Park Hotels & Resorts (NYSE: PK) outperformed second-quarter expectations, fueled by surging leisure and group travel demand across its prime resort locations in Hawaii and Florida. Following these strong results and a robust start to the third quarter, the company has officially upgraded its full-year guidance for RevPAR, adjusted EBITDA, and adjusted funds from operations.
Growth Momentum Across the Portfolio
Chairman and CEO Thomas Baltimore highlighted that comparable RevPAR grew nearly 7% year-over-year, excluding the Royal Palm South Beach, which was undergoing redevelopment. The momentum intensified throughout the quarter, climbing from 4% in April to over 11% by June.
While urban properties saw a steady 4% growth, the resort portfolio outperformed with a 9% increase in RevPAR. Baltimore attributed this success to strategic investments in asset renovations, high-rated leisure bookings, and a significant uptick in group demand.
Hawaii and Florida Lead the Surge
Hawaii served as a major growth engine, with RevPAR rising 9%. The Hilton Hawaiian Village stood out with an 117 RevPAR index—a four-point improvement over June 2024. Occupancy hit 98% in July, and the company is set to launch a $100 million renovation of the 348-room Ali’i Tower this August.
Florida properties followed suit, with the Bonnet Creek complex reporting a 13% RevPAR increase and Key West locations rising 10%. Notably, food-and-beverage revenue at the Waldorf Astoria Orlando surpassed previous records by 24%, while the Casa Marina in Key West saw a 36% jump in dining revenue following its recent repositioning.
Urban Markets and Group Travel Strength
Major cities contributed significantly to the quarterly performance. Washington, D.C. recorded 17% RevPAR growth due to government-related travel, while Chicago and Boston saw gains of 12% and 9%, respectively, bolstered by citywide events and group demand.
Group rooms revenue jumped 9.5% for the quarter, with June alone seeing 23% growth. Looking ahead, the company’s group revenue pace for 2026 is up 6%, with even stronger double-digit gains projected for 2027 in key markets like San Francisco, New York, and Hawaii.
Financial Performance and Strategic Dispositions
CFO Sean Dell’Orto reported that total portfolio RevPAR hit $217, with hotel adjusted EBITDA rising 9% to $204 million. The adjusted EBITDA margin expanded by 80 basis points to nearly 32%.
Park continues to streamline its portfolio by shedding non-core assets. Having sold 10 of 19 identified hotels since early 2025 for roughly $200 million, the company intends to finalize its exit from remaining non-core holdings by the end of the year. These remaining assets currently represent less than 5% of the total portfolio value.
Royal Palm South Beach Relaunch
After a $100 million, 15-month redevelopment, the Royal Palm South Beach reopened on July 22. The project upgraded 393 rooms, added 11 new units, and overhauled public spaces and dining concepts. Management anticipates that EBITDA for this property could double upon stabilization, with early bookings showing significant rate premiums compared to pre-renovation levels.
Revised Outlook and Debt Management
Reflecting its confidence in the current trajectory, Park raised its full-year RevPAR outlook to a 3%–4.5% range. Adjusted EBITDA guidance was increased by $25 million at the midpoint to $617 million–$637 million, with adjusted FFO now expected between $1.90 and $2.00 per share.
The company maintains a disciplined approach to its $3.7 billion net debt, planning to utilize current financing to retire the $1.27 billion Hilton Hawaiian Village mortgage in September. Shareholders will receive a third-quarter cash dividend of $0.25 per share, payable on October 15 to shareholders of record as of September 30.