-end 2026.

Deals & partnerships

Not stated Sale of ownership interest in an unconsolidated joint venture that owns and operates the Embassy Suites Old Town Alexandria. $29 million

288-room hotel. Completed in May.

Not stated Exit through the termination of the short-term ground lease and sale of the hotel's operating assets for the Embassy Suites Austin. $6 million

262-room hotel. Completed in June.

Not stated Sale of the Hilton Short Hills. $12 million

314-room hotel. Completed in July.

Capital programs

Royal Palm South Beach Redevelopment completed $100 million

Benefit:Comprehensive renovation of 393 existing guestrooms, addition of 11 new keys, re-imagination of lobby and public spaces, 4 new F&B concepts, enhanced meeting facilities. Potential to double hotel's EBITDA upon stabilization.

Successfully completed in just 15 months as planned, reopening on July 22. Demonstrates ability to execute complex capital projects.

Ali'i Tower Renovation (Hilton Hawaiian Village) underway $100 million
Start: July 2026

Benefit:Comprehensive renovation of 348 guestrooms, addition of 3 new keys, enhancements to F&B outlets (Tropics bar and grill, Mix Bar). Upon completion, nearly 80% of guest rooms across the 3,000-room complex will be renovated.

Set to commence in July 2026. Expected to reopen early next year. Part of broader Hawaii portfolio investments.

Main Tower Guest Room Renovation (New Orleans) underway
Start: May 2026

Benefit:Renovation of remaining 489 guest rooms. Upon completion, all 1,600+ guest rooms will have been fully renovated, significantly enhancing quality and competitiveness.

Third and final phase commenced in May 2026. Expected to be completed by mid-October 2026.

Hawaii Portfolio Transformative Capital Investments nearing completion $350 million

Benefit:Includes Rainbow Tower and Palace Tower renovations already completed, and Ali'i Tower underway. Positions Hawaiian resorts to capitalize on market recovery and narrow the $60 million EBITDA gap to 2023 peak.

Cumulative investments across the Hawaii portfolio, expected to be completed with the Ali'i Tower renovation in early 2027.

Risks & headwinds

Increased Operating Expenses Full year 2026

Assumed increase of 3% to 4% for full year FY26.

Mitigation:Partially offset by $11 million in property tax appeal benefits and a 20% reduction in property insurance premiums.

Remaining Non-Core Asset Exposure Material reduction expected by year-end 2026

9 remaining non-core hotels, accounting for less than 5% of the portfolio's value. 3 assets in dispute account for $16 million in EBITDA, and 6 other assets account for approximately $35 million in EBITDA.

Mitigation:Active marketing efforts underway for several assets; firm commitment to materially reducing exposure.

Honolulu Convention Center Partial Closure Expected to remain closed through 2027

Offset by strong leisure demand and in-house group activity in Hawaii.

Mitigation:Hilton Hawaiian Village gaining market share and benefiting from renovations, with increased airlift to Hawaii announced by major airlines.

What to watch in Q3 FY26

Royal Palm South Beach earnings ramp

FY27 and FY28
Current Modest earnings contribution in H2 FY26
Target More meaningful earnings growth

Why it matters

Verifies the success of the $100 million renovation and its contribution to portfolio EBITDA, targeting $28 million upon stabilization.

our outlook assumes only a modest earnings contribution from the hotel in the back half of the year with more meaningful earnings growth expected in 2027 and 2028 as the hotel ramps towards stabilization.

Find out whether PK delivers this. Inve re-checks your case every morning.

Q&A highlights

Clarify the magnitude and timing of the previously mentioned EBITDA upside from key renovation projects, specifically the $200 million figure.

Tom Baltimore clarified the EBITDA upside is closer to $100 million, comprising $60-$70 million from Hawaii recovery and $28 million from Royal Palm stabilization. He emphasized the success of transformative renovations and capital recycling, noting Bonnet Creek's EBITDA growth from $62 million to $105-$110 million.

“I think the $200 million might be a little overstated. We've really focused more around $100 million. That would be sort of the $60 million to $70 million sort of recovery of Hawaii. And then, of course, as both Sean and I mentioned in our prepared remarks, about $28 million, plus or minus upon stabilization for Royal Palm.”

asked by Floris Gerbrand Van Dijkum · answered by Thomas Baltimore

2 min read 6 chapters

Detailed narrative

Q2 Performance Highlights

Park Hotels & Resorts reported an outstanding second quarter, with total portfolio RevPAR increasing nearly 6% to $217, and nearly 7% year-over-year excluding Royal Palm South Beach. This outperformance was driven by strong group demand, up 9.5% year-over-year, and higher-rated leisure travel, which grew over 13%. Key markets like Hawaii, Orlando, Key West, Chicago, Santa Barbara, and Washington D.C. all generated double-digit RevPAR growth.

Strategic Capital Investments

The company's disciplined capital investment strategy continues to yield strong returns, with assets in Orlando, Key West, and Hawaii showing exceptional performance after recent renovations. The Royal Palm South Beach was successfully reopened on July 22nd following a $100 million transformative redevelopment, completed on time in 15 months. This investment is expected to double the hotel's EBITDA upon stabilization within the next two years.

Hawaii Portfolio Strength

Hawaii was a top performer with RevPAR increasing approximately 9% year-over-year, accelerating sequentially each month. Hilton Hawaiian Village saw RevPAR increase nearly 12% and EBITDA grow over 13%, achieving a RevPAR index of 117. The upcoming Ali'i Tower renovation, a $100 million investment, will complete nearly 80% of guest room renovations across the 3,000-room complex, positioning the market to recover its $60 million-$70 million EBITDA gap to 2023 peak levels.

Non-Core Asset Dispositions

Park continues to execute its capital recycling strategy, completing three additional dispositions since the May earnings call for $47 million in proceeds. Since early 2025, 10 of 19 identified non-core hotels have been sold, generating nearly $200 million at an average multiple of 12.5x EBITDA. The remaining non-core assets account for less than 5% of the portfolio's value, with efforts underway to materially reduce exposure by year-end.

Balance Sheet and Liquidity

The company ended Q2 with net debt of approximately $3.7 billion, resulting in a net debt-to-EBITDA ratio of 6.1x, a 0.2x improvement from last quarter. Liquidity stood at $2.6 billion, including $260 million in cash and $1.7 billion in available credit. Proceeds from delayed draw term loans and Bonnet Creek financing will be used to repay the $1.27 billion Hilton Hawaiian Village mortgage in September and refinance the Hilton Santa Barbara mortgage.

Group Demand Momentum

Group rooms revenue increased 9.5% year-over-year in Q2, with June up nearly 23%. Full-year 2026 group revenue pace is up nearly 6%, and Q3 group pace is up over 15%. Looking to 2027, group revenue pace for the core portfolio is up over 6%, with double-digit increases in key markets like Hawaii, New York, Key West, and San Francisco, providing confidence in sustained demand.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.