Q3 2025 Park Hotels & Resorts Inc Earnings Call

Ian Weissman: 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 Park with the SEC, specifically the most recent reports on Form 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information such as FFO and adjusted EBITDA.

Ian Weissman: 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 8-K filed 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 comparable hotel basis. This morning, Tom Baltimore, our Chairman and Chief Executive Officer, will provide an update on Park's strategic initiatives, Q3 performance, and outlook for the remainder of the year. Sean Dell'Orto, our Chief Financial Officer, will provide additional color on Q3 results and 2025 guidance, as well as an update on our balance sheet and dividends. Following our prepared remarks, we will open the call for questions. With that, I would like to turn the call over to Tom. Thank you, Ian, and welcome everyone. Park remained laser-focused on our strategic priorities during the Q3.

Actual future performance outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Park with the SEC, specifically the most recent reports on Form 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information such as 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 8-K 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 comparable Hotel basis.

This morning, Tom Baltimore, our chairman and chief. Executive officer will provide an update on Park, strategic initiatives, third quarter, performance and outlook for the remainder of the year.

Sean dellorto our Chief Financial Officer will provide additional color on third quarter results and 2025 guidance as well as an update on our balance sheet and dividends

Our prepared remarks. We will open the call for questions with that. I would like to turn the call over to Tom.

Thank you, Ian.

And welcome everyone.

Ian Weissman: Fortifying our strong and flexible balance sheet, recycling capital to enhance the quality and growth potential of our core portfolio, and driving operational excellence by minimizing cost in a challenging operating environment. Through disciplined execution, we continue to transform Park into an owner of high-quality, iconic hotels with compelling growth profiles. We believe this ongoing portfolio refinement, combined with unlocking embedded value across our assets, positions us to deliver stronger performance in the years ahead. Because we continue to be proactive with respect to our balance sheet, we successfully extended and upsized our corporate credit facility in September to provide us with committed debt capital that increases our total liquidity to $2.1 billion to address our 2026 debt maturities. I want to thank our bank partners for their continued support and confidence in Park, and for giving us the flexible capital to execute our business plan.

Park remains laser-focused on our strategic priorities during the third quarter.

4. Strong and flexible balance sheet.

Recycling Capital to enhance the quality and growth potential of our core portfolio.

And driving operational excellence by minimizing cost.

In a challenging operating environment.

Through disciplined execution. We continue to transform park into an owner of high-quality iconic hotels with compelling growth profiles.

We believe this ongoing portfolio refinement.

Combined with unlocking embedded value across our assets. Positions us to deliver stronger performance in the years ahead.

Because we continue to be proactive with respect, to our balance sheet.

We successfully extended an upsized corporate credit facility in September to provide us with committed debt capital that increases our total liquidity to $2.1 billion to address our 2026 debt maturities.

I want to thank our bank partners for their continued support and confidence in park.

Ian Weissman: Turning to our capital allocation initiatives, our strategy over the past several years has been, and continues to be, focused on unlocking significant embedded value within our core portfolio to maximize returns for our shareholders. With development returns far exceeding acquisition yields, we continued to lean into high ROI reinvestments, deploying over $325 million across our best-performing assets at returns approaching 20%, including the meeting space expansion and renovations at our Signia and Waldorf Astoria Bonnet Creek Complex in Orlando, the renovation and repositionings at our Casa Marina and Reach Resorts in Key West, and the renovation and upbranding of our Santa Barbara Resort. In May, we launched our sixth major hotel redevelopment in seven years, a $103 million renovation and repositioning of the Royal Palm located in the heart of South Beach, Miami.

and for giving us the flexible Capital to execute our business plan,

Turning to our Capital allocation initiatives.

Our strategy over the past several years, has been and continues to be focused on unlocking, significant embedded value within our core portfolio to maximize returns for our shareholders.

With development returns far exceeding acquisition yields, we continue to lean into high Roi reinvestments.

deploying over 325 million across our best performing assets at returns approaching 20%

Including the meeting space expansion and renovations at our Signia and Walter Pistoria Bonnet Creek complex in Orlando.

The renovation and repositions at our Castle Marina and reach resorts in Key West.

And the renovation and upbringing of our Santa Barbara Resort.

In May.

We launched our 6 major Hotel Redevelopment in 7 years.

Ian Weissman: This transformational project is expected to generate a 15% to 20% IRR and more than double the hotel's EBITDA from $14 million to nearly $28 million upon stabilization. Importantly, construction remains on schedule and on budget, and we are targeting a reopening ahead of the 2026 World Cup matches in Miami next June. We also have several other major renovation projects underway, including the final phases of guest room tower renovations at both of our Hawaii hotels, expected to be completed in early Q1 2026. As well as the second phase of guest room renovations at our Hilton New Orleans Riverside Hotel, upgrading another 428 guest rooms in the 1,167-room main tower. The remaining 489 guest rooms at New Orleans are expected to be completed over the next one to two years.

A $103 million renovation and repositioning of the Royal Palm, located in the heart of South Beach, Miami.

This transformational project is expected to generate a 15% to 20% IRR.

And more than double the hotel's ibida from 14 million to nearly 28 million.

Upon stabilization importantly, construction remains on schedule, and on budget. And we are targeting a reopening ahead of the 2026 World Cup matches in Miami. Next June,

We also have several other major renovation projects underway, including the final phases of guest room tower renovations at both of our Hawaii hotels.

Expected to be completed in early q1 2026.

Of guest room renovations, at our Hilton New Orleans Riverside Hotel, we are upgrading another 428 guest rooms.

In the 1167 room main tower.

Ian Weissman: In total, we expect to execute approximately $220 million in strategic renovation projects this year, further enhancing the quality of our core portfolio. We remain confident that reinvesting in our assets represents the highest and best use of capital. Since 2018, we have invested approximately $1.4 billion in our core hotels, upgrading nearly 8,000 guest rooms and fully repositioning several of our most strategic assets. We continue to be disciplined and deliberate with our capital recycling efforts, particularly as the transaction market remains episodic. Our goal remains crystal clear: to divest our remaining 15 non-core consolidated hotels and concentrate ownership across 20 high-quality assets in markets with strong growth fundamentals and limited new supply, and that account for 90% of the value of our portfolio. Successful execution of this strategy will position us with one of the highest-quality portfolios in the sector and among the strongest same-store growth profiles.

The remaining 489 guest rooms at New Orleans are expected to be completed over the next 1 to 2 years.

In total.

We expect to execute approximately 220 million in strategic renovation projects this year.

Further in enhancing the quality of our core portfolio.

We remain confident that reinvesting in our assets represents the highest and best use of capital.

Since 2018, we have invested approximately 1.4 billion dollars in our core hotels.

Upgrading nearly 8,000 guest rooms and fully repositioning several of our most strategic assets.

We continue to be disciplined and deliberate with our capital recycling efforts, particularly as the transaction market remains episodic.

Our goal remains crystal clear to divest our remaining 15 non-orthodox.

Ian Weissman: In line with this plan, we recently closed the 266-room Embassy Suites Kansas City, a property on an expiring ground lease that generated minimal EBITDA, and by year-end, we will exit two additional non-core hotels on expiring ground leases: the DoubleTree Seattle Airport and the DoubleTree Sonoma, which are expected to generate a combined EBITDA of just $300,000 this year. Exiting these three lower-quality assets will meaningfully enhance our portfolio metrics, increasing nominal RevPAR by nearly $6 and expanding margins by approximately 70 basis points. Despite a challenging environment, we remain laser-focused on executing our strategic objectives. With several non-core assets currently being marketed and active discussions underway on multiple transactions, including two potential deals under letter of intent.

Successful execution of this strategy will position us with 1 of the highest quality portfolios in the sector and among the strongest same store growth profiles.

In line with this plan.

We recently closed the 266 room Embassy Suites Kansas City.

a property on an expiring ground lease that generated minimally, but

And by year end, we will exit 2 additional non-core hotels on expiring ground leases, the Double Tree Seattle Airport and the Double Tree Soma.

Which are expected to generate a combined EBITDA of just dollars this year.

Exiting these 3 lower quality assets will meaningfully enhance our portfolio metrics increasing nominal revpar by nearly 6 dollars and expanding margins by approximately 70 basis points.

Despite a challenging environment.

We remain laser focused on executing our strategic objectives.

Ian Weissman: Turning to operations, as we disclosed on our Q2 call, Q3 results were impacted by a meaningful decline in group demand driven by tough year-over-year comparisons following last year's strong citywide calendars across several of our markets, incremental disruption from the second phase of our Hawaii renovations, which began in August. A month earlier than last year, and further challenged by softer leisure and government demand. Overall, RevPAR declined 6%, or approximately 5% when excluding Royal Palm South Beach. Despite these headwinds, some of our core markets performed exceptionally well, further demonstrating our ability to unlock value at our hotels. In Orlando, the Bonnet Creek Complex delivered nearly 3% RevPAR growth, with both the Signia by Hilton Orlando Bonnet Creek and Waldorf Astoria Orlando hotels achieving their highest Q3 RevPAR and GOP in the complex's history.

With several non-core assets currently being marketed, active discussions are underway on multiple transactions, including two potential deals under letter of intent.

Turning to operations as we disclosed on our second quarter call.

Third quarter results, were impacted by a meaningful decline in group, demand driven by tough year-over-year comparisons. Following last year's strong city-wide calendars across several of our markets.

Incremental disruption.

From the second phase of our Hawaii renovations, which began in August.

A month earlier than last year and further challenged by softer leisure and government demand.

Overall revpar declined, 6%.

Or approximately 5% when excluding Royal Palm South Beach.

Despite these headwinds. So of our core markets performed exceptionally well.

Further demonstrating our ability to unlock value at our hotels.

In Orlando, the Bonnet Creek complex delivered nearly 3% RevPAR growth.

Ian Weissman: Looking ahead to Q4, the complex is set to benefit from multiple group buyouts, with group revenue pace up 28% and RevPAR growth expected in the mid to upper single digits. In Key West, RevPAR growth outperformed the broader portfolio, increasing 1% for the quarter, while Casa Marina's RevPAR index reached 110, up nearly 800 basis points year-over-year, driven by very strong group demand. Overall, group room rates increased 28%, driving higher occupancy and stronger overall results. For Q4, we expect continued outperformance supported by ongoing leisure transience strength as we head into peak season, translating to mid single-digit RevPAR growth. In New York, RevPAR rose nearly 4%, with meaningful share gains across all segments. Meanwhile, in San Francisco, the JW Marriott San Francisco Union Square delivered RevPAR growth of nearly 14%, supported by strong group and transient demand.

With both the sigma and Walder Foria hotels achieving their highest third quarter rev Park and GOP in the complex's history.

Looking ahead, the Q4.

The complex is set to benefit from multiple group buyouts, with group revenue up 28% and revenue park growth expected in the mid to upper single digits.

In Key West.

Red Park growth outperformed. The broader portfolio increasing 1% for the quarter or Casa marinas. Revpar index reached 110

Up nearly 800 basis points year-over-year, driven by very strong group demand.

Overall.

Groove room, lights, increased. 28%.

Driving higher occupancy and stronger overall results for Q4.

We expect continued outperformance supported by ongoing Leisure transient strength as we head into peak season.

Translating to Mid single digit rev Park growth.

In New York revpar Rose.

Nearly 4% with meaningful share gains across all segments.

%.

Ian Weissman: Both hotels are expected to maintain strong momentum through year-end, driven by very strong group trends, with group revenue pace up 14% in New York and 160% in San Francisco. Finally, at the Caribe Hilton in Puerto Rico, Q3 RevPAR increased nearly 12%, with incremental leisure demand driven by the Bad Bunny residency, which added roughly 1,300 basis points of lift to the quarter. Looking ahead to Q4, we expect a significant rebound led by a broad-based recovery in group demand, coupled with easier year-over-year comparisons in Hawaii as we lap the 45-day labor strike, which began late September last year, the impact of which was endured throughout Q4 last year.

Supported by strong group and transient demand.

Both hotels are expected to maintain strong momentum through year-end, driven by very strong group trends.

With group Revenue, pay sub 14% in New York and 160% in San Francisco.

Finally, at the Green Bay Hilton in Puerto Rico, Q3 revar increased nearly 12%.

With incremental Leisure demand driven by The Bad Bunny residency, which added roughly 1300 basis points of lift to the quarter.

Looking ahead to the fourth quarter.

We expect a significant rebound led by a broad-based recovery in group demand.

Coupled with easier year-over-year comparisons in Hawaii.

As we lap the 45-day labor strike that began in late September last year.

Ian Weissman: Group revenue pace for Q4 is currently up over 12% year-over-year, with double-digit increases for several of our largest group houses, including our Bonnet Creek Complex in Orlando, our JW Marriott in San Francisco, our Hiltons in New York, and New Orleans. Chicago, and Denver, our two Hawaii resorts, and the Caribe Hilton Resort in Puerto Rico. That said, the extended government shutdown has impacted both group and transient demand in several of our core markets, and more pronounced in Hawaii, D.C., and San Diego, placing additional pressure on Q4 results. Through the end of October, we estimate that the shutdown has reduced expectations for room revenue by approximately $2.5 million, resulting in a roughly 180 basis point drag on this month's RevPAR performance.

The impact of which was endured throughout the fourth quarter last year.

Group Revenue pays for the fourth quarter is currently up over 12% year-over-year.

With double digit increases for several of our largest group houses, including our Bonnet Creek complex in Orlando, our JW Marriott in San Francisco our Hiltons in New York.

New Orleans.

Chicago in Denver, our two Hawaii resorts, and the Curry Bay Hilton Resort in Puerto Rico. That said,

The extended government shutdown has impacted both group and transient demand in several of our core markets.

And more pronounced in Hawaii, D.C., and San Diego.

Placing additional pressure on fourth quarter results.

Through the end of October.

We estimate that the shutdown has reduced expectations for room Revenue by approximately 2.5 million.

Ian Weissman: October RevPAR is now expected to be relatively flat year-over-year for the total portfolio, or up approximately 1.5% when excluding the Royal Palm South Beach in Miami Beach. Based on our current forecast, which reflects the impact of the shutdown through October only, we expect Q4 RevPAR growth to range between negative 1% and plus 2%, or positive 1% to positive 4% when you exclude Royal Palm South Beach. Sean Dell'Orto will provide more detail on our updated full-year guidance in just a moment. Finally, as we turn our attention to 2026, I am confident that the strategic investments we have made will position Park Hotels & Resorts Inc. to outperform during reacceleration of the lodging cycle. While some macro uncertainty persists, particularly for the lower-end consumer-facing economic pressure from higher rates, we see the foundation forming for the next cycle of expansion.

Resulting in a roughly 180 basis point drag on this month's RevPAR performance.

October RevPAR is now expected to be relatively flat year-over-year.

For the total portfolio, we're up approximately 1.5%. When excluding the Royal Palm in Miami,

Based on our current forecast, which reflects the impact of the shutdown through October only.

We expect fourth quarter repair growth to range between negative 1%.

And plus 2%.

Or positive 1% to positive 4%, when you exclude Royal Palm.

Sha will provide more detail on our updated full-year guidance in just a moment.

Finally.

As we turn our attention to 2026, I am confident.

That the strategic investments we have made will position Park to outperform during the reaction of the lodging cycle.

While some macro uncertainty persist.

Particularly, for the lower-end consumer-facing economic pressure from higher rates.

Ian Weissman: A more accommodative Fed and easing financial conditions, resulting in lower rates and taxes, should support a rebound in business investment. At the same time, sustained public sector and private sector spending, particularly around AI infrastructure and the anticipated productivity gains from AI adoption, together with a modest pickup in inbound international travel, particularly from Japan, should further strengthen lodging fundamentals. Looking ahead, we remain optimistic about 2026 and beyond, supported by expectations for lower interest rates and a more favorable regulatory environment, and a renewed investment cycle, all of which should drive stronger economic and travel growth, along with a meaningful boost from major events, including World Cup events in multiple cities, the Super Bowl in the San Francisco Bay Area, and New York and Boston's 250th anniversary celebrations. With industry supply growth remaining at historic lows, we see a clear path for RevPAR acceleration and sustainable long-term growth.

We see the foundation forming for the next cycle of expansion.

A more accommodative fed and easing Financial conditions.

resulting in lower rates in taxes.

Should support a rebound in business investment.

At the same time sustained public sector and private sector spending particularly around AI infrastructure and the anticipated productivity gains from AI adoption.

Together with a modest pickup in inbound international travel. Particularly from Japan should further strengthen lodging fundamentals.

Looking ahead, we remain optimistic about 2026 and Beyond.

Supported by expectations for lower interest rates a more favorable regulatory environment.

And A Renewed investment cycle.

All of which should drive stronger economic and travel growth.

Along with a meaningful Boost from major events, including World Cup events in multiple cities.

The Super Bowl in San Francisco Bay Area.

In New York and Boston's 250th, anniversary celebrations.

With industry supply growth remaining at historic lows.

Ian Weissman: Particularly across the segments and markets where our portfolio is concentrated, and additional growth from the capital investments we are making in the core portfolio. With that, I'll turn it over to Sean. Thanks, Tom. For Q3, RevPAR was $181, representing a 6% decline over the prior year, or down 5% excluding the Royal Palm South Beach, which suspended operations in May for its full-scale renovation. Total hotel revenues were $585 million, and hotel-adjusted EBITDA came in at $141 million, translating into hotel-adjusted EBITDA margin of 24.1%. Despite the softer top-line results, continued cost discipline by our team and hotel partners held expense growth relatively flat for the quarter, marking the third consecutive quarter with expense growth of 1% or less. Adjusted EBITDA was $130 million, and adjusted FFO per share was $0.35.

We see a clear path for revar acceleration and sustainable long-term growth.

Particularly across the segments and markets where our portfolio is concentrated, and additional growth from the capital investments we are making in the core portfolio. And with that,

I'll turn it over to Sean.

81 representing a 6% decline over the prior year or down 5%, excluding the Royal Palm, South Beach, which suspended operations in May for its full-scale renovation.

Total Hotel revenues were 585 million and hotel adjusted. I came in at 141 million translating into Hotel, adjusted IBA margin of 24.1%.

Despite the softer Topline results. Continued cost discipline by our team and hotel Partners held expense growth relatively flat for the quarter.

Marking the third consecutive quarter with expense growth of 1% or less.

Ian Weissman: Turning to the balance sheet, as Tom mentioned, we made significant progress toward addressing our 2026 maturities by amending and upsizing our corporate credit facility. The facility now includes a $1 billion senior unsecured revolver with a fully extended maturity in 2030, a new $800 million senior unsecured delayed draw term loan facility with a fully extended maturity in 2031, and the $200 million senior unsecured term loan maturing in 2027 that was entered into in May of last year. We expect to draw on the new term loan next year to fully repay the $122 million mortgage on the Hyatt Regency Boston, and together with a subsequent financing transaction expected in the first half of 2026, fully repay the $1.275 billion mortgage on the Hilton Hawaiian Village by the middle of next year when the PAR prepayment window opens.

Adjusted ibida was 130 million in adjusted ffo per. Share was 35 cents.

Turning to the balance sheet. As Tom mentioned, we've made significant progress toward addressing our 2026 maturities by amending and upsizing our corporate credit facility.

The facility now includes a 1 billion, dollar, senior unsecured revolver with a fully extended maturity in 2030.

A new million-dollar, senior unsecured delayed draw term loan facility with a fully extended maturity in 2031.

And the hundred million dollar, senior unsecured Term Loan maturing in 2027. That was entered into in May of last year.

We expect to draw on the new Term Loan next year, to fully repay, the 122 million mortgage on the highest Regency Boston.

Ian Weissman: With respect to the Hilton San Francisco and Park 55 hotels, which were placed into receivership in November 2023, we now expect the hotels to be sold by the receiver on or before the 21st of next month, as the purchaser has exercised its one-time extension right outlined in the executed purchase and sale agreement. Turning to dividends, on October 23, we declared a Q4 cash dividend of $0.25 per share to stockholders of record as of December 31, translating to an annualized yield of approximately 9%. To preserve liquidity for our strategic initiatives, to reinvest in the portfolio and deleverage the balance sheet, we do not expect to declare a top-off dividend for 2025, reserving over $50 million based on the midpoint of our updated FFO guidance. Finally, on guidance, based on Q3 results and known impacts from the government shutdown, we are adjusting our full-year outlook.

And together with a subsequent financing transaction expected. In the first half of 2026, fully repay, the 1.275 billion mortgage on the Hilton Hawaiian Village by the middle of next year, when the par prepayment window opens,

with respect to the Hilton San Francisco and park 55 hotels, which are placed into receivership in November of 2023. We now expect the hotels to be sold by the receiver on, or before the 21st of next month.

As the purchaser has exercised its one-time extension right, outlined in the executed purchase and sale agreement.

Turning to dividends, on October 23rd, we declared a fourth quarter cash dividend of $0.25 per share to stockholders of record as of December 31st.

Translating to an annualized yield of approximately 9%.

To preserve liquidity for our strategic initiatives to reinvest in the portfolio and delever the balance sheet, we do not expect to declare a top-off dividend for 2025.

Preserving over $50 million based on the midpoint of our updated FFO guidance.

Ian Weissman: We now expect full-year RevPAR growth to be down around 2% at the midpoint of a range between -2.5% to -1.75%, or down 1% at the midpoint, excluding the Royal Palm South Beach. Our revised guidance reflects weaker-than-expected Q3 results and continued softness in leisure demand expected for Q4, further compounded by the impact of the government shutdown in October. Accordingly, we are also lowering our full-year adjusted EBITDA forecast by $12.5 million at the midpoint to $608 million, within a tightened range of $595 million to $620 million, resulting in a hotel-adjusted EBITDA margin range of 26.3% to 26.9%, a 20 basis point change versus prior guidance. Adjusted FFO per share is now expected to be $1.91 at the midpoint, within a range of $1.85 to $1.97 per share. This concludes our prepared remarks. We have now opened the line for Q&A.

And finally, on guidance based on third quarter results and known impacts from the government shutdown. We are adjusting our full year outlook.

We now expect full year rep Park growth to be down around 2% at the midpoint of a range between negative 2.5% to negative 1.75%.

Or down 1% at the midpoint excluding the Royal Palm South Beach.

Our revised guidance, reflects weaker than expected, third, quarter results, and continued softness in Leisure, demand, expected for the fourth quarter.

Further compounded by the impact of the government shutdown in October.

Accordingly. We are also lowering our full year. Adjusted Eva forecast by 12.5 million at the midpoint to 608 million within a tighter range of 595 million to 620 million.

resulting in a hotel adjusted, even a margin range of...

26.3% to 26.9%.

A 20 basis point change versus prior guidance.

Adjusted FFO per share is now expected to be $1.

9,191 cents at the midpoint within a range of $1.85 to $1.97 per share.

Ian Weissman: To address each of your questions, we ask that you limit yourself to one question and one follow-up. Operator, may we have the first question, please? Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to ask a question, please press Star 1 on your telephone keypad at this time. A confirmation tone will indicate that your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the Star keys. Our first question today is coming from Duane Pfennigwerth of Evercore ISI. Please go ahead. Hey, thank you. Hey, Duane. I wanted to ask you about the expense performance.

This concludes our prepared remarks. We will now open the line for Q&A to address each of your questions. We ask that you limit yourself to one question and one follow-up.

Operator, may we have the first question, please?

Thank you, ladies and gentlemen. The floor is now open for questions. If you would like.

A confirmation tone will indicate that your line is in the question queue. You may press star 2. If you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star Keys. Our first question today is coming from Dwayne pfennigwerth of evercore isi. Please go ahead.

Wanted to ask you.

Ian Weissman: Given kind of the lower outlook on Q4 RevPAR, it feels like you're pulling expenses down to a surprising degree to offset that. Can you just talk specifically about where that's coming from and what the planning cycle for those expense pull-downs looks like? How much lead time do you need to do that? It just continues to be a bit surprising, given the variance in RevPAR and the lesser variance in EBITDA. Thank you. Sure, Duane. As Sean, I'll take the first stab at that. We talked about this last quarter. Clearly, aggressive asset management is a key pillar of ours, and we're working with our hotel partners. We're looking to reduce costs in this environment that we're experiencing. We talked about deep dives last quarter. We did that in over a dozen properties, definitely some key properties of ours, looking at both revenue and cost opportunities.

Expense performance, you know, given given kind of the lower outlook on 4q revpar.

And and what the planning cycle? Uh, for those expense pulldowns looks looks like how, how much lead time do you need uh, to do that? It just it just continues to be a bit surprising.

Uh, given the variance in revenue, PAR, and the lesser variance in EBITA. Thank you.

Ian Weissman: On the cost side, it's been anywhere from productivity elements, staffing, full FTE-type staffing, procurement. Think about how you might look at certain brand standards and certain assets that don't necessarily fit or make sense and challenging those. A number of initiatives, experimenting with a few ideas to ultimately drive costs out of the operating model. This is something that we've been working on throughout the year, and we've noted that some of the deep dives we did in a batch of properties, we started in Q1 and Q2, and we were expecting to see the benefits of that as the year went on. Some of that is there embedded in kind of what we see in Q4. On the other side, too, we continue to benefit from the renewal we did in the insurance side with 25% reduction in premiums.

Sure. Dwayne as Sean, I'll take a uh, the first step at that. Um, you know, we talked about this last quarter. Um, you know, clearly aggressive as to manage the key pillar of ours and, you know, we working with the hotel Partners. Uh, you know, we're looking to reduce costs in this environment that uh, we're experiencing, you know, we talked about deep, Dives last quarter. We did that in over a dozen properties and definitely some Key properties of ours, looking at both revenue and cost opportunities on the cost side. It's been anywhere from productivity elements, um, Staffing, um, full FTE type Staffing, um procurement, um, think about how you might. Uh, look at um, you know, certain brands standards and and certain assets that don't necessarily fit or make sense and challenging those. So, a number of initiatives uh, experimenting with a few ideas, uh, to ultimately Drive costs uh out of the operating model. So this is something that we've been working on throughout the year and and we've noted that so the Deep Dives we did in a batch of properties. We started

Q1 and Q2 and we're expecting to see the benefits of that as the year went on. So some of that is, is there embedded in in kind of what we see in Q4 um, you know, I think

Ian Weissman: We continue to fight on tax appeals in certain markets, especially where real estate valuations are lower than they were pre-COVID and seeing effects of that as well. That's all kind of getting layered in. Clearly, there's a focus even more intently as you see some of the expectations of Q4 come through. That's, I think, more kind of real-time adjustments that you make in terms of staffing levels to what you might see in occupancy drops. In the end, it's yielded results here. I mean, when you adjust out Royal Palm South Beach, which obviously is closed, and you adjust out Hilton Hawaiian Village, which had some anomalies and other things related to it with a strike on the cost side, and other anomalies that we've had lapping over year over year, we've seen expense growth decline each quarter from the start of the year.

Ian Weissman: We were up 2.7% in Q1, and we're down ultimately just below flat, about 50 basis points down expected for Q4. I think it's just a lot of hard work being done, a lot of good work being done to execute against this. Okay. Keep it there, Sean. Thank you. Thank you. The next question is coming from Smedes Rose of Citi. Please go ahead. Hey, Smedes. Hi, thanks. Hi. I just wanted to ask you a little bit on the dividend side. You noted that you don't have to pay, or you won't be paying the special dividend in the fourth quarter. Is the remaining quarterly $0.25, is that really just to reflect the required sort of payout from a tax perspective, or is there anything you could do there on the dividend side as you think about cash retention going forward? Yeah. It's a great question, Smedes.

On the other side, too. We continue to, you know, benefit from the renewal we did, and the insurance side with 25% reduction in premiums, we continue to fight on tax appeals, in certain markets, especially where real estate valuations are lower than they were preco and and seeing effects of that, as well. So that's all kind of getting layered in. Um, clearly there's a focus even more intently, as you see, some of the expectations of Q4 come through, um, and that's, I think more kind of real time adjustments that you make, in terms of Staffing levels to, uh, you know, what, you might see in occupancy drops. Um, I think in the end, the, you know, the, it's yielded results here. I mean, when you adjust out Royal Palm, which obviously is closed and you, and you just out of Hawaiian Village which had some, uh, anomalies and other things related, to, with the strike, on the cost side, um, we've seen and other anomalies, you know, that we've had and lapping over a year over year, you know, we've seen expense growth decline, each quarter, uh, from the start of the Year we're up 2.7 in q1 and we're down. Uh, ultimately just below, uh, flat. You know about

50 basis points down expected for Q4. So I think it's just it's a lot of hard work being done. A lot of good work being done to execute against this.

Okay, keep it there, Sean. Thank you.

Thank you. The next question is coming from smees at City. Please go ahead.

Thanks mates. All right. Thanks

Hi. Um, I I just wanted to ask you a little bit on the dividend side, do you? Uh noted that you don't have to pay or you won't be paying the the um, special dividend in the fourth quarter and is the remaining quarterly 25 cents. Is that really just to reflect um the required sort of payout from a tax perspective or is there anything um you know you could do there on the dividend side to sort of as you think about sort of cash retention going forward?

Ian Weissman: Obviously, we've been a little perplexed by the number of calls that we've gotten regarding the dividend. If I could frame for a second, if you look over the last three years, we've returned about $1.3 billion in capital to shareholders, both through dividends, obviously, and through buybacks. We've bought back about 38.5 million shares. That's about 20% of our float. If you think about that $1.3 billion, our equity market cap today is somewhere at around $2 billion, plus or minus, at obviously a depressed, low, and somewhat ridiculous number. When you think about that and we're 60%, 70% of that, we've already returned, and we're already paying a dividend that's 9%, 10%. There are no liquidity issues at Park Hotels & Resorts Inc.

Yeah, it's a great question. To me, it's obvious. We've...

Um, we've been a little perplexed by the number of calls that we've gotten regarding the dividend, and if I could sort of frame for a second, um,

You know, if you look over the last three years, we have returned about $1.3 billion in capital to shareholders.

Uh, both through dividends obviously through BuyBacks. We've we've bought back.

About 38.5 million shares.

That's about 20% of our float. And if you think about that 1.3 billion, I mean our Equity market cap today somewhere, you know, around 2 billion plus, or minus and and obviously a depressed um, low and somewhat ridiculous. Uh number um when you think about that and we're 60 70% of that. We've already returned.

Um, and we're already paying a dividend that's 9.10%.

Ian Weissman: If anything, based on what we've just done and incredible work led by Sean Dell'Orto and by the team with our credit facility, we've got $2.1 billion in liquidity. There are no issues at all. I also remind people, if you think back to the pandemic when we virtually had no revenue, and all the discipline and the moves that we made and that we got through that. Clearly, no liquidity issues at all. This was just a conscious effort that we thought a 9% to 10% dividend yield, far in excess of any of our peers, was really the right threshold. We do have depreciation. We do have the ability to be able to shield, and we really thought that we could deploy that incremental quarter, $0.25 plus or minus, back into strategic investments and/or having it available to pay down leverage. It was really nothing more than that.

So there was nothing, there's no liquidity issues at Park. If anything based on what we've just done and incredible work, led by Sean, and by the team,

Um, and and with our credit facility, we've got, you know, 2.1 billion in liquidity. So there are no issues at all. And I also remind people, if you think back to the pandemic, when we virtually had no Revenue,

Ian Weissman: I just want to reinforce we are very disciplined about our capital allocation. I think we've demonstrated that time and time again, and we'll continue to have that focus and that discipline. We thought the incremental $0.25 and reallocating that was the right business decision at this point. Okay. I guess just switching gears for a minute, I wanted to ask you, as we obviously have a lot of focus turning to 2026, could you just talk about what you're seeing on the group side for next year, for sort of pace of bookings or revenue and. Any particular kind of sub-markets where you're seeing significant strength or weakness?

Start, you know, 9 to 10% dividend yield far in excess of any of our peers was really the right threshold. Uh, we do have depreciation, we do have, um, the ability to be able to shield and we really thought that we could deploy that incremental quarter, it's 25 cents plus or minus back into strategic Investments, you know, Andor having it available to pay down leverage, so it was really nothing more than that. Um, and I just want to reinforce. Uh, we are very disciplined about our Capital allocation. I think we've demonstrated that time and time again. Uh, and we'll continue to have that um that that

That focus and that discipline. We thought the incremental increase of 25 cents and reallocating that was the right business decision at this point.

Okay. Um,

Ian Weissman: If we look at 2026 group pace, and I think it's important to sort of, given Hawaii is still ramping up, if you exclude Hawaii and exclude Royal Palm South Beach, which will reopen and complete in May, early June of next year, you're essentially flat in 2026 right now. 2027 as we look out, I think we're up about 4.1% plus or minus. As we think about markets, clearly strong markets: Signia by Hilton Orlando Bonnet Creek, probably 9%. Our Hyatt in Boston, double digits. Caribe Hilton probably up another 39%. Santa Barbara up a significant amount, certainly north of 50%. Casa Marina up low to mid single digits. Certainly feel very good about that right now as we look out. We fully expect that we'll continue to see more activities with our operating partners continue to build the group base for 2026.

I guess, just Switching gears for just a minute. I wanted to ask you just as we obviously have a lot of focus is turning to 2026. Could you just talk about kind of what you're seeing on the group side? Um, for next year, if there, um, you know, sort of pace of of bookings or revenue and um, you know, any particular kind of submarkets where you're, um, seeing you know, significant strengths or weakness.

Well, if we look at 26 group pace, I think it's important to sort of note that, given Hawaii's still ramping up, if you exclude Hawaii and exclude Royal Palm, which will reopen and complete in May or early June of next year, you're essentially flat in 26 right now.

27, as we look out. I think we're up about about 4, uh, 1% plus or minus. So we think about markets, uh, clearly, strong markets, uh, signia Bonnet Creek, uh, probably 9%

Uh, our height in Boston, double digits, uh, Kibbe probably up another 39%. Santa Barbara up, uh, significant amounts, certainly north of 50%. Castle Marina up low to mid single digits.

Ian Weissman: As we think about 2026, we're pretty encouraged. There are a number of data points out there that I think are interesting. Clearly, as you think through with the Fed, we certainly expect a more accommodative Fed, lower rates, clearly lower tax rates, deregulation, certainly more public and private investment. As we all know, the kind of dollars that are being invested right now in AI and infrastructure and certainly the expected productivity gains there. You've got also special events. You've got the impact of World Cup, which we all certainly believe is going to be significant. Obviously, the Super Bowl out in the San Francisco Bay Area. Obviously, the anniversary celebrations, 250 years, which will be largely anchored in New York and in Boston. We expect, obviously, Park Hotels & Resorts Inc. is going to be very well positioned to take advantage of that.

So certainly, uh, I feel very good about, uh, that right now. As we look out, we fully expect that we will continue to see more activities with our operating partners. Continue to build the group base for 2026. As we think about 2026, we're pretty encouraged. I mean, there are a number of data points out there that I think are interesting.

Uh, clearly if you think through with the FED, we certainly expect a more accommodative fed lower rates um clearly lower lower tax rates, deregulation, certainly more public, and private investment uh is and as we all know the kind of dollars that are being invested right now in Ai and infrastructure and certainly the expected uh productivity gains there but you've got also special events. You've got the impact of World Cup which we all we certainly believe is going to be significantly. The Super Bowl out in the San Francisco Bay Area

Ian Weissman: As we look out, we're certainly encouraged. It would be nice to have some of the tariffs and some of the other matters, geopolitical sort of calm down. Less of an impact would certainly be helpful, and I think provide incremental tailwinds as well. We're very encouraged as we look out to 2026. We're also very encouraged by really the strategic investments that we continue to make. As you think about what we're doing in Hawaii, both properties there. If you think about New Orleans, what we're doing, obviously just incredibly bullish about our transformation in Miami. We think that's just going to be an extraordinary success and really excited about the progress that we're making there and fully expect that that'll open, obviously, in May, early June of next year. Great. Thank you. Thank you. Thank you. The next question is coming from Chris Woronka of Deutsche Bank.

Um, obviously the anniversary celebrations, 250 years, um, which will be, uh, largely anchored in New York in in Boston. Uh, we expect obviously Park's going to be very well positioned to take advantage of that. So, as we look out, we're certainly encouraged, uh, it would be nice to have of some of the tariffs and some of the other matters, geopolitical sort of, uh, uh, calm down, um, less of an impact would certainly be helpful and I think providing incremental Tailwind as well, but we're very encouraged as we look out to 2026. We're also very encouraged by really the Strategic Investments that we continue to make. As you think about what we're doing in Hawaii. Both both properties there. If you think about New Orleans, what we're doing, obviously just incredibly bullish about our transformation in in Miami. We think that's just going to be an extraordinary success and really excited about the progress.

That we're making there and fully expect that that will open. Obviously in in May early June of next year

Great. Thank you.

Thank you.

Ian Weissman: Please go ahead. Hey. Good morning, guys. Hey, Tom. So my first question, Tom, you mentioned asset sales. You got 15 non-core assets. You may have other things with land and such. I guess the question would be, what's your conviction level? What's your confidence level, maybe now versus a year ago or six months ago on some of these same assets? What needs to happen to get some of these over the finish line? Do you think we start seeing an acceleration in that as we move through into the new year? Chris, it's a great question, and thank you for it. I can't tell you, as a leadership team, we are laser-focused. Let me just set the stage for a second. Really, our top 20 assets account for 90% of the value of the company.

Thank you. The next question is coming from Chris w***** of Deutsche Bank. Please go ahead.

Hey uh, good morning guys.

Hey, Tom. Um,

so so my, my my first question Tom you mentioned asset sales and um

Versus a year ago or a 6 months ago and some of these same assets, you know what what's what needs to happen to get some of these over the finish line. And, you know, do you think we we start seeing an acceleration in that um as we move through and into the new year,

Ian Weissman: If you really focus on sort of the core and the core metrics of those 20 assets, it's as really as strong as any portfolio in the sector. We remain laser-focused on selling the non-core and recycling that capital. I think it's important to remind listeners, we have sold or disposed now of 47 assets for north of $3 billion since the spin. In the worst of times, even during the pandemic, keep in mind we had six assets in San Francisco. We now have one asset, and we sold two of those in the worst of times during the pandemic. It is challenging in this environment. It's not an issue of debt. There's plenty of debt capital. There's plenty of equity capital. I think if you can get really just better visibility and less volatility, that certainly will help. There are two additional leases.

Chris. It's a, it's a great question and thank you for it. I mean, we, I can't tell you as a, as a leadership team and, uh, we are laser focused. Um, let me just set the stage for a second. Really, our top 20 assets account for 90% of the value of the company. And if you really focus on sort of the core and the core metrics of those 20 assets, it's, it's, it's really as strong as any portfolio, um, in the, uh, in the sector. Um, we remain laser focused on selling the non-core and recycling that capital, I think it's important to remind listeners. I mean, you know, we have sold or disposed now of 47 assets for north of 3 billion since the spin. So we have in the worst of times even during the pandemic. Um, we keep in mind, we had 6 Assets in San Francisco. We now have 1 asset and we sold 2 of those in the worst of times during the pandemic. It is challenging in this environment. It's not a an issue with

Ian Weissman: Obviously, we gave back the Kansas City asset, which we mentioned in our prepared remarks. We've got two other assets that we made the decision last year that we would not extend those ground leases, short-term ground leases. We'll give those assets back at the end of this year. We've got two other assets under letter of intent, and we've got several others at various stages of the marketing process. We are very confident. We probably would lean more towards the low end of our guidance than the high end. We've said $300 to $400 million this year. It is conceivable that some of that could bleed into early next year from a closing standpoint. Please rest assured that we are laser-focused, committed, and experienced in selling and disposing of these non-core assets. We've done it with assets that have been even more complex.

Of of debt, there's plenty of debt Capital, there's plenty of equity capital, I think if, if you can get really just better visibility and less volatility that certainly will help. Um, there are 2 additional leases obviously, we gave back the Kansas City s asset which is we

Ian Weissman: Every asset's got a story, whether it's a legal or tax or some other matter. The team is working their tails off to make progress and get this matter behind us. The sooner we can get closer to that 20 hotels, we think that's really going to improve our optionality. I think it will allow investors to really look through at the core assets and really the incredible work that we're doing within that core. That's where we're spending significant dollars. We believe passionately that we can generate higher returns from development yields than we can from acquisition yields. Okay. Thanks for all that color, Tom. As a follow-up, I think we heard Hilton last week talking about lower expenses to owners and franchisees, and some of that is coming from the, I guess, what you'd call the share. I don't know the exact term, but some of the chargebacks.

Uh, mentioned obviously, in our prepared remarks we've got 2, other assets that we made the decision last year that we would not extend those ground, leases short-term, ground leases, we'll give those assets back. If the, at the end of this year, um, we've got 2 other assets that under letter of intent and we've got several others at various stages of the marketing process. Um, we are very confident, we probably would lean more towards the low end of our guidance than the high-end we've said, 3 to 400 million this year and it is conceivable that some of that could bleed into early next year from a closing standpoint. But please rest assured that we are um laser focused committed experienced and and selling and disposing of these non-core assets. We've done it, we've done it with assets that have been even more complex. Every asset has got a story whether it's a legal or tax or some other matter. Uh but the team is uh working their tails off to make.

Progress, and get this matter behind us. The sooner we can get closer to that 20 hotels. We think that's really going to improve our optionality, but I think allow investors to really look through at the core assets and really the incredible work that we're doing within that core, that's where we're spending significant dollars. We Believe passionately that we can we can generate higher Returns on our in from development yields and we can from acquisition yields.

Okay. Um, thanks for all that color Tom. Um, as a followup? Yeah. Yeah, I think, I think we heard Hilton last week talking about, um, lower expenses to, to owners of franchisees and some of that is coming from the, I guess what, you call the share. Um,

Ian Weissman: Is there more that can be done there? How do you guys view that? Is that a material or tangible benefit to you next year? Maybe where you sit with respect to maximizing what can be done through the franchise agreements to keep your costs down from the parent companies. Thanks. Yeah. It's another great question, Chris. We are spending a lot of time with our partners at Hilton and our other operating partners. As Sean Dell'Orto so eloquently pointed out, when you think about expenses and what we've done three quarters in a row, if you look at insurance, if you look at the deep dive analysis that you mentioned, we are as good as anybody at really, in this environment where you haven't really had the top-line growth across the sector, doing everything humanly possible to take cost and really reinvent the operating model where we can.

I don't know the exact term, but some of the chargebacks...

Is there is there more that can be done there? How do you guys view that it's at a, you know, a material or tangible benefit to you next year and just maybe where you, where you sit with respect to, um, you know, maximizing what, what can be done with the, with through the franchise agreements, to, to keep your costs down from the, uh, from the parent companies. Thanks.

Yeah it's it's a it's another great question Chris we are we are spending a lot of time with our partners at at Hilton and our other operating partners.

Ian Weissman: You're going to see that continue, and you're going to see us continue to push and encourage and partner with Hilton, with Marriott, Hyatt, etc., trying to find ways to continue to take cost out of the business. There are huge opportunities there, and I have to thank, candidly, with the advancement of AI as that continues to expand, that we've got to believe that there are going to be significant savings and productivity gains there as well. I don't think those occur necessarily this week, this month, but I certainly believe over the intermediate and long term, there are going to be real opportunities there. Okay. Appreciate all that color, Tom. Thanks. Thank you. The next question is coming from David Katz of Jefferies. Please go ahead. Hey, David. Good morning. Thanks for—hey, good morning. Thanks for taking my question.

Occur, uh, necessarily this week, this month, but I certainly believe over the intermediate and long term, there are going to be real opportunities there.

Okay. Appreciate all that color Tom. Thanks.

Thank you. The next question is coming from David Katz of Jefferies. Please go ahead.

Ian Weissman: What I would love some help with, having gone out there earlier this year with yourselves and your peers. Hawaii is still just a confusing market for me. Can you just sort of give us as much insight on sort of what the puts and takes of the drivers, the headwinds are out of Hawaii at this point? Yeah. It's a fair question, David. I think you've got to kind of step back a little bit and just think about Hawaii. If you think about over the last 20 years, Oahu's RevPAR growth has really outpaced the U.S. by at least 120 basis points. I think Key West and Hawaii are sort of lead, a CAGR of about 4.5% versus the U.S. average of about 3.3%. If you think back over that period of time, you've had negative supply growth, I think 0.3% or less than that.

Hey, good morning, thanks for. Hey, good morning. Thanks for taking my question. Uh, what I would love some help with uh having you know, gone out there earlier this year, with your your yourself and your peers. Um you know Hawaii is still just a confusing, you know, market for me, can can you just sort of give us as much Insight on sort of what the, you know, puts and takes of the drivers? The headwinds are, you know, out of Hawaii at this point.

Yeah, it's a fair question, David. I, I think I think you got to kind of step back a little bit and just think about Hawaii, um, if you think about over the last 20 years, um, you know, a Wahoo's revpar growth is really outpaced the US by uh, 100 at least 120 basis points. Um, I think Key West in Hawaii is sort of lead.

Um, a CAGR of about 4.5% versus the U.S. average of about 3.3%. If you think back over that period of time, you've had negative supply growth.

Ian Weissman: If you think about the next five years, we're thinking about supply growth in Hawaii at 0.3% again. That backdrop to us is very, very encouraging. Domestic airlift has also increased 20% since 2019. A lot of the owners in Hawaii own their assets under ground leases, and in our case, in both of our world-class resorts there, we own those, obviously, fee simple. We just think that's a huge advantage. Obviously, there's a little bit of a concentration issue. Ideally, we wouldn't want to have 25% to 30%. If you're going to have it anywhere, having it in Hawaii certainly gives us comfort. Clearly, from a demand standpoint, if you look historically, it's about 9 to 10 million visitors, 60% plus or minus coming out of the U.S., 17% historically coming out of Japan over the last 30 years.

Um, I think 0.3 or less than that. Think about the next 5 years, we're thinking about Supply growth in Hawaii.

And you know, 0.3 again. So that that backdrop to us is very, very encouraging. Domestic airlift is also increased, uh, 20% since 2019, and a lot of the owners in Hawaii own uh own their their assets under ground leases and in our case, in both of our world-class Resorts there,

Um, you know, we own those obviously few simple, and we just think that's a huge advantage. And obviously, there's a little bit of a concentration issue. Uh, you know, ideally we wouldn't want to have 25% to 30%, but if you're going to have it anywhere, having it in Hawaii certainly gives us comfort. Um, clearly from a demand standpoint, if you look historically, it's about 10 million visitors—9 to 10 million visitors, 60%, plus or minus, coming out of the U.S.

Ian Weissman: To get to your point, it was about 1.5 million in Japan. We're going to end this year probably somewhere in the 720,000 to 750,000. You're clearly seeing less visitation from Japan. It's been a slower ramp-up. There are reasons for that, the stronger dollar versus the yen. There have been some fuel surcharges. There have been some cheaper alternatives. Clearly, that Hawaii ramp-up or the Hawaii participation today is about probably 3% to 4%. Of the international demand at our assets versus probably 19% plus or minus where it was in 2019. We are encouraged by recent discussions. Sequentially, Hawaii has gotten better. Obviously, we had the strike. It was a very challenging environment for 45 days and the lingering effects of that. We were down 18% first quarter, 13% second quarter, 9% plus or minus third quarter.

Uh, 17% historically, coming out of Japan, over the last 30 years and...

You know to to to get to your point. Um it was about 1.5 million in Japan. I mean we're we're going to end this year. Probably somewhere in the 72070 Thousand. So you're you're clearly seeing less visitation from from Japan. It's been a slower ramp up. Um, there are reasons for that. The stronger dollar versus the Yen, and there have been some fuel fuel s charges, uh, there have been some cheaper alternatives. So, you know, clearly that that Hawaii ramp up or Hawaii participation today is about, you know, probably 3 to 4%

um, of the international demand at our at our assets versus probably 19% plus, or minus

Ian Weissman: We expect we're going to be somewhere north of 20% here in fourth quarter, even with sort of the revised guidance that Sean outlined. It's certainly taking a little longer. We are bullish and passionate and still believe, obviously, the investments that we're making. Tapa Tower, huge benefit. Rainbow Tower and what we're seeing there. We're excited, obviously, about what we're doing at Hilton Waikoloa. Hilton Waikoloa, a little more complex, the second phase of that renovation. More rooms out of service. That certainly is contributing to a little bit more disruption there and certainly contributing to some of the softness there. Canadian travel. Canadians, as we all know, account for, and Mexican travelers, about half of the inbound international travel into the U.S.

Where it was in 2019. So, we are encouraged by recent discussions. Sequentially, Hawaii's gotten better, I would say. We had the strike. It was a very challenging environment for 45 days, and the lingering effects of that... You know, we were down 18% in the first quarter, 13% in the second quarter, and 9%, plus or minus, in the third quarter. And, you know, we're expecting we're going to be somewhere north of 20% here in the fourth quarter, even with sort of the revised guidance that Sean outlined. So, it's certainly.

Ian Weissman: Canadians have been frustrated, and they have been voting with their dollars, and their travel has been down in Hawaii, and it's certainly been down in other markets as well. We are certainly feeling the effects of that as well. Once some of those matters on the trade front get normalized and get resolved, we certainly expect that they will be back and certainly think that Hawaii will accelerate in terms of its ramp-up. Not going on, but you still like it. Thank you. Yep. Very much so. Thank you. The next question is coming from Patrick Scholes of Truist Securities. Please go ahead. Thank you. Good morning, everyone. Sorry if I missed this in the prepared remarks. You had noted in your guidance and expectations, only expecting the government shutdown through today. It doesn't look like it's going to get resolved today.

Voting with their, with their dollars. And, you know, their, their travel has been down in Hawaii and it's only been down in other markets as well. So, we're certainly feeling the effects of that as well. Once some of those matters on the trade front, um, get get normalized and get resolved, we certainly expect that they will be back and certainly think that that, uh, Hawaii will accelerate in terms of its ramp up

Lot going on, but you still like it. Thank you.

yep, very much so and

Thank you. The next question is coming from Patrick's goals, of truist Securities. Please go ahead.

Uh, thank you. Uh, good morning, everyone. Sorry if I missed this in the prepared remarks. Um, you had noted...

Ian Weissman: Why not continue that expectation in your guidance beyond today? Thank you. Yeah. It's another excellent question. Look, at the time we were preparing the guidance and the situation has been so fluid, we wanted to include for investors and analysts and all the listeners what we knew. What we knew as of the end of October was about $2.5 million of impact. We've included that. We also were conservative in our guidance, and that reflects sort of the midpoint. If this were to continue and none of us know how this is going to unfold, everybody's probably got an opinion. The reality is that if you look at the lower end of our guidance, we believe that we are adequately covered if this were to continue. I'll reinforce that.

In your, uh, guidance and expectations, only expecting the government shutdown through today, it, it doesn't look like it's going to get resolved today. Um, why not, uh, continue that expectation in your guidance beyond today? Thank you.

Yeah, it's a it's a it's another excellent question. Look at the at the time we were preparing the guidance and the Situation's been so fluid. We wanted to include for investors and analysts and all the listeners, what we knew, and what we knew, you know, as of the end of October, um, was about 2 and a half million dollars.

Of impact. So we've included that. But we also were conservative in our guidance and that reflects sort of the midpoint

So, if this word it continued and none of us know how this is going to to unfold.

Ian Weissman: We centered our guidance on that midpoint and recognize that if it were to continue, we believe that we're covered through that guidance range. I would also tell you my own opinion. Growing up and living in this market for my life and talking and watching, my strong belief is that this will be resolved in the near future. I don't think either party can allow for this to continue much longer, particularly with the impact with 40 million people not having food benefits among other benefits. I hope that our leaders in Washington on both sides of the aisle will resolve it in short order. We think that we are covered for the guidance that we have provided. If we get more information or if it were to extend and have more of an impact, we certainly will provide that on either side of that.

Uh, and everybody's probably got an opinion. Um, the reality is that if you look at the lower end of our guidance, we we believe that we are adequately covered. If this word it continue and I'll reinforce that, um, we centered our obviously, our our guidance on that midpoint and recognize that if it were to continue that, we believe that we're covered through that guidance range. I would also tell you in my own opinion

Ian Weissman: We wanted to provide and be transparent for what we knew and what we were seeing in our portfolio. Thank you. The next question is coming from Stephen Grambling of Morgan Stanley. Please go ahead. Hey, thank you. Just wanted to follow up on the reallocation of the top-off dividend to investment. Is that something that you'll have the opportunity to do in the future? Maybe I missed this. If you did have that opportunity, maybe any thoughts around thinking through that capital allocation? Are there big projects that you try to pull forward that you have on your horizon? Thanks. Yeah, it's a great question. Thank you for it. As I said earlier, we've been very thoughtful about capital allocation. Again, returned $1.3 billion to shareholders here over the last three years.

I'm growing up and living in this market for my life and, uh, and talking and watching. Uh, my my, my, my strong belief is that that this will be resolved in the near future. Um, I don't think either party can allow for this to continue much longer, particularly with the impact with 40 million, people not having uh, food benefits among other benefits. And so I hope that our leaders in Washington on both sides of the aisle will uh will resolve it in short order and um but you're we we we think that we are covered for the guidance that we have provided if we get more information uh, or if it were to extend and um and have more of an impact, we certainly will provide that on either on either side of that. But

We wanted to provide and be transparent for what we need and what we were seeing at our portfolio.

Okay, thank you.

Thank you.

Thank you. The next question is coming from Steven Grambling of Morgan Stanley. Please go ahead.

Hey, thank you. Uh, just wanted to follow up on the reallocation of the the, the top off dividend to, um, investment is, is that something that

You know, you'll have the opportunity to do in the future. Maybe I missed it and and if you did have that opportunity, um, maybe any thoughts around thinking through that Capital allocation is, there are there big projects that, you know, you you try to pull forward that that you have on your um on your Verizon. Thanks.

Ian Weissman: We really concluded, Sean and I and the team, that a 9% to 10% dividend, which is where we are today and certainly sector leading, was certainly enough and made sense. We will have the flexibility in the future to manage that dividend, and we will be thoughtful. We just thought reallocating that $50 million for either debt reduction and/or continued strategic investments in our portfolio makes a lot of sense. I mean, if you take Bonnet Creek as an example and just the success that we're having there, we've taken EBITDA from there approximately $55 million. We think we'll be somewhere north of $95 million this year. We're generating significant returns. Returns.

Yeah, it's a great to great question. Thank you for it. Listen, we've, as I said earlier, we've been very thoughtful about Capital allocation. And again, you know, return 1.3 billion to shareholders here over the last 3 years and, you know, we really concluded, uh, um, Sean and, and I, and the team that, you know, obviously a 9 10% dividend, which is where we are today, uh, was and certainly sector leading was was, uh, certainly enough and made sense. Uh, we will have the flexibility in the future, uh, to certainly manage that dividend and, you know, we will be thoughtful. Um,

Uh, we just didn't think we thought reallocating that 50 million for either debt reduction and or continued strategic investments in our portfolio. Uh, makes a lot of sense. I mean, if you take Bonnet Creek as an example and just the success that we're having their

Thomas Baltimore: Through our development and strategic ROI activities, we can generate through acquisitions. Strong believers in that and strong believers that there's a lot of embedded upside within this portfolio.

And higher returns through our development and strategic ROI activities. We can generate, through acquisition, so we are strong believers in that and strong believers that there's a lot of embedded upside within this portfolio.

Sean Dell'Orto: Got it. Just to be clear then, I guess the answer in some ways depends on where the dividend yield shakes out in valuation. Is that fair?

Thomas Baltimore: Yes. Yeah. That certainly plays. I mean, we've always targeted kind of 65% of AFFO, and obviously, we've managed that a little more this year, but again, it's not a liquidity issue. We've got plenty of liquidity. We have no issues there, and we have our 2026 maturities addressed appropriately in a very thoughtful, very creative way. Huge credit to Sean and the team and what we've done there. We are very thoughtful, and I think we've been as disciplined as anybody on the capital allocation front. We also know a respectable, solid dividend makes sense. Clearly, we're way in excess of all of our peers on that front.

Got it and just to be clear that. So I guess it the answer in some ways, depends on where the dividend yield shakes out in valuations, is that fair?

Yeah, yes, yeah. That's I mean we've, you know, we've always targeted kind of 65% of afo and, you know, obviously, we've managed that a little more that this year, but it's not again. It's not a liquidity issue. We've got plenty of liquidity.

Sean Dell'Orto: Fair enough. Thank you so much.

Uh we've got when you and we have no issues there and we have our 20 26 maturities, uh uh addressed appropriately in a very thoughtful, very creative uh and huge credit to shun and the team and what we've done there. So we are, uh, we are very thoughtful and I think we've been as disciplined as anybody on the capital allocation front, but, but we also know, uh, uh, ah, ah, respectable solid dividend makes sense and clearly, we're way way in excess of uh, of all of our peers in that front.

Thomas Baltimore: Thank you.

Fair enough. Thank you so much.

Thank you.

Ian Weissman: Thank you. The next question is coming from Chris Darling of Green Street. Please go ahead.

Thank you. The next question is coming from Chris darling of

[Analyst]: Thanks. Good morning.

Thomas Baltimore: Hey, Chris.

[Analyst]: Tom, thinking about the impact of the government shutdown, in the past when these events have been resolved, do you typically see demand come back fairly quickly, or is there historically a lagged recovery? I'm not sure if you have any experience thinking back to draw on.

Thanks, good morning.

So, Tom is thinking about the impact of the government shutdown. In the past, when these events have been resolved, do you typically see demand come back fairly quickly, or is there historically a lagged recovery? Not sure if you have any experience, you know, thinking back to drawing.

Sean Dell'Orto: Yeah. I mean, I think there's certainly a possibility of that, Chris. I mean, clearly, it depends. We haven't seen, well, we've seen some group cancel related to government. It's been certainly more so on the transient and kind of seeing how the pickup of that has been more impacted. Groups, a lot of these groups tend to have to, are required to meet in a way. We certainly expect that those will rebook. Now, the question will be, will it be within the quarter or will it be kind of into next year? It's the kind of question. It might be a little bit more spread out over a number of months that may be hard to tell really a true impact on it.

Sean Dell'Orto: I mean, we did some looking in a way back at the last long one in the first Trump term, and it straddled both December and January. You certainly saw some impact in government spend and transit in January, but didn't really see a dramatic pickup in February. It was also a good time, a good macro-economic environment too there. It's kind of hard to look back in the past and try to draw any conclusions, but just from a standpoint of the fact that a lot of people have to make these trips, have to do this travel in a way. There's probably a thought that you're going to rebalance some of that. It's just a matter of when.

Yeah, I mean, I think there's certainly a possibility that Chris. I mean clearly at the depends. Um, you know, we haven't seen, uh, We've. Well, we've seen some group cancel related to government. It's been certainly more. So on the transient kind of seeing how that uh how that's you know, the pick up of that is been more impacted. But, you know, if groups, you know, a lot of these groups tend to have to are required to meet in a way. And so we certainly expect that those are re rebooked now. The question will be, will it be within the quarter or will be kind of in the next year? And it's a kind of question so it might be a little bit more spread out. Um, over a number of months that may be hard to tell really a true impact on it. We, we did some looking in a way, um, back at the last long 1, um, and the first Trump term. And, and it straddled both, uh, December and January. Um, and so, you certainly saw, uh, some impact in in government spend and transit in January, but generally see pick up in in February, but it was also a good time, you know?

Thomas Baltimore: Chris, I agree with everything that Sean said. The other point I'd make here in our portfolio, obviously a strong fourth quarter group pace of about 12%. Surprisingly, November and December were double-digit increases and certainly stronger than October. If we are all lucky and our leaders on both sides of the aisle resolve and reopen the government, we could see increased activity here based on what's on the books already in November and December. It could be a bit of a green shoot for us there.

A good macro environment too there. So it's kind of hard to look back in the past and try to draw in conclusions but just from a standpoint of the fact that, you know, a lot of people have to, you know, make these trips have to do this travel in a way. And and so there's probably a thought that you're going to rebalance some of that. It's just about, or when

Chris, I agree with everything that Sean said. The other point I'd make here is that our portfolio had a strong fourth quarter, with a group pace of about 12%. Surprisingly, November and December saw double-digit increases.

And, and certainly stronger than October. So if we are all Lucky and, uh, and our, our leaders on both sides of the aisle resolve and reopen the government, uh, we could see, um, increased activity here based on, what's on the books already, in November, and December. So it could be a bit of a green shoot for us there.

[Analyst]: Okay. Those are all helpful thoughts. Realize it's a fluid situation, certainly. Maybe just one quick one going back to capital allocation. As you work to sell some of these non-core assets in the coming quarters and you think through use of proceeds, to what extent are you thinking about share buybacks, just given the frustration with where the share price has been relative to, of course, needing to retain some amount of capital for the different redevelopments and expansions that you've talked about?

Thomas Baltimore: Yeah. It's a great question, Chris. I would say, look, as I mentioned, I've said it a few times on the call, we've returned $1.3 billion, and we've bought back 20% of the float. With that backdrop, it is important to us. We've always had a guiding principle of leverage in that three to five times. We're certainly above that. Obviously, a little bit of that's artificial right now because you've got major renovations underway in New Orleans, two assets in Hawaii, and of course, Royal Palm. We certainly would like, as a team, to use some of the excess proceeds to pay down debt and continue to invest back into our portfolio. There are opportunistic times when going in and buying shares will make sense, but I'd say right now the two priorities would be really paying down debt and reinvesting back into the portfolio.

Okay. Yeah, those are all helpful thoughts. I realize, you know, it's a fluid situation. Certainly, um, you know, maybe just one quick one. Um, going back to capital allocation, as you work to sell some of these non-core assets in the coming quarters and you think through use of proceeds, um, to what extent are you thinking about share buybacks? Just giving the frustration, um, with where the share price has been, um, relative to, of course, you know, needing to retain some amount of capital for the different, um, you know, redevelopments and expansions that you've talked about.

Yeah. It's a it's a it's a great question Chris. I I would say look as I as I mentioned I've said it a few times on the call. You know, we've returned 1.3 billion and you know we've bought back 20% of the float.

So with that backdrop, it's important to us.

Um, opportunistic times when going in and buying shares will make sense, but I'd say right now, the two priorities are paying down debt and reinvesting back into the portfolio.

[Analyst]: All right, thank you for the time.

Thomas Baltimore: Thank you.

All right, thank you for the time.

Thank you.

Ian Weissman: Thank you. The next question is coming from Jay Kornreich of Cantor Fitzgerald. Please go ahead.

[Analyst]: Hey. Thanks. Good morning. I just wanted to ask a question about the Q4 outlook. RevPAR is roughly flat, which is a change from the expectation last quarter where Q4 would be, I guess, up 3 to 5%, and recognizing there are some new dynamics such as the government shutdown. Are there any other points or markets that you would relate to that maybe led to some of the deceleration for the Q4 expectation?

Thank you. The next question is coming from Jay Corn, right? Of Cantor Fitzgerald. Please go ahead.

Hey, thanks. Good morning. I just wanted to ask a question about the 4q Outlook, uh, rev par is roughly flat, which is a change from the expectation last quarter over. 4K would be, I guess Up 3 to 5% and recognizing, there are some new Dynamics such as the government shutdown. But are there any other points or markets that that you would relate to that? Maybe led to some of the deceleration for the 4q expectation?

Sean Dell'Orto: Yeah. Jay, I'll jump in on that one. In our last call, we talked about a 3% to 5% up for Q4. As you spoke to, as you're noticing, about a 350 basis point drop relative to that expectation. It's kind of a mix of macro trends and near-term disruption as well as a little bit of Park Pacific sprinkled in there. When you start from just a more macro level and just some of the transient softness we've seen, whether it's through inbound international travel that Tom talked about, just seeing continuation of that, and kind of looking at certain markets and seeing a little bit of the trend line there, I'd say there's about 150 basis points of impact to Q4 based on just kind of more general trends and then mostly on transient because group remains strong.

Yeah, J. I'll jump in on that 1. Um, in, in our last call, we talked about a 3 to 5% up for Q4 so you just spoke to as you're noticing about 350 basis points drop, um, relative to, you know, that expectation. Um, you know, it's kind of a mix of macro Trends, um, and near-term disruption, as well as a little bit of Park specific, uh, sprinkled in there. But when you kind of start from just a more macro level and just some of the transient softness we've seen, whether it's, you know, through this through uh you know inbound international travel with Tom talked about just seeing continuation of that. Um and looking at certain markets and seeing a little bit of the trend line there, um I'd say that there's about 150 basis points

Sean Dell'Orto: We up pace is up 12%, and within our largest 15 group hotels, it's up 17%. We feel good about the group setup. It's just more the transient side being impacted relative to our previous expectations. Going from there, government impact about 100 basis points obviously continues to be a challenge since the beginning of earlier in the year with DOGE and everything else. We've certainly seen the weakness there, but now more pronounced with the government shutdown, which we've talked about. Chicago, we've seen pickup trends deteriorate materially there with the National Guard deployment into that market. It's been, again, more of a transient impact in terms of pickup there. Group position there in Hilton Chicago is up 12% for the quarter and is holding, but it's about a 50 basis point impact to Q4 there from that market.

Sean Dell'Orto: Waikoloa mentioned before on the renovation scope there, just kind of a little more disruption than planned, due to some schedule shifting. We're doing a little bit kind of as part of phase two, we're doing a little bit of extra work from phase one brought into phase two. It's a little bit of an adjustment there, about 50 basis points. General softness, 150 basis points, government-related 100, and then another 100 between the Waikoloa renovation and the Chicago disruption.

Of impact to Q4 based on just Corner more General Trends. And then mostly on trending because group remains strong. Um, we up Paces up 12% and, and within our largest 15 group hotels, it's up 17%. So we feel good about the group setup, it's just more, the transient side being impacted in a relative to our previous expectations going from their government impact about 100 basis points. Since obviously continues to be a challenge since the beginning of, you know, earlier in the year with those and everything else, we've seen the weakness there, but now more pronounced with, uh, with the government shutdown, which we've talked about, um, Chicago we've seen, uh, pickup Trends deteriorate, uh, to, you know, materially there with the National Guard, you know, deployment, uh, into that market. So it's been again more of an a transient impact in terms of pickup there, a group position there. And they're Hilton, Chicago is up, 12% for the quarter, and is holding so it, but it's more about, it's about a 50 basis, point impact, to Q4 there, from that market, and then white KOA.

For um, on the uh, uh, on the renovation, uh, scope there. Just kind of a little more disruption than plan, do some schedule shifting. Uh, we're doing a little bit kind of

As part of Phase 2, we're doing a little bit of extra work from Phase 1, brought into Phase 2, with a little bit of an adjustment there. It's about 50 basis points, so general softness is 150 basis points, government related is 100, and then another 100 between the White KOA renovation and the disruption in Chicago.

Thomas Baltimore: Okay, I appreciate that breakdown. That's all for me.

Okay, I appreciate that breakdown. That's all for me.

Ian Weissman: Thank you. The next question is coming from Cooper Clark of Wells Fargo. Please go ahead.

[Analyst]: Great. Thanks for taking the question and appreciate the earlier comments on the dispositions. Curious if you could speak to the bidder pools and buyers you are actively seeing looking for product in the transaction market today. Wondering what markets, products, or yield a buyer is looking for to step in today with what should be a better 2026 and 2027 demand picture despite some uncertainty.

Thank you. The next question is coming from Cooper Clarke of Wells Fargo. Please, go ahead.

Thomas Baltimore: Yeah. I mean, look, there's plenty of liquidity out there, and I think the buyer pool is mixed. I mean, you've got owner-operators, certainly family offices, you've got small private equity to larger private equity. You've really got the normal menu. As I think about assets, we are, we've had, and our team has had great success in really finding that buyer for a particular opportunity. We continue to comb through and have discussions. I think the hesitation with some buyers is debt markets certainly have improved. If you believe that rates are going to continue to come down, you might be a little more hesitant on that front. Certainly just better visibility on the demand front, and probably, candidly, just clarity on some of the geopolitical and trade and inflation. I mean, all the things that all of us are working through right now.

Great. Thanks for taking the question and appreciate. Hello. Thanks for taking the question and appreciate the early earlier comments on the dispositions curious. If you could speak to the bitter pools and buyers you are actively seeing looking for product in the transaction market. Today wondering what markets products or yield or buyer is looking for to step in today with what should be a better 26 and 27 demand picture despite some uncertainty

Yeah, I mean, look, there's plenty of liquidity out there, and I think that the buyer pool is is mixed. I mean, you've got from, uh, owner operators, uh, certainly family offices. Um, you've got, uh, small, private Equity to larger private Equity. Um, you you've really got the normal menu, um, and it's, I think about assets, we are

Thomas Baltimore: Uncertainty really is the enemy of decision-making. I do think that there are some buyers out there that are being a little more hesitant, and in some cases, we certainly understand that. From my own experience, periods of dislocation really create the best opportunities to be buyers, particularly if you've got an intermediate and longer-term hold period. Obviously, we continue to work hard. Again, we've got the track record, and I can't emphasize that enough, and how we've been able to reshape this portfolio since the spin here. Now we're 47 assets that we've sold or disposed of, and two more in the queue, and several more at various stages, whether LOI or at the marketing process. We're confident we'll get it done, and no one is going to work harder than the men and women at Park as we continue to pursue our objectives.

This location really creates the best opportunities for buyers, particularly if you've got an intermediate to longer-term hold period. Um, obviously, we continue to work hard. Um, again, we've got the track record, and I just can't emphasize that enough. Um, and how we've been able to reshape.

Uh, this portfolio, uh, since the spin here, and now we're at 47 assets that we've sold or disposed of, with 2 more in the queue and several more at various stages, whether LOI or at the marketing process. So, we are confident we'll get it done. Uh, and no one is going to work harder than the men and women at Park as we continue to pursue our objectives.

[Analyst]: Okay. That's helpful. I appreciate it's still early, and there's some uncertainty, but wondering how you're thinking about the balance of group, BT, and leisure into 2026, just given some of your earlier comments on group pace and also a strong 2026 event calendar in various markets.

Thomas Baltimore: Encouraged. I mean, listen. Part of this, if we can obviously the president's return and the discussions in China, if you can begin to just provide clarity both on tariffs and trade matters, and you look at the backdrop of the just inordinate amount of capital that's being invested through AI, but you start seeing, and obviously on the public investment side, just the CHIPS Act. I mean, probably 30%, 40% of that or more remains to be spent as well, coupled with the special events that I've mentioned and you mentioned as well from the World Cup, the Super Bowl, and obviously the 250th anniversary. I think the animal spirits, getting more clarity and just getting broader participation in the broader economy. We know that both in the lower end and certainly parts of the middle, that people are hesitant and perhaps a little more stretched.

Okay, that's helpful. And then appreciated still early and there's some uncertainty, but wondering how you're thinking about the balance of Group BT and Leisure into '26. Just giving some of your earlier comments on Group pace and also a strong '26 event calendar in various markets.

Um, and encouraged. I mean, I listen, I uh, you know, part of this if we can see the president's return and the discussions in China. If you can begin to just provide clarity, um, both on tariffs and trade matters. Uh, and you can, and you look at the backdrop of the just inordinate amount of capital that's being invested through AI. But you start seeing, and obviously on the...

Thomas Baltimore: If those issues can be addressed, and I do think that the recent tax bill helps with that, you'll get a tailwind that I think 2026 and certainly 2027 as we look out, we see are very, very encouraging. The other thing that gives us great comfort is the fact that you've got muted supply. If you look at the Park portfolio, we're 0.7% supply growth versus the long-term average of about 2%. That's over the next five years. We find that very encouraging as we look out. As you look at our portfolio, you can't replicate. You can't replicate what we have in Hawaii, what we have obviously in Bonnet Creek, and what we have in Key West and those barriers to entry. We're very, very encouraged as we look out. Over the near term, want to get through this year.

On the public investment side, just the chips act and probably 30. 40% of that or more remains to be uh, of spent as well coupled with the special events that I've mentioned. And you mentioned as well from uh the World Cup, the Super Bowl and obviously the 250th anniversary. Um and I think the the animal spirits um getting more clarity and just getting broader participation in the broader economy. Uh, we know that both in the lower end and certainly parts of the middle um, that that people are hesitant and perhaps a little more stretched if those issues can be addressed. And I, I do think that the recent tax bill helps with that, you'll get a, a Tailwind that I think 26. And certainly 27, as we look out, we see are very, very encouraging. The other thing that gives us great comfort is the fact that you got muted Supply. If you look at the park portfolio, where you know 0.7% Supply growth versus his long-term average of about 2,

Thomas Baltimore: Obviously, we want to get beyond the government shutdown and some of the other matters of uncertainty. I think as we look out 2026, 2027, we are very, very encouraged.

To 2% and that's over the next 5 years. So we find that very encouraging as we look out and as you look at our portfolio, um, you can't replicate, you can't, replicate what we have in Hawaii, what we have, obviously, in Bonnet Creek and what we have in Key West and those barriers to entry. So we're very, very encouraged as we look out. Um, over the near term want to get through this year. Um obviously you want to get get beyond the government shutdown and and some of the other matters of UN

Certainty. But I think, as we look out to 2026 and 2027, we are very, very encouraged.

[Analyst]: Awesome. Thank you.

Thomas Baltimore: Thank you.

Awesome. Thank you.

Ian Weissman: Thank you. The next question is coming from Dan Politzer of JP Morgan. Please go ahead.

Thank you.

[Analyst]: Good morning, everyone. Thanks for taking my question. I wanted to go back to the capital allocation this year. Obviously, notwithstanding the dividend, there were some CapEx that I think came down. As you think about preserving more capital to reinvest in the portfolio, the CapEx coming down this year, maybe there's some timing there. Directionally, is there maybe any inkling on how we should think about CapEx for next year, just given it seems like you're focused on reinvesting in the portfolio?

Thank you. The next question is coming from Dan Pollitzer of J.P. Morgan. Please go ahead.

Hey, good morning, everyone.

Thomas Baltimore: Yeah. I think I'll let Sean give you the math, but we are not lowering CapEx. If anything, we have been crystal clear. I think if you look at what we've done in Bonnet Creek, what we've done obviously in Key West, obviously what we're doing right now in Miami, what we're doing in Hawaii with two of the towers near complete. Think about Hilton Waikoloa Village, which will be done this year. If anything, we sort of, if anything, we accelerated and expanded scope slightly. Part of that, some things that we needed to go back and some other things we felt we needed to expand. We are all in. We think we're making the right decisions. I think the results are showing that. We're seeing the incremental lift in rates, IRRs that are in the 15% to 20%. Think about what we did in Santa Barbara.

Here, obviously not was standing the dividend. There was, there was some capex that I think came down, as you think about, you know, preserving more Capital to reinvest in the portfolio, the capex coming down this year and maybe there's some timing there, there actually is there. Maybe any inkling on how we should think about capex for next year, just giving it seems like you're you're focused on reinvesting in the portfolio.

Yeah, I I I think I'll let Sean give you the the math but we we we are not um, lowering capex. I mean, there's there's if if anything

Um, we have been crystal clear and and I think if you if you look at what we've done in Bonnet Creek, what we've done obviously and uh in in Key West obviously, what we're doing right now in Miami, what we're doing in Hawaii with with uh 2 of the towers near near complete? Um think about Hilton woa which will be done. Um this year if anything we sort of, if anything we accelerated and expanded scope slightly um and and part of that is some things that we needed to go back and some other things.

Thomas Baltimore: We think high, better returns for us through the development side than what we're seeing on the acquisition side.

Things. We thought we needed to expand, so we are. We are all in. Um, we think we're making the right decisions, and obviously, I think the results are showing that we're seeing the incremental lift in IRRs that are in the 15 to 20%. Think about what we did in Santa Barbara.

Sean Dell'Orto: Yeah. Just to add, it's more so timing. We're probably about $190 million or so through the third quarter on spend. We're certainly expected to be more ramped up with Royal Palm well underway here for Q4. I think in total for the year, which is felt like just probably more appropriate range for the actual spend out the door. Projects still remain the same, just more going into next year.

[Analyst]: Got it. Thanks. Just on Hawaii, maybe another one asked differently. I think you're pacing about 70% to 75% of the EBITDA relative to 2023. As you think about the glide path and trajectory into 2026, do you think you can fully close that gap, or do you think it's going to take a few years?

Yeah, I just I just add, it's it's more so timing. Um, you know, we're probably about 190 million or so, um, through um, through the third quarter uh, on spend and and we're certainly expected to be more ramped up with raw Palm on well, underway here, for the Q4. But I think in total for the year, uh, we just felt like there's probably more appropriate range for the actual spend out the door, projects still remain the same, just more going in into next year.

Got it. Thanks and they just don't know why, maybe another 1 that's differently. Uh, I think you're pacing about 70 775 percent of the, Evo relative to to 2023 as you think about the Glide path in trajectory into 2026? Do you, do you think you can fully close that Gap or do you think it's it's going to take a few years?

Thomas Baltimore: I think you're back in 2027. I think you're still ramping in 2026, and you're looking at what's probably low $150 million number this year versus $177 million. Keep in mind that we're finishing the second phase of the Palace Tower in Hilton Waikoloa. Of course, you've got the Rainbow Tower that we're finishing up here in Hilton Waikoloa, which obviously is one of the premier towers. We remain steadfast and very confident and certainly believe that those continue to ramp up. We're also making a number of other operational changes. We are spending a tremendous amount of time with our partners at Hilton, looking at both from a leadership, sales, and marketing, all of the commercial engines. It's terribly important to us, but it also is a big fee generation for our partners at Hilton as well.

Uh, I I think you're you're back, uh, in 20 in 27. I think you're still ramping in in, in 26.

Um, that and you're looking at what's probably low $150s number this year versus $177. And keep in mind that we're finishing the second phase of.

Uh, the Palace Tower in Hilton Lake Aloha. Uh, and then of course we've got the Rainbow Tower that we're finishing up here in Hilton. Whoa, which obviously is one of the premier towers?

So we it, it remain steadfast and very confident and certainly believe that those continue to ramp up and we're also making a number of other operational changes. Uh, we are spending a tremendous amount of time, uh, with our partners at Hilton. Looking at both from a, a leadership sales, and, and marketing. Um, all of the commercial engines, uh, it's terribly important to us, but it's also is a big fee generation for generator for our partners at Hilton as well. So

[Analyst]: Got it. Thanks so much.

Thomas Baltimore: Thank you.

got it. Thanks so much.

Ian Weissman: Thank you. The next question is coming from Robin Farley of UBS. Please go ahead.

[Analyst]: Great. Thank you.

Thank you. Thank you. The next question is coming from Robin Farley of UBS. Please go ahead.

Thomas Baltimore: Hi, Robin.

[Analyst]: Hi. How are you? Just two small clarifications at this point. One is just trying to understand your comments about the, because the release says your guidance includes just the strike through sort of today. I mean, sorry, the government shutdown through today. It sounded like you said that the lower end of your range includes the shutdown continuing through the quarter. Just if I heard you right about the impact in October, it seems like the range wouldn't be wide enough if it continued. Is it just that, is government business less of a factor in November and December than in October? That would make sense if that's the case. Do you think it would be a similar impact when we think about how the next two months could look?

Great, thank you. Um, Rob. Hi, how are you? Uh, just 2 small clarifications at at this point, what is, um, just trying to, um, understand your your comments about the, you know, because the release says, your guidance includes just the strikes through sort of today, um, or I mean, sorry, the government shut down through today. Um, it sounded like you said that the lower end of your range includes the shutdown continuing through the quarter, but just, if, if I heard you write about the impact in October, um, it seems like the range wouldn't be wide enough if, um, if it, if it continued, is it just that

Thomas Baltimore: Yeah. We think it would be less of an impact, Robin, as we look out. As I said, one person's opinion. I just don't believe that they can allow this to drag out much longer for all the reasons we all know, all of the families and kids and others that are being impacted. We're all hearing rumors that this should be resolved, hopefully in the very near future. We also believe that the lower end of that guidance will largely protect us based on the guidance that we've provided.

This government business is less of a factor in November and December than in October. I mean, that would make sense if that's the case. Or do you think it would be a similar impact when we think about how the next two months could look?

Yeah, we we think it would be less of an impact um, Robin as we look out and it looks as I I said, 1 person opinion. Um I I just don't believe that they can allow this to drag out much longer for for all the reasons we all know, all of the uh, families and kids and others that are being impacted. Uh,

[Analyst]: Understood. Even if it were solved today in theory, right, there'd still be some November impact. I've totally understood. Thank you. The other clarification was just on Hawaii. I wasn't sure if I caught your comments about for group bookings. I think when you said group pace, the company overall was flat in 2026. I think you were excluding Hawaii. I just wanted to, it seems like Hawaii, you're comping the strike. You have the benefit of some room renovations. I know the convention center in Hawaii will close at the end of 2026. I know that obviously 2027, that would make the 2027 sort of timing off. For 2026, is your group Hawaii, the pace benefiting from those strike comps and things?

Uh, and, you know, we're, we're all hearing rumors that, uh, that that, that certainly, uh, this should be resolved, hopefully in the very near future, but we also believe that the lower end of that guidance will largely Protect US, based on the guidance that we've provided.

Understood. And, but just, you know, even if it were solved today in theory, right? We there'd still be still be some November impact, but I'm not totally understood. Thank you. Um, and then, the other clarification was just on Hawaii and I just, um, it wasn't sure if I, when I caught your comments about forward group, bookings. I think, when you said group pace for the company, overall was flat in 26, I think you were excluding Hawaii and just wanted to it seems like Hawaii, you're you're comping, the strike, you have the benefit of some room, Renovations, I know that Convention Center in Hawaii will close at the end of 26th. So, I know that obviously the 27th, you know, that would make the 27th sort of timing off. But for 20,

2026 is your group, Hawaii. The pace benefiting from those strikes, comps, and things.

Thomas Baltimore: Yeah. Robin, our understanding is that the convention center will be closing the end of 2025.

[Analyst]: The Hawaii down is primarily just the timing of that and not so much?

Yeah. Robin, our understanding is that the convention center will be closing at the end of 2025.

So the so the Hawaii down.

Thomas Baltimore: Correct. Correct.

And not so much, right.

[Analyst]: Okay. Thanks.

Thomas Baltimore: Yeah, keep in mind, group. Yeah, group is also a small percentage of Hawaii, but it will be closing here in 2025.

Correct.

Yeah. And and keep in mind group is a, ya group, is also a small percentage of Hawaii. But but the

[Analyst]: Okay. Great. Thank you.

Uh, it will be closing, uh, here in 25.

Thomas Baltimore: Thank you.

Ian Weissman: Thank you. The next question is coming from Ari Klein of BMO Capital Markets. Please go ahead.

Thank you. The next question is coming from Ari Kline of BMO Capital Markets. Please go ahead.

[Analyst]: Thanks. I had a bit of a bigger picture question. I think historically, non-residential fixed investment has been relatively highly correlated with demand. Now, perhaps with AI, that relationship is seemingly not holding up the same way and maybe even distorting the relationship. Curious what you think about that. If that continued, how does that impact your ability to forecast? What else are you looking at in terms of helping with things?

Uh, thanks. Uh, I had a bit of a bigger picture question. Yeah, I think historically, non-residential fixed investment has been relatively highly correlated with demand, but now perhaps with AI, that relationship, um, you know, assumingly not holding up the same way.

You know, and maybe even distorting the relationship. I'm curious what you think about that and, if that continued, how does that impact your ability to, uh, to fork out and what else are you looking at, you know, in terms of helping, um, you know, with things?

Thomas Baltimore: Yeah. We all spend time trying to figure out what's going to be the right correlation. If you think historically, it was GDP growth. If you think about certainly the last decade or so, it's been huge emphasis on non-residential fixed investment spending. I have to believe candidly on both sides. I think that both remain important. I just think it's the level. If you think about just GDP, they have been disconnected here in the short term. I have to believe that that will change and we'll continue to see as GDP gets in, as Bessent and others want to get it in that 3% range, we certainly think that's going to be a huge tailwind for our sector. That's one point that I would make.

Yeah, are we all we all spend time? Trying to figure out what's going to be the the, the the right correlation? If you think, historically? Right? It was GDP growth.

Uh, and then, if you think about, you know, certainly the last decade or so, it's been huge emphasis on non-residential fixed investment spending. I, I have to believe candidly on, on, on, on both sides. I think that both, uh, remain, uh, important. I just think it's the level. Uh, and if you think about just GDP, um, they they have been disconnected here in, uh, in the short term. I I have to believe that that that will change and we will continue to see is is GDP gets in um as as best in and others want to get it in that 3% range. We certainly think that's going to be a huge Tailwind for

Thomas Baltimore: If you think about just the amount of investment spending in the adjacencies, both in energy, both in data centers, both AI, both in all the things that have got to be done from certainly the electrification side, I have to believe that that will continue to benefit lodging as well as we sort of look out. If you get non-residential fixed investment spending in that sort of 3% to 5% range, you get GDP in that 3% range. Think of both the operating leverage and the benefit that we think that's going to accrue to lodging will be significant. Candidly, we'll have an industry that we hope will be certainly more attractive to investors from that standpoint where you can get the kind of operating leverage, which is just more difficult to get when we are at these lower RevPAR numbers.

[Analyst]: Thanks for that. Maybe just on the dividend, I understood you're not paying the top-off. As you think about the yield in that 9% to 10% range, when it comes to next year, is there a thought to maybe reduce that, the existing yield?

For our sector. Uh, that that's 1 point that I would make. And if you think about just the amount of investment spending in the adjacencies, both in energy uh both in data centers, both AI. Um, both in all the things that have got to be done from uh, the certainly electrification uh, um, side. I, I have to believe that that will continue to benefit lodging as well as we as we sort of look out. And if you get not residents will fix Investments spending in, that sort of 3 to 5% range, you get GDP in that 3% range, think of both the operating leverage and the benefit that we think that's going to recruit a lodging will be significant and candidly, we'll have an industry that we hope will be, certainly more attractive to investors from that standpoint where you can get the kind of operating leverage which is just more difficult to get when we at these lower uh rev part numbers.

Thanks for that and maybe.

Call on the dividend.

Understood in that.

You know, in that 9% to 10% range when it comes to next year, is there a thought to maybe reduce that yield?

Thomas Baltimore: Yeah. We obviously haven't decided that for next year. Historically, we've been in that 65% of AFFO. If anything, you could see us certainly consider moderating that a little. At this kind of run rate, a $1 dividend, we think, is very healthy and certainly a 9% to 10%. For anything we hear from most investors, they certainly appreciate that. This has gotten a lot more interest than we would have thought and hoped, to be candid. I know some, I want to reinforce again, there are no liquidity issues, zero with Park. If anything, we've got significant liquidity. We just decided that we wanted to allocate. We thought that there was an opportunity both to pay down some debt and also reinvest back into the portfolio. It was really a strategic decision made by the leadership team.

Yeah, I I we we haven't decided that for, for next year. Historically, we've been in that 65% of afo. Um, if anything we you know we you could see us. Um certainly consider moderating that a little um

But at this kind of run rate um a dollar uh dividend we think is very healthy and certainly a 9 to 10 percentage for anything we hear from most investors, they certainly appreciate that. This is gotten a lot more interest than we would have thought and hoped to be candid. Um and I know some I want to reinforce again. There are no liquidity issues zero with Park. If anything we've got significant liquidity,

Um, we just decided that we wanted to allocate. We thought that there was an opportunity, both to pay down some debt and also reinvest back into the portfolio. So it was really a strategic decision made by the leadership team.

[Analyst]: Thank you.

Thomas Baltimore: Thank you.

Thank you.

Ian Weissman: Thank you. The next question is coming from Ken Billingsley of Compass Point. Please go ahead.

Um, thank you.

Thank you. The next question is coming.

From.

Billingsley of Compass Point, please go ahead.

[Analyst]: Good afternoon. We appreciate you fitting me in here. The question is regarding comparing total RevPAR to RevPAR growth on a year-to-date basis. A number of markets saw smaller total RevPAR growth versus its comparable RevPAR, such as New York, Boston, D.C. My question is, is this all group and banquet related? How is 2026 shaping up in the group business? Will a bump in leisure travel to some of those cities for the 250th anniversary actually negatively impact kind of our total RevPAR expectation for those markets?

Oh, good afternoon. Uh, we appreciate you fitting me in here. Um, the question is growing, uh, comparing total RevPAR to RevPAR growth on a year-to-date basis. You know, a number of markets saw smaller total RevPAR growth versus its comparable RevPAR, such as New York, Boston, and D.C. My question is, is this all group and banquet related? And how is 2026 shaping up in the group business? Um, will a bump in leisure travel to some of those cities for the 250th anniversary have a negative impact on our total RevPAR expectation for those markets?

Sean Dell'Orto: I think we certainly continue to see strong out-of-room spend. That goes hand in hand with group here with banquet and catering, but those patterns have kind of held up. Even with Q3, we had certainly a weaker group quarter and a little bit weaker than expected. Despite that, banquets amongst urban and resort properties have held up pretty well on the banquet revenue side. The outlet side was down about 6% to 7% relative to expectations, again, more so because I think as you had a little bit of weaker group, you pivoted to more discount channels. Kind of a low price point guest who's not necessarily going to spend as much in the outlet. We certainly saw that dynamic go on there.

Sean Dell'Orto: I think when you look at the mainstream guests and consumer, it's on the group side, people continue to spend on their events, AV and the like, and guests that are kind of more on the transient side, leisure side, and even business are spending in the outlet. I think that's led to what we've typically seen is about, I think, predicting about a 100 basis point benefit differential between total RevPAR and RevPAR this year. We certainly expect that to continue into next year as you think about some of these, especially with some of these events. I think there's certainly a nice benefit and pop you expect on rate in the rooms for things like the World Cup.

A little bit weaker than expected despite that, uh, bankruptcy, you know, amongst our Urban Resort properties have held up pretty well. I think what Revenue side, the outlet side was down about 67% relative to expectations uh again more so because I think as you have a little bit of weaker group, you pivoted to more discount channels, um so you know kind of higher low price point guest who's not necessarily going to spend as much in the outlet. So he certainly saw that Dynamic go on there but I think when you look at the mainstream, uh, you know, guests and and and consumer, it's, you know, on the group side, uh, people continue to spend, uh, on their events, uh, ab and the like, and and guests that are kind of more on the training side, leader side and even business are, are spending the outlets. So I think that's in, that's led to what we've typically seen is about. I think, predicting about 100 basis points, uh, benefits, you know, differential between total rev car and red cars this year. Um, would certainly expect that to continue into next year as you think about some of these, you know, some of these events. Um, you know, I think,

Sean Dell'Orto: You see a lot of, you expect a lot of people being around these markets as part of the maybe not even going to the games, as part of the celebrations and really being promoting restaurants and certainly other things and outlets inside the hotels themselves. I think we certainly expect to see continuation of strong spending patterns outside the rooms to help promote total RevPAR growth above room RevPAR growth.

You know, there's certainly a nice benefit and pop you expect on rate in the rooms for things like the World Cup. But you see a lot of, you know, you expect a lot of people being uh, around these markets um, you know, as part of the meeting, not going even going to the game just part of the celebrations and really being, uh, promoting, you know, restaurants, and and certainly other things and Outlets inside the, the hotels themselves. So, I think we certainly expect to see continuation of, of strong spending paths outside the room to help promote total rep Park, growth above room rep, our growth,

[Analyst]: I appreciate that. Thank you.

Appreciate that. Thank you.

Sean Dell'Orto: Yep.

Ian Weissman: Thank you. At this time, I would like to turn the floor back over to Mr. Baltimore for closing comments.

Yep.

Thank you. At this time, I would like to turn the floor back over to Mr. Baltimore for closing comments.

Thomas Baltimore: On behalf of the Park team, really appreciate everyone taking time today. We are available for follow-up questions and look forward to seeing many of you in D.C. and in Dallas. Safe travels. Please know the Park team is laser-focused on continuing to create shareholder value.

On behalf of the Park team, I really appreciate everyone taking the time today.

Um we are available for follow-up questions and look forward to seeing uh many of you, and they read in in Dallas, uh safe travels.

and,

Uh, please know that Park team is laser focused on continuing to create shareholder value.

Ian Weissman: Thank you. Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Thank you, ladies and gentlemen. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.