Park Hotels Earnings: Rate Growth Lower, but EBITDA Margin Decline Better Than Anticipated

Park Hotels & Resorts reported fourth-quarter results that were mixed compared with our estimates, though we do not see anything from the quarter that would materially change our $23 per share fair value estimate for the no-moat company. Occupancy fell 150 basis points year over year to 69.9% while average daily rates were up only 0.7%, leading to a revenue per available room decline of 1.4% that came in below our estimate of a 1.1% revPAR gain. However, the 330-basis point decline in hotel EBITDA margins to 24.6% was smaller than the 380-basis point decline we had expected. As a result, Park reported adjusted funds from operations of $0.39 per share in the fourth quarter. While that is down from the $0.52 figure the company reported in the fourth quarter of 2023, it came in ahead of our $0.28 estimate for the quarter.