Park Hotels & Resorts Inc. Reinstates 2024 Earnings Guidance; Operators and Union Finalize Long-Term Labor Agreements in Hawaii, Seattle and Boston Ending Nearly Six-Weeks of Strike Activity at Four Hotels
Park Hotels & Resorts has reinstated its 2024 earnings guidance following the resolution of labor strikes at four hotels in Hawaii, Seattle, and Boston. The company's October 2024 Comparable RevPAR decreased 1.3% year-over-year, but excluding strike-affected hotels, it would have increased 3.5%. The updated 2024 outlook projects Comparable RevPAR of $183-$185, net income of $152-$172 million, and Adjusted EBITDA of $635-$655 million. The company expects to declare a Q4 dividend between $0.60-$0.66 per share, including a quarterly cash dividend of $0.25 and an annual top-off dividend of $0.35-$0.41.
Park Hotels & Resorts ha ripristinato le sue previsioni sugli utili per il 2024 dopo la risoluzione degli scioperi lavorativi in quattro hotel alle Hawaii, a Seattle e a Boston. Nel mese di ottobre 2024, il RevPAR comparabile dell'azienda è diminuito dell'1,3% rispetto all'anno precedente, ma escludendo gli hotel colpiti dagli scioperi, sarebbe aumentato del 3,5%. Le prospettive aggiornate per il 2024 prevedono un RevPAR comparabile tra $183 e $185, un utile netto compreso tra $152 e $172 milioni, e un EBITDA aggiustato tra $635 e $655 milioni. L'azienda si aspetta di dichiarare un dividendo per il quarto trimestre compreso tra $0.60 e $0.66 per azione, inclusi un dividendo in contante trimestrale di $0.25 e un dividendo annuale di completamento tra $0.35 e $0.41.
Park Hotels & Resorts ha restablecido su guía de ganancias para 2024 tras resolver huelgas laborales en cuatro hoteles en Hawái, Seattle y Boston. El RevPAR comparable de la compañía en octubre de 2024 disminuyó un 1.3% en comparación con el año anterior, pero excluyendo los hoteles afectados por las huelgas, habría aumentado un 3.5%. Las perspectivas actualizadas para 2024 proyectan un RevPAR comparable de $183 a $185, ingresos netos de $152 a $172 millones, y EBITDA ajustado de $635 a $655 millones. La empresa espera declarar un dividendo del cuarto trimestre entre $0.60 y $0.66 por acción, incluyendo un dividendo en efectivo trimestral de $0.25 y un dividendo anual de perfeccionamiento de $0.35 a $0.41.
Park Hotels & Resorts는 하와이, 시애틀, 보스턴의 네 개 호텔에서 발생한 노동 쟁의가 해결된 후 2024년 수익 전망을 복구했습니다. 2024년 10월의 비교 가능한 RevPAR는 지난해 대비 1.3% 감소했지만, 쟁의에 영향을 받은 호텔을 제외하면 3.5% 증가했을 것입니다. 업데이트된 2024년 전망은 비교 가능한 RevPAR이 $183-$185, 순이익이 $152-$172 백만, 조정 EBITDA가 $635-$655 백만이 될 것으로 예상하고 있습니다. 이 회사는 4분기 주당 $0.60-$0.66의 배당금을 선언할 것으로 기대하고 있으며, 여기에는 분기당 현금 배당금 $0.25와 연간 추가 배당금 $0.35-$0.41이 포함됩니다.
Park Hotels & Resorts a rétabli ses prévisions de bénéfices pour 2024 après la résolution de grèves de travailleurs dans quatre hôtels à Hawaï, Seattle et Boston. Le RevPAR comparable de l'entreprise en octobre 2024 a diminué de 1,3 % par rapport à l'année précédente, mais en excluant les hôtels touchés par les grèves, il aurait augmenté de 3,5 %. Les perspectives mises à jour pour 2024 prévoient un RevPAR comparable de 183 à 185 $, un revenu net de 152 à 172 millions $ et un EBITDA ajusté de 635 à 655 millions $. L'entreprise prévoit de déclarer un dividende pour le quatrième trimestre compris entre 0,60 et 0,66 $ par action, incluant un dividende en espèces trimestriel de 0,25 $ et un dividende annuel de complément de 0,35 à 0,41 $.
Park Hotels & Resorts hat seine Gewinnprognose für 2024 nach der Beilegung von Arbeitskämpfen in vier Hotels in Hawaii, Seattle und Boston wiederhergestellt. Der vergleichbare RevPAR des Unternehmens sank im Oktober 2024 um 1,3% im Vergleich zum Vorjahr, aber ohne die von den Streiks betroffenen Hotels wäre er um 3,5% gestiegen. Die aktualisierte Prognose für 2024 rechnet mit einem vergleichbaren RevPAR von 183 bis 185 US-Dollar, einem Nettogewinn von 152 bis 172 Millionen US-Dollar und einem bereinigten EBITDA von 635 bis 655 Millionen US-Dollar. Das Unternehmen erwartet, eine Dividende für das vierte Quartal zwischen 0,60 und 0,66 US-Dollar pro Aktie zu erklären, einschließlich einer vierteljährlichen Bar-Dividende von 0,25 US-Dollar und einer jährlichen Zusatzdividende von 0,35 bis 0,41 US-Dollar.
- Labor agreements successfully negotiated, ending strikes at four major hotels
- Strong performance in New Orleans and Miami with double-digit RevPAR gains
- Robust group and business transient demand in New York, Boston, and D.C., contributing 6% RevPAR growth
- Expected high dividend yield of 9.6% based on recent trading levels
- October 2024 Comparable RevPAR declined 1.3% compared to October 2023
- Q4 RevPAR growth expected to be negatively impacted by 600-700 basis points due to strike recovery
- Adjusted EBITDA guidance lowered by $30 million from previous outlook
- Operating income margin guidance reduced by 80 basis points
Insights
The resolution of labor strikes at four major hotels and reinstated 2024 guidance reveals significant operational impacts.
Key financial metrics have been adjusted downward: Adjusted EBITDA guidance lowered by
The operational recovery trajectory shows mixed signals. While hotels in New Orleans and Miami posted double-digit RevPAR gains from strong convention business, the strike-affected properties will drag Q4 portfolio RevPAR by
Strong performance in key markets (New York, Boston, Washington D.C.) with
TYSONS, Va., Nov. 11, 2024 (GLOBE NEWSWIRE) -- Park Hotels & Resorts Inc. (“Park” or the “Company”) (NYSE:PK) today announced its reinstated and updated full-year 2024 earnings guidance following the recent ratification of labor agreements between operators and labor unions at four of Park's hotels – the 2,860-room Hilton Hawaiian Village Waikiki Beach Resort (Honolulu), the 604-room Hilton Boston Logan Airport (Boston), the 850-room DoubleTree Hotel Seattle Airport (Seattle) and the 396-room Hilton Seattle Airport & Conference Center (Seattle).
“I am thrilled that our operators, who have been negotiating with the local unions representing the affected employees at the hotels, have successfully negotiated long-term labor agreements with hotel employees, and that hotel operations have returned to normal. We expect demand trends to continue accelerating through the holiday travel season, with minimal impact on 2025 performance,” said Thomas J. Baltimore, Jr., Chairman and Chief Executive Officer.
Operations Update
The Company's preliminary October 2024 Comparable RevPAR is expected to be
For the fourth quarter of 2024, the Company expects these four hotels to negatively impact the portfolio's year-over-year Comparable RevPAR growth by 600 to 700 basis points as the properties recover from the lingering business disruption in November and December.
Outlook Reinstatement and Update
The Company previously announced that it was not in a position to update its full-year 2024 outlook in its earnings release dated October 29, 2024 given the uncertainties surrounding then-ongoing negotiations between operators and labor unions at Park hotels and the related impacts on operating results. Due to the ratification of labor agreements covering union employees at the four Park hotels in Hawaii, Seattle and Boston, the Company is reinstating and updating its full-year 2024 financial outlook.
As previously reported, the Company's operations were impacted by labor activity at these four Park hotels beginning in late September 2024, which led to the cancellation of certain group events and overall lower transient volumes at these properties. Accordingly, the Company anticipates its full-year 2024 operating results to be as follows:
| (unaudited, dollars in millions, except per share amounts and RevPAR) | ||||||||||||||||||||
| Full-Year 2024 Outlook as of November 11, 2024 | Full-Year 2024 Outlook as of July 31, 2024 | Change at Midpoint | ||||||||||||||||||
| Metric | Low | High | Low | High | ||||||||||||||||
| Comparable RevPAR | $ | 183 | $ | 185 | $ | 185 | $ | 187 | $ | (2 | ) | |||||||||
| Comparable RevPAR change vs. 2023 | 1.5 | % | 2.5 | % | 3.5 | % | 4.5 | % | (200) bps | |||||||||||
| Net income | $ | 152 | $ | 172 | $ | 155 | $ | 185 | $ | (8 | ) | |||||||||
| Net income attributable to stockholders | $ | 141 | $ | 161 | $ | 144 | $ | 174 | $ | (8 | ) | |||||||||
| Earnings per share – Diluted(1) | $ | 0.68 | $ | 0.77 | $ | 0.69 | $ | 0.83 | $ | (0.03 | ) | |||||||||
| Operating income | $ | 383 | $ | 405 | $ | 410 | $ | 441 | $ | (32 | ) | |||||||||
| Operating income margin | 14.9 | % | 15.6 | % | 15.6 | % | 16.5 | % | (80) bps | |||||||||||
| Adjusted EBITDA | $ | 635 | $ | 655 | $ | 660 | $ | 690 | $ | (30 | ) | |||||||||
| Comparable Hotel Adjusted EBITDA margin(1) | 27.1 | % | 27.7 | % | 27.3 | % | 28.1 | % | (30) bps | |||||||||||
| Comparable Hotel Adjusted EBITDA margin change vs. 2023(1) | (100) bps | (40) bps | (50) bps | 30 bps | (60) bps | |||||||||||||||
| Adjusted FFO per share – Diluted(1) | $ | 2.00 | $ | 2.10 | $ | 2.10 | $ | 2.26 | $ | (0.13 | ) | |||||||||
______________________________________________
(1) Amounts are calculated based on unrounded numbers.
Park's outlook is based in part on the following assumptions:
- Includes approximately
$30 million of Hotel Adjusted EBITDA disruption related to Hurricanes Helene and Milton and labor activity across all four of Park's impacted hotels in the fourth quarter of 2024. The Company expects a significant portion of the group events that were cancelled related to labor activity will be rebooked for a future period. Excluding the impact of hurricanes and labor activity, full-year 2024 Comparable RevPAR growth was expected to be approximately 200 bps higher, or within the range of3.5% to4.5% , compared to 2023; - The removal of the Hilton Oakland Airport from Park's Comparable portfolio, which was closed in August 2024 and incurred an EBITDA loss of nearly
$4 million for the trailing twelve months, results in increases to full-year 2024 Comparable RevPAR of nearly$2 and full-year 2024 Comparable Hotel Adjusted EBITDA margin of 30 bps; - Includes 50 bps of RevPAR and
$9 million of Hotel Adjusted EBITDA disruption from renovations at certain of Park's hotels, of which$8 million is associated with renovations at Park's Hawaii hotels; - Adjusted FFO excludes
$60 million of default interest and late payment administrative fees associated with default of the$725 million non-recourse CMBS Loan (“SF Mortgage Loan”) secured by 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”) for full-year 2024, which began in June 2023 and is required to be recognized in interest expense until legal title to the Hilton San Francisco Hotels are transferred; - Fully diluted weighted average shares for the full-year 2024 of 209 million; and
- Park's Comparable portfolio as of November 11, 2024, which excludes the Hilton Oakland Airport as noted above, and does not take into account potential future acquisitions, dispositions or any financing transactions, which could result in a material change to Park’s outlook.
Park's full-year 2024 outlook is based on a number of factors, many of which are outside the Company's control, including uncertainty surrounding macro-economic factors, such as inflation, changes in interest rates and the possibility of an economic recession or slowdown, as well as the assumptions set forth above, all of which are subject to change.
Dividend Update
Park plans to declare its fourth quarter dividend before the end of 2024 and currently expects such dividend to be within a range of
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 the effects of Park's decision to cease payments on its
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 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, 2023, 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, FFO per share, Adjusted FFO per share, 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
Park is one of the largest publicly-traded lodging real estate investment trusts (“REIT”) with a diverse portfolio of iconic and market-leading hotels and resorts with significant underlying real estate value. Park's portfolio currently consists of 41 premium-branded hotels and resorts with over 25,000 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 OUTLOOK – EBITDA, ADJUSTED EBITDA, COMPARABLE HOTEL ADJUSTED EBITDA AND COMPARABLE HOTEL ADJUSTED EBITDA MARGIN | |||||||
| (unaudited, in millions) | Year Ending | ||||||
| December 31, 2024 | |||||||
| Low Case | High Case | ||||||
| Net income | $ | 152 | $ | 172 | |||
| Depreciation and amortization expense | 257 | 257 | |||||
| Interest income | (21 | ) | (21 | ) | |||
| Interest expense | 214 | 214 | |||||
| Interest expense associated with hotels in receivership | 60 | 60 | |||||
| Income tax expense | (9 | ) | (9 | ) | |||
| Interest expense, income tax and depreciation and amortization included in equity in earnings from investments in affiliates | 10 | 10 | |||||
| EBITDA | 663 | 683 | |||||
| Gain on sale of assets, net | (19 | ) | (19 | ) | |||
| Gain on derecognition of assets | (60 | ) | (60 | ) | |||
| Share-based compensation expense | 18 | 18 | |||||
| Impairment and casualty loss | 13 | 13 | |||||
| Other items | 20 | 20 | |||||
| Adjusted EBITDA | 635 | 655 | |||||
| Less: Adjusted EBITDA from investments in affiliates | (21 | ) | (21 | ) | |||
| Add: All other | 54 | 56 | |||||
| Hotel Adjusted EBITDA | 668 | 690 | |||||
| Less: Adjusted EBITDA from hotels disposed of | 3 | 3 | |||||
| Comparable Hotel Adjusted EBITDA | $ | 671 | $ | 693 | |||
| Year Ending | |||||||
| December 31, 2024 | |||||||
| Low Case | High Case | ||||||
| Total Revenues | $ | 2,578 | $ | 2,604 | |||
| Less: Other revenue | (92 | ) | (92 | ) | |||
| Hotel Revenues | 2,486 | 2,512 | |||||
| Less: Revenues from hotels disposed of | (9 | ) | (9 | ) | |||
| Comparable Hotel Revenues | $ | 2,477 | $ | 2,503 | |||
| Year Ending | |||||||
| December 31, 2024 | |||||||
| Low Case | High Case | ||||||
| Total Revenues | $ | 2,578 | $ | 2,604 | |||
| Operating income | $ | 383 | $ | 405 | |||
| Operating income margin(1) | 14.9 | % | 15.6 | % | |||
| Comparable Hotel Revenues | $ | 2,477 | $ | 2,503 | |||
| Comparable Hotel Adjusted EBITDA | $ | 671 | $ | 693 | |||
| Comparable Hotel Adjusted EBITDA margin(1) | 27.1 | % | 27.7 | % | |||
______________________________________________
(1) Percentages are calculated based on unrounded numbers.
| PARK HOTELS & RESORTS INC. NON-GAAP FINANCIAL MEASURES RECONCILIATIONS OUTLOOK – NAREIT FFO ATTRIBUTABLE TO STOCKHOLDERS AND ADJUSTED FFO ATTRIBUTABLE TO STOCKHOLDERS | |||||||
| (unaudited, in millions except per share data) | Year Ending | ||||||
| December 31, 2024 | |||||||
| Low Case | High Case | ||||||
| Net income attributable to stockholders | $ | 141 | $ | 161 | |||
| Depreciation and amortization expense | 257 | 257 | |||||
| Depreciation and amortization expense attributable to noncontrolling interests | (4 | ) | (4 | ) | |||
| Gain on derecognition of assets | (60 | ) | (60 | ) | |||
| Impairment loss | 12 | 12 | |||||
| Equity investment adjustments: | |||||||
| Equity in earnings from investments in affiliates | (28 | ) | (28 | ) | |||
| Pro rata FFO of equity investments | 16 | 16 | |||||
| Nareit FFO attributable to stockholders | 334 | 354 | |||||
| Casualty loss | 1 | 1 | |||||
| Share-based compensation expense | 18 | 18 | |||||
| Interest expense associated with hotels in receivership | 60 | 60 | |||||
| Other items | 5 | 7 | |||||
| Adjusted FFO attributable to stockholders | $ | 418 | $ | 440 | |||
| Adjusted FFO per share – Diluted(1) | $ | 2.00 | $ | 2.10 | |||
| Weighted average diluted shares outstanding | 209 | 209 | |||||
______________________________________________
(1) 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 include results from hotels that were active and operating in Park's portfolio since January 1st of the previous year and property acquisitions as though such acquisitions occurred on the earliest period presented. Additionally, Comparable metrics exclude results from property dispositions that have occurred through November 11, 2024 and 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 (loss) excluding depreciation and amortization, interest income, interest expense, income taxes and also 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 (loss) 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 (loss) 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. Further, the Company does not use or present EBITDA, Adjusted EBITDA, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA margin as measures of liquidity or cash flows.
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 (loss) 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.
| Investor Contact | 1775 Tysons Boulevard, 7th Floor |
| Ian Weissman | Tysons, VA 22102 |
| + 1 571 302 5591 | www.pkhotelsandresorts.com |
FAQ
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