Park Hotels & Resorts executives said the hotel-focused real estate investment trust isn't backing off its goal to sell non-core assets, even in an uncertain transactions market.
Speaking during Park's first-quarter 2025 earnings call, Chairman and CEO Thomas Baltimore Jr. said the REIT made progress toward its initiative to sell $300 million to $400 million of non-core assets in 2025. He said Park currently has several assets in various stages of the marketing and disposition process, including a pending sale.
The transaction market is "very challenging" currently amid geopolitical tensions and trade wars, Baltimore said.
"Uncertainty is the enemy of decision making," he said. "For many business leaders ... they're probably hesitant, they're probably pausing in many situations and certainly being cautious. [That's] no difference in what certainly we're seeing and probably a lot of our peers" [are seeing].
Baltimore said Park has separated itself as a company that is able to get deals done even under the worst of circumstances, so the REIT remains focused in reaching its goal.
"There's plenty of liquidity, there's plenty of equity capital, there's plenty of debt capital, and if I'm a small family office owner, operator mid-sized [private equity] firm, these periods of dislocation can be a really unique opportunity to certainly buy assets," he said.
While there is a great deal of uncertainty lingering in the market, it's important to note that nothing is pointing toward it rising to the level of past major disruptions — for now, he said.
"This isn't 9/11. This is not the Great Financial Crisis. This is not obviously the global pandemic," he said.
First-quarter performance
Executives with the REIT said its hotels collectively had better-than-expected performance in the first quarter, as most markets outperformed industry averages in revenue per available room, with its two Hawaii hotels as the exception.
Baltimore said its Bonnet Creek complex in Orlando, Florida — which includes the Signia by Hilton Orlando Bonnet Creek and the Waldorf Astoria Orlando — saw a year-over-year RevPAR increase of 14% in the first quarter on the heels of the completion of a $220 million renovation in 2023. Comparable RevPAR in the market was up 12% in the first quarter, which also includes the Hilton Orlando.
Universal Epic Universe is set to open this month as the third theme park and fourth park overall to open at Universal Orlando Resort. Orlando is also famously home to the Walt Disney World Resort. Baltimore said Orlando welcomes about 74 million visitors a year.
"With that kind of backdrop and given it's a strong hub for convention as well, we are very, very bullish on Orlando, Bonnet Creek in particular," he said. "Given the additional meeting space that we added in both the Waldorf as well as the Signia, we have the ability to be able to layer in groups that we didn't have the ability before."
Baltimore also made note of the Casa Marina Key West, Curio Collection by Hilton increasing its RevPAR by 12% in the quarter. The property also completed a renovation in 2023.
While the company saw some core markets — such as Miami; New Orleans; Puerto Rico; Washington, D.C.; and San Francisco — exceed industry averages in RevPAR gains, its two Hawaii properties — the Hilton Hawaiian Village Waikiki Beach Resort and Hilton Waikoloa Village — offset the gains with a 15% decline in RevPAR in the quarter, he said.
Some of that RevPAR decline can be attributed to labor strikes at the Hilton Hawaiian Village in the fourth quarter, he said. Both properties completed the first of two renovation phases in the first quarter.
While the demand ramp-up hasn't been as quick as expected, Baltimore said he remains optimistic in the intermediate and long-term future of Hawaii.
"We could not be more confident about any market than Hawaii, just given the limited supply growth, given the historic nature of the market where it is. Its RevPAR growth rate has outpaced the U.S. by 120 basis points over the last 20 years," he said.
Updated full-year outlook
Park downgraded its full-year outlook on comparable RevPAR and adjusted earnings before interest, taxes, depreciation and amortization to account for ongoing uncertainty. Its RevPAR projection is now between down 1% and up 2% compared to previously being between flat and up 3%. Its EBITDA projection is now between $590 million and $650 million, down from between $610 million and $670 million.
"As we navigate the increasingly complex global economic landscape and evaluate the impact of the escalated trade war on global travel, we have revised our full-year outlook to reflect a modest slowdown in demand," Sean Dell'Orto, executive vice president, chief financial officer and treasurer, said.
Dell'Orto said most of the adjustment is tied to slower-than-expected recovery at the Hilton Hawaiian Village.
By the numbers
For the first quarter, comparable revenue per available room was $177.67, down 0.7% from 2024 levels. Comparable occupancy was down 2.1% to 69.2% and comparable average daily rate was up 2.3% to $256.62, compared to the first quarter last year.
Adjusted earnings before interest, taxes, depreciation and amortization was $144 million for the quarter, down from $162 million last year. The REIT had a net loss of $57 million in the first quarter, down 296.6% year over year.
As of press time, Park's stock was trading at $10.21 a share, down 27.4% year to date. The New York Stock Exchange composite was up 1.5% for the same period.