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North America

Park Hotels Beats First-Quarter Estimates 

Alan Woinski and Kim Woinski

May 1st, 2024

Skift Take

Park Hotels exceeded adjusted EBITDA and AFFO estimates and raised their financial guidance, citing optimism in their group and leisure outlook, likely due to recently renovated properties.

Investors were whipsawed today with a massive rally mid-afternoon after the Fed’s comments sounded better than feared, only to have the rug taken out from under them by the end of the day. The DJIA only managed an 87 point rise while Nasdaq was down 52, the S&P 500 fell 17 points and the 10 year treasury yield was down .09 to 4.60%. Lodging stocks were mixed. SVC traded down to a new low, SOND was down -5% but SOHO was up 5% on the day.

Park Hotels and Marriott International reported 1Q24 results with both raising 2024 estimates. PK had a beat and raise while MAR’s results were a bit noisy but were in line. MAR raised 2024 EBITDA estimates by $80 million at the midpoint, which appears to be all second half 2024 related as 1Q was in line and they maintained 2Q guidance. Net rooms growth for MAR was 7.1% in 1Q driven mostly by the MGM deal. MAR spent $1.2 billion in 1Q, buying back 4.8 million shares. They already spent $300 million on share buybacks in 2Q through April 26th.

For PK, they beat adjusted EBITDA and AFFO estimates and raised guidance. They had very positive comments on the group and even the leisure outlook. That could be because they have quite a few properties that have completed renovations.

Ashford Hospitality Trust announced preliminary expectations for their 1Q results. They announced a preliminary estimated range of Adjusted EBITDA of $58.5 million to $60.5 million and Adjusted FFO of ($14.7 million) to ($12.7 million) for the quarter.

STR reported US lodging data for the week ended 4/27. US hotel RevPAR was down -2.7% for the week with rate and occupancy both in negative territory, -1.2%/1.3% respectively. Group RevPAR was down 13.3%. Passover took place during the week and was during the first couple of weeks of April in 2023.

Prime Group announced the opening of the 289 suite Residence Inn by Marriott Chicago Downtown Magnificent Mile. The property is owned by Prime Group and managed by Marriott International. The hotel includes a fitness center, 10 meeting rooms with a combined 8,150 square feet of functional meeting space with the lobby being on the 20th floor featuring 360 degree views of the city. Three unique dining options are offered as well as a rooftop bar on the 21st floor.

Provident Resources Group received approval from the Lehigh Valley International Airport Authority to secure funding for the development of a 26,000 square foot, 173 room Courtyard by Marriott. The hotel will be in Lehigh County, PA and is expected to be built in two phases. Provident said they already have the financing; they just needed approval on it. They expect to break ground on the development in late August or in September which would have the hotel opening to customers in 2026.

Bloomberg reported that Accor SA is in advanced talks to acquire luxury hotel brand HabitasAccor would acquire Habitas, which traces its roots to camps at the Burning Man festival in the Nevada desert, through its majority owned Ennismore, according to the report. Accor and Habitas both declined to comment. Habitas operates luxury resorts in Mexico, Namibia and Morocco, among other countries.

Target Hospitality, an operator of workplace lodging for oil field workers, said they will take a closer look at a proposal from its largest shareholder to take the company private. Target is forming a committee to evaluate a proposal from Arrow Holdings, an affiliate of London private equity firm TDR CapitalArrow’s offer was for $10.80 per share for the shares they do not already own. Arrow owned 49% of the company as of March 26th. TDR Capital is also affiliated with MFA Global and they hold nearly 16%.

Gale Miami Hotel & Residences announced the grand opening of the brand’s latest addition. The new Miami, FL property continues the legacy of Gale South Beach, while celebrating the historical relevance of the downtown Miamineighborhood and its landmarks. Photography from the Miami History Museumwill be featured throughout the rooms, honoring the opening of the original Galelocation. Gale Miami features studios, one and two bedroom layouts that span from 410 to 910 square feet. Hotel accommodations are available for both daily hotel bookings and short-term rentals with many units equipped with full kitchen and washer dryers. Gale Miami is one of the only downtown hotels to offer its guests exclusive beach club access. The hotel offers a 70,000 square foot amenity space over three floors, a Gale Wellness program, 9,000 square feet of restaurant space on the ground floor as well as two more on the 9th floor. The Gale Miami Conference Center is on the 8th floor and includes more than 20,000 square feet of space. The property will also have three designated floors of exhibition space.

A 200-room hotel next to the convention center in Dayton, Ohio is getting close to becoming a reality after county leaders approved a large amount of money for the project. The Transportation Center parking garage in Downtown Dayton which used to be an Asian restaurant is where the plan is to build a new 12-14 story hotel. The location is right across from the convention center. The $45 million renovation on the Convention Center is expected to be completed by April or May of next year. The Convention Center Facilities Commission wants to fast track the plans for the new hotel to have it done around the same time if possible.

In Billings, Montana the Billings Hotel and Convention Center is going through major renovations right now to offer additional space for some of their upcoming events. 15,000 square feet of additional space with 2,000 theater seats and 1,200 more for banquet dinners will be offered at the Convention Center once the construction is completed by late December of this year. The official opening to the public is expected in January 2025.

The Pocono Palace Resort in Pennsylvania, the resort that is famous for its seven foot tall champagne glass whirlpool bath for two and heart-shaped tubs, is set to close after 48 years of offering romantic stays. Cove Pocono Resorts announced the Pocono Palace Resort has been sold with transfer of title expected on May 2nd. Their two other romantic retreats will stay open as only the 206 Fantasy Road resort has been bought. Cove Haven Resort and Paradise Stream Resort will remain open with anyone that had reserved rooms at the Palace after May 1st to be rescheduled at one of the other two properties. The New York Post said the new owner does not plan to maintain the property as a couples retreat and will likely close down the 165 suite, two-restaurant business, then renovate it and rebrand it as something else.

The Luana Waikiki Hotel & Suites is now being managed by hotel management company Springboard Hospitality, effective as of April 1st. Springboard said they have plans to conduct a refresh of the property that will include the introduction of new onsite dining concepts. The hotel is Springboard’s eleventh in Hawaii. The property includes an onsite spa and salon, gym, in-room kitchenettes, and private lanais for each guestroom. The updates are expected to include guest room interiors, such as bedroom and lounge furniture as well as other ancillary items. Lighting and artwork will also be a big focus of the refresh.

The latest Hotel Construction Pipeline Trend Report for Canada from Lodging Econometrics revealed that at the end of the 1Q 2024 there were 314 projects/39,628 rooms in the total pipeline. This is a new record-high in project counts, up 11% in project counts and 5% in room numbers year over year. There are 70 projects/9,151 rooms under construction in Canada up 49%/58% respectively. At the end of the first quarter, 80 projects/9,593 rooms are scheduled to start construction in the next 12 months while projects and rooms in the early planning stage reached an all-time high of 164 projects/20,884 rooms. Hotel construction projects in the province of Ontario account for 59% of the projects and 60% of the rooms in the total pipeline for new all-time highs of 186 projects and 23,839 rooms. British Columbia is second with a record 57 projects/8,290 rooms and then Quebec with 20 projects/2,403 rooms. The three provinces account for 84% of the projects and 87% of the rooms in the total pipeline in CanadaToronto has the highest number of construction projects with a record high 67 totaling 9,323 rooms followed by Vancouver with 21 projects/4,079 rooms. Five new hotels with 704 rooms opened in Canada during the first quarter. An additional 26 new hotels, accounting for 3,050 rooms, are scheduled to open by year end. The total of 31 new hotels/3,754 rooms opening in 2024 will be up 1% from 2023. LE expects 39 new hotel openings in 2025 with 3,869 rooms.

Paramount Lodging Advisors announced the sale of the Fairfield Inn & Suites Grand Rapids. The 80 key property is less than 10 minutes from Gerald R. Ford International Airport which is undergoing a $110 million project to accommodate passenger growth.

Alan Woinski and Kim Woinski

May 1st, 2024

Companies: Park Hotels and Resorts Inc., Accor, Arrow Global, Ashford Hospitality Trust, Courtyard by Marriott, Fairfield Inn & Suites, Habitas, Marriott International, MGM Resorts, Paramount Lodging, Prime Group, Residence Inn by Marriott, Service Properties Trust, Soho House and Co Inc., Sonder Holdings Inc., Springboard Hospitality, Target Hospitality Group

Locations: Chicago, Miami, Michigan, Montana, Ohio, Pennsylvania, Poconos, Quebec, Toronto, Vancouver, Waikiki

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