Park officials clarify HNA news, detail transactions
Park officials clarify HNA news, detail transactions
05 MARCH 2018 8:55 AM

Officials from Park Hotels & Resorts shared some details on HNA Group’s plan to sell all or part of its stake in the company and also discussed the company’s transactions strategy on a fourth-quarter earnings call. 

MCLEAN, Virginia—Park Hotels & Resorts executives confirmed they are in talks with HNA Group in regards to the Chinese conglomerate wanting to sell all or part of its 25% stake in the company—which is currently worth $1.4 billion—but officials didn’t say much more on the matter during Park’s fourth-quarter and full-year earnings call.

“I will note for those on the call that yes, HNA requested an early registration and we are presently in discussions with them,” Park’s President and CEO Tom Baltimore told analysts on the call Friday, which also marked Park’s one-year anniversary as a public company. “Obviously a registered public offering requires the participation of Park, and we will have no further comment or color to add on this subject at this time.”

Park also announced this week that it would be selling seven Hilton hotels in the United Kingdom to Starwood Capital Group for £135 million ($186 million).

Baltimore told analysts the company has made significant progress in selling noncore assets.

“The portfolio in the U.K. was a very complex transaction with a very seasoned counterparty and required some structuring issues to manage around,” he said. “We worked in partnership and aggressively to get that completed.”

He added that part of the recycling process is getting out of noncore assets and properties that have low revenue-per-available-room ranges.

Pickup in group
Park’s earnings release states that the company saw a 1% increase in group rooms revenue in the fourth quarter and a 0.6% increase for the full year.

Transient rooms revenue increased 1.6% for the quarter and 0.1% for the full year.

“If you remember our last call, we were trending 1% or less, we’ve seen a nice pickup and now group pace is north of (3%) for 2018, which is very encouraging,” Baltimore said. “… No doubt that leisure has been stronger than business transient, so it’s really been a combination of both business and leisure group as well.”

2018 guidance
Comparable RevPAR growth is expected to range between 0% and 2% for full-year 2018, according to the earnings release.

Park projects net income to range between $232 million and $266 million, and adjusted earnings before interest, tax, depreciation and amortization is expected to be between $705 million and $745 million for the full year.

As of press time, Park’s stocks were down 13.8% year to date. The Baird/STR Hotel Stock Index was down 5% for the same time period.

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