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Park Hotels & Resorts PK recently released its preliminary fourth quarter and full-year 2024 results. The company also provided an update on capital recycling and capital distribution activities.
Preliminary results for November 2024 indicates that RevPAR is anticipated to be 3.9% lower than last year. However, excluding the impacts of the recently concluded strike activities in Honolulu, Boston and Seattle, the growth in RevPAR for November 2024 is expected to have improved by 510 basis points, resulting in a growth rate of 1.2%.
The company expects the preliminary RevPAR for the fourth quarter of 2024 to be 2.7% lower. Nevertheless, excluding the recently resolved strike activity, there will likely be an impressive increase of 2.3%. Consequently, the full-year RevPAR year-over-year growth for 2024 is anticipated to be approximately 2.5% or 3.9% excluding the impact of the strike activity.
Backed by strong group and leisure trends, in November 2024, the company witnessed year-over-year double-digit RevPAR growth at the renovated Bonnet Creek Orlando complex and Casa Marina Resort hotel in Key West.
Solid demand from both group and business transient led to a double-digit RevPAR increase in Chicago in November 2024. The company’s suburban portfolio also achieved high-single-digit RevPAR growth compared to the prior year period.
Capital Allocation
The company continues to concentrate on divesting non-core hotels and allocating capital within its portfolio through projects that yield accretive returns on investment and leverage-neutral stock buybacks. This strategy is illustrated by the recent sale of a consolidated joint venture asset for $35 million, along with $26 million in stock repurchases executed during the fourth quarter.
PK’s Capital Recycling Efforts
On Dec. 4, 2024, the consolidated joint venture that holds ownership of the 375-room DoubleTree Hotel Spokane City Center, located in Spokane, WA, executed the sale of the hotel for proceeds amounting to $35 million. After accounting for Park’s expected capital expenditures, the sale price reflects a 6.2% capitalization rate, based on the net operating income from the last 12 months (9.2% excluding capex), or a multiple of 13 times the trailing 12-month EBITDA (8.7 times excluding capex). The proceeds obtained from the sale will be allocated to settle the $13.5 million mortgage on the property, while Park's pro rata share of the remaining net proceeds will be directed toward general corporate purposes.
From the beginning of 2024 through Dec. 5, 2024, Park has completed the sale of three hotels, yielding gross proceeds of approximately $76 million, representing a multiple of 12.2 times the trailing 12-month EBITDA when anticipated capex are included (9 times excluding capex).