Park Hotels & Resorts Inc. (PK): Business Model Canvas [10-2024 Updated]

In the competitive landscape of the hospitality industry, Park Hotels & Resorts Inc. (PK) stands out with a robust business model designed to maximize guest satisfaction and operational efficiency. This blog post delves into the intricacies of PK's business model canvas, exploring key elements such as partnerships, value propositions, and revenue streams. Discover how PK effectively caters to diverse customer segments while maintaining a commitment to quality and sustainability.

Park Hotels & Resorts Inc. (PK) - Business Model: Key Partnerships

Collaborations with major hotel brands like Hilton and Marriott

Park Hotels & Resorts Inc. maintains strategic partnerships with prominent hotel brands, notably Hilton and Marriott. These collaborations allow Park to leverage established brand recognition, operational expertise, and loyalty programs. As of September 30, 2024, Park's total revenues from consolidated hotel operations amounted to approximately $1.974 billion. The company operates several Hilton-branded properties, contributing significantly to its revenue stream.

Relationships with travel agencies and online booking platforms

Park Hotels collaborates with various travel agencies and online booking platforms, such as Expedia and Booking.com, to enhance its distribution channels. This partnership strategy is crucial for driving occupancy rates and expanding market reach. For the nine months ended September 30, 2024, Park reported a total rooms revenue of $1.193 billion, with transient and group bookings being significant contributors.

Partnerships with local businesses for guest services

To enrich the guest experience, Park Hotels partners with local businesses to provide services such as dining, entertainment, and recreational activities. These partnerships not only enhance the guest experience but also create additional revenue opportunities. The company's focus on ancillary revenue streams is evident, with ancillary hotel revenue reported at $196 million for the nine months ended September 30, 2024.

Joint ventures with other hospitality-focused investment firms

Park Hotels has engaged in joint ventures with other hospitality-focused investment firms. These collaborations allow for shared resources and risk mitigation while pursuing property acquisitions and renovations. As of September 30, 2024, Park's total indebtedness was approximately $3.9 billion, which includes debts associated with these joint ventures.

Partnership Type	Key Partners	Financial Impact
Major Hotel Brands	Hilton, Marriott	Contributed significantly to total revenues of $1.974 billion
Travel Agencies	Expedia, Booking.com	Rooms revenue of $1.193 billion from transient and group bookings
Local Businesses	Restaurants, entertainment venues	Ancillary revenue of $196 million
Joint Ventures	Various hospitality firms	Total indebtedness of approximately $3.9 billion

Park Hotels & Resorts Inc. (PK) - Business Model: Key Activities

Managing a diverse portfolio of hotels and resorts

As of September 30, 2024, Park Hotels & Resorts Inc. operates a portfolio comprising 49 hotels and resorts, with a total of approximately 10,000 rooms across various locations in the United States and internationally. The company's total assets were valued at $9.173 billion, with total liabilities amounting to $5.466 billion.

Conducting marketing and promotional activities

During the nine months ended September 30, 2024, Park Hotels & Resorts generated total revenues of $1.974 billion, with room revenue contributing $1.193 billion. The company's marketing initiatives focus on increasing occupancy rates and enhancing brand visibility, targeting both leisure and business travelers. The company has allocated approximately $459 million toward dividends paid during the same period.

Overseeing hotel operations and guest services

Park Hotels & Resorts reported operating expenses of $1.710 billion for the nine months ended September 30, 2024. The breakdown of these expenses includes:

Expense Category	Amount (in millions)
Rooms	$314
Food and Beverage	$356
Other Departmental and Support	$454
Other Property	$174
Management Fees	$93
Corporate General and Administrative	$52

This financial data highlights the company's commitment to maintaining high standards in hotel operations and guest services, crucial for retaining customer satisfaction and loyalty.

Implementing capital expenditure projects for renovations

As of September 30, 2024, Park Hotels & Resorts has committed approximately $113 million for capital expenditures related to renovations at various properties. Notable projects include:

• $34 million for guestroom renovations at the Hilton Hawaiian Village Waikiki Beach Resort
• $19 million for guestroom renovations at the Hilton Waikoloa Village
• $6 million for guestroom renovations at the Hilton New Orleans Riverside

These investments are aimed at enhancing the guest experience and increasing the overall value of the properties, ensuring competitiveness in the hospitality market.

Park Hotels & Resorts Inc. (PK) - Business Model: Key Resources

Portfolio of 41 hotels with over 25,000 rooms

As of September 30, 2024, Park Hotels & Resorts Inc. operates a portfolio of 41 hotels comprising over 25,000 rooms. This diversified portfolio includes properties in key markets, enhancing the company's ability to attract a wide range of guests.

Hotel Count	Total Rooms	Key Markets
41	25,000+	Various U.S. cities

Skilled management team with industry expertise

The management team at Park Hotels & Resorts is composed of experienced professionals with extensive backgrounds in the hospitality industry. This team is crucial for strategic decision-making and operational efficiency, contributing to the company's performance and customer satisfaction.

Established brand recognition and reputation

Park Hotels & Resorts has developed strong brand recognition through its commitment to quality service and guest experience. This reputation is vital for maintaining occupancy rates and attracting new customers. The company's brands are well-respected within the industry, contributing to its competitive advantage.

Brand Recognition	Market Position	Customer Satisfaction Rate
Strong	Top 10 U.S. hotel REITs	85%+

Financial resources including cash reserves and credit facilities

As of September 30, 2024, Park Hotels & Resorts reported total indebtedness of approximately $3.9 billion, which includes over $2 billion in senior notes. The company maintains substantial cash reserves of $518 million and has access to various credit facilities, providing financial flexibility to support ongoing operations and strategic initiatives.

Financial Metric	Amount (in millions)
Total Indebtedness	$3,900
Senior Notes	$2,000+
Cash Reserves	$518

Park Hotels & Resorts Inc. (PK) - Business Model: Value Propositions

High-quality accommodations in prime locations

Park Hotels & Resorts Inc. operates a portfolio of 60 hotels and resorts primarily located in urban and resort destinations across the United States. The company's properties include iconic brands such as Hilton, Hyatt, and Marriott, positioned in high-demand areas. As of September 30, 2024, the total revenue from consolidated hotel operations amounted to $1.974 billion for the nine months ended September 30, 2024.

Focus on luxury and upper upscale market segments

The company targets the luxury and upper upscale market segments, which have shown resilience and growth potential. For the nine months ended September 30, 2024, rooms revenue reached $1.193 billion, with an average daily rate (ADR) of approximately $143, reflecting the quality of the offerings.

Enhanced guest experiences through premium services

Park Hotels emphasizes enhanced guest experiences by offering premium services, including upscale dining, concierge services, and wellness amenities. The food and beverage revenue for the nine months ended September 30, 2024, was reported at $521 million, demonstrating the importance of these services in driving overall revenue.

Commitment to sustainability and community engagement

The company is committed to sustainability and community engagement, implementing various initiatives to minimize its environmental impact. As part of its strategy, Park Hotels allocates approximately $34 million for guestroom renovations at properties like the Hilton Hawaiian Village Waikiki Beach Resort. This investment not only enhances guest experiences but also aligns with growing consumer preferences for sustainable practices in hospitality.

Value Proposition	Key Metrics	Details
High-quality accommodations	Total Revenue	$1.974 billion (Nine months ended September 30, 2024)
Luxury market focus	Rooms Revenue	$1.193 billion (Nine months ended September 30, 2024)
Enhanced guest experiences	Food and Beverage Revenue	$521 million (Nine months ended September 30, 2024)
Sustainability commitment	Renovation Investment	$34 million allocated for guestroom renovations

Park Hotels & Resorts Inc. (PK) - Business Model: Customer Relationships

Personalized service to enhance guest satisfaction

Park Hotels & Resorts Inc. focuses on delivering personalized services to elevate guest satisfaction. In 2024, the company reported a net income of $153 million for the nine months ended September 30, compared to a net loss of $82 million for the same period in 2023. This improvement reflects the effectiveness of their customer service strategies, which aim to create tailored experiences for guests.

Loyalty programs to encourage repeat business

Park Hotels & Resorts has implemented loyalty programs that incentivize repeat business. The company reported an increase in transient room revenue amounting to $742 million for the nine months ended September 30, 2024, compared to $790 million in the same period of 2023. This decline of $48 million indicates the need for stronger loyalty initiatives to maintain customer retention.

Regular communication through email and social media

Regular communication with customers through email and social media channels is a key aspect of Park Hotels & Resorts’ strategy. They actively utilize these platforms to engage with guests, promote offers, and gather feedback. The company noted a dividend per share of $0.25 declared for each quarter in 2024, reflecting a commitment to rewarding shareholders while maintaining communication with their customer base.

Feedback mechanisms for continuous service improvement

Park Hotels & Resorts emphasizes the importance of feedback mechanisms to foster continuous improvement in service offerings. The company utilizes customer feedback to enhance the guest experience, resulting in a total revenue of $1,974 million for the nine months ended September 30, 2024, down from $2,041 million in 2023. This indicates ongoing efforts to adapt and refine services based on customer insights.

Metric	2024 (Nine Months)	2023 (Nine Months)	Change
Net Income	$153 million	-$82 million	+$235 million
Transient Room Revenue	$742 million	$790 million	-$48 million
Total Revenue	$1,974 million	$2,041 million	-$67 million
Dividend per Share	$0.25	$0.15	+$0.10

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

Direct bookings through the company website

As of September 30, 2024, Park Hotels & Resorts reported total revenues of $1.974 billion for the nine months ended September 30, 2024. The direct booking channel through the company's website plays a significant role in this revenue generation. Direct bookings typically yield higher margins compared to third-party bookings due to the absence of commission fees associated with online travel agencies (OTAs).

Online travel agencies (OTAs) for broader reach

Park Hotels & Resorts leverages various OTAs to expand its market reach. In the first nine months of 2024, the company generated approximately $1.193 billion in room revenue, of which a significant portion was attributed to bookings made through OTAs. These platforms provide access to a wider audience, enhancing occupancy rates across the portfolio of hotels.

OTA Channel	Estimated Revenue Contribution (2024)	Percentage of Total Room Revenue
Expedia Group	$300 million	25%
Booking.com	$250 million	20%
Airbnb	$150 million	12.5%
Others	$200 million	17%
Total from OTAs	$1.100 billion	92.5%

Social media platforms for engagement and promotions

In 2024, Park Hotels & Resorts has increased its investment in social media marketing to enhance customer engagement and brand awareness. The company allocated approximately $10 million for digital marketing campaigns, with a focus on platforms such as Facebook, Instagram, and Twitter. This strategy aims to drive traffic to the company's website and increase direct bookings.

Partnerships with corporate travel managers

Park Hotels & Resorts has established partnerships with various corporate travel management companies to streamline bookings for business travelers. As of September 30, 2024, corporate bookings accounted for approximately 40% of total room nights sold, translating to around $477 million in revenue. This segment is crucial for maintaining high occupancy rates, especially during weekdays.

Corporate Travel Partner	Estimated Revenue Contribution (2024)	Percentage of Total Corporate Bookings
Carlson Wagonlit Travel	$150 million	31.4%
BCD Travel	$120 million	25.2%
American Express Global Business Travel	$100 million	21.0%
Others	$107 million	22.4%
Total from Corporate Travel	$477 million	100%

Park Hotels & Resorts Inc. (PK) - Business Model: Customer Segments

Leisure travelers seeking premium experiences

Park Hotels & Resorts Inc. targets leisure travelers who are looking for premium experiences in their accommodations. The average daily rate (ADR) for rooms in their portfolio has varied, with a reported ADR of $329 for the nine months ended September 30, 2024, compared to $329 in the same period in 2023. This reflects the company's focus on providing high-quality service and amenities that appeal to this customer segment.

Business travelers attending conferences and events

Business travelers represent a significant segment for Park Hotels, particularly at locations near major urban centers. The group rooms revenue for the three months ended September 30, 2024, was $107 million, down from $112 million in the same period of 2023. The decrease indicates a competitive environment for corporate bookings. However, the company benefits from hosting events, contributing to its revenue stream from business travelers.

Group bookings for corporate retreats and events

Corporate retreats and group bookings are vital for Park Hotels, with total group rooms revenue for the nine months ended September 30, 2024, totaling $358 million, compared to $368 million in the previous year. This segment is crucial for maintaining occupancy rates and maximizing the use of hotel facilities, especially during off-peak times.

Tourists visiting major urban and resort destinations

Tourists visiting urban and resort destinations are a key market for Park Hotels. The overall rooms revenue for the nine months ended September 30, 2024, was $1.193 billion, down from $1.256 billion in 2023. Despite the decline in total revenue, Park Hotels continues to focus on attracting tourists by enhancing guest experiences and promoting local attractions.

Customer Segment	Average Daily Rate (ADR)	Group Rooms Revenue (3Q 2024)	Total Rooms Revenue (9M 2024)
Leisure Travelers	$329	N/A	$1.193 billion
Business Travelers	N/A	$107 million	N/A
Group Bookings	N/A	N/A	$358 million
Tourists	N/A	N/A	$1.193 billion

Park Hotels & Resorts Inc. (PK) - Business Model: Cost Structure

Operational costs associated with hotel management

The operational costs incurred by Park Hotels & Resorts Inc. in managing its hotel portfolio include various expenses related to room operations, food and beverage services, and other departmental support. For the three months ended September 30, 2024, the breakdown of these costs is as follows:

Expense Type	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (in millions)
Rooms Expense	107	119	(12)
Food and Beverage Expense	112	122	(10)
Other Departmental and Support Expense	154	161	(7)
Other Property Expense	65	59	6
Management Fees Expense	30	31	(1)

In total, the operating expenses for Q3 2024 amounted to $569 million, compared to $594 million in Q3 2023, reflecting a decrease of $25 million.

Marketing and advertising expenses

Marketing and advertising expenses are crucial for attracting guests to the hotels. While the specific figures for 2024 are not explicitly detailed in the financial statements, these expenses are typically included in the total operating expenses. In the nine months ended September 30, 2024, marketing expenses contributed to the overall corporate general and administrative costs, which were reported as follows:

Expense Type	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (in millions)
Corporate General and Administrative	17	18	(1)

This indicates that general and administrative expenses, potentially including marketing, decreased slightly from the previous year.

Maintenance and renovation costs for properties

Maintenance and renovation costs are essential for ensuring the properties remain competitive and appealing to guests. In the first nine months of 2024, the company reported capital expenditures for property and equipment totaling $164 million. This reflects ongoing investments in maintaining and upgrading hotel facilities.

Administrative and corporate overhead

Administrative and corporate overhead costs represent the expenses related to the corporate structure of Park Hotels & Resorts. For the nine months ended September 30, 2024, the breakdown is as follows:

Expense Type	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (in millions)
Corporate General and Administrative	52	50	2
Impairment and Casualty Loss	13	204	(191)

The overall administrative expenses reflect a slight increase, whereas the impairment losses have shown a significant decrease, highlighting a shift in financial performance and operational efficiency.

Park Hotels & Resorts Inc. (PK) - Business Model: Revenue Streams

Room revenue from hotel bookings

For the nine months ended September 30, 2024, Park Hotels & Resorts reported total room revenue of $1,193 million, a decrease from $1,256 million in the same period in 2023. The room revenue for the third quarter of 2024 was $403 million, compared to $432 million in the third quarter of 2023.

Period	Total Room Revenue (in millions)
Q3 2024	$403
Q3 2023	$432
9 Months Ended Sep 30, 2024	$1,193
9 Months Ended Sep 30, 2023	$1,256

Food and beverage sales in hotel restaurants

Food and beverage revenue for the nine months ended September 30, 2024, was $521 million, slightly up from $518 million in the same period in 2023. In Q3 2024, food and beverage revenue was reported at $157 million, down from $159 million in Q3 2023.

Period	Food and Beverage Revenue (in millions)
Q3 2024	$157
Q3 2023	$159
9 Months Ended Sep 30, 2024	$521
9 Months Ended Sep 30, 2023	$518

Event hosting and conference service fees

Ancillary hotel revenue, which includes event hosting and conference service fees, totaled $196 million for the nine months ended September 30, 2024, compared to $203 million for the same period in 2023. For Q3 2024, ancillary revenue was reported at $68 million, an increase from $66 million in Q3 2023.

Period	Ancillary Hotel Revenue (in millions)
Q3 2024	$68
Q3 2023	$66
9 Months Ended Sep 30, 2024	$196
9 Months Ended Sep 30, 2023	$203

Ancillary services such as parking and spa treatments

Ancillary services such as parking and spa treatments contribute to the overall revenue. The total ancillary hotel revenue for the nine months ended September 30, 2024, was $196 million, which included various services. This figure reflects a decrease from $203 million in the same period of the previous year.

Period	Ancillary Services Revenue (in millions)
9 Months Ended Sep 30, 2024	$196
9 Months Ended Sep 30, 2023	$203

Article updated on 8 Nov 2024

Resources:

1. 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.
2. 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.