Hotel room revenues dropped more than 6% year over year in the third quarter for Park Hotels & Resorts, and company officials are lowering their fourth-quarter projections. But Park executives stress the company remains in a strong position financially.
Speaking during Park's latest earnings call, Chairman and CEO Thomas Baltimore Jr. said the company still has significant liquidity, particularly after reworking its now $1 billion revolving credit facility.
During the call, Baltimore repeatedly pushed back on questions on whether the company was worried about cash flow with analysts pointing to a decision to not declare a special dividend in the fourth quarter.
"So clearly no liquidity issues at all," he said. "This was just a conscious effort that we thought a 9% to 10% dividend yield, which is far in excess of any of our peers, was really the right threshold."
Across Park's hotel portfolio, revenue per available room fell 6.1% for the quarter, driven by a 3.5-percentage-point drop in occupancy and a 1.7% drop in average daily rate.
The REIT scaled back its full-year 2025 outlook and now projects RevPAR to fall between 1.8% to 2.5%, down from an earlier projection of flat RevPAR performance to a 2% drop.
Sean Dell’Orto, Park's executive vice president, chief financial officer and treasurer, said there were reasons both specific to Park and affecting the broader travel industry behind the drop in expectations.
"In our last call, we talked about [being up] 3% to 5% in [the fourth quarter], so you're noticing about a 350-basis-point drop relative to that expectation," he said. "It's kind of a mix of macro trends and near-term disruption, as well as a little Park-specific [issues] sprinkled in there."
Dell’Orto said about 150 basis points of the drop are "general trends" in travel, 100 more are from the government shutdown or other cuts in government travel, with the remainder disruption from renovations or in major markets where Park's hotels are present.
Baltimore said the company now has $2.1 billion in liquidity and no pressing debt maturities.
Near-term strategy
For the time being, Park officials remain committed to a capital strategy of making improvements to their existing portfolio and selling off 15 hotels designated as "non-core" en route to a portfolio Baltimore described as "20 high-quality assets in markets with strong growth fundamentals [and] limited new supply."
He added the company has invested roughly $1.4 billion in its core properties that make up 90% of the company's value, and that is only likely to continue.
"We're generating significant returns and higher returns through our development and strategic ROI activities than we can generate through acquisition," he said. "So we're strong believers in that, and strong believers that there's a lot of embedded upside within this portfolio."
During the third quarter, Park closed the Embassy Suites Kansas City Plaza and terminated the property's ground lease, noting it was only slated to account for $0.2 million in earnings before interest, taxes, depreciation and amortization for full-year 2025.
The company is currently doing $220 million in renovation work at the Royal Palm South Beach Miami, Hilton Hawaiian Village Waikiki Beach Resort, Hilton Waikoloa Village and Hilton New Orleans Riverside.
Third-quarter performance
During the quarter, Park recorded a net loss of $14 million — down from $57 million in net income for the same period in 2024 — with adjusted EBITDA of $130 million, down from $159 million.
For the first three quarters of 2025, Park has recorded a net loss of $73 million, compared to $153 million in net income during the same period in 2024.
Total revenue came in at $610 million, down from $649 million.
As of press time, Park's stock was trading at $10.30 a share, down 25.3% year to date. The NYSE composite was up 12.3% for the same period.