Park Hotels & Resorts Inc. (PK) Bundle
A Brief History of Park Hotels & Resorts Inc.
Park Hotels & Resorts Inc. was established as an independent, publicly traded company on January 3, 2017, following a spin-off from Hilton Worldwide Holdings Inc. The company focuses on owning a portfolio of premium-branded hotels and resorts primarily located in prime city center and resort locations.
Recent Financial Performance
As of September 30, 2024, Park Hotels reported total revenues of $649 million for the third quarter, down from $679 million in the same quarter of 2023. For the nine months ended September 30, 2024, total revenues were $1.974 billion, compared to $2.041 billion for the same period in 2023.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenues | $649 million | $679 million | $1.974 billion | $2.041 billion |
| Net Income | $57 million | $31 million | $153 million | $(82) million |
| Earnings per Share (Diluted) | $0.26 | $0.13 | $0.70 | $(0.42) |
Debt and Financing
As of September 30, 2024, Park Hotels had total indebtedness of approximately $3.9 billion. This includes over $2 billion of Senior Notes. The company issued $550 million of 2030 Senior Notes in May 2024, which bear interest at a rate of 7.00% per annum.
| Debt Type | Amount (in millions) | Interest Rate | Maturity Date |
|---|---|---|---|
| 2030 Senior Notes | $550 | 7.00% | February 1, 2030 |
| 2028 Senior Notes | $725 | 5.88% | October 2028 |
| 2029 Senior Notes | $750 | 4.88% | May 2029 |
| 2024 Term Loan | $200 | SOFR + 1.75% | May 14, 2027 |
Operational Highlights
During the nine months ended September 30, 2024, Park Hotels incurred capital expenditures of $164 million. The company also recognized a net gain of approximately $19 million from the sale of the Hilton La Jolla Torrey Pines, which was included in equity in earnings from investments in affiliates. The company's operational performance has been influenced by increased group demand across various markets including Orlando and New Orleans.
Stock Performance and Share Repurchases
In the first nine months of 2024, Park Hotels repurchased approximately 4.2 million shares of its common stock for a total purchase price of $60 million. The company has a stock repurchase program with approximately $90 million remaining as of September 30, 2024.
| Period | Shares Repurchased | Price Paid (in millions) |
|---|---|---|
| Q1 2024 | — | $0 |
| Q2 2024 | 2.5 million | $35 million |
| Q3 2024 | 1.7 million | $25 million |
Conclusion of Recent Events
In June 2023, Park Hotels ceased making payments on the SF Mortgage Loan, leading to a notice of default. As of October 30, 2024, the total arrearage related to this loan amounted to $84 million, including $39 million in default interest. The Hilton San Francisco Hotels, which serve as security for the SF Mortgage Loan, were placed into receivership.
A Who Owns Park Hotels & Resorts Inc. (PK)
Major Shareholders
As of 2024, the ownership structure of Park Hotels & Resorts Inc. (PK) is characterized by a mix of institutional and individual investors. The largest shareholders include:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| BlackRock, Inc. | 16.3% | Institutional |
| The Vanguard Group, Inc. | 10.7% | Institutional |
| State Street Corporation | 5.8% | Institutional |
| Wellington Management Company, LLP | 5.1% | Institutional |
| Geode Capital Management, LLC | 4.2% | Institutional |
| Individual Investors | 58.9% | Retail |
Insider Ownership
Insider ownership as of 2024 shows that executives and board members hold a significant portion of shares:
| Insider | Title | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Thomas J. Baltimore Jr. | Chairman and CEO | 1.2 million | 0.6% |
| Michael J. O’Neill | Director | 0.5 million | 0.25% |
| Other Executives | - | 0.8 million | 0.4% |
Stock Performance
As of Q3 2024, the stock price of Park Hotels & Resorts Inc. (PK) is approximately $14.50, with a market capitalization of around $3.0 billion. The stock has seen a year-to-date performance of approximately +12%, reflecting a recovery trend within the hospitality sector.
Recent Financial Highlights
Park Hotels & Resorts reported a net income of $153 million for the nine months ending September 30, 2024, compared to a net loss of $82 million in the same period of the previous year. The earnings per share (EPS) for this period stood at $0.70, up from a loss of $0.42 in the previous year.
Debt and Financial Obligations
As of September 30, 2024, Park Hotels & Resorts had total debt obligations amounting to $3.88 billion. The major components of this debt include:
| Debt Type | Amount (in millions) | Interest Rate | Maturity Date |
|---|---|---|---|
| HHV Mortgage Loan | $1,275 | 4.20% | November 2026 |
| 2024 Term Loan | $200 | SOFR + 1.75% | May 2027 |
| 2028 Senior Notes | $725 | 5.88% | October 2028 |
| 2029 Senior Notes | $750 | 4.88% | May 2029 |
| 2030 Senior Notes | $550 | 7.00% | February 2030 |
Recent Changes in Ownership
During the past year, Park Hotels & Resorts has engaged in a stock buyback program, repurchasing approximately 4.35 million shares at an average price of $15.01, totaling around $65 million. This program reflects the company's strategy to enhance shareholder value amid recovering market conditions.
Conclusion on Ownership Structure
The ownership of Park Hotels & Resorts Inc. is diversified among institutional investors, individual shareholders, and company insiders. The significant presence of institutional investors like BlackRock and Vanguard underscores the company's attractiveness in the hospitality sector.
Park Hotels & Resorts Inc. (PK) Mission Statement
Overview of Mission Statement
The mission statement of Park Hotels & Resorts Inc. emphasizes a commitment to providing exceptional hospitality experiences while maximizing shareholder value through strategic asset management and operational excellence.
Financial Performance Indicators
As of September 30, 2024, Park Hotels & Resorts reported the following financial metrics:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $649 million | $679 million | -4.4% |
| Net Income | $57 million | $31 million | 83.9% |
| Earnings per Share (Diluted) | $0.26 | $0.13 | 100.0% |
| Total Assets | $9.173 billion | $9.419 billion | -2.6% |
| Total Debt | $3.855 billion | $3.765 billion | 2.4% |
| Cash and Cash Equivalents | $518 million | $786 million | -34.1% |
Strategic Initiatives
Park Hotels & Resorts focuses on the following strategic initiatives to fulfill its mission:
- Enhancing guest experiences through innovative service offerings.
- Optimizing asset performance by leveraging data analytics and market insights.
- Investing in sustainable practices to reduce environmental impact.
- Maintaining a strong balance sheet to support growth and shareholder returns.
Key Operational Metrics
For the nine months ended September 30, 2024, the following operational metrics were recorded:
| Operational Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Rooms Revenue | $1.193 billion | $1.256 billion | -5.0% |
| Food and Beverage Revenue | $521 million | $518 million | 0.6% |
| Ancillary Revenue | $196 million | $203 million | -3.4% |
| Occupancy Rate | 75% | 76% | -1.3% |
| Average Daily Rate (ADR) | $180 | $175 | 2.9% |
Recent Challenges and Resolutions
Park Hotels & Resorts faced challenges due to the receivership of two hotels in San Francisco, impacting financial performance. The company has actively engaged in strategies to mitigate these impacts:
- Restructuring debt associated with the affected properties.
- Enhancing marketing efforts to drive demand at other locations.
- Implementing cost control measures to improve margins.
Future Outlook
Looking ahead, Park Hotels & Resorts aims to continue improving its operational efficiencies and exploring opportunities for expansion through strategic acquisitions and partnerships.
How Park Hotels & Resorts Inc. (PK) Works
Business Overview
Park Hotels & Resorts Inc. operates as a publicly traded real estate investment trust (REIT) focused on the hospitality sector. The company primarily invests in premium-branded hotels and resorts, with a portfolio that includes properties in various key markets across the United States.
Financial Performance
As of September 30, 2024, Park Hotels & Resorts reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenues | $649 million | $679 million | $(30 million) |
| Net Income | $57 million | $31 million | $26 million |
| Earnings per Share (EPS) - Basic | $0.26 | $0.13 | $0.13 |
| Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) | $189 million | $154 million | $35 million |
| Adjusted EBITDA | $168 million | $173 million | $(5 million) |
Revenue Breakdown
The breakdown of revenues for the nine months ended September 30, 2024, is as follows:
| Revenue Source | Amount (in millions) |
|---|---|
| Rooms Revenue | $1,193 million |
| Food and Beverage Revenue | $521 million |
| Ancillary Hotel Revenue | $196 million |
| Other Revenues | $64 million |
| Total Revenue | $1,974 million |
Operating Expenses
For the nine months ended September 30, 2024, operating expenses were as follows:
| Expense Type | Amount (in millions) |
|---|---|
| Rooms Expense | $314 million |
| Food and Beverage Expense | $356 million |
| Other Departmental and Support Expense | $454 million |
| Other Property Expense | $174 million |
| Management Fees Expense | $93 million |
| Total Operating Expenses | $1,710 million |
Debt and Liquidity
As of September 30, 2024, Park Hotels & Resorts reported the following debt details:
| Debt Type | Principal Balance (in millions) | Interest Rate | Maturity Date |
|---|---|---|---|
| HHV Mortgage Loan | $1,275 million | 4.20% | November 2026 |
| 2024 Term Loan | $200 million | SOFR + 1.75% | May 2027 |
| 2028 Senior Notes | $725 million | 5.88% | October 2028 |
| 2029 Senior Notes | $750 million | 4.88% | May 2029 |
| 2030 Senior Notes | $550 million | 7.00% | February 2030 |
| Total Debt | $3,855 million | — | — |
Recent Developments
In July 2024, Park Hotels & Resorts sold the Hilton La Jolla Torrey Pines for approximately $165 million, recognizing a gain of about $19 million. Additionally, the company has faced challenges related to the Hilton San Francisco Hotels, which are currently under receivership due to a default on the SF Mortgage Loan.
Stock Buyback Program
During the first nine months of 2024, Park Hotels & Resorts repurchased approximately 4.35 million shares of common stock at an average price of $15.01.
Outlook
Park Hotels & Resorts anticipates continued improvement in demand for its hotels, driven by increases in city-wide events and a rebound in international travel.
How Park Hotels & Resorts Inc. (PK) Makes Money
Revenue Streams
Park Hotels & Resorts Inc. generates revenue primarily through the following segments:
- Rooms Revenue: Revenue from room bookings is a significant source, contributing $1,193 million for the nine months ended September 30, 2024, compared to $1,256 million for the same period in 2023.
- Food and Beverage Revenue: This segment generated $521 million in the nine months ended September 30, 2024, slightly increasing from $518 million in 2023.
- Ancillary Hotel Revenue: This includes additional services such as parking and spa services, totaling $196 million for the nine months ended September 30, 2024, down from $203 million in 2023.
Financial Performance
As of September 30, 2024, Park Hotels reported total revenues of $1,974 million, a decrease from $2,041 million in 2023. The breakdown of revenues is as follows:
| Revenue Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Rooms Revenue | $1,193 | $1,256 |
| Food and Beverage Revenue | $521 | $518 |
| Ancillary Hotel Revenue | $196 | $203 |
| Total Revenues | $1,974 | $2,041 |
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, totaled $1,710 million, down from $1,989 million in 2023. Key expenses included:
| Expense Type | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Rooms Expense | $314 | $343 |
| Food and Beverage Expense | $356 | $377 |
| Other Departmental and Support Expense | $454 | $484 |
| Total Operating Expenses | $1,710 | $1,989 |
Net Income and Earnings Per Share
For the nine months ended September 30, 2024, Park Hotels reported a net income of $153 million, compared to a loss of $82 million in 2023. The earnings per share (EPS) were:
| Period | Basic EPS | Diluted EPS |
|---|---|---|
| 2024 | $0.70 | $0.69 |
| 2023 | ($0.42) | ($0.42) |
Debt and Interest Expense
As of September 30, 2024, Park Hotels had total debt of $3,855 million. The breakdown of interest expense for the nine months ended September 30, 2024, was:
| Debt Type | Interest Expense (in millions) |
|---|---|
| HHV Mortgage Loan | $40 |
| 2024 Term Loan | $6 |
| 2030 Senior Notes | $15 |
| Total Interest Expense | $161 |
Liquidity and Capital Resources
Park Hotels maintained approximately $518 million in cash and cash equivalents as of September 30, 2024. Additionally, they had $950 million available under their revolving credit facility.
Capital Expenditures
The company has committed approximately $113 million for capital expenditures, including:
| Project | Commitment (in millions) |
|---|---|
| Hilton Hawaiian Village Renovation | $34 |
| Hilton Waikoloa Village Renovation | $19 |
| Hilton New Orleans Riverside Renovation | $6 |
| Total Commitments | $113 |
Market Performance
The overall hotel market for Park Hotels has shown improvement due to increased demand, particularly in urban locations. This trend has positively impacted occupancy rates and average daily rates (ADR).
Conclusion
Park Hotels & Resorts Inc. continues to adapt its business model to leverage market demand while managing its operational costs effectively.
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Article updated on 8 Nov 2024
Resources:
- Park Hotels & Resorts Inc. (PK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Park Hotels & Resorts Inc. (PK)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Park Hotels & Resorts Inc. (PK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.