TYSONS, Va.,
Recent Highlights
- Pro-forma Occupancy for
May 2022 for Park’s 46 consolidated hotels was 67.9%, with occupancy forecasted to be 76.3% inJune 2022 ; - Updated Q2 2022 outlook based upon improving demand to increase the outlook for RevPAR by
$9 at the midpoint to$171 , while Adjusted EBITDA guidance increased by 9% (or$15 million ) at the midpoint to a new range of$175 million to$195 million from the Q2 2022 outlook Park provided inMay 2022 ; - Repurchased 8.5 million shares of common stock in
May 2022 at an average price of$18.33 per share, or$157 million . 12.0 million shares have been repurchased year-to-date at an average price of$18.23 per share, or$218 million ; - All of Park’s hotels are now open following the reopening of the 1,024-room Parc 55 San Francisco – a
Hilton Hotel , onMay 19, 2022 ; - Sold the 211- room
Hilton Chicago/Oakbrook Suites inMay 2022 for gross proceeds of$10.3 million and under contract to the sell the 128-roomHilton Garden Inn Chicago/Oakbrook Terrace for$9.4 million ; - Entered into a definitive agreement to sell Park’s 25% interest in the joint venture that owns the 1,190-room
Hilton San Diego Bayfront for gross proceeds of$157 million , which includes$55 million of Park’s interest in the debt in the joint venture, with net proceeds anticipated to be approximately$102 million ; - Entered into a definitive agreement to sell the 195-room Homewood Suites by
Hilton Seattle Convention Center for$80 million ; and - Year-to-date, Park has sold or is under contract to sell its interests in five non-core hotels for total gross proceeds of approximately
$268 million , or 14.0x the hotels’ combined 2019 Adjusted EBITDA (or 13.1x when excluding anticipated capital expenditures), and at an average capitalization rate of 6.7% on the hotels’ 2019 net operating income (excluding anticipated maintenance capital expenditures).
“I am incredibly pleased to see the continued strengthening of the recovery across our portfolio,” said
Operational Highlights
- Pro-forma Occupancy, ADR and RevPAR for
May 2022 and comparisons toApril 2022 ,May 2021 andMay 2019 for Park’s 46 consolidated hotels were as follows:
Preliminary | vs. | vs. | vs. | ||||||||||
Pro-forma Occupancy | 67.9% | (2.2 | )% | pts | 27.9 | % | pts | (16.7 | )% | pts | |||
Pro-forma ADR | $ | 234.32 | (1.6 | )% | 28.0 | % | 4.1 | % | |||||
Pro-forma RevPAR | $ | 159.06 | (4.8 | )% | 117.2 | % | (16.5 | )% | |||||
- Pro-forma Occupancy, ADR and RevPAR for
May 2022 and comparisons toApril 2022 ,May 2021 andMay 2019 for Park’s 45 consolidated hotels open during the entirety ofMay 2022 were as follows:
Preliminary | vs. | vs. | vs. | ||||||||||
Pro-forma Occupancy | 70.2% | (2.6 | )% | pts | 28.6 | % | pts | (14.1 | )% | pts | |||
Pro-forma ADR | $ | 234.33 | (1.6 | )% | 28.0 | % | 5.0 | % | |||||
Pro-forma RevPAR | $ | 164.48 | (5.2 | )% | 116.2 | % | (12.6 | )% | |||||
Generated Pro-forma Hotel Revenues of$218 million and positivePro-forma Hotel Adjusted EBITDA of$68 million inApril 2022 , resulting inPro-forma Hotel Adjusted EBITDA Margin of 31.1% (compared to$201 million ,$59 million and 29.3%, respectively, forMarch 2022 ), with 42 of 45 consolidated hotels that were open duringApril 2022 generating positivePro-forma Hotel Adjusted EBITDA ;- Momentum for group booking activity continued to gain with the addition of approximately 100,000 room nights in April for the remainder of 2022 and 2023 with group booking pace for the remainder of 2022 at 68% of what 2019 group bookings were as of
April 2019 , an improvement of over 260 bps fromMarch 2022 , with average group rate in line with 2019 levels for the same time period; while group bookings for 2023 are 72% of what 2019 group bookings were as ofApril 2018 , with average group rate exceeding 2019 group levels by 2.2% for the same time period; and - Mid-week occupancies, excluding resort hotels, nearly tripled to an average of 74% in
May 2022 compared toJanuary 2022 , signaling the continued recovery of business transient demand.
2022 Outlook
Based on recent trends, which are signaling an accelerated pace of recovery, Park’s outlook for Q2 2022 is updated as follows:
(unaudited, dollars in millions, except per share amounts and RevPAR) | ||||||||||||||||||||
Q2 2022 Outlook | Q2 2022 Outlook | Change at | ||||||||||||||||||
as of | as of | Midpoint | ||||||||||||||||||
Metric | Low | High | Low | High | ||||||||||||||||
RevPAR | $ | 169 | $ | 173 | $ | 160 | $ | 164 | $ | 9 | ||||||||||
RevPAR Growth vs. 2019 | (12 | )% | (10 | )% | (16 | )% | (14 | )% | 4 | |||||||||||
Net income | $ | 33 | $ | 53 | $ | 16 | $ | 36 | $ | 17 | ||||||||||
Net income attributable to stockholders | $ | 29 | $ | 50 | $ | 13 | $ | 33 | $ | 17 | ||||||||||
Earnings per share - Diluted(1) | $ | 0.13 | $ | 0.22 | $ | 0.05 | $ | 0.14 | $ | 0.08 | ||||||||||
Adjusted EBITDA | $ | 175 | $ | 195 | $ | 160 | $ | 180 | $ | 15 | ||||||||||
28.4 | % | 29.4 | % | NR | (1) | NR | (1) | NR | (1) | |||||||||||
(280 | )bps | (180 | )bps | (390 | )bps | (240 | )bps | 85 | bps | |||||||||||
Adjusted FFO per share – Diluted(2) | $ | 0.47 | $ | 0.56 | $ | 0.40 | $ | 0.49 | $ | 0.07 |
(1) (2) | Not reported. Per share amounts are calculated based on unrounded numbers. |
Q2 2022 outlook is based in part on the following assumptions:
- Fully diluted weighted average shares are expected to be 228 million; and
- Does not take into account potential future acquisitions and dispositions, including those currently under contract, which could result in a material change to Park’s outlook.
Park's Q2 2022 outlook is based on many factors, many of which are outside the Company's control, including uncertainty surrounding any new disruptions from the COVID-19 pandemic, and all of which are subject to change. The Company continues to be unable to provide a full-year outlook for 2022 given the continued economic uncertainty as the global economy continues to recover from the COVID-19 pandemic and the impact from other macroeconomic factors; however, if the positive demand trends continue over the next few months, the Company anticipates being able to provide a full-year 2022 outlook in its second quarter earnings release.
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
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
About
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 52 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.
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
HOTEL EBITDA, HOTEL ADJUSTED EBITDA AND
PRO-FORMA HOTEL ADJUSTED EBITDA MARGIN
(unaudited, in millions) | |||||
Month Ended | Month Ended | ||||
Hotel net income | $ | 25 | $ | 37 | |
Depreciation and amortization expense | 23 | 22 | |||
Interest expense | 9 | 9 | |||
57 | 68 | ||||
Other | 2 | — | |||
$ | 59 | $ | 68 |
Month Ended | Month Ended | ||||||
Total Revenues | $ | 208 | $ | 225 | |||
Less: Other revenue | (6 | ) | (6 | ) | |||
Less: Revenue from hotels disposed of | (1 | ) | (1 | ) | |||
$ | 201 | $ | 218 |
Month Ended | Month Ended | ||||||
$ | 201 | $ | 218 | ||||
$ | 59 | $ | 68 | ||||
29.3 | % | 31.1 | % |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
Q2 2022 OUTLOOK – EBITDA, ADJUSTED EBITDA AND HOTEL ADJUSTED EBITDA
AND HOTEL ADJUSTED EBITDA MARGIN
Three Months Ended | ||||||||
(unaudited, in millions) | ||||||||
Low Case | High Case | |||||||
Net income | $ | 33 | $ | 53 | ||||
Depreciation and amortization expense | 68 | 68 | ||||||
Interest expense | 62 | 62 | ||||||
Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 3 | 3 | ||||||
EBITDA | 166 | 186 | ||||||
Share-based compensation expense | 4 | 4 | ||||||
Other items | 5 | 5 | ||||||
Adjusted EBITDA | 175 | 195 | ||||||
Less: Adjusted EBITDA from investments in affiliates | (10 | ) | (10 | ) | ||||
Add: All other | 13 | 13 | ||||||
$ | 178 | $ | 198 |
Three Months Ended | ||||||||
Low Case | High Case | |||||||
Total Revenues | $ | 642 | $ | 690 | ||||
Less: Other revenue | (17 | ) | (17 | ) | ||||
$ | 625 | $ | 673 |
Three Months Ended | ||||||||
Low Case | High Case | |||||||
$ | 625 | $ | 673 | |||||
$ | 178 | $ | 198 | |||||
28.4 | % | 29.4 | % |
NON-GAAP FINANCIAL MEASURES RECONCILIATIONS
Q2 2022 OUTLOOK –NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND
ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS
Three Months Ended | ||||||||
(unaudited, in millions except per share data) | ||||||||
Low Case | High Case | |||||||
Net income attributable to stockholders | $ | 29 | $ | 50 | ||||
Depreciation and amortization expense | 68 | 68 | ||||||
Depreciation and amortization expense attributable to noncontrolling interests | (1 | ) | (1 | ) | ||||
Equity investment adjustments: | ||||||||
Equity in earnings from investments in affiliates | (4 | ) | (4 | ) | ||||
Pro rata FFO of equity investments | 6 | 6 | ||||||
Nareit FFO attributable to stockholders | 98 | 119 | ||||||
Share-based compensation expense | 4 | 4 | ||||||
Other items | 5 | 5 | ||||||
Adjusted FFO attributable to stockholders | $ | 107 | $ | 128 | ||||
Adjusted FFO per share - Diluted(1) | $ | 0.47 | $ | 0.56 | ||||
Weighted average diluted shares outstanding | 228.0 | 228.0 |
(1) | Per share amounts are calculated based on unrounded numbers. |
DEFINITIONS
EBITDA and
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.
The Company believes that
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
Revenue per
Pro-forma
The Company presents certain data for its consolidated hotels on a pro-forma hotel basis as supplemental information for investors:
For more information, contact:
Senior Vice President, Corporate Strategy
571-302-5591
iweissman@pkhotelsandresorts.com
For additional information or to receive press releases via e-mail, please visit our website at www.pkhotelsandresorts.com
Source:
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