Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE:PK)
today provided preliminary fourth quarter and full-year 2023
results.
“I am incredibly pleased with our preliminary fourth quarter and
year-end results, with both preliminary Comparable RevPAR and
Adjusted EBITDA exceeding the midpoint of our previously announced
2023 guidance ranges. Our portfolio continued to deliver impressive
results, as business travel accelerated in Boston, Chicago and New
York, which helped to drive a near 8% year-over-year preliminary
Comparable RevPAR increase for the quarter in our urban portfolio,
while leisure demand trends remained strong at our Hawaii hotels,
with combined fourth quarter preliminary RevPAR for those two
resorts up over 8% versus prior year. As we look ahead to 2024, we
are excited about our expectations for ongoing strength across our
portfolio and anticipate that the transformative renovation
projects at both the Bonnet Creek Orlando complex and the Casa
Marina Key West hotel will create significant long-term value for
shareholders. Additionally, in 2024, we remain focused on improving
our balance sheet and financial flexibility through additional
non-core asset sales, while opportunistically reinvesting back into
our portfolio through value-enhancing ROI projects,” said Thomas J.
Baltimore, Jr., Chairman and CEO of Park.
Operational Highlights
Based upon an initial review of preliminary operating and
financial results, the Company has provided preliminary fourth
quarter and full-year 2023 results as follows:
(unaudited,
amounts in millions, except for RevPAR, ADR, Total RevPAR, and per
share data) |
|
Preliminary |
|
Q4 2023 |
|
Change vs. 2022(1) |
|
Full -Year 2023 |
|
Change vs. 2022(1) |
Comparable RevPAR |
$ |
178.25 |
|
|
4.1 |
% |
|
$ |
178.62 |
|
|
8.7 |
% |
Comparable Occupancy |
|
71.0 |
% |
|
1.5 |
% pts |
|
|
72.7 |
% |
|
4.9 |
% pts |
Comparable ADR |
$ |
250.93 |
|
|
1.9 |
% |
|
$ |
245.80 |
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
Comparable Total RevPAR |
$ |
287.21 |
|
|
4.9 |
% |
|
$ |
285.50 |
|
|
10.2 |
% |
|
|
|
|
|
|
|
|
Net income |
$ |
189 |
|
|
440.0 |
% |
|
$ |
107 |
|
|
(38.2 |
)% |
Net income attributable to
stockholders |
$ |
188 |
|
|
452.9 |
% |
|
$ |
98 |
|
|
(39.5 |
)% |
|
|
|
|
|
|
|
|
Operating income |
$ |
276 |
|
|
230.2 |
% |
|
$ |
343 |
|
|
16.3 |
% |
Operating income margin |
|
42.1 |
% |
|
2,950 |
bps |
|
|
12.7 |
% |
|
90 |
bps |
|
|
|
|
|
|
|
|
Comparable Hotel Adjusted
EBITDA |
$ |
171 |
|
|
2.3 |
% |
|
$ |
680 |
|
|
9.2 |
% |
Comparable Hotel Adjusted
EBITDA margin(2) |
|
27.6 |
% |
|
(70 |
) bps |
|
|
27.9 |
% |
|
(30 |
) bps |
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
163 |
|
|
2.5 |
% |
|
$ |
659 |
|
|
8.7 |
% |
Adjusted FFO attributable to
stockholders |
$ |
111 |
|
|
9.9 |
% |
|
$ |
440 |
|
|
25.0 |
% |
|
|
|
|
|
|
|
|
Earnings per share -
Diluted(1) |
$ |
0.89 |
|
|
493.3 |
% |
|
$ |
0.45 |
|
|
(36.6 |
)% |
Adjusted FFO per share –
Diluted(1) |
$ |
0.53 |
|
|
17.8 |
% |
|
$ |
2.05 |
|
|
33.1 |
% |
Weighted average shares
outstanding – Diluted |
|
210 |
|
|
(14 |
) |
|
|
215 |
|
|
(13 |
) |
_________________________(1) Amounts are calculated based
on unrounded numbers.
(2) For both the three months and year ended December 31,
2023, (50) bps of the change represents the impact of the
disruption from the renovations at both the Bonnet Creek Orlando
complex and the Casa Marina Key West hotel.
(unaudited, dollars in
millions, except for RevPAR and per share data) |
|
|
|
|
|
|
|
|
|
|
|
Metric |
Preliminary Full-Year 2023 |
|
Full-Year 2023 Outlook |
|
|
|
Results as of January 22, 2024 |
|
as of November 1, 2023(1) |
|
Variance(1) |
Comparable RevPAR |
$ |
179 |
|
|
$ |
178 |
|
|
$ |
1 |
|
Comparable RevPAR change vs.
2022 |
|
8.7 |
% |
|
|
8.2 |
% |
|
|
0.5 |
% |
|
|
|
|
|
|
Adjusted EBITDA |
$ |
659 |
|
|
$ |
656 |
|
|
$ |
3 |
|
Comparable Hotel Adjusted
EBITDA margin(2) |
|
27.9 |
% |
|
|
28.0 |
% |
|
|
(10 |
) bps |
Comparable Hotel Adjusted
EBITDA margin change vs. 2022(2) |
|
(30 |
) bps |
|
|
(20 |
) bps |
|
|
(10 |
) bps |
Adjusted FFO per share –
Diluted(2) |
$ |
2.05 |
|
|
$ |
1.97 |
|
|
|
4.1 |
% |
_________________________
(1) Presented at the estimated midpoint.(2) Amounts are
calculated based on unrounded numbers.
Preliminary Estimated Financial Results
Park is presenting certain estimated financial and operating
results (and, in certain cases, estimated ranges) for the fourth
quarter and full-year 2023, based upon the information available as
of the date of this press release. Park's actual results may differ
materially from these preliminary estimated results or ranges.
These estimates are preliminary and are inherently uncertain and
subject to change as Park completes the preparation of its
consolidated financial statements and related notes and completion
of its financial close procedures for the year ended December 31,
2023. Therefore, you should not place undue reliance upon this
information. Park’s independent registered public accounting firm
has not audited, reviewed, compiled or performed any procedures
with respect to the preliminary estimated financial information
included in this press release and, accordingly, does not express
an opinion or any other form of assurance with respect thereto. You
should carefully review Park’s consolidated financial statements
for the year ended December 31, 2023, when they become
available.
Earnings Release and Conference Call
Park will report its finalized Fourth Quarter and Full-Year 2023
financial results after the stock market closes on February 27,
2024 and host a conference call for investors and other interested
parties to discuss fourth quarter and full-year 2023 results on
February 28, 2024, beginning at 11 a.m. Eastern Time. Participants
may listen to the live webcast by logging onto the Investors
section of the website at www.pkhotelsandresorts.com.
Alternatively, participants may listen to the live call by dialing
(877) 451-6152 in the United States or (201) 389-0879
internationally and requesting Park Hotels & Resorts’ Fourth
Quarter and Full-Year 2023 Earnings Conference Call. Participants
are encouraged to dial into the call or link to the webcast at
least ten minutes prior to the scheduled start time.
A replay of the webcast will be available within 24 hours after
the live event on the Investors section of Park’s website.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (“Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended (“Exchange Act”). Forward-looking
statements include, but are not limited to, statements related to
the impact of Park's decision to cease payments on its $725 million
non-recourse CMBS loan ("SF Mortgage Loan") secured by the Hilton
San Francisco Hotels and the effects of the lender's exercise of
its remedies, including placing such hotels into receivership, as
well as our current expectations regarding the performance of our
business, our financial results, our liquidity and capital
resources, including anticipated repayment of certain of Park's
indebtedness, the completion of capital allocation priorities, the
expected repurchase of Park's stock, the impact from macroeconomic
factors (including inflation, elevated interest rates, potential
economic slowdown or a recession and geopolitical conflicts), the
effects of competition, 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 our control and which could materially affect
our results of operations, financial condition, cash flows,
performance or future achievements or events.
All such forward-looking statements are based on current
expectations of management and therefore involve estimates and
assumptions that are subject to risks, uncertainties and other
factors that could cause actual results to differ materially from
the results expressed in these forward-looking statements. You
should not put undue reliance on any forward-looking statements and
we urge investors to carefully review the disclosures Park makes
concerning risks and uncertainties in Item 1A: “Risk Factors” in
Park's Annual Report on Form 10-K for the year ended December 31,
2022, 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.
Non-GAAP Financial Measures
Park presents certain non-GAAP financial measures in this press
release, including Nareit FFO attributable to stockholders,
Adjusted FFO attributable to stockholders, EBITDA, Adjusted EBITDA,
Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin. These
non-GAAP financial measures should be considered along with, but
not as alternatives to, net income as a measure of its operating
performance. Please see the schedules included in this press
release including the “Definitions” section for additional
information and reconciliations of such non-GAAP financial
measures.
About Park Hotels & Resorts
Park is one of the largest publicly traded lodging REITs with a
diverse portfolio of market-leading hotels and resorts with
significant underlying real estate value. Park’s portfolio
currently consists of 43 premium-branded hotels and resorts with
over 26,000 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 RECONCILIATIONSPRELIMINARY
EBITDA AND ADJUSTED EBITDA |
(unaudited, dollars in
millions) |
Preliminary |
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2023 |
Operating income |
$ |
276 |
|
|
$ |
343 |
|
Interest income |
|
9 |
|
|
|
38 |
|
Interest expense |
|
(52 |
) |
|
|
(207 |
) |
Interest expense on the SF Mortgage Loan |
|
(14 |
) |
|
|
(45 |
) |
Equity in earnings from investments in affiliates |
|
2 |
|
|
|
11 |
|
Other gain, net |
|
1 |
|
|
|
5 |
|
Income tax expense(1) |
|
(33 |
) |
|
|
(38 |
) |
Net
income |
|
189 |
|
|
|
107 |
|
Depreciation and amortization expense |
|
94 |
|
|
|
287 |
|
Interest income |
|
(9 |
) |
|
|
(38 |
) |
Interest expense |
|
52 |
|
|
|
207 |
|
Interest expense on the SF Mortgage Loan |
|
14 |
|
|
|
45 |
|
Income tax expense(1) |
|
33 |
|
|
|
38 |
|
Interest expense, income tax and depreciation and amortization
included in equity in earnings from investments in affiliates |
|
1 |
|
|
|
8 |
|
EBITDA |
|
374 |
|
|
|
654 |
|
Gain on sales of assets, net |
|
— |
|
|
|
(15 |
) |
Gain on derecognition of assets(2) |
|
(221 |
) |
|
|
(221 |
) |
Gain on sale of investments in affiliates |
|
— |
|
|
|
(3 |
) |
Share-based compensation expense |
|
4 |
|
|
|
18 |
|
Impairment and casualty loss |
|
— |
|
|
|
204 |
|
Other items |
|
6 |
|
|
|
22 |
|
Adjusted
EBITDA |
$ |
163 |
|
|
$ |
659 |
|
_____________________________________(1) Represents the
midpoint of an estimated range of $30 million to $36 million for
the three months ended December 31, 2023 and $34 million to $42
million for the year ended December 31, 2023. (2) For the
three months and year ended December 31, 2023, represents the gain
from derecognizing the Hilton San Francisco Hotels from Park's
consolidated balance sheet in October 2023, when the receiver took
control of the hotels.
PARK HOTELS & RESORTS INC.NON-GAAP
FINANCIAL MEASURES RECONCILIATIONSPRELIMINARY
COMPARABLE HOTEL ADJUSTED EBITDA ANDCOMPARABLE
HOTEL ADJUSTED EBITDA MARGIN |
(unaudited, dollars in
millions) |
Preliminary |
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2023 |
Adjusted
EBITDA |
$ |
163 |
|
|
$ |
659 |
|
Less: Adjusted EBITDA from investments in affiliates |
|
(5 |
) |
|
|
(24 |
) |
Add: All other(1) |
|
12 |
|
|
|
52 |
|
Hotel Adjusted
EBITDA |
|
170 |
|
|
|
687 |
|
Less: Adjusted EBITDA from hotels disposed of |
|
— |
|
|
|
(3 |
) |
Less: Adjusted EBITDA from the Hilton San Francisco Hotels |
|
1 |
|
|
|
(4 |
) |
Comparable Hotel
Adjusted EBITDA |
$ |
171 |
|
|
$ |
680 |
|
|
Preliminary |
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2023 |
Total
Revenues |
$ |
657 |
|
|
$ |
2,698 |
|
Less: Other revenue |
|
(21 |
) |
|
|
(85 |
) |
Less: Revenues from hotels disposed of |
|
— |
|
|
|
(10 |
) |
Less: Revenue from the Hilton San Francisco Hotels |
|
(17 |
) |
|
|
(162 |
) |
Comparable Hotel
Revenues |
$ |
619 |
|
|
$ |
2,441 |
|
|
Preliminary |
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2023 |
Total Revenues |
$ |
657 |
|
|
$ |
2,698 |
|
Operating income |
$ |
276 |
|
|
$ |
343 |
|
Operating income margin(2) |
|
42.1 |
% |
|
|
12.7 |
% |
|
|
|
|
|
Preliminary |
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2023 |
Comparable Hotel Revenues |
$ |
619 |
|
|
$ |
2,441 |
|
Comparable Hotel Adjusted
EBITDA |
$ |
171 |
|
|
$ |
680 |
|
Comparable Hotel Adjusted
EBITDA margin(2) |
|
27.6 |
% |
|
|
27.9 |
% |
_________________________
(1) Includes revenues and expenses related to support service
arrangements with Hilton Grand Vacations and non-income taxes on
TRS leases.(2) Percentages are calculated based on unrounded
numbers.
PARK HOTELS & RESORTS INC.NON-GAAP
FINANCIAL MEASURES RECONCILIATIONSPRELIMINARY
NAREIT FFO AND ADJUSTED FFO |
(unaudited, in millions,
except per share data) |
Preliminary |
|
Three Months Ended |
|
Year Ended |
|
December 31, 2023 |
|
December 31, 2023 |
Net income
attributable to stockholders |
$ |
188 |
|
|
$ |
98 |
|
Depreciation and amortization expense |
|
94 |
|
|
|
287 |
|
Depreciation and amortization expense attributable to
noncontrolling interests |
|
(1 |
) |
|
|
(4 |
) |
Gain on sales of assets, net |
|
— |
|
|
|
(15 |
) |
Gain on derecognition of assets(1) |
|
(221 |
) |
|
|
(221 |
) |
Gain on sale of investments in affiliates |
|
— |
|
|
|
(3 |
) |
Impairment loss |
|
— |
|
|
|
202 |
|
Equity investment adjustments: |
|
|
|
Equity in earnings from investments in affiliates |
|
(2 |
) |
|
|
(11 |
) |
Pro rata FFO of investments in affiliates |
|
2 |
|
|
|
14 |
|
Nareit FFO
attributable to stockholders |
|
60 |
|
|
|
347 |
|
Casualty loss |
|
— |
|
|
|
2 |
|
Share-based compensation expense |
|
4 |
|
|
|
18 |
|
Incremental interest expense on the SF Mortgage Loan(2) |
|
12 |
|
|
|
20 |
|
Other items(3) |
|
35 |
|
|
|
53 |
|
Adjusted FFO
attributable to stockholders |
$ |
111 |
|
|
$ |
440 |
|
Nareit FFO per share –
Diluted(4) |
$ |
0.29 |
|
|
$ |
1.62 |
|
Adjusted FFO per share
– Diluted(4) |
$ |
0.53 |
|
|
$ |
2.05 |
|
Weighted average
shares outstanding – Diluted |
|
210 |
|
|
|
215 |
|
______________________________
(1) For the three months and year ended December 31, 2023,
represents the gain from derecognizing the Hilton San Francisco
Hotels from Park's consolidated balance sheet in October 2023, when
the receiver took control of the hotels.
(2) Represents incremental interest expense associated with
the default of the SF Mortgage Loan.
(3) Includes estimated tax expense at the midpoint of $29
million and $35 million as a result of the effective exit from the
Hilton San Francisco Hotels.
(4) Per share amounts are calculated based on unrounded
numbers.
PARK HOTELS & RESORTS
INC.DEFINITIONS
Comparable
The Company presents certain data for its consolidated hotels on
a Comparable basis as supplemental information for investors:
Comparable Hotel Revenues, Comparable RevPAR, Comparable Occupancy,
Comparable ADR, Comparable Hotel Adjusted EBITDA and Comparable
Hotel Adjusted EBITDA Margin. The Company presents Comparable hotel
results to help the Company and its investors evaluate the ongoing
operating performance of its hotels. The Company’s Comparable
metrics exclude results from property dispositions that have
occurred through December 31, 2023 and include results from
property acquisitions as though such acquisitions occurred on the
earliest period presented. Park's Comparable hotels also exclude
the two Hilton San Francisco Hotels, the 1,921-room Hilton San
Francisco Union Square and 1,024-room Parc 55 San Francisco – a
Hilton Hotel (collectively, the "Hilton San Francisco Hotels"),
which were placed into receivership at the end of October 2023.
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel
Adjusted EBITDA Margin
Earnings before interest expense, taxes and depreciation and
amortization (“EBITDA”), presented herein, reflects net income
excluding depreciation and amortization, interest income, interest
expense, income taxes and interest expense, income tax and
depreciation and amortization included in equity in earnings from
investments in affiliates.
Adjusted EBITDA, presented herein, is calculated as EBITDA, as
previously defined, further adjusted to exclude the following items
that are not reflective of Park's ongoing operating performance or
incurred in the normal course of business, and thus, excluded from
management's analysis in making day-to-day operating decisions and
evaluations of Park's operating performance against other companies
within its industry:
- Gains or losses on sales of assets for
both consolidated and unconsolidated investments;
- Costs associated with hotel acquisitions or dispositions
expensed during the period;
- Severance expense;
- Share-based compensation expense;
- Impairment losses and casualty gains or losses; and
- Other items that management believes are not representative of
the Company’s current or future operating performance.
Hotel Adjusted EBITDA measures hotel-level results before debt
service, depreciation and corporate expenses of the Company’s
consolidated hotels, which excludes hotels owned by unconsolidated
affiliates, and is a key measure of the Company’s 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 Adjusted EBITDA margin is calculated as Hotel Adjusted
EBITDA divided by total hotel revenue.
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel
Adjusted EBITDA margin are not recognized terms under United States
(“U.S.”) GAAP and should not be considered as alternatives to net
income or other measures of financial performance or liquidity
derived in accordance with U.S. GAAP. In addition, the Company’s
definitions of EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and
Hotel Adjusted EBITDA margin may not be comparable to similarly
titled measures of other companies.
The Company believes that EBITDA, Adjusted EBITDA, Hotel
Adjusted EBITDA and Hotel Adjusted EBITDA margin provide useful
information to investors about the Company and its financial
condition and results of operations for the following reasons: (i)
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted
EBITDA margin 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) EBITDA, Adjusted EBITDA, Hotel
Adjusted EBITDA and Hotel Adjusted EBITDA margin are frequently
used by securities analysts, investors and other interested parties
as a common performance measure to compare results or estimate
valuations across companies in the industry.
EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel
Adjusted EBITDA margin have limitations as analytical tools and
should not be considered either in isolation or as a substitute for
net income or other methods of analyzing the Company’s operating
performance and results as reported under U.S. GAAP. Because of
these limitations, EBITDA, Adjusted EBITDA and Hotel Adjusted
EBITDA should not be considered as discretionary cash available to
the Company to reinvest in the growth of its business or as
measures of cash that will be available to the Company to meet its
obligations.
Nareit FFO attributable to stockholders, Adjusted FFO
attributable to stockholders, Nareit FFO per share – diluted and
Adjusted FFO per share – diluted
Nareit FFO attributable to stockholders and Nareit FFO per
diluted share (defined as set forth below) are presented herein as
non-GAAP measures of the Company’s performance. The Company
calculates funds from (used in) operations (“FFO”) attributable to
stockholders for a given operating period in accordance with
standards established by the National Association of Real Estate
Investment Trusts (“Nareit”), as net income attributable to
stockholders (calculated in accordance with U.S. GAAP), excluding
depreciation and amortization, gains or losses on sales of assets,
impairment, and the cumulative effect of changes in accounting
principles, plus adjustments for unconsolidated joint ventures.
Adjustments for unconsolidated joint ventures are calculated to
reflect the Company’s pro rata share of the FFO of those entities
on the same basis. As noted by Nareit in its December 2018 “Nareit
Funds from Operations White Paper – 2018 Restatement,” since real
estate values historically have risen or fallen with market
conditions, many industry investors have considered presentation of
operating results for real estate companies that use historical
cost accounting to be insufficient by themselves. For these
reasons, Nareit adopted the FFO metric in order to promote an
industry-wide measure of REIT operating performance. The Company
believes Nareit FFO provides useful information to investors
regarding its operating performance and can facilitate comparisons
of operating performance between periods and between REITs. The
Company’s presentation may not be comparable to FFO reported by
other REITs that do not define the terms in accordance with the
current Nareit definition, or that interpret the current Nareit
definition differently. The Company calculates Nareit FFO per
diluted share as Nareit FFO divided by the number of fully diluted
shares outstanding during a given operating period.
The Company also presents Adjusted FFO attributable to
stockholders and Adjusted FFO per diluted share when evaluating its
performance because management believes that the exclusion of
certain additional items described below provides useful
supplemental information to investors regarding the Company’s
ongoing operating performance. Management historically has made the
adjustments detailed below in evaluating its performance and in its
annual budget process. Management believes that the presentation of
Adjusted FFO provides useful supplemental information that is
beneficial to an investor’s complete understanding of operating
performance. The Company adjusts Nareit FFO attributable to
stockholders for the following items, which may occur in any
period, and refers to this measure as Adjusted FFO attributable to
stockholders:
- Costs associated with hotel
acquisitions or dispositions expensed during the period;
- Severance expense;
- Share-based compensation expense;
- Casualty gains or losses; and
- Other items that management believes are not representative of
the Company’s current or future operating performance.
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. 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. 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.
Total RevPAR
Total RevPAR represents rooms, food and beverage and other hotel
revenues divided by the total number of room nights available to
guests for a given period. Management considers Total RevPAR to be
a meaningful indicator of the Company’s performance as
approximately one-third of revenues are earned from food and
beverage and other hotel revenues. Total RevPAR is also a useful
indicator in measuring performance over comparable periods.
For more information, contact:Ian
WeissmanSenior Vice President, Corporate
Strategy571-302-5591iweissman@pkhotelsandresorts.com
For additional information or to receive press
releases via e-mail, please visit our website
atwww.pkhotelsandresorts.com
Park Hotels and Resorts (NYSE:PK)
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Park Hotels and Resorts (NYSE:PK)
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