Park Hotels & Resorts Inc. PK astutely unveiled its preliminary fourth quarter and full-year 2023 results, revealing a stellar performance and promising future prospects for the year ahead.

Strong Financial Results

The hotel REIT reported an exceptional adjusted funds from operations (FFO) per share of 53 cents for the fourth quarter, surpassing the Zacks Consensus Estimate of 50 cents. The preliminary adjusted FFO per share marked a robust 17.8% increase year over year, fueled by a preliminary revenue figure of $657 million, which exceeded the consensus estimate of $654 million.

Key Performance Metrics

For the full year 2023, preliminary adjusted FFO per share demonstrated a commendable 33.1% year-over-year surge to $2.05, outpacing the Zacks Consensus Estimate of $2.03. Notably, preliminary comparable revenue per available room (RevPAR) for the fourth quarter of 2023 exhibited a 4.1% increase year over year, reaching $178.25, while the full-year 2023 results showcased an even more robust performance, with an impressive 8.7% year-over-year growth in comparable RevPAR, reaching $178.62.

The urban portfolio experienced nearly 8% growth in comparable RevPAR, driven by the acceleration of business travel in key cities like Boston, Chicago, and New York. Meanwhile, leisure demand remained strong at Hawaii hotels, contributing to a more than 8% increase in preliminary RevPAR for the resorts. Moreover, comparable occupancy for the fourth quarter of 2023 increased by 1.5 percentage points to 71.0%, with the comparable Average Daily Rate rising by 1.9% to $250.93. These factors collectively contributed to a 4.9% growth in total comparable RevPAR, reaching $287.21.

Positive Momentum and Outlook

Park Hotels & Resorts is optimistic about the ongoing strength across its portfolio in 2024. Anticipating favorable impacts from transformative renovation projects, including the Bonnet Creek Orlando complex and the Casa Marina Key West hotel, the company is poised for a promising year ahead. Furthermore, it aims to enhance financial flexibility and improve the balance sheet through non-core asset sales while strategically reinvesting in value-enhancing Return on Investment projects.

Upcoming Earnings Release

Park will release its finalized fourth-quarter and full-year 2023 financial results on Feb 27, 2024, followed by a conference call on Feb 28, 2024.

Conclusion and Investor Recommendations

Park Hotels & Resorts’ preliminary 2023 results embody strong performance across key financial metrics. With positive trends in comparable RevPAR, occupancy rates, and profitability, the company appears well-positioned for a promising 2024. Investors are advised to closely monitor the upcoming earnings release and conference call for deeper insights into Park’s future prospects and strategic initiatives.

It is noteworthy that shares of this Zacks Rank #3 (Hold) company have rallied 35.8% in the past three months, outperforming the industry’s increase of 20%.

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Stocks to Consider

For investors seeking potential opportunities in the REIT sector, stocks such as OUTFRONT Media Inc. OUT and STAG Industrial, Inc. STAG present favorable prospects. OUTFRONT Media sports a Zacks Rank #1 (Strong Buy), while STAG Industrial carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for OUTFRONT Media’s 2023 FFO per share has moved 1.9% northward over the past three months to $1.63. Similarly, the Zacks Consensus Estimate for STAG Industrial’s 2023 FFO per share has exhibited a marginal upward trend in the past three months to $2.28, indicating an estimated increase of 3.2% year over year.

It is important to note that anything related to earnings presented in this article represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.

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