Busier hotels, lower profit forecast: inside Park Hotels' split outlook
Room demand supports an operating upgrade. A comparison with the earlier forecast shows why reported earnings face a different path as Park renovates its portfolio.
More rooms are occupied at Park Hotels & Resorts, guests are paying higher rates, and management has raised its operating outlook. Yet its forecast for full-year reported profit has moved down.
The difference matters because Park is spending heavily to improve its hotels while selling properties it no longer wants. Some costs reduce reported earnings but are removed from the adjusted measures management uses to describe the recovery.
Our Park Hotels company profile tracks the results, renovation program, property sales and debt.
The hotel business is gaining ground
Park owns a portfolio of large hotels and resorts, many operating under Hilton brands. In the third quarter, revenue per available room, or RevPAR, a measure combining occupancy and room rates, rose 8.4% across comparable hotels. Occupancy reached 76.4%, compared with 74.0% a year earlier.
That strength carried into the forecast. Park now expects full-year comparable RevPAR growth of 5.5% to 6%, up from 3% to 4.5% in August, a range it repeated in September. Management also reported preliminary October RevPAR growth of nearly 11%.
More room revenue did not produce equally strong results everywhere. Group guests spent less outside their rooms than Park typically sees, while wages, utilities and the costs of serving more occupied rooms rose. At New York Hilton Midtown, RevPAR increased 5.2%, but hotel-level adjusted EBITDA fell 30.7%.
Two profit forecasts move in opposite directions
| Measure | August outlook | November outlook |
|---|---|---|
| Adjusted EBITDA | $617–$637 | $635–$645 |
| Reported net income | $78–$98 | $70–$80 |
Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization and further items Park excludes. It helps show hotel operating performance, while reported net income also reflects the costs of owning, financing and changing the portfolio.
Research by Ticker Byline shows that higher depreciation and excluded charges more than offset the improvement in Park's operating forecast. We compared the full earnings reconciliations behind the August and November guidance. At the calculated midpoints, adjusted EBITDA rises $13 million, while reported net income falls $13 million.
The main differences are $11 million more depreciation and amortization and $16 million more excluded items, including impairment and casualty losses, severance and other adjustments. Smaller changes elsewhere complete the comparison. The annual interest-expense forecast is actually $1 million lower.
Renovations affect earnings and cash at different times
The Royal Palm South Beach Miami reopened in July after a renovation costing more than $110 million. Management expects it to add at least two percentage points to Park's comparable RevPAR growth next year.
Another project, the more than $100 million renovation of the Ali'i Tower at Hilton Hawaiian Village, began in August and is expected to finish in the first quarter of 2027. Park recorded $12 million of accelerated depreciation in the third quarter as it shortened the useful lives of assets being replaced.
Depreciation spreads the cost of assets over their useful lives. The cash investment follows its own timetable: Park raised its 2026 capital-spending budget to $270 million to $280 million from $230 million to $260 million in August.
In the first nine months, operating cash flow of $315 million less $204 million of cash capital spending left $111 million. Dividends used $150 million over the same period. The renovation program therefore deserves attention alongside the improving operating figures.
Property sales and refinancing reshape the next year
Park sold The Wade in October for about $19 million before costs, after selling Hilton Short Hills in July. The strategy directs investment toward the hotels it intends to keep and removes future spending needs at properties it sells.
It also completed the refinancing of the $1.275 billion Hilton Hawaiian Village mortgage in September. That removes a large near-term maturity, while other loans still need attention. A $150 million Santa Barbara mortgage refinancing is expected in mid-November.
The next test is whether stronger room demand turns into more earnings and cash after the renovation work. The operating upgrade shows progress. The lower reported-profit forecast and larger investment budget show the cost of getting there.