Park Hotels & Resorts Inc

Greetings and welcome to the Park Hotels and Resorts fourth quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ian Weissman, Senior Vice President, Corporate Strategy. Please go ahead.

Thank you, operator, and welcome everyone to the Park Hotels and Resorts fourth quarter and full year 2025 earnings call. Before we begin, I would like to remind everyone that many of the comments made today are considered forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed. and we are not obligated to publicly update or revise these forward-looking statements. Actual future performance, outcomes, and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by PARCC with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information, such as adjusted FFO and adjusted EBITDA. You can find this information together with reconciliations to the most directly comparable GAAP financial measure in yesterday's earnings release, as well as in our 8K file with the SEC, and the supplemental financial information available on our website at pkhotelsandresorts.com. Additionally, unless otherwise stated, all operating results will be presented on a comfortable hotel basis. This morning, Tom Baltimore, our chairman and chief executive officer, will update on our strategic initiatives, review parks fourth quarter and full year performance, and provide an outlook for 2026. While Sean DeLorto, our chief operating officer and chief financial officer, will provide additional color on fourth quarter and full year results, our plan to address our upcoming debt maturities later this year, and further details on guidance. Following our prepared remarks, we will open the call for questions. With that, I would like to turn the call over to Tom.

Thanks, Ian, and welcome everyone.

2025 was another very productive year for PARCC, one marked by meaningful progress against our strategic priorities. and continued execution across the core portfolio. Throughout the year, we remain laser focused on reshaping and upgrading the portfolio and reinvesting in our highest quality hotels, all with the goal of positioning the company for sustained long-term success. Our strategy has been both consistent and deliberate, concentrating our ownership in 21 core hotels, with superior growth prospects, aggressively exiting non-core assets, and allocating capital toward high impact redevelopment projects with the potential to unlock meaningful embedded value across the core portfolio with ROI opportunities exceeding $1 billion. In 2025, we executed more than $120 million in non-core sales at a blended multiple of 21 times. These transactions included the sale of the Hyatt-centric Fisherman's Wharf and our 25% joint venture interest in the capital, Hilton, as well as exiting three hotels sitting on expiring ground leases that produced no earnings on a combined basis. As we enter 2026, we continue to make steady progress toward completing our remaining non-core asset dispositions. In January, we closed on the sale of the 193-room Hilton Checkers in downtown Los Angeles for approximately $13 million, representing over a 17 times 2025 EBITDA. We have established a strong track record of successfully recycling capital, having sold or disposed of 51 hotels for over $3 billion Over the past nine years, and despite a challenging transaction environment, we have sold or disposed of 13 hotels since 2023, increasing portfolio-wide nominal REVPAR by nearly 8% and hotel-adjusted EBITDA margins by over 275 basis points. While the timing of non-core dispositions may be uneven, we remain firmly committed to materially reducing our exposure to our non-core portfolio by year end. Active work streams are currently underway across all remaining non-core properties as we continue to advance this objective. Additionally, building on the success of our development team, we launched our sixth major redevelopment in seven years, the 108th million-dollar transformation of the Royal Palm South Beach, while making significant progress on enhancing the overall quality of our Hawaii and New Orleans properties through extensive guest room renovations. Together, these projects reinforce our conviction that reinvesting in the core portfolio remains the highest use of capital, which will best position PARC to deliver outsized earnings growth and enhanced shareholder value over time. Turning to operations, I remain encouraged by the relative outperformance of our core portfolio, which delivered a solid 3.2% increase in REVPAR during the fourth quarter, or 5.7%, excluding the Royal Palm, representing nearly 1,500 basis points of outperformance versus our non-core portfolio. That trend was consistent throughout much of the year, with REVPAR growth from our core portfolio outperforming the non-core hotels by an average of 480 basis points in 2025, further reinforcing our stated strategy. During the fourth quarter, group performance stood out, supported by convention demand in Hawaii and New York and solid corporate group activity in Orlando. Fourth quarter group revenue for our core portfolio increased significantly 13% year-over-year, complemented by double-digit growth in banquet and catering revenues across several key markets, including Hawaii, Chicago, Orlando, and Denver, reflecting broad-based strength across key markets. Among our core hotels, Hilton Hawaiian Village was one of our strongest performers during the fourth quarter, generating 22% rep part growth, benefiting from easier year-over-year comparisons, following last year's labor disruption. We are increasingly encouraged by the outlook for both properties following the completion of the Rainbow Tower renovation at Hilton Hawaiian Village and the Palace Tower at Waikoloa Village. Following the renovation, both resorts will be operating with significantly upgraded product and should be well positioned for a step up in performance as demand trends are forecasted to improve and we lap an otherwise challenged 2025, which our resorts were meaningfully impacted by the disruption from Liberation Day and the government shutdown, the continued softness in Canadian demand, and renovation displacement. As we look ahead, we expect a multi-year recovery towards prior peak levels in Hawaii. We are beginning to see that recovery take shape with momentum building into the second quarter. As Hawaii continues to normalize, we expect it to be one of the most meaningful contributors to earnings growth across the portfolio. Additional standouts in the portfolio include Orlando, which delivered exceptional results, with our Bonnet Creek complex generating a record fourth quarter rep bar, up nearly 9% year-over-year. driven by a 15% increase in group revenues as the complex continues to benefit from its expanded meeting platform and renovated room product. I'm also pleased to share that the Waldorf Astoria Bonnet Creek has been named the number one hotel in Orlando by U.S. News & World Report. The property was also ranked number eight in Florida and within the top 100 of all hotels nationally, reflecting meaningful improvements over last year's ranking. I want to acknowledge the entire Bonnet Creek team for this achievement, which further highlights the quality and benefits of unlocking embedded value within our core portfolio. New York remained another top performer, delivering its highest fourth quarter group revenue in hotel history, up over 8% year over year, while the Hilton Chicago Hotel posted a nearly 4% increase in group revenue despite a challenging citywide calendar supported by improved short-term pickup strategies and in-house group. Turning to our Royal Palm renovation, we continue to make meaningful progress on this transformational project with more than half of the guest rooms complete and key public areas such as the lobby lounge, event terrace, and pool deck taking shape. Our best-in-class design and construction team is working hard to deliver the hotel by June, and we are laser-focused on achieving that goal. Overall, Miami remains one of the strongest hotel markets in the country, and I am incredibly excited about the long-term outlook for this asset. We continue to expect to realize a 15% to 20% return on our invested capital, with the hotel forecasted to more than double its EBITDA from 14 million to nearly 28 million once stabilized. We look forward to hosting many of you at the property during next month's city conference to showcase this world-class asset and the remarkable transformation underway.

Looking ahead to 2026, we see several factors that could support an improving lodging environment.

From a macro perspective, the U.S. economy remains on relatively firm footing with modestly higher growth expectations, easing inflation, and ongoing fiscal stimulus, all of which should provide incremental support to the U.S. consumer. In addition, easier year-over-year comparisons as we lap last year's government demand disruptions, together with the anticipated lift from major events such as the World Cup, and the America 250 celebrations in New York, Boston, and Washington, D.C. are expected to benefit demand across several of our core markets. Furthermore, new hotel construction remains muted, keeping supply growth at historical lows and supporting healthy operating fundamentals for the next several years. While we remain optimistic about the setup for the year with easier year-over-year comparisons and major event-driven demand, our guidance remains cautious with the potential for geopolitical or macroeconomic volatility continuing to drive uncertainty around booking decisions and impacting short-term group pickup trends and international inbound demand, particularly from Canada.

Sean will provide additional detail on Ernie's guidance later in the call.

In summary, 2025 was another year of meaningful progress for PARC, one in which we advance our strategic priorities, continue to reshape the portfolio, and strengthen the foundation for long-term growth. Our disciplined approach to capital allocation by accelerating non-core dispositions while reinvesting in our highest quality assets continues to unlock embedded value across the core portfolio. The transformation underway at Royal Palm, the substantial renovation work at our two iconic Hawaiian resorts and New Orleans, and a broader base momentum across several of our core markets further reinforce our conviction in the earnings power of our core portfolio. As we move into 2026, we remain laser focused on completing our transition to a streamlined portfolio of 21 high-quality hotels located in premium gateway cities and resort markets, and we are confident in the long-term growth opportunities for PARC.

And with that, I'll turn the call over to Sean.

Thanks, Tom. For the fourth quarter, REVPAR was approximately $182, representing a nearly 1% year-over-year increase, or nearly 3% when excluding Royal Palm. The core portfolio, excluding Royal Palm, continue to demonstrate meaningful operational strength, delivering a REBPAR increase of 6% to nearly $216, or nearly 1,500 basis points higher than our non-core portfolio, underscoring the resilience of our highest quality assets. Core hotel adjusted EBITDA margin also improved materially, expanding 230 basis points to 30%. In sharp contrast to the non-core portfolio, which recorded a 280 basis point contraction to 10%. Overall, core hotel-adjusted EBITDA increased 13%, or nearly $18 million over the prior year period, despite an over $4 million headwind from Royal Palm being closed, while the non-core portfolio declined 28%, creating an approximately $4 million drag on quarterly earnings. These results underscore the strength and durability of our core portfolio and highlight the value and creative nature of our portfolio reshaping initiative. For the full year, Red Park came in slightly ahead of expectations, declining 2% versus 2024, while Hotel adjusted even a margin and was 26.5%, reflecting a 130 basis point reduction from the prior year. As expected, the Royal Palm renovation remained the primary headwind. contributing a 110 basis point drag to full-year rev park growth and approximately 15 basis points of margin pressure. From a CAF-X standpoint, in 2025, we invested nearly $300 million across the portfolio, including roughly $110 million during the fourth quarter. Earlier in the year, we completed nearly $75 million of guest room renovations that began in 2024 at our two Hawaiian properties, the Rainbow Tower at Hilton Hawaiian Village and the Palace Tower at Hilton Waikoloa Village. The second and final phase of guest room renovations for the Rainbow Tower, which commenced in Q3 of last year, is expected to be completed in a few weeks, while the final phase for the Palace Tower, which also commenced in Q3 of last year, was delivered last month, bringing the total investment for the second phase across both Hawaii properties to approximately $85 million. In addition, we completed the second of three renovation phases, totaling more than $30 million at the Hilton New Orleans Riverside last month, with the third and final phase scheduled for completion in December of this year. Looking ahead, we expect a lower level of capital investment for 2026, with $230 million to $260 million of spend planned, which includes completing the $108 million comprehensive redevelopment of the Royal Palm. In addition, we are excited to launch a full-scale renovation of the Ali'i Tower at Hilton Hawaiian Village, expected to encompass all 348 guest rooms, the tower lobby, its private pool, and the addition of three new keys. Total investment for the project is expected to be approximately $96 million. To expedite the construction schedule, we plan to suspend operations in the self-contained tower beginning in the third quarter of this year, with a reopening planned for the middle of next year. Overall, we expect renovation-related disruption at Hilton Wine Village to be $1 to $2 million in 2026, representing a 10 basis point impact to portfolio REVPAR. Once completed, nearly 80% of the resort's nearly 2,900 rooms will have been newly renovated, materially enhancing the long-term competitiveness of our iconic resort. Turning to the balance sheet, as of year-end 2025, our liquidity was approximately $2 billion, including $200 million of cash $1 billion of available capacity under our revolver, and $800 million of an undrawed, delayed draw term loan. As we noted last quarter, we continue to make meaningful progress towards strengthening our balance sheet, while our long-term focus remains on further reducing leverage. As we execute non-core asset sales, proceeds are expected to be used to pay down debt. while organic growth from our core portfolio is expected to further reduce leverage toward our targeted goal of below five times over the next couple of years. With respect to our 2026 maturities, we intend to draw on the delayed draw term loan to fully repay the $121 million mortgage loan secured by the Hyatt Regency Boston in June, and then draw the remaining capacity in September in combination with proceeds from a planned mortgage financing for our Bonnet Creek complex in order to fully repay the $1.275 $1.275 billion CMBS financing on Hilton Wine Village, which matures in early November. We are currently in active discussions to originate a $650 million floating rate delayed draw mortgage for our Bonnet Creek complex, including both Assignia and Waldorf Astoria properties, and expect closing to occur later this quarter. We expect a blended spread over SOFR between the Bonnet Creek mortgage loan and the term loan to be approximately 220 to 225 basis points. Turning to guidance, as Tom noted, we are establishing a full year 2026 REBPAR growth range of flat to up 2%, with expense growth expected to be low single digits for the full year. With respect to earnings, adjusted EBITDA is forecast to be $580 million to $610 million, and adjusted FFO per share is expected to be in the range of $1.73 to $1.89. We expect Q1 to be the most challenging quarter of the year, due to difficult year-over-year comparisons. New Orleans, due to lapping the Super Bowl last year, and Miami together represent an expected 450 basis point drag on REVPAR during the quarter, translating to an approximate $12 million headwind to earnings relative to last year. Partially offsetting this pressure, we expect double-digit REVPAR growth at Bonnet Creek, Puerto Rico, and San Francisco, supported by strong group pace for each, along with the Super Bowl in the Bay Area. as well as low single-digit growth at both of our Hawaii hotels, driven by improving leisure and transient demand following their extensive room renovations. There are also a few key assumptions embedded in our guidance that are worth highlighting. First, with respect to the Royal Palm reopening and its impact on 2026 results, as Tom mentioned earlier, we are working diligently toward a targeted grand opening in early June. However, given the challenges associated with securing advanced bookings without absolute certainty to opening ahead of the World Cup matches beginning in mid-June, our guidance does not assume any material benefit from World Cup-related demand at the hotel. Overall, we expect Royal Palm to generate approximately $3 to $4 million of hotel-adjusted EBITDA this year compared to the nearly $28 million expected at stabilization and approximately $5 million reported in 2025 when the hotel was opened during high season prior to its closure in May. Second, with respect to asset sales, our guidance excludes any impact from potential non-core dispositions in 2026 outside of what we have already closed. While we remain fully committed to selling the majority of our non-core hotels during the year, the timing of the transactions remains uncertain, making the earnings impact difficult to estimate. For context, the remaining 13 non-core hotels generated approximately $60 million of hotel adjusted EBITDA in 2025. or just 9% of total hotel adjusted EBITDA. Finally, our adjusted FFO guidance reflects the successful refinancing of approximately $1.4 billion of debt during the back half of the year, at a blended interest rate of approximately 5.5%. On an annualized basis, this refinancing is expected to increase interest expense by roughly $20 million, of which $9 million is included in our guidance, given the anticipated timing of the refinancing. Finally, in 2025, we returned a total of $245 million of capital between $200 million of dividends and $45 million of share repurchases. And over the past three years, we have returned $1.3 billion of capital, including stock repurchases of over 12% of total outstanding shares. With respect to this year's first quarter dividend, on February 13th, we declared a cash dividend of $0.25 per share to be paid on April 15th to stockholders of record as of March 31st. At current trading levels, this quarterly fixed dividend translates to an annual yield of over 8.5%. This concludes our prepared remarks. We will now open the line for Q&A. To address each of your questions, we will ask that you limit yourself to one question and one follow-up.

Operator, may we have the first question, please?

Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your lines in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. And our first question comes from the line of Sneedy's Rose with Citi.

Please proceed. Hi, good morning.

Or good afternoon, rather. I wanted to ask you just a little bit more about how you think... could roll out over the course of the year, your Hawaii properties. I know you obviously the fourth quarter was pretty easy comp. But just in terms of are you looking at group pay, it's given I think the convention center is closed in Honolulu. It's just kind of what are you seeing kind of on the trajectory? I guess the real question is what do you think those properties can contribute this year in terms of EBITDA?

This is Sean.

Certainly had a good comp in Q4 for Hawaii. With the convention center closed, that's about 50,000 room nights typically that the property gets from citywide convention related business. It's probably done a good job though of replacing that as best possible with about 60% of that lost or at least ultimately converted into in-house group as well as about 20,000 room nights booked through a crew business, contract business. So they've done a good job to kind of replace that for this year. You know, in the end, I think Hawaii, both Hawaiian Village and Waikoloa combined, you should be kind of on the higher end of our guide of REVPAR growth, the 2% range. You know, again, with the convention center being out and kind of some early disruption from the ending of Phase 2 at Hawaiian Village, I think you'll see some rate growth, but not tremendous, again, just given the mix change there. I think you'll see certainly some decent growth overall on the EBITDA level, kind of in the mid single digits or so growth combined for the properties. Waikoloa certainly has an easier comp, certainly had challenges last year, and we certainly expect to see that materialize into a better, probably low double-digit growth on the EBITDA level for YCAL overall. So blended together, again, kind of a top line, top of the end of the range, 2% growth, plus or minus on the REVPAR, translating into kind of mid-single-digit growth combined for the properties.

It's me, Tom Baltimore. I agree with everything that Sean just outlined. If I could just add a comment about Japanese visitation. Obviously, relatively... flat last year, but we are seeing some green shoots and certainly believe that we'll be in kind of mid-single-digit growth in terms of visitation, you know, perhaps somewhere in the 750,000 visitors to Hawaii, which is certainly a continued progress. Obviously, we'd like for that to accelerate as much as possible, but we are seeing green shoots there, and as we sort of look out and and get the data on various forecasts, it looks like that continues at 5% to 6% into 2027 as well. So we see both of those are certainly encouraging tailwinds as well.

Great. And then, Tom, could you maybe just comment portfolio-wide, just kind of like what you're seeing on the pace of group revenues for this year?

For Hawaii,

No, just for your portfolio-wide.

Portfolio-wide, if you exclude obviously Miami and Hilton Hawaiian Village and obviously tough comp in New Orleans, up about 3% for the year in 26. And then if you look out to 27, just our core portfolio alone, we're about 4, 4.5%. So very encouraging from that standpoint.

Thank you. Appreciate it. The next question comes from the line of Dwayne Fenningworth with Evercore ISI.

Please proceed. Hey, thanks. Good morning. And sorry if I'm making you repeat anything. But just on the sequential for Hilton Hawaiian Village, I think we're going from like a plus 20 to a low single. So can you just speak to What would be driving that specifically for the March quarter?

I'm sorry, for Q1, Dwayne?

Yeah, aren't we pacing at a very high rate in 4Q to a low single-digit rate? So just why the change sequentially?

You have Group Pace down in Hawaiian Village. Again, speaking to, while they have replaced business here and there from the Convention Center, but Pace down 37% in Hawaiian Village for Q1. Certainly a big driver there for kind of how, even though it certainly is lapping Q1's performance, it's roughly kind of in that flattish range for the quarter.

Okay, that's helpful. And then just on Miami, can you talk about any refinement to your estimate on when that will be up and running, and how do you think about capturing some of the World Cup demand, just given you may reopen kind of close to that time frame? In other words, it's probably hard to commit to that now, but maybe as you gain confidence in the reopening – Just how you think about that from a positioning and revenue management perspective.

A couple things, Dwayne. I've been down to Miami quite a bit and toured the property. Obviously, I say this with humility but also with great confidence. I think we've demonstrated a track record really second to none in our sector in terms of being able to handle these types of very complex projects. If you think about Bonnet Creek and the success and the complexity of that, This really mirrors that. Carl Mayfield, who heads our design and construction team, is personally on site at least two or three days a week. We've got somewhere between 275 to 325 construction workers working six days a week, one to two shifts, and they're very confident. We're doing everything humanly possible to get done in that June timeframe. We'll be down there this weekend and touring again Monday morning. So as Sean said in his prepared remarks, as you think about us opening in early June, plus or minus, and then obviously the World Cup, the ability to be able to sell and commit, that makes it a little more challenging. Just given the amount of demand expected and how well I think we all believe Miami will do with the World Cup, we think obviously getting open we'll be able to capture and certainly be able to capture at very attractive rates. So very, very bullish, very excited about the project. And as Sean also noted, I mean, we're not being overly ambitious in terms of the impact that this hotel will have on the overall performance for the year. So if anything, we've been conservative. That's intentional. And we're certainly hoping that we can exceed that. But, again, remain enthusiastically excited about this transformation. We can't wait to host many of you next weekend, as you can see for yourself, the progress and the real-time work that's underway there. And we're, you know, 100 days plus or minus from completion and doing everything we can to make that happen. Okay, thank you.

The next question comes from the line of Rich Hightower with Parkways.

Please proceed.

Hey, good afternoon, guys.

Good afternoon, Rich.

Good to be on the park call again. So, Sean, I know that you kind of laid out a little bit of the color on the first quarter specifically with respect to the cadence of growth in 26. And then obviously there was some color on Hawaii specifically. But if you guys wouldn't mind, maybe just help us understand how that works kind of, you know, broadly for the portfolio over the course of all the different quarters of the year within the context of that flat to two ref bar guide.

Sure, Rich, and welcome back. Great to hear your voice on the call here. Yeah, just respect to kind of the quarterly cadence as you think about, you know, Q1 is certainly one where we think it's the weaker quarter of the year where it's probably performing a little bit better than expected, but certainly came into the year with a kind of belief that it would be down slightly. Maybe ultimately gets to flat, we'll see, but it's certainly in the bottom end of the range. as we think about Q1. Q2 and Q3 certainly should pick up. You're lapping some of this disruption from last year's, you know, policy initiatives, whether it was tariff-related, DOGE, obviously the Canadians and their kind of decline in travel into the states. You know, you start to see those impacts of that in Q2 and Q3. And so while lapping that on top of a World Cup that we believe, you Particularly, it could probably drive about 30, 35 basis points for the year. So certainly some positive impact we're thinking of in kind of Q2 into Q3 as well. So those should ultimately drive towards the higher end of the range, I should say, for the year. And then Q4 is one where we got group pace down 8%. So as Tom mentioned, if you exclude a couple of properties, we're certainly up. But I'd say overall portfolio is down slightly there. The big driver for that is Q4. And so while there's work to be done and there's certainly some potential upside in terms of pickup for the year pickup, I think that's kind of where our conservative comes in as well. We certainly think we've got about $20 million or so of revenue more to pick up than last year. And so we've seen kind of the last couple of years how things have gone. So we certainly want to take a little bit more cautious tone to that, looking at the pace being down about 8% for group and Q4. So that's ends up making Q4 a little bit more closer, we think, to the bottom of the range for sure.

That's great, Keller. Thank you. And I guess my follow-up is on the expense side of it. You've got a 2% to 3% kind of total OPEX guidance for the year. I think we heard earlier in the week that labor could run around 4% to 5%. And so just how do you feel about you know, the potential flex on that guidance range, and also, I think, within the context of a union renegotiation in New York later this year. Thanks.

Yeah, you're right. We're expecting that low single-digit kind of growth, and certainly with the CBAs, both that have been renewed or ultimately upcoming, we certainly see something in the mid-single-digit type growth, as you talked about with labor. But offsetting that, you've got Again, if you're kind of looking at top line and revenue-based type of fees and everything else, you're going to see lower end of the range there. We talked about doing deep dives at our properties last year. A lot of that came through kind of the back half of the year, and so we certainly get the benefit of the full year impact of that. This year, that's a nice little offset, we think, as well to the labor growth, as well as I think fixed costs will continue to be one where we see certainly below inflationary type growth. Insurance. Another good year, no big claims, certainly from us, but I think across the board there with events from hurricanes and the like, absent the fires in L.A. at the beginning of the year, but ultimately not to a point where I think underwriters will need to kind of look to grow their premiums, I think will certainly be a favorable market. So we certainly expect to see continued improvement there as well, along with taxes we think would ultimately while it can be choppy at times, you know, ultimately being checked for the year. So those, I think, are some of the offsets of the labor that gets us down to what we're talking about.

That's great. And congrats on the big promotion, by the way.

Thank you. Appreciate that.

The next question comes from the line of Ari Klein with BMO Capital Markets. Please proceed.

Thanks, and good afternoon. Just on the non-core asset sales, what's the level of interest I guess you're seeing in those assets, and how quickly do you think you can move there? And then obviously the focus is on selling those non-core hotels, but is there or could there be some consideration to selling any of the core hotels if an opportunity arose? Thanks.

Thanks. Ari, a lot to unpack there. Let me try to frame it a little bit for you. We have been laser-focused, as we said, I think, a couple times in the prepared remarks and, you know, continuing to really reshape the portfolio. I think it's important to remind listeners, you know, the core hotels account for 90% of the EBITDA in the company and 90% of the value. If you take sort of REVPAR, the core REVPAR is around 215, 210, and $18. That's about 69% plus or minus higher than the non-core. The core hotels generate about $40,000 in EBITDA per key and 30% EBITDA margins, whereas non-core, a rev par of approximately $129 plus or minus and about 14% margins and about $10,000 in EBITDA per key. So, I mean, a really stark contrast, hence the reason that we're so aggressively working, and we have been working. I think it's also important to note, you know, we've sold or disposed of 51 assets, and I think people sometimes forget that includes 14 international joint ventures in Dublin, in Brazil, two in Germany, the Netherlands, South Africa, many complex assets here in the US. So the team is skilled. The team is experienced. We've done it in the worst of times. We were selling during the pandemic. We've been selling post-pandemic. There are buyers. I think everybody knows that we're a net seller. And so in some situations, some of the assets have short-term ground leases or joint ventures or low tax basis. So, you know, every single one has a story. but we've got aggressive work streams underway. Our investments team and our legal team are working incredibly hard, and we're confident that we're going to get it solved. We've made significant progress before. We can handle this, and the goal is to get as many of them, if not all of them, done this year. We do have a few that are involved in a dispute, obviously, so those will probably lag. But the other 10 hotels, we are aggressively working every day, late into the evenings, and multiple discussions are underway. And we look forward to keeping investors informed, and we look forward, most importantly, closing them, using those proceeds to pay down debt and really reinvest back into the core portfolio where we're confident we can generate outsized returns. We believe, obviously, that we can generate higher yields from development projects than we can from acquisition projects at this time.

Thanks for that, Collar. And then maybe just a follow-up on Miami and the Royal Palm. How quickly or how much in front of the actual opening can you actually start to take bookings, especially in front of a massive event like the World Cup? And then just the pathway towards getting to those stabilized EBIT levels, how long do you think it takes to get there? Is it 27, 28, or beyond, I suppose?

Yeah, well, I guess first we're confident, obviously, in being able to take what was $14 million in EBITDA from a tired and certainly an asset that needed really a transformational renovation to to 28 million on a stabilized basis, we certainly would think a couple of years is not unreasonable, just given the extraordinary amount of development and activity occurring. And I don't need to tell anyone on this phone, not only from a business standpoint, but the number of people relocating to the region as well. And proximate to us is probably $4 billion of development activity, not all of that hotels, but other asset classes as well. So we remain very, very bullish on Miami as we look out. Regarding your question, obviously, as to how quickly we can get open, you know, we're in frequent contact, obviously, with both planning, both the approval process from the regulators, and as soon as we're ready and as soon as we get the signal, we will be up in Up and running, we've kept, obviously, our general manager who's on site every day. We've kept, obviously, the key leadership team of the operating group. So we'll be able to pivot and move very quickly. And, again, as Sean noted in his prepared remarks, you know, north of 50% of the guest rooms are already complete. So we are making great progress and are working around the clock and going to do everything we can to make that date.

Thank you. The next question comes from the line of David Katz with Jefferies.

Please proceed.

Morning or afternoon. Thanks for taking my question. Look, if we're laying out a 2026 where I'll make the leap that you're likely to be successful getting divested of your non-core hotels, my Expectation of those is that their earnings level are such where they would be meaningfully de-levering events for Park. Do you think, and we don't want to get ahead of ourselves, but do you think 2027 could be a year of potentially playing offense and maybe getting ready to buy something?

Nothing, David, would make me and this team more excited. than to be able to make that pivot from playing defense to offense, and I think you really hit the nail on the head. We've been working our tails off, and as you know, you've been along the journey with us, and you've watched the effort, and I think there are a few doubters out there, but I think you can remind people through the pen of just the hard work and the heavy lifting and the complexity of work that we've done in reshaping not only the 51 hotels that we've sold, but also keep in mind we were self-operating five hotels, and we also had three laundry facilities that have subsequently been closed. So the team is tested. It's experienced. We share that belief, and that the sooner we can substantially reduce the non-core so that it's no longer not only an overhang but even a discussion point, gives us the opportunity, I think, for consideration for re-rating of the company, hopefully our multiple, and allows us to go on offense. There are a lot of interesting opportunities that I think are out there today, and I think there'll be more in the future. And I think getting down to low 20s in terms of our core portfolio gives us a lot of optionality. The other thing to keep in mind is you think about some of our core assets in Bonnet Creek and the and the two iconic resorts in Hawaii and all the capital that we're putting. I think about also what we're doing in Miami. We own all of that fee simple, very rare, and all of that we think is also going to be advantageous for parking, gives us a lot of optionality as we can think about where it makes sense to continue to grow and in some cases to monetize, if that makes sense.

it it does and look i know it's hard it sounds like a couple of the assets are in some form of dispute stuff to tell but you know is it reasonable to expect that you know most of the assets that are non-core are going to get done you know within 2026 yes yes that is the goal that is the mission

We know it's at stake, and we're working as hard as we can. Obviously, there are things that happen beyond our control, David, but I think you've seen the effort. You and others have witnessed the amount of work that we've done in this respect. And it has not been easy, but we're up to the task.

Got it. Thank you. The next question comes from the line of Chris Woronka with Deutsche Bank. Please proceed. Hey, good afternoon, guys. Thanks for taking the question.

So maybe just to kind of double-click back to the asset sales, I guess, Tom, is there a way – I think we're really talking about 10 hotels if we exclude the three leases – Is there a way you could maybe bucket the type of buyers that you're maybe working with or characterize them in any way? Because I think we see headlines in the market every day about isolated struggles on the private side. And I think investors are kind of wondering whether any of that potentially is a roadblock to moving any of those assets.

Yeah, Chris, it's a great question. I would say one thing globally, there's plenty of equity capital. That's the first comment. The second, there's plenty of debt capital and private credit. So there's no issue there. There are also interested buyers, whether they be small family offices, whether they be owner operators, whether they're deep value entrepreneurs. And Look, some of the buyers tend to have a little sharper elbows in this kind of situation because they realize in some cases these are deeper turns and some reposition opportunities, but there's more than an adequate buyer pool out there. Some markets are a little tougher. I'd say obviously Chicago and L.A. are a little tougher than San Francisco right now for all the obvious reasons, but There are buyers, not our first rodeo. It's up to us to figure it out and solve it. You don't want to hear excuses. Our investors don't want to hear excuses. And we know what's required to do. And at the same time, we've got to make sure that we're getting fair value and that we're executing as quickly and as efficiently as we can. But there are work streams underway on all of them. There are some that have, whether they be short-term ground leases or So low tax basis. I mean, it's a little bit of all of that, but that's no different than what we experienced candidly within the 51 assets that we've sold, particularly some of those more complicated international assets that we sold a few years ago.

Okay. Fair enough. Thanks, Tom. As a follow-up, obviously you have the New York labor contract coming up. I think, Tom, you might have mentioned in the past that once you get through that and you kind of understand what the new math looks like, you might consider a longer-term plan there. That could include a lot of different things, maybe a conversation with Hilton. So is there anything you could add to that at this point as we move closer to the union reset?

Yeah. Obviously, I'm going to be careful here, Chris, as you can imagine. I'd make a couple observations. We've got an excellent operating team on site. You saw the results that we delivered last year. New York was incredibly strong. Record fourth quarter, up five to seven percent for the year. We're encouraged as we sort of look out here in 26. I don't think it's in anybody's best interest across the city for protracted negotiations or any kind of strike or that type of activity. We're one seat at the table. There are a lot of other owners also involved in this. You've also got, obviously, the World Cup, and we're going to be on the world stage. And I think as we think about tailwinds for us being the largest hotel in the city, there's probably a little bit of upside opportunity there from a demand standpoint. So we're encouraged. We think it will get done. We have assumptions in our guidance as to what we think that – that impact will be. And obviously we're not going to negotiate publicly, but we think we've got it covered from that standpoint. And as we think about the hotel, we're doing some modernization work on the infrastructure. We'll then huddle with Hilton. We'll look internally as to what we think makes the most sense. But no doubt when you think about you've only got really two big boxes in New York that can handle large groups We think that gives us a unique positioning and a unique opportunity for us over the intermediate and long term. And, again, we had an outstanding year in 2025, and we're very, very encouraged as we look out in 2026 for the New York Midtown.

Okay.

Very good. Appreciate all that color. Thanks, Tom. The next question comes from the line of Dan Pulitzer with JP Morgan.

Please proceed.

Hey, good afternoon, everyone, and thanks for taking my questions. First, I just want to touch on the RevPAR range. It came in a little bit lower than we were expecting. It sounds like there's a fair degree of conservatism in there. You're baking in the possibility of macro and political uncertainty. But perhaps you could maybe bookend or paint a picture where Where are the areas of conservatism in the guide specifically as it relates to some of the properties or markets where you're most excited about?

Certainly. Look, I think, again, I'll start with just from a macro standpoint in terms of I talked about the quarterly cadence with Rich earlier and just kind of what that means. When you think about Q4 and it being down 8%, That's kind of where a good point of conservative would be. You think about where we see some of that softness, whatever you want to call it, in Q4. It is back to Hawaiian Village. It's down about 50% on pace in Q4. Midtown, while it's got a good setup for the year overall, down 6% for the year in pace. Its weakest quarter is Q4. So I think Again, going into that, I think that's where we kind of feel there are obviously bigger impact hotels. We continue to find a way to just make sure that we use caution against some of the near-term, in-the-year-for-the-year pickup trends as we get through the rest of the year. But, yeah, there's certainly a case we made that things could be better, but ultimately I think as we think through what we've seen in the past, I think those are some of the – that's the time period, and those are some of the markets we're a little bit more hesitant on right now.

I would also add, just to sort of step back, you can paint, I think, a rosier picture. You know, the tailwinds for 2026 are encouraging. Obviously, we all expect a more accommodative Fed and perhaps lower interest rates. I mean, we're lapping Doge, Liberation Day, government shutdown. You've got the major events, obviously World Cup. You've got America's 250 celebrations, deregulation, fiscal stimulus, that's all encouraging. We've got the massive AI investment cycle, and what we all hope and expect will be productivity gains at some point. Easing inflation didn't show quite that way today in the PCE report, but the other side of that, you've also got some risk out there. You've got geopolitical, and obviously we look at what's happening in the In the Middle East and in Iran, in the U.S. right now, inflationary pressures are still there. International travel really hasn't rebounded yet. We're seeing some green shoots, but we're certainly still down pre-pandemic. And, you know, the consumer is cautious, and we've got a K-shaped economy right now. So, look, we think it was prudent to be conservative and cautious. for all the reasons that Sean outlined, particularly as he went quarter by quarter. And obviously, as I give you sort of macro, we should think about the tailwinds, but there are some headwinds out there. And if you think about what's happened the last few years in the sector, the first quarter came out to be pretty good. And then for many of us, if not all of us, we saw somewhat of a downward trend. So we think right now it makes sense to just be a little more measured a little more cautious coming out of the box, but we are crystal clear as to the business priorities for PARC. What we're focused on is selling non-core, investing in our core portfolio, paying down debt, looking for all of the operational efficiencies we can, and really outperforming. We'd rather have a lower bar and outperform And we're aligned as a management team there and really focused on continuing to deliver for shareholders.

Got it. Thank you. That's helpful. And then just for my follow-up, Tom, Sean, whoever wants to take it, it's more on capital allocation and leverage. Sean, you mentioned the target of five terms in the next couple of years. How do you think about that? Given that's kind of where you're setting this expectation, how do you think about near term the allocation of capital between you know, some of the project and investment opportunities, share repurchases given the price and valuation of the stock, or even the dividend, which obviously, you know, I don't know how secure you view that or how kind of tied you are to that level, but just kind of broad strokes how you think about those buckets.

Well, I think as we sell, certainly as we sell to non-core, we've been focused on redeploying that capital towards deleveraging So I think that's probably the main focus and certainly helps bring us to that target. With that, but obviously the investments we've made already and then we continue to make with things like Royal Palm, some other projects we have lined up. We think, again, those drive nice returns for us. And over the next couple of years as those ramp up, along with a longer kind of a recovery here in Hawaii, back to kind of where we were achieving EBITDA levels in 2023, those are the things that we think organically get the growth to help kind of bring us towards that five times target.

Got it. Thanks so much. The next question comes from the line of Cooper Clark with Wells Fargo.

Please proceed.

Great. Thanks for taking the question. Hello, thank you very much. Curious if you could speak to the RevPAR uplift from the World Cup in America 250 celebration that's currently embedded in Guide, and if on the World Cup that uplift is mainly just coming from the Hilton Midtown asset?

Yeah, I think for the full year, for the portfolio, the impact, we estimate somewhere in that 30 to 35 basis points. Probably about 20 of that or so would come from New York Another 10 from Boston and five from kind of other markets that aren't as big for us, but ultimately obviously have games going on or matches going on there.

Great. Thanks. And then appreciate some of the earlier color on individual projects and puts and takes, but curious if you could talk about the total rev par disruption and EBITDA disruption from renovations this year. how that compares to 25, and then maybe how we should be thinking about potential tailwinds from renovation in 27 as you look out?

Yes, certainly. I mean, obviously, Royal Palms, the big one, it's certainly a big benefit, you know, certainly helps support flow in the back half of the year after it opens up. But in the first part of the year, you're talking about 300 basis points of REVPAR impact within the quarters. Altogether, though, if you kind of remove, Miami just has about 30 basis point impact to the full year of full year guide. So it's a little bit of first half, second half there. Other projects aren't really net disruptive to the portfolio, maybe to the tune of 20, 30 basis points of impact. Certainly going forward, clearly Miami will continue to have an outsized impact to the portfolio. We certainly expect it to see that in kind of 100 plus basis point positive impact to the portfolio going forward as it ramps back up. And I think certainly we expect to see some nice recovery in the Hawaiian assets from the investments made in New Orleans, which already is getting good reception from meeting planners, winning business based on the product we have there. We certainly expect that to kind of be a nice tailwind for us over the next year or two.

Great. Thank you.

The next question comes from the line of Robin Farley with UBS. Please proceed.

Great. Thanks. I just wanted to get a little more color around the new project in Hawaii, the renovation. You mentioned one to two million of disruption in 26. I think that starts mid-year. So is it, I guess if we think about what that tower specifically generates in EBITDA, would that mean sort of three to four million? And where do you think that goes after the renovation? And then just to tack on to that. If I remember at Helton Hawaiian Village, there's an, I guess, underdeveloped parcel there, right? I don't know if there were stores or something on it that I think you've talked about as being like a site for potential future development. I know you're really focused on delivering right now, but does the additional renovation here in Hawaii, is that a sign that you're thinking about kind of more investment going forward in Hawaii? Thanks.

Yeah, Robin, lots to unpack there. Listen, I think the big message is we are absolutely committed to Hawaii, particularly Hilton Hawaiian Village. 23 acres, fee simple, iconic. We've obviously renovated the Tapa Tower, 1,100 keys. We've just finished Rainbow Tower north of 800 keys. plus or minus. Alihi Tower, as Sean mentioned, 351 keys. We think we can add another three keys there. It's self-contained, so it's sort of the higher-end product on the campus at the village there. And so we really think that this is the window to renovate that. Obviously, there's a gym, a self-contained restaurant. So we really believe that the window that we've identified that The disruption will be minor, the couple million dollars that we mentioned, and that this is the window to get it done. So excited about it, thrilled about it. It's really separate from the A&B Tower. The A&B Tower is more opportunistic. We wanted to grab that last site. We are still finishing up the final entitlements. We have no intention of proceeding with that project at any time soon until, obviously, demand has fully recovered We think that's a long-term, and I emphasize long-term play at a future date. We have no intention of proceeding with that at this point. But a leaky tower, we think, is prudent. We think that's going to continue to really give not only a tailwind, but significant lift and a way to distinguish the property even further from its competitive set. So we're excited about getting that done. And as Sean noted in his prepared remarks, you know, north of 80% of the rooms at at what's already a 2,900-room campus and village would be completed and fully renovated, which we think really helps us as we look to 27 and beyond. So hopefully that gives you a good framework.

Very helpful. Thank you. Just one quick follow-up on the OE tower. If I remember, it has its own entrance and sort of like pool area maybe even. Is there a thought that or potential – for that to be a different brand or like a different price point after the renovation, that it could be like a hotel within a hotel or anything along those lines?

Yeah, it's certainly something that we've looked at from time to time. No doubt it will have an elevated price point. Whether or not it's a hotel within a hotel is something that the asset management team here at PARC and the operators and our operating partners at Hilton will look at. We've studied that from time to time. It clearly is the most elevated product, and we're obviously going to take it to the next level and are really, really excited about the work that's going to commence there and get done, obviously, as we said, and certainly by the middle of 2027. Great.

Thank you. The next question comes from the line of Jay Kornreich with Tanner Fitzgerald.

Please proceed.

Hey, thanks so much. Obviously, a lot of ground already covered here, but just curious on, you know, the out-of-room F&B spend has been quite strong as of late. So just wondering what you're seeing from customers and groups there on that front and how much revenue growth there could be from the out-of-room spend this year.

Yeah, sure. I mean, you're right. It has been very strong. I'd say on total, it's probably about 40, 50 basis points above kind of where our rep part is, translating to total rep part. And we think it's the same This year, as we think about the guide as well, big drivers, you know, in-house group, as well as even Smurf, will, I think, help to drive banquet and catering even, you know, to a decent amount this year. Outlet spend in the resorts has been strong. Headlined by our Dorada restaurant, for example, in Casa Marina, which we opened up last year and drove outlet spend up 40% in that property. We expect that to actually – it's now open, obviously, for the high season this year. So we expect to see continued growth in those areas. Other things I think are just more – a little bit more in line, kind of single-digit, low single-digit type growth, whether it's parking and other fees generated in that respect. But for the most part, with banquet and catering, the groups continue to spend – We don't see much pressure from that as well as in the resorts, certainly the higher-end properties. You certainly see the benefits of the higher-income guests who are spending in the outlets.

Okay, great. I appreciate the color. I'll leave it there. Thank you.

This concludes the question-and-answer session. I'd like to turn the call back over to Tom Baltimore for closing remarks.

I appreciate all of you taking time today. I look forward to seeing many of you at the city conference in another week or so. And I also just want to take a moment to congratulate my partner, Sean Delorto, on his promotion. Well-deserved. Sean has been just an extraordinary CFO, a great business partner, great leader. I know that I speak for the board and myself. We are thrilled today. that Sean is taking on the CEO title, COO title, in addition to the CFO title, and I look forward to working with him for many years to come. So congratulations, Sean, and I look forward to seeing all of you in the near future.

This concludes today's conference. You may disconnect your lines at this time. We thank you for your participation.