Park Hotels & Resorts executives cite "a material increase in expected lost rooms revenue" since issuing their initial guidance.
TYSONS, Va.--(BUSINESS WIRE)-- Park Hotels & Resorts Inc. (NYSE: PK) (the “Company” or “Park”) today announced that it is has withdrawn its previously announced 2020 outlook amid growing concerns about the COVID-19 virus outbreak. Since providing guidance nearly two weeks ago, Park has experienced a material increase in the number of corporate group cancellations. Additionally, increasing travel restrictions, governmental travel advisories and state of emergency declarations across several of our key markets are expected to adversely impact the Company’s financial results for the full year 2020.
On February 26, 2020, as part of the Company's full-year 2019 earnings press release, Park provided full-year 2020 guidance which included approximately $8 million of lost rooms revenues resulting primarily from known group customer cancellations related to COVID-19. Largely over the last week, the Company has experienced a material increase in expected lost rooms revenue from group customer cancellations, which, as of today's date, have increased to approximately $30 million, with most of that impact expected to occur in March and April.
“Since our earnings call on February 27, 2020, the situation related to COVID-19 has evolved rapidly, creating a notable economic impact to our business,” said Thomas J. Baltimore, Jr., Chairman and CEO of Park. “In addition to the anticipated impact to inbound international travel, during the past week we have seen an increase in group and business transient cancellations as corporate customers pause and assess the highly fluid and uncertain environment. Consequently, we expect to see a material impact in the first half of this year. However, given the short-term nature of the cancellations and the uncertainty of how long the COVID-19 outbreak will last, we cannot provide a view on our 2020 outlook at this time. While we currently expect to recoup some of the lost revenue in the form of cancellation fees as well as rebooked events, we are primarily focused on implementing cost containment strategies across our portfolio as well as ensuring the health and safety of all employees and guests in our hotels. I am confident our teams will thoughtfully adapt to this changing environment and employ best practices from our pool of highly experienced leaders both on property and among our corporate team.”
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