Park Hotels & Resorts Q1 2025: Navigating Contradictions in Asset Sales and Hawaii's Recovery Outlook

Asset sales strategy, Hawaii's demand and recovery outlook, group pace and demand expectations, impact of international travel on Hawaii market, asset sales and market conditions are the key contradictions discussed in Park Hotels & Resorts' latest 2025Q1 earnings call.



Revenue and Performance Metrics:
- Park Hotels & Resorts reported total hotel revenues of $608 million and hotel adjusted EBITDA of $151 million for Q1 2025.
- The reported RevPAR was $178, indicating a modest 70 basis point decline from the prior year, although occupancy fell by 210 basis points, offset by a 2.3% increase in ADR.

Capital Allocation and Strategic Initiatives:
- The company initiated $80 million in capital improvements during Q1 and plans to invest a total of $310 million to $330 million in 2025.
- This investment is driven by a strategic focus on maximizing shareholder returns by unlocking embedded value in the portfolio, as exemplified by the planned $100 million renovation of the Royal Palm South Beach, Miami.

Regional Performance Variability:
- The Bonnet Creek complex in Orlando and the Casa Marina resort in Key West experienced RevPAR increases of 14% and 12%, respectively, while the Hilton Hawaiian Village Hotel's RevPAR declined by 15%.
- The regional performance discrepancy is attributed to factors like the ongoing recovery from a labor strike in Hawaii and varying levels of inbound travel from abroad.

Group Revenue and Market Trends:
- Group revenue pace was up 9% in Q1, contributing significantly to overall performance, although Q2 is expected to have a weaker pace, particularly in markets like New Orleans and Chicago.
- The trends reflect a mixed market outlook due to geopolitical tensions and global trade wars, which are impacting booking windows and cross-border leisure travel. However, strong group bookings and favorable inbound travel from the U.S. are providing stability.