Park’s Core Portfolio Outperforms by 1,500 Basis Points

Date of Call: Feb 20, 2026

Financials Results

• Revenue: RevPAR was approximately $182, representing a nearly 1% year-over-year increase or nearly 3% when excluding Royal Palm.
• Operating Margin: Core hotel adjusted EBITDA margin improved 230 basis points to 30%, while the Non-Core portfolio recorded a 280 basis point contraction to 10%.

Guidance:

• Full year 2026 RevPAR growth range of flat to up 2%.
• Expense growth expected to be low single digits for the full year.
• Adjusted EBITDA forecast to be $580 million to $610 million.
• Adjusted FFO per share expected to be in the range of $1.73 to $1.89.
• Q1 is expected to be the most challenging quarter due to difficult year-over-year comparisons.

Business Commentary:

Strategic Portfolio Reshaping:

• Park Hotels & Resorts executed over $120 million in Non-Core asset sales in 2025, including properties like the Hyatt Centric Fisherman's Wharf and a joint venture interest in the Capital Hilton.
• The company aims to further reduce Non-Core exposure by year-end, focusing on capital recycling to invest in high-impact redevelopment projects within the Core portfolio.

Operational Performance and RevPAR Growth:

• The Core portfolio delivered a 3.2% increase in RevPAR during the fourth quarter, with a 5.7% increase excluding the Royal Palm, nearly 1,500 basis points higher than the Non-Core portfolio.
• This outperformance is attributed to strategic investments in portfolio quality and redevelopment projects, alongside market-specific demand drivers like group and convention business.

Development and Redevelopment Initiatives:

• Park launched its sixth major redevelopment with the $108 million transformation of the Royal Palm South Beach and made significant progress on enhancing Hawaii and New Orleans properties.
• These initiatives are part of a strategy to reinvest in the Core portfolio, aiming to unlock embedded value and drive future earnings growth.

Debt Management and Financial Strategy:

• With $2 billion in liquidity, the company plans to use proceeds from Non-Core asset sales to pay down debt and target a leverage ratio below 5x over the next couple of years.
• The strategy includes refinancing approximately $1.4 billion of debt at a blended interest rate of around 5.5% to further strengthen the balance sheet.

2026 Outlook and Guidance:

• For 2026, Park expects RevPAR growth of flat to up 2%, with adjusted EBITDA forecast between $580 million to $610 million.
• The guidance reflects cautious optimism, considering potential geopolitical and macroeconomic volatility, alongside anticipated tailwinds from major events and easier year-over-year comparisons.

Sentiment Analysis:

Overall Tone: Positive

• CEO states, '2025 was another very productive year for Park, one marked by meaningful progress against our strategic priorities.' Management is 'increasingly encouraged by the outlook' and 'very, very bullish' on projects like the Royal Palm in Miami. They see 'several factors that could support an improving lodging environment' and are 'confident in the long-term growth opportunities for Park.'

Q&A:

• Question from Bennett Rose (Citigroup Inc., Research Division): Concerns about RevPAR and EBITDA contribution from Hawaii properties given the closed convention center and renovation disruption.
  Response: Management expects Hawaii RevPAR to be at the higher end of the 2% growth range, with mid-single-digit EBITDA growth, driven by replacement of convention center business and easier comps, supported by expected mid-single-digit Japanese visitation growth.

• Question from Duane Pfennigwerth (Evercore ISI Institutional Equities, Research Division): Why group pace for Hilton Hawaiian Village is expected to decline sequentially in Q1.
  Response: Group pace is down 37% due to the replacement of convention center business, which is not fully offsetting the loss, impacting Q1 RevPAR growth expectations.

• Question from Duane Pfennigwerth (Evercore ISI Institutional Equities, Research Division): Update on Miami's Royal Palm reopening timeline and capturing World Cup demand.
  Response: Management is confident in the June reopening, with over half of guestrooms complete. While the hotel is positioned well for World Cup demand, guidance assumes only minimal benefit due to booking uncertainties, but they are 'very bullish' on the long-term outlook.

• Question from Richard Hightower (Barclays Bank PLC, Research Division): Quarterly cadence of RevPAR growth within the flat to 2% full-year guide.
  Response: Q1 expected to be at the bottom of the range due to tough comps; Q2 and Q3 should pick up from lapping prior-year disruptions and event-driven demand; Q4 is expected to be at the bottom due to group pace decline.

• Question from Richard Hightower (Barclays Bank PLC, Research Division): Outlook on operating expense growth given potential labor inflation and New York union renegotiation.
  Response: Low single-digit expense growth is guided, with mid-single-digit labor cost growth offset by lower revenue-based fees, operational efficiencies, and favorable insurance/tax trends.

• Question from Aryeh Klein (BMO Capital Markets Equity Research): Interest and pace in selling Non-Core assets, and potential for selling Core hotels.
  Response: Management is aggressively working to sell the remaining Non-Core assets this year, aiming to materially reduce exposure, and sees ample buyer interest. They are focused on the Core portfolio for growth and value creation.

• Question from Aryeh Klein (BMO Capital Markets Equity Research): Booking timeline for Royal Palm post-opening and path to stabilized EBITDA.
  Response: The hotel is expected to open in early June, with more than half of guestrooms complete. Stabilized EBITDA of $28 million is forecast, with a transformational return of 15-20%, expected within a couple of years.

• Question from David Katz (Jefferies LLC, Research Division): Whether 2027 could be a year of playing offense and pursuing acquisitions after divesting Non-Core assets.
  Response: CEO expressed willingness to pivot to offense, noting the team's experience in asset sales and the optionality provided by fee-simple Core assets, which could enable growth or monetization opportunities.

• Question from Chris Woronka (Deutsche Bank AG, Research Division): Characterization of buyers for Non-Core assets and potential roadblocks.
  Response: There is ample equity and debt capital, with interested buyers including family offices and owner-operators. Some markets are tougher, but the company has successfully sold complex assets before and is confident in achieving fair value.

• Question from Chris Woronka (Deutsche Bank AG, Research Division): Outlook on New York labor negotiations and potential longer-term plans post-contract.
  Response: Management expects negotiations to conclude without disruption, with assumptions built into guidance. They view the Midtown property as strategically valuable and will evaluate options with Hilton after the contract is settled.

• Question from Daniel Politzer (JPMorgan Chase & Co, Research Division): Areas of conservatism within the RevPAR guidance and specific property outlooks.
  Response: Guidance is cautious, particularly in Q4 where group pace is down significantly, and on near-term pickup trends. Tailwinds exist but are balanced against geopolitical risks, consumer caution, and international travel softness.

• Question from Daniel Politzer (JPMorgan Chase & Co, Research Division): Capital allocation priorities regarding leverage reduction, projects, share repurchases, and dividend.
  Response: Primary focus is deleveraging using proceeds from Non-Core sales. Organic growth from projects like Royal Palm and Hawaii recovery is expected to help reach a target leverage ratio below 5x. The dividend is a key component of capital return.

• Question from Cooper Clark (Wells Fargo Securities, LLC, Research Division): RevPAR uplift from World Cup and America 250 celebrations embedded in guidance.
  Response: The World Cup and related events are estimated to contribute 30-35 basis points of RevPAR growth for the full year, with about 20 basis points from New York, 10 from Boston, and 5 from other markets.

• Question from Cooper Clark (Wells Fargo Securities, LLC, Research Division): Total RevPAR and EBITDA disruption from renovations in 2026 and tailwinds for 2027.
  Response: Renovations cause a 300 basis point RevPAR headwind in the first half (Royal Palm) but provide tailwinds in the second half. Future tailwinds from completed projects in Hawaii and New Orleans are expected to be significant.

• Question from Robin Farley (UBS Investment Bank, Research Division): EBITDA impact of the Ali'i Tower renovation and future investment plans in Hawaii.
  Response: The Ali'i Tower renovation is expected to disrupt EBITDA by $1-2 million in 2026 but will enhance the property's competitiveness. Future development on the AMB parcel is a long-term opportunity, not an immediate priority.

• Question from Jay Kornreich (Cantor Fitzgerald & Co., Research Division): Growth potential from out-of-room F&B spend in 2026.
  Response: Out-of-room F&B spend is expected to be about 40-50 basis points above RevPAR growth, driven by strong in-house group and banquet demand, with continued growth anticipated from new outlets like Dorado Restaurant.

Contradiction Point 1

Hawaii Group Demand Outlook and Pace

Hawaii's group trajectory shifts from flat in 2026 to being a cautionary point.

What is Daniel Politzer's outlook for JPMorgan Chase & Co.? - Daniel Politzer (JPMorgan Chase & Co.)

2025Q4: Hawaiian Village and Midtown are key areas of caution within the guidance. - [Sean Dell'Orto](COO, Executive VP, CFO & Treasurer) and [Thomas Baltimore](CEO)

What factors reflect the conservative assumptions in the guidance range of flat to 2% RevPAR, and which areas show the most optimism? - Robin Farley (UBS Investment Bank)

2025Q3: The flat 2026 group pace is excluding Hawaii. Hawaii’s group performance is impacted by the timing of the convention center closing... not by easier comps from the strike. - [Thomas Baltimore](CEO)

Contradiction Point 2

2026 Group Pace Forecast

The forecast for the core portfolio's 2026 group pace moves from essentially flat to up 3%.

What is Bennett Rose's role at Citigroup Inc.? - Bennett Rose (Citigroup Inc.)

2025Q4: Excluding tough comps in Miami and New Orleans, the core portfolio's group pace is up about 3% for 2026... - [Thomas Baltimore](CEO)

What is the overall growth rate of group revenue year-to-date? - Bennett Rose (Citigroup Inc.)

2025Q3: Excluding Hawaii and the Royal Palm... group pace for 2026 is essentially flat. - [Thomas Baltimore](CEO)

Contradiction Point 3

Capital Allocation Strategy Regarding the Dividend

The strategic approach to the dividend's role in capital allocation appears to shift.

What is JPMorgan Chase's earnings outlook? - Daniel Politzer (JPMorgan Chase & Co.)

2025Q4: The primary focus is deleveraging by using proceeds from Non-Core sales to pay down debt. Organic growth from Core investments... also help reduce leverage... - [Sean Dell'Orto](COO, Executive VP, CFO & Treasurer)

How do you approach capital allocation and leverage reduction, including share repurchases and dividends? - Stephen Grambling (Morgan Stanley)

2025Q3: The decision to reallocate the $0.25 dividend was based on the belief that returns from strategic reinvestment... exceed acquisition yields. - [Thomas Baltimore](CEO)

Contradiction Point 4

Timeline and Certainty of Non-Core Asset Sales

Contradiction on the firmness of the 2026 sales target and the expected timeline for the non-core portfolio cleanup.

What was Aryeh Klein's question from BMO Capital Markets? - Aryeh Klein (BMO Capital Markets)

2025Q4: The goal is to sell as many as possible in 2026 to pay down debt and reinvest..." and "That is the goal and mission... The team is committed and has the experience to execute. - [Thomas Baltimore](CEO)

What is the current progress on Non-Core asset sales, and are Core hotels being considered for sale? - Floris van Dijkum (Ladenburg Thalmann)

2025Q2: The vast majority are expected to be gone by end of 2026, with potentially a 'straggler or two' remaining. - [Thomas Baltimore](CEO)

Contradiction Point 5

Hawaii RevPAR Growth Trajectory

Guidance for Hawaii's RevPAR growth strengthens significantly between quarters.

What are your expectations for revenue growth in the next quarter? - Bennett Rose (Citigroup Inc.)

2025Q4: Hawaii's RevPAR is expected to be at the higher end of the 2% growth range. - [Sean Dell'Orto](COO, Executive VP, CFO & Treasurer)

What is the group pace trajectory for Hawaii properties and their EBITDA contribution this year, considering the easy Q4 comp and closed convention center? - Floris Van Dijkum (Compass Point)

2025Q1: RevPAR is forecasted to turn positive in Q3 (mid-single digits) and benefit from easier comparisons in Q4. - [Tom Baltimore](CEO)