Park Hotels & Resorts (NYSE:PK) reported second-quarter results that exceeded its expectations, driven by stronger group and leisure demand, particularly at resort properties in Hawaii, Florida and Key West. The company raised its full-year RevPAR, adjusted EBITDA and adjusted funds from operations guidance following the performance and a strong start to the third quarter.
Chairman and Chief Executive Officer Thomas Baltimore said comparable RevPAR rose nearly 7% year over year excluding the Royal Palm South Beach, which was under redevelopment for much of the period. Growth accelerated through the quarter, from about 4% in April to 5% in May and more than 11% in June, he said.
Hawaii and Florida Lead Portfolio Performance
Hawaii RevPAR rose about 9% year over year, supported by leisure demand and in-house group activity. Hilton Hawaiian Village was a standout, with RevPAR increasing nearly 12% and EBITDA rising more than 13%. The property ended June with a RevPAR index of 117, a four-point improvement from June 2024, Baltimore said.
Hilton Hawaiian Village recorded 98% occupancy in July, nearly 700 basis points above the prior year, while preliminary July RevPAR rose more than 6%. Baltimore said recently renovated Rainbow and Palace Towers have generated stronger guest demand and rate premiums. The company plans to begin a roughly $100 million renovation of the 348-room Ali’i Tower at Hilton Hawaiian Village during August, with completion expected early next year.
In Florida, RevPAR rose 13% at the Bonnet Creek complex and 10% at the company’s Key West properties. The Waldorf Astoria Orlando and Signia by Hilton Orlando Bonnet Creek posted RevPAR growth of nearly 15% and 12%, respectively. Waldorf Astoria Orlando food-and-beverage revenue exceeded the prior year’s record by 24%, according to Baltimore.
Casa Marina in Key West led its market with RevPAR growth of more than 14%, while food-and-beverage revenue increased 36%. Baltimore said the property’s repositioning and restaurant enhancements helped lift its RevPAR index by more than eight points to above 120.
Among urban hotels, Washington, D.C., posted nearly 17% RevPAR growth on higher government-related demand. Chicago RevPAR increased nearly 12% on group and transient demand, while Hyatt Regency Boston recorded nearly 9% RevPAR growth, aided by group, citywide, Boston Marathon and World Cup-related demand.
Group Demand and Earnings Results
Group rooms revenue increased 9.5% year over year in the second quarter, including nearly 23% growth in June. Baltimore said full-year 2026 group revenue pace was up nearly 6% from the same point last year, while third-quarter group pace was more than 15% higher. Group revenue pace for the core portfolio in 2027 was up more than 6%, with double-digit gains in Hawaii, New York, Key West and San Francisco.
Chief Financial Officer and Chief Operating Officer Sean Dell’Orto said total portfolio RevPAR increased nearly 6% to $217 in the second quarter. Total hotel revenue rose 6%, hotel adjusted EBITDA increased nearly 9% to $204 million, and hotel adjusted EBITDA margin expanded 80 basis points to nearly 32%.
Adjusted EBITDA totaled $198 million and adjusted FFO was $0.70 per share. Dell’Orto said group revenue exceeded expectations by 700 basis points, while leisure transient revenue grew more than 13% and exceeded internal expectations by nearly 500 basis points.
The company said FIFA World Cup-related demand in New York, Boston and San Francisco delivered a modest benefit, contributing roughly 30 basis points to full-year portfolio RevPAR growth. That contribution largely offset the expected 30-basis-point drag from Royal Palm during 2026.
Royal Palm Reopens, Non-Core Sales Continue
Park reopened the Royal Palm South Beach on July 22 after completing a redevelopment that took 15 months. The project involved more than $100 million of investment, including renovations to 393 guest rooms, the addition of 11 rooms, redesigned public areas, four food-and-beverage concepts and upgrades to meeting facilities.
Baltimore said the company expects the hotel’s EBITDA could double upon stabilization over the next two years. Dell’Orto said early bookings showed group and transient average daily rates for the remainder of 2026 up 21% and 53%, respectively, from pre-renovation levels. The company expects only a modest earnings contribution from Royal Palm in the second half, with more substantial growth anticipated in 2027 and 2028.
Park also completed three additional non-core dispositions: its interest in the Embassy Suites Old Town Alexandria joint venture for $29 million in gross proceeds, the exit of Embassy Suites Austin for about $6 million, and the sale of Hilton Short Hills for $12 million. Since announcing its non-core exit plan in early 2025, the company has sold or disposed of 10 of 19 identified hotels, generating nearly $200 million of proceeds at an average multiple of about 12.5 times EBITDA.
The remaining non-core hotels account for less than 5% of portfolio value, Baltimore said. The company aims to materially reduce its exposure by year-end.
Guidance Raised and Debt Refinancing Planned
Park raised its full-year RevPAR outlook to a range of 3% to 4.5%, an increase of about 225 basis points at the midpoint. The company also lifted adjusted EBITDA guidance by about $25 million at the midpoint to $617 million to $637 million, and increased adjusted FFO guidance to $1.90 to $2.00 per share.
July RevPAR increased 8.5%, Dell’Orto said, led by Hawaii, Key West, Boston, Santa Barbara and Washington, D.C. The company expects third-quarter RevPAR growth to trend toward the upper end of its updated range.
Second-quarter capital spending totaled $64 million, with full-year capital expenditures expected to range from $230 million to $260 million. Dell’Orto said maintenance capital spending could fall below $200 million on a run-rate basis absent major return-on-investment projects.
Park ended the quarter with approximately $3.7 billion of net debt and net debt to EBITDA of 6.1 times. The company plans to use remaining delayed-draw loan capacity and Bonnet Creek financing proceeds to repay the $1.27 billion Hilton Hawaiian Village mortgage in September, and plans to refinance the Hilton Santa Barbara mortgage later this year.
The board approved a third-quarter cash dividend of $0.25 per share, payable Oct. 15 to shareholders of record as of Sept. 30.
About Park Hotels & Resorts (NYSE:PK)
Park Hotels & Resorts Inc is a publicly traded real estate investment trust (REIT) specializing in luxury and upper-upscale hospitality properties. The company’s primary business activity involves owning and leasing premier hotels and resorts across major urban and resort destinations. Through long-term management and franchise agreements with leading hotel operators, Park generates revenue from room nights, food and beverage offerings, meetings and events, and ancillary services.
Since its spin-off from Hilton Worldwide in January 2017, Park Hotels & Resorts has assembled a diversified portfolio of more than 60 properties.
