Park Hotels and Resorts is no longer the mixed Hilton leftover that left the parent in early 2017. The second-quarter print is the first clean look at a company that is concentrating capital in a Core book of destination resorts and city convention hotels while exiting the rest. Group demand and renovated assets, not a broader lodging cycle, are doing the work. The equity debate is whether that mix shift, plus a committed refinance of the Waikiki mortgage, produces a simpler lodging REIT before the next demand pause.
Comparable rooms revenue per available room, or RevPAR, printed at $217. That is up nearly six percent from the year-ago quarter, and closer to seven percent if the closed Royal Palm South Beach is set aside. Hotel-level adjusted earnings before interest, taxes, depreciation and amortization, the lodging industry's operating-profit yardstick, rose to $204 million. The margin widened even as GAAP rooms revenue was flat, which is the Core story working. Hilton Hawaiian Village, Bonnet Creek, and Casa Marina all posted double-digit RevPAR after prior renovations. The offset is still on the balance sheet. Net debt remains about $3.7 billion. Leverage sits near six times current adjusted earnings, and the weighted average maturity sat under two years at mid-year because the Waikiki CMBS loan still sat on the books.
Management raised the full-year RevPAR growth range after a stronger June and a firm July. Adjusted earnings guidance now sits between $617 million and $637 million. Adjusted funds from operations, the REIT cash-earnings measure, is guided between $1.90 and $2.00 a share. The open questions are execution, not demand color. Does the Hawaiian Village refinance close on the committed delayed-draw facilities without stretching interest expense past the dividend? Do remaining Non-Core hotels sell without more impairments? Does the oceanfront tower project at Waikiki add rate after a year of displacement? Those three items decide whether the multiple expands or the stock remains a high-yield lodging stub.