Park Hotels & Resorts Inc. (PK): Business Model Canvas

Introduction:

The hotel industry has been growing by leaps and bounds over the past decade. In 2019, the global hotel industry generated a revenue of over $600 billion, and it is expected to reach $870 billion by 2025, growing at a CAGR of 4.3%. This growth can be attributed to increased travel and tourism activities, a rise in disposable income, and improvements in the standard of living. With this growth, comes the emergence of new players in the market, such as Park Hotels & Resorts Inc.

Park Hotels & Resorts Inc. is a self-managed and self-administered real estate investment trust (REIT) that primarily focuses on upscale and luxury hotels and resorts located in prime destinations around the world. This blog post will delve into the business model canvas of the company, highlighting its key partners, activities, value propositions and revenue streams, as well as its differentiation factors.

As we take a closer look at Park Hotels & Resorts Inc.'s business model canvas, it is important to note that the company's revenue is generated through operating hotel properties, making direct investments in hotel properties through joint ventures, and from asset management services fees. The company's key partners and suppliers include hotel brands, property management companies, and travel agencies.

With a focus on sustainability initiatives that deliver a differentiated guest experience, Park Hotels & Resorts Inc. is well positioned to maximize shareholder value while maintaining a strong presence in the US and international markets. This blog post will provide insights into the company's strategic approach to property development, financing, and management, all while providing an engaging read for readers who are interested in the hotel industry as a whole.

Key Partnerships

Park Hotels & Resorts Inc. (PK) relies on various partners to ensure efficient operations and the delivery of quality services to its guests. The company has established key partnerships with the following entities:

• Hotel Owners and Developers: PK collaborates with various hotel owners and developers to expand its portfolio of properties. These partners provide new properties that PK can operate, manage, and/or invest in to enhance its offerings to guests and increase its revenue.
• Online Travel Agencies (OTAs): PK partners with OTAs like Expedia, Booking.com, and Hotels.com to expand its reach and attract guests to its properties. These partners provide a platform where guests can research and book a stay at any of the hotels in PK's portfolio.
• Technology Providers: PK relies on technology providers like Oracle Hospitality and Guestware to provide software solutions that help the company deliver quality services to guests, manage its properties more efficiently, and improve its revenue. These partners provide PK access to their latest technologies, which enables the company to stay competitive in the market.
• Food and Beverage Suppliers: PK has partnerships with food and beverage suppliers like Sysco and US Foods to provide quality food products for its hotels' restaurants and room service. These partners ensure that PK's guests enjoy quality meals during their stay at any of the company's properties.
• Travel Agents: PK has established partnerships with travel agents to increase the number of guests booking their stay at any of the company's properties. These partners market PK's hotels to their clients and provide booking solutions that make it easy for guests to plan their trip and stay comfortably at any of PK's properties.

These key partnerships enable PK to improve its operations, deliver quality services to guests, and increase its revenue. By collaborating with these entities, PK can expand its footprint in the hospitality industry and stay competitive in the market.

Key Activities

Park Hotels & Resorts Inc. (PK) is a publicly traded real estate investment trust (REIT) that owns and operates more than 60 premium hotels and resorts in the United States and abroad. To create value for its stakeholders, PK engages in several key activities.

• Acquiring and developing properties: PK strategically acquires and develops hotel properties in locations that have strong demand fundamentals and are expected to generate attractive returns on investment. This includes conducting extensive due diligence and market research to identify profitable opportunities.
• Asset management: PK has a skilled asset management team that oversees the daily operations of its hotels to ensure they are being operated efficiently and effectively. This includes monitoring revenue and expense trends, implementing cost-saving measures, and implementing new programs to drive revenue growth.
• Providing exceptional guest experiences: PK understands that its success is tied to providing a memorable guest experience at its hotels. To achieve this, PK focuses on delivering high-quality service, providing comfortable and inviting accommodations, and offering exceptional amenities to enhance the guest experience.
• Marketing and brand management: PK has an experienced marketing team that promotes its brand and hotels to targeted audiences. This includes using a variety of marketing channels such as social media, online advertising, and public relations. PK also invests in building and maintaining strong brand equity and awareness through ongoing brand management activities.
• Financial management: PK has a well-established finance department that manages its financial operations, including budgeting, forecasting, financial reporting, and risk management. This is critical to ensure that PK is making informed business decisions based on accurate financial information.

Through its key activities, PK aims to create long-term value for its shareholders by operating a portfolio of premier hotels and resorts that provide guests with exceptional experiences and generate profitable returns on investment.

Key Resources

Park Hotels & Resorts Inc. (PK) requires a range of resources to operate its business successfully. These resources include:

• Property Portfolio: The company owns a diverse range of hotel properties across various locations, which is the primary resource. It includes luxury hotels and resorts, mid-scale hotels, and select-service hotels that provide the customers with diverse options to choose from.
• Employees: The company's employees play a crucial role in ensuring the smooth functioning of its operations. The skilled workforce includes corporate management, hotel staff, and customer service employees.
• Brand Name: The Park Hotels & Resorts brand name is a valuable resource that helps attract customers due to the reputation and quality of service it provides. The brand has a positive image among customers, which helps attract more visitors.
• Technology: The company uses various technologies to improve its operations, including IT systems such as property management systems, customer relationship management systems, and revenue management systems. The technology also includes energy management systems that help reduce energy costs.
• Financial Resources: The company requires a substantial amount of financial resources to acquire and maintain its properties, pay salaries, invest in technology, and advertise its brand.
• Supplier Relationships: The company has established robust relationships with its suppliers to ensure that the hotel properties receive high-quality goods and services in a timely and cost-effective manner.
• Brand Partnerships: The company also partners with various brands to enhance its offerings, which helps attract more customers. These partnerships include collaborations with restaurants and spas to provide their customers with a complete luxury experience.
• Certifications: The company holds various certifications for its properties, such as LEED certification, which helps attract customers who value environmentally-friendly accommodation.

These resources are critical for the company's success, and the efficient utilization of these resources can differentiate the company from its competitors.

Value Propositions

Park Hotels & Resorts Inc. is committed to providing a world-class hospitality experience for its guests. Our value propositions are based on delivering exceptional quality, personalized service, and innovative solutions that meet the unique needs and preferences of our guests.

• Premium Accommodations: We offer a range of premium accommodations including luxury hotels, resorts, and vacation rentals that are designed to provide our guests with a comfortable and memorable stay.
• Personalized Service: We believe in providing personalized service that exceeds our guests’ expectations. We understand that each guest has unique needs and preferences, and we strive to create a customized experience that meets their specific requirements.
• Innovative Solutions: We are committed to constantly evolving and improving our services and offerings to meet the changing needs of our guests. We invest in innovative solutions, including advanced technology, to enhance the guest experience and streamline operations.
• Sustainability: We are committed to reducing our environmental impact by implementing sustainable practices and initiatives. We understand the responsibility we have to the environment and our communities, and we strive to make a positive impact through our operations.
• World-Class Amenities: Our properties offer a range of world-class amenities such as fine dining restaurants, spas, fitness centers, and entertainment options to ensure our guests have everything they need for a comfortable and enjoyable stay.

Our value propositions are designed to create a unique and memorable experience for our guests. We believe that by offering exceptional quality, personalized service, and innovative solutions, we can position ourselves as a leading hospitality company in the industry.

Customer Relationships

Park Hotels & Resorts Inc. thinks about customer relationships as a crucial element of its business success. The company has realized that building long-lasting relationships with customers is vital to ensure they keep coming back, increasing their lifetime value and bringing in new referrals. The Park Hotels & Resorts Inc. Customer Relationship Strategy prioritizes personalized and direct interaction with customers to strengthen customer engagement, loyalty, and retention. Types of Customer Relationships:

• Personal Assistance: Park Hotels & Resorts Inc. values providing personalized assistance to all guests. The hotel chain has implemented a 24/7 customer service hotline to ensure that guests can always have their queries resolved instantly. Additionally, there is an option to chat live with a customer care representative on the company's website, ensuring customers get adequate attention and support.
• Self-service: The company has an online platform where customers can conveniently manage their reservations, prebook amenities and get instant updates on their booking's progress. This service empowers customers to access all the relevant information they need at their convenience, allowing them to make informed decisions and create a sense of control over their customer experience with the hotel.
• Communities: Park Hotels & Resorts Inc. utilizes social media platforms to create a community of its customers worldwide. This community offers a platform for customers to review services; ask questions, and engage with the customer support team. This strategy not only increases customer loyalty but also helps in creating an emotional connection between the hotel and the customers.

Park Hotels & Resorts Inc. constantly updates its customer relationship strategy to align with the ever-evolving needs and expectations of their customers. The company views its customer relationship strategy as an integral part of its competitive advantage by offering excellent services while creating a unique customer-centric experience.

Channels

Park Hotels & Resorts Inc. will use various channels to reach its target market and generate revenue. The channels we will use are:

• Direct Sales: We will use our website and call center to generate direct sales. Customers can book their reservations online or by calling our customer service representatives.
• Online Travel Agencies: We will partner with online travel agencies (OTAs) such as Expedia, Booking.com, and Priceline to increase our visibility and reach more customers. These partnerships will help us reach customers who prefer to book their reservations through OTAs.
• Travel Agents: We will partner with travel agencies and tour operators to attract guests who prefer personalized service and customized travel itineraries.
• Corporate Sales: We will target corporate clients by partnering with companies and offering discounts and packages for their employees.
• Marketing Campaigns: We will use various marketing channels such as social media, email marketing, and targeted advertising to promote our hotels.

These channels will be integrated with our customer relationship management (CRM) system to provide personalized and efficient customer service to our guests. By using these channels, we aim to create a seamless customer experience and increase our revenue streams.

Customer Segments

Park Hotels & Resorts Inc. caters to a diverse range of customer segments including:

• Business travelers: Park Hotels & Resorts Inc. provides high-end accommodations and amenities to business travelers that require comfortable and convenient lodging while on business trips. The company offers state-of-the-art meeting rooms and event spaces that can be utilized for corporate events and conferences.
• Leisure travelers: The company offers various amenities, activities, and experiences that cater to the needs of leisure travelers, such as luxury spas, adventure sports, golf courses, fine dining restaurants, and more. The company aims to provide a luxurious and memorable stay to leisure travelers that can create lasting memories.
• Group travelers: Park Hotels & Resorts Inc. provides special rates and packages to groups of travelers, such as weddings, family reunions, sports teams, and community events. The company offers accommodations that cater to the unique needs of group travelers such as adjoining rooms, special events spaces, and easy access to amenities.
• Extended stay guests: The company provides extended-stay accommodations and amenities to guests such as corporate employees, government employees, and construction workers who need to stay for longer periods. The company offers special rates, discounts, and flexible lease agreements to long-term guests.

The company also targets specific customer segments such as luxury travelers, event planners, government officials, and airline crew members. Park Hotels & Resorts Inc. aims to provide personalized services and experiences that cater to the unique needs of each customer segment.

Cost Structure

The cost structure for Park Hotels & Resorts Inc. is mainly composed of fixed and variable costs.

Fixed Costs:

• Property Acquisition and Development Costs: This includes the costs incurred in acquiring and developing new properties, such as land purchase, construction, and other associated costs.
• Property Maintenance Costs: This includes the costs incurred in maintaining the properties, such as property taxes, insurance, utilities, and maintenance expenses.
• Administration and Overhead Costs: This includes the costs associated with running the corporate headquarters and administrative functions, such as salaries and benefits of employees, IT systems, and legal and accounting services.
• Marketing and Promotion Costs: This includes the costs incurred in promoting the hotel properties and attracting customers, such as advertising and public relations expenses.

Variable Costs:

• Operating Costs: This includes the costs incurred in running the hotel properties, such as labor costs, supply costs, and other expenses.
• Occupancy-Related Costs: This includes the costs associated with providing room services, such as laundry, housekeeping, and room amenities.
• Food and Beverage Costs: This includes the costs incurred in providing food and beverage services to hotel guests, including purchasing ingredients, preparing and serving food, and managing the restaurants and bars.
• Capital Expenditures: This includes the costs associated with maintaining and upgrading the hotel properties, such as renovation costs and furniture and fixture replacements.

Overall, the cost structure is influenced by various factors such as the stage of the hotel lifecycle, the location of the properties, and the level of competition in the market. To optimize the cost structure, Park Hotels & Resorts Inc. continuously evaluates the efficiency of its operations and adjusts expenses as necessary to maximize profitability while offering high-quality services to its guests.

Revenue Streams

Park Hotels & Resorts Inc. generates revenue through various streams:

• Room Revenue: Park Hotels & Resorts Inc. generates revenue from renting hotel rooms to guests. The room rates depend on the type of room, location, season, and amenities provided.
• Food and Beverage: The company generates revenue from restaurants, cafes, bars, and room service. The food and beverage revenue is an important source of income for the company and accounts for a significant portion of the total revenue.
• Conference and Meeting Rooms: Park Hotels & Resorts Inc. generates revenue by renting conference and meeting rooms to businesses and other groups. The company offers various conference and meeting packages that include catering, audio-visual equipment, and other services.
• Wedding and Banquets: The company generates revenue by hosting weddings, receptions, banquets, and other events. The revenue is derived from the rental of event spaces, catering, and other services.
• Rental and Other Income: The company generates revenue from the rental of retail spaces, parking, and other services. Additionally, the company earns revenue from interest on investments, fees for late cancellations, and other miscellaneous fees.

Park Hotels & Resorts Inc. has diversified its revenue streams to minimize the impact of any one source of income. The company is constantly exploring new revenue streams to enhance its income.

Conclusion

Overall, the business model canvas for Park Hotels & Resorts Inc. (PK) shows the company's strong focus on offering quality hospitality services to meet the needs of various customers. The company's strategic partnerships, revenue streams, and cost structure guarantee revenue growth and maximum profits. The company's value proposition of providing luxurious accommodation, business facilities, and local experiences for their guests sets them apart from their competitors.

• The company's key partnerships with big hotel brands, airlines, and travel websites leverage their reach to the global market and help increase their customer base through referrals and marketing.
• Their various revenue streams such as room rates, F&B services, rentals, and other tourism activities guarantee that they can generate enough revenue to support their operations and keep up with their quality standards.
• The company's cost structure, which focuses on operational efficiency, cost-cutting strategies, and sustainable tourism practices, will help them stay competitive in the industry while maintaining their profits.

Park Hotels & Resorts Inc. (PK) also shows their commitment to innovation and continuous improvement through their investments in technology, research and development, and staff development. This ensures that they can keep up with the changing times and offer the best quality of services to their guests.

Overall, the canvas highlights the company's strengths and opportunities for growth, while also identifying potential risks and weaknesses that need to be addressed. The canvas serves as a guide for the company's overall strategy and direction, ensuring that they can deliver the best possible value to their stakeholders and customers.