Park Hotels & Resorts Reinstates Dividend and Provides Brief Update on Operating Trends

Tysons, Virginia, UNITED STATES


TYSONS, Va., March 11, 2022 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE:PK) today provided an operational update and announced the reinstatement of its dividend.

Recent Highlights

  • On March 1, 2022, Park reopened the 314-room Hilton Short Hills, NJ, leaving just one hotel, the Parc 55 San Francisco - a Hilton Hotel, suspended;
  • On March 7, 2022, Moody’s Investors Service (“Moody’s”) upgraded Park’s outlook to Stable from Negative; and
  • On March 9, 2022, Park declared a first quarter 2022 cash dividend of $0.01 per share to be paid on April 15, 2022 to stockholders of record as of March 31, 2022.

“I am very pleased with the broad-based recovery in demand that we witnessed in February and expect to continue into March,” said Thomas J. Baltimore, Jr., Chairman and CEO of Park. “Strong leisure demand in Hawaii, Miami and Key West helped to drive overall performance and occupancy continued to build across our urban portfolio of hotels, improving sequentially by 15 percentage points to 40%, while average rate increased nearly 20% during the month of February – further signs of a business recovery beginning to take shape. With these positive trends and the path to recovery increasingly clearer, I am pleased to report that Moody’s recently upgraded Park’s outlook from Negative to Stable, and the Board of Directors reinstated Park’s quarterly dividend, approving a $0.01 per share payout for the first quarter 2022.”

Operational Highlights

  • Pro-forma Occupancy, ADR and RevPAR for February 2022 and comparisons to January 2022, February 2021 and February 2019 for Park’s 48 consolidated hotels were as follows:
 Preliminary
February 2022
 vs. January 2022 vs. February 2021 vs. February 2019 
         
Pro-forma Occupancy 52.8% 12.8%pts27.5%pts(25.1)%pts
Pro-forma ADR$223.63  9.2% 45.7% 1.9% 
Pro-forma RevPAR$118.07  44.3% 204.3% (30.9)% 
              
  • Pro-forma Occupancy, ADR and RevPAR for February 2022 and comparisons to January 2022, February 2021 and February 2019 for Park’s 46 consolidated hotels open during the entirety of February 2022 were as follows:

 Preliminary
February 2022
 vs. January 2022 vs. February 2021 vs. February 2019 
         
Pro-forma Occupancy 55.5% 13.5%pts28.9%pts(22.2)%pts
Pro-forma ADR$223.63  9.2% 45.7% 3.4% 
Pro-forma RevPAR$124.02  44.3% 204.3% (26.1)% 
              
  • Occupancy forecasted to be 60.5% in March 2022 for Park’s 48 consolidated hotels and 62.8% for Park’s 47 consolidated hotels open during the entirety of March 2022;
  • Generated Hotel Revenues of $116 million and positive Hotel Adjusted EBITDA of $3 million in January 2022, with 18 of 46 consolidated hotels that were open during January 2022 generating positive Hotel Adjusted EBITDA;
  • As of January 31, 2022, group bookings for Q2 – Q4 2022 are 64% of what 2019 group bookings were as of January 2019, with average group rates approximating 2019 levels for the same time period; while group bookings for 2023 are 68% of what 2019 group bookings were as of January 2018, with average group rates exceeding 2019 group levels for the same time period; and
  • Recovery in all segments anticipated to strengthen throughout 2022 with positive momentum expected to continue for Park’s leisure focused hotels, while both group and business transient demand is expected to accelerate starting in the second quarter.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements related to Park’s current expectations regarding the performance of its business, financial results, liquidity and capital resources, including expected dates that its hotels will break even or achieve positive Hotel Adjusted EBITDA, the impact to the Company's business and financial condition and that of its hotel management companies, measures being taken in response to COVID-19, the impact from macroeconomic factors (including inflation and geopolitical conflicts), the effects of competition and the effects of future legislation or regulations, the expected completion of anticipated dispositions, the declaration and payment of future dividends and other non-historical statements. Forward-looking statements include all statements that are not historical facts, and in some cases, can be identified by the use of forward-looking terminology such as the words “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “hopes” or the negative version of these words or other comparable words. You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could materially affect its results of operations, financial condition, cash flows, performance or future achievements or events. Currently, one of the most significant factors continues to be the adverse effect of COVID-19, including actions taken to contain the pandemic or mitigate its effects, the emergences of virus variants and resurgences, on the Company’s financial condition, results of operations, cash flows and performance, its hotel management companies and its hotels’ tenants, and the global economy and financial markets. Investors are cautioned to interpret many of the risks identified in the risk factors included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as being heightened as a result of the ongoing and numerous adverse effects of COVID-19.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements and Park urges investors to carefully review the disclosures Park makes concerning risk and uncertainties in Item 1A: “Risk Factors” in Park’s Annual Report on Form 10-K for the year ended December 31, 2021, as such factors may be updated from time to time in Park’s filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Except as required by law, Park undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

About Park Hotels & Resorts
Park is the second largest publicly traded lodging REIT with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Park’s portfolio currently consists of 54 premium-branded hotels and resorts with approximately 32,000 rooms primarily located in prime city center and resort locations. Visit www.pkhotelsandresorts.com for more information. 

PARK HOTELS & RESORTS INC.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
HOTEL EBITDA, HOTEL ADJUSTED EBITDA AND
HOTEL REVENUES

(unaudited, in millions)  
  Month Ended
January 31, 2022
Hotel net income $(29)
Depreciation and amortization expense  23 
Interest expense  9 
Hotel EBITDA and Hotel Adjusted EBITDA  3 


(unaudited, in millions)  
  Month Ended
January 31, 2022
Total Revenues $122 
Less: Other revenue  (6)
Hotel Revenues $116 
     

PARK HOTELS & RESORTS INC.
DEFINITIONS

EBITDA and Hotel Adjusted EBITDA

Hotel earnings before interest expense, taxes and depreciation and amortization (“Hotel EBITDA”), presented herein, reflects net income excluding depreciation and amortization, interest income, interest expense and income taxes of the Company’s consolidated hotels. Hotel Adjusted EBITDA is Hotel EBITDA further adjusted to exclude items that management believes are not representative of the Company’s consolidated hotels current or future operating performance and is a key measure of the Company’s consolidated hotels profitability. The Company presents Hotel Adjusted EBITDA to help the Company and its investors evaluate the ongoing operating performance of the Company’s consolidated hotels.

Hotel EBITDA and Hotel Adjusted EBITDA are not recognized terms under United States (“U.S.”) GAAP and should not be considered as an alternative to net income or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. In addition, the Company’s definition of Hotel EBITDA and Hotel Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

The Company believes that Hotel EBITDA and Hotel Adjusted EBITDA provides useful information to investors about the Company and its financial condition and results of operations for the following reasons: (i) Hotel EBITDA and Hotel Adjusted EBITDA are among the measures used by the Company’s management team to make day-to-day operating decisions and evaluate its operating performance between periods and between REITs by removing the effect of its capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from its operating results; and (ii) Hotel EBITDA and Hotel Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties as common performance measures to compare results or estimate valuations across companies in the industry.

Hotel EBITDA and Hotel Adjusted EBITDA have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss) or other methods of analyzing the Company’s operating performance and results as reported under U.S. GAAP.

Occupancy

Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel or group of hotels. Room nights available to guests have not been adjusted for suspended or reduced operations at certain of Park’s hotels as a result of COVID-19. Occupancy measures the utilization of the Company’s hotels’ available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help management determine achievable Average Daily Rate (“ADR”) levels as demand for rooms increases or decreases.

Average Daily Rate

ADR (or rate) represents rooms revenue divided by total number of room nights sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the hotel industry, and management uses ADR to assess pricing levels that the Company is able to generate by type of customer, as changes in rates have a more pronounced effect on overall revenues and incremental profitability than changes in occupancy, as described above.

Revenue per Available Room

Revenue per Available Room (“RevPAR”) represents rooms revenue divided by the total number of room nights available to guests for a given period. Room nights available to guests have not been adjusted for suspended or reduced operations at certain of Park’s hotels as a result of COVID-19. Management considers RevPAR to be a meaningful indicator of the Company’s performance as it provides a metric correlated to two primary and key factors of operations at a hotel or group of hotels: occupancy and ADR. RevPAR is also a useful indicator in measuring performance over comparable periods.

Pro-forma

The Company presents certain data for its consolidated hotels on a pro-forma hotel basis as supplemental information for investors: Pro-forma Hotel Revenues, Pro-forma RevPAR, Pro-forma Total RevPAR, Pro-forma Occupancy, Pro-forma ADR, Pro-forma Hotel Adjusted EBITDA and Pro-forma Hotel Adjusted EBITDA Margin. The Company presents pro-forma hotel results to help the Company and its investors evaluate the ongoing operating performance of its hotels. The Company’s pro-forma metrics exclude results from property dispositions that have occurred through March 11, 2022 and include results from property acquisitions as though such acquisitions occurred on the earliest period presented.

For more information, contact:
Ian Weissman
Senior Vice President, Corporate Strategy
571-302-5591
iweissman@pkhotelsandresorts.com

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www.pkhotelsandresorts.com