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    PK
    Earnings call· Jun 2026(Q2 FY26)

    Park Hotels & Resorts Q2 FY26 earnings call PK

    Aug 7, 2026 Source

    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

    12
    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

    4
    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%
    		————

    Operational metrics

    45
    Total portfolio RevPAR
    $217nearly 6% increase
    Q2 FY26

    Total portfolio RevPAR increased nearly 6% to $217.

    Total portfolio RevPAR growth (excluding Royal Palm South Beach)
    7%year-over-year
    Q2 FY26

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

    Hotel adjusted EBITDA
    $204 millionnearly 9% increase
    Q2 FY26

    Hotel adjusted EBITDA increased nearly 9% to $204 million.

    Hotel adjusted EBITDA margin
    32%up 80 basis points year-over-year
    Q2 FY26

    Resulting in a hotel adjusted EBITDA margin of nearly 32%, up 80 basis points year-over-year.

    Adjusted EBITDA
    $198 million
    Q2 FY26

    Adjusted EBITDA totaled $198 million.

    Adjusted FFO per share
    $0.70
    Q2 FY26

    Adjusted FFO per share was $0.70.

    Group rooms revenue growth
    9.5%year-over-year
    Q2 FY26

    Group rooms revenue increased 9.5% year-over-year, exceeding expectations by 700 basis points.

    Group rooms revenue growth (June)
    23%year-over-year
    June FY26

    June group revenue increased nearly 23%.

    Leisure transient segment growth
    13%
    Q2 FY26

    The leisure transient segment grew by over 13% and exceeded expectations by nearly 500 basis points.

    FIFA World Cup contribution to full year RevPAR
    30
    FY26

    Contributing roughly 30 basis points towards full year portfolio RevPAR growth.

    Royal Palm drag on full year RevPAR
    30
    FY26

    Essentially offsetting the 30 basis point drag expected from Royal Palm this year.

    Capital improvements invested
    $64 million
    Q2 FY26

    During the second quarter, we invested a total of $64 million in capital improvements.

    Net debt
    $3.7 billion
    Q2 FY26

    We ended the second quarter with net debt of approximately $3.7 billion.

    Liquidity
    $2.6 billion
    Q2 FY26

    Liquidity was $2.6 billion, including $260 million in cash, $1 billion of available capacity under our revolver under our delayed draw term loan and the $700 million Bonnet Creek delayed draw financing.

    Cash balance
    $260 million
    Q2 FY26

    Including $260 million in cash.

    Available revolver capacity
    $1 billion
    Q2 FY26

    Including $1 billion of available capacity under our revolver under our delayed draw term loan.

    Bonnet Creek delayed draw financing
    $700 million
    Q2 FY26

    And the $700 million Bonnet Creek delayed draw financing.

    Delayed draw term loan drawn
    $200 million
    Q2 FY26

    During the quarter, we drew $200 million under the delayed draw term loan.

    Hyatt Regency Boston mortgage repaid
    $120 million
    Q2 FY26

    Used a portion of the proceeds to repay the $120 million Hyatt Regency Boston mortgage ahead of its July maturity.

    Dividend per share
    $0.25
    Q2 FY26

    On July 15, we paid our second quarter cash dividend of $0.25 per share.

    Dividend per share
    $0.25
    Q3 FY26

    On July 31, the Board approved a third quarter cash dividend of $0.25 per share.

    Annualized dividend yield
    6.5%
    Current

    The dividend currently translates to an annualized yield of approximately 6.5% based on recent trading levels.

    July RevPAR growth
    8.5%
    July FY26

    July RevPAR increasing 8.5% driven by continued strength in Hawaii, Key West, Austin, Santa Barbara and Washington, D.C.

    Property tax appeals benefit
    $11 million
    Q2 FY26

    Partially offset by reductions in fixed costs with $11 million in benefits achieved from successful property tax appeals in the second quarter.

    Property insurance premiums reduction
    20%
    June 1 renewal

    And a 20% reduction in property insurance premiums achieved during the June 1 renewal of our program.

    Royal Palm H2 FY26 group ADR increase
    21%compared to pre-renovation levels
    H2 FY26

    Initial booking trends with group and transient ADRs for the balance of this year, up 21% and 53%, respectively, compared to pre-renovation levels.

    Royal Palm H2 FY26 transient ADR increase
    53%compared to pre-renovation levels
    H2 FY26

    Initial booking trends with group and transient ADRs for the balance of this year, up 21% and 53%, respectively, compared to pre-renovation levels.

    EBITDA from non-core assets in dispute
    $16 million
    Annual

    3 of those 9 are part of the dispute, which don't really require a lot of discussion at this point and only about $16 million in EBITDA.

    EBITDA from other non-core assets
    $35 million
    Annual

    The other 6 assets account for approximately $35 million in EBITDA, and we've got work streams underway.

    Group pace for balance of 2026
    5.5% to 6%
    H2 FY26

    We're 5.5%, 6% for the balance of '26.

    Percent of business on books
    96%
    FY26

    About 96% of our business is on the books, plus or minus.

    Core portfolio RevPAR
    $215
    Current

    As you look at the core, there's about a 63% difference, obviously, in RevPAR from about $215 plus or minus to $131.

    Non-core portfolio RevPAR
    $131
    Current

    As you look at the core, there's about a 63% difference, obviously, in RevPAR from about $215 plus or minus to $131.

    Core portfolio margins
    30% to 31%
    Current

    If you look at margins on core, it's about 30%, 31% versus about 16%.

    Non-core portfolio margins
    16%
    Current

    If you look at margins on core, it's about 30%, 31% versus about 16%.

    Hilton brand exposure
    85% to 90%
    Current

    Our portfolio is certainly heavily Hilton and call it, 85% to 90% of our business is coming from Hilton.

    Orlando visitors
    77 million to 79 million
    FY26

    Orlando is the most visited destination in the country. I think expected 77 million to 79 million visitors this year alone.

    Las Vegas visitors
    45 million
    FY26

    I think Vegas is around 45 million.

    New York visitors
    67 million
    FY26

    I think New York is about 67 million, plus or minus.

    Bonnet Creek EBITDA
    $62 million
    Prior

    We've taken Bonnet Creek from $62 million in EBITDA. We're tracking towards $105 million to $110 million this year.

    Bonnet Creek EBITDA (tracking)
    $105 million to $110 million
    FY26

    We've taken Bonnet Creek from $62 million in EBITDA. We're tracking towards $105 million to $110 million this year.

    Fixed cost reduction
    1.5down year-over-year
    H1 FY26

    As you look at first half, we were probably on average about 1.5 points down year-over-year on fixed cost.

    Fixed cost reduction
    0.5below
    H2 FY26

    With insurance helping us in the back half of the year, it's still probably about 0.5 point below.

    Labor cost growth
    4% to 5%
    Current

    We know that labor is certainly that 4% to 5% kind of growth range.

    Hilton Hawaiian Village mortgage repayment
    $1.27 billion
    September FY26

    We intend to use the remaining delayed draw terminal capacity together with the Bonnet Creek proceeds to fully repay the $1.27 billion Hilton Hawaiian Village mortgage in September.

    Industry KPIs

    7
    MetricValueDetails
    Occupancy rate98%%
    Revenue growth6%%
    Disposition volume$47 millionUSD
    Net debt adjusted EBITDA6.1xx
    Leasing bookings volume signed9.5%%
    Ffo core ffo normalized ffo per share$0.70USD
    Development pipeline under construction$100 millionUSD

    Orderbook & backlog

    1
    Remaining non-core assets9 hotelsQ2 FY26

    Less than 5% of portfolio value

    Committed to materially reducing exposure by year-end 2026.

    Deals & partnerships

    3
    Not statedSale 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 statedExit 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 statedSale of the Hilton Short Hills.$12 million

    314-room hotel. Completed in July.

    Capital programs

    4
    Royal Palm South Beach Redevelopmentcompleted$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 Investmentsnearing 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

    3
    Increased Operating ExpensesFull 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 ExposureMaterial 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 ClosureExpected 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

    5

    Royal Palm South Beach earnings ramp

    FY27 and FY28
    CurrentModest earnings contribution in H2 FY26
    TargetMore 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.

    Q&A highlights

    6

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.