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Park Hotels & Resorts Inc Stock Quote PK

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Morningstar's Park Hotels & Resorts Inc Stock Analysis

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Strong Leisure Demand and Recovery of Group Business Drive Park Hotels' Strong Q2 Results

Kevin Brown, CFA Senior Analyst

Analyst Note

| Kevin Brown, CFA |

Park Hotels & Resorts' second-quarter results were better than anticipated, though we currently don’t anticipate any material changes to our $25.50 fair value estimate for the no-moat company. Occupancy improved to 71.0%, which was better than the 41.7% Park reported in the second quarter of 2021 but still below the prepandemic level of 85.6% in the second quarter of 2019. However, average daily rate was up 33.9% year over year and 8.3% compared with the second quarter of 2019. As a result, revenue per available room year was up 119.7% year over year, better than our estimate of 93.3% growth and only 10.2% below 2019 levels. What really surprised us this quarter is that hotel EBITDA margins climbed to 30.8%, up from just 13.9% this time last year, to be in line with the 31.1% that Park reported in the second quarter of 2019. Strong revenue and EBITDA growth led to reported adjusted funds from operations of $0.61 per share in the quarter, far higher than the $0.16 loss reported last year and much closer to the $0.81 reported in the second quarter of 2019.

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Key Statistics - PK

Company Profile - PK

Business Description

Park Hotels & Resorts owns upper-upscale and luxury hotels with 27,889 rooms across 48 hotels in the United States. Park also has interests through joint ventures in another 4,297 rooms in seven U.S. hotels. Park was spun out of narrow-moat Hilton Worldwide Holdings at the start of 2017, so most of the company's hotels are still under Hilton brands. The company has sold all its international hotels and 15 lower-quality U.S. hotels to focus on high-quality assets in domestic, gateway markets.

Contact
1775 Tysons Boulevard, 7th Floor
Tysons, VA, 22102
T +1 571 302-5757
Industry REIT - Hotel & Motel
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Stock Type Distressed
Employees 80

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