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Operator: Greetings, and welcome to the Park Hotels & Resorts Inc. Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Press star-zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ian Weissman, Senior Vice President, Corporate Strategy. Please go ahead.
Ian Weissman: Thank you, operator, and welcome, everyone, to the Park Hotels & Resorts Inc. Fourth Quarter and Full Year 2025 earnings call. Before we begin, I would like to remind everyone that many of the comments made today are considered forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements. Actual future performance, outcomes, and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Park Hotels & Resorts Inc. with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information, such as Adjusted FFO and Adjusted EBITDA. You can find this information together with reconciliations to the most directly comparable GAAP financial measure in yesterday's earnings release as well as in our 8-Ks filed with the SEC and the supplemental financial information available on our website at pkhotelsandresorts.com. Additionally, unless otherwise stated, all operating results will be presented on a comparable hotel basis. This morning, Thomas Jeremiah Baltimore, our Chairman and Chief Executive Officer, will update on our strategic initiatives, review Park Hotels & Resorts Inc.'s fourth quarter and full year performance, and provide an outlook for 2026, while Sean M. Dell'Orto, our Chief Operating Officer and Chief Financial Officer, will provide additional color on fourth quarter and full year results, our plan to address our upcoming debt maturities later this year, and further details on guidance. Following our prepared remarks, we will open the call for questions. With that, I would like to turn the call over to Thomas Jeremiah Baltimore.
Thomas Jeremiah Baltimore: Thanks, Ian. And welcome, everyone. 2025 was another very productive year for Park Hotels & Resorts Inc., one marked by meaningful progress against our strategic priorities and continued execution across the core portfolio. Throughout the year, we remained laser-focused on reshaping and upgrading the portfolio and reinvesting in our highest-quality hotels, all with the goal of positioning the company for sustained long-term success. Our strategy has been both consistent and deliberate, concentrating our ownership in 21 core hotels with superior growth prospects, aggressively exiting non-core assets, and allocating capital toward high-impact redevelopment projects with the potential to unlock meaningful embedded value across the core portfolio with ROI opportunities exceeding $1,000,000,000. In 2025, we executed more than $120,000,000 in non-core sales at a blended multiple of 21 times. These transactions included the sale of the Hyatt Centric Fisherman's Wharf and our 25% joint venture interest in the Capital Hilton as well as exiting three hotels sitting on expiring ground leases that produced no earnings on a combined basis. As we entered 2026, we continue to make steady progress toward completing our remaining non-core asset dispositions. In January, we closed on the sale of the 193-room Hilton Checkers in Downtown Los Angeles for approximately $13,000,000, representing over 17 times 2025 EBITDA. We have established a strong track record of successfully recycling capital, having sold or disposed of 51 hotels for over $3,000,000,000 over the past nine years, and despite a challenging transaction environment, we have sold or disposed of 13 hotels since 2023, increasing portfolio-wide nominal RevPAR by nearly 8% and hotel Adjusted EBITDA margins by over 275 basis points. While the timing of non-core dispositions may be uneven, we remain firmly committed to materially reducing our exposure to our non-core portfolio by year-end. Active workstreams are currently underway across all remaining non-core properties as we continue to advance this objective. Additionally, building on the success of our development team, we launched our sixth major redevelopment in seven years, the $108,000,000 transformation of the Royal Palm South Beach, while making significant progress on enhancing the overall quality of our Hawaii and New Orleans properties through extensive guest room renovations. Together, these projects reinforce our conviction that reinvesting in the core portfolio remains the highest use of capital, which will best position Park Hotels & Resorts Inc. to deliver outsized earnings growth and enhanced shareholder value over time. Turning to operations. I remain encouraged by the relative outperformance of our core portfolio, which delivered a solid 3.2% increase in RevPAR during the fourth quarter, or 5.7% excluding the Royal Palm, representing nearly 1,500 basis points of outperformance versus our non-core portfolio. That trend was consistent throughout much of the year, with RevPAR growth from our core portfolio outperforming the non-core hotels by an average of 480 basis points in 2025, further reinforcing our stated strategy. During the fourth quarter, group performance stood out, supported by convention demand in Hawaii and New York, and solid corporate group activity in Orlando. Fourth quarter group revenue for our core portfolio increased 13% year over year, complemented by double-digit growth in banquet and catering revenues across several key markets, including Hawaii, Chicago, Orlando, and Denver, reflecting broad-based strength across key markets. Among our core hotels, Hilton Hawaiian Village was one of our strongest performers during the fourth quarter, generating 22% RevPAR growth, benefiting from easier year-over-year comparisons following last year's labor disruption. We are increasingly encouraged by the outlook for both properties following the completion of the Rainbow Tower renovation at Hilton Hawaiian Village and the Palace Tower at Waikoloa Village. Following the renovation, both resorts will be operating with significantly upgraded product and should be well positioned for a step-up in performance as demand trends are forecasted to improve and we lap an otherwise challenged 2025, which our resorts were meaningfully impacted by the disruption from Liberation Day and the government shutdown, the continued softness in Canadian demand, and renovation displacement. As we look ahead, we expect a multiyear recovery towards prior peak levels in Hawaii. We are beginning to see that recovery take shape, with momentum building into the second quarter. As Hawaii continues to normalize, we expect it to be one of the most meaningful contributors to earnings growth across the portfolio. Additional standouts in the portfolio include Orlando, which delivered exceptional results, with our Bonnet Creek complex generating a record fourth quarter RevPAR, up nearly 9% year over year, driven by a 15% increase in group revenues as the complex continues to benefit from its expanded meeting platform and renovated room product. I am also pleased to share that the Waldorf Astoria Bonnet Creek has been named the number one hotel in Orlando by U.S. News & World Report. The property was also ranked number eight in Florida and within the top 100 of all hotels nationally, reflecting meaningful improvements over last year's ranking. I want to acknowledge the entire Bonnet Creek team for this achievement, which further highlights the quality and benefits of unlocking embedded value within our core portfolio. New York remained another top performer, delivering its highest fourth quarter group revenue in hotel history, up over 8% year over year, while the Hilton Chicago hotel posted a nearly 4% increase in group revenue despite a challenging citywide calendar supported by improved short-term pickup strategies and in-house group. Turning to our Royal Palm renovation. We continue to make meaningful progress on this transformational project with more than half of the guest rooms complete, and key public areas such as the lobby lounge, event terrace, and pool deck taking shape. Our best-in-class design and construction team is working hard to deliver the hotel by June, and we are laser-focused on achieving that goal. Overall, Miami remains one of the strongest hotel markets in the country, and I am incredibly excited about the long-term outlook for this asset. We continue to expect to realize a 15% to 20% return on our invested capital, with the hotel forecasted to more than double its EBITDA from $14,000,000 to nearly $28,000,000 once stabilized. We look forward to hosting many of you at the property during next month's Citi conference to showcase this world-class asset and the remarkable transformation underway. Looking ahead to 2026, we see several factors that could support an improving lodging environment. From a macro perspective, the U.S. economy remains on relatively firm footing with modestly higher growth expectations, easing inflation, and ongoing fiscal stimulus, all of which should provide incremental support to the U.S. consumer. In addition, easier year-over-year comparisons as we lap last year's government demand disruptions, together with the anticipated lift from major events such as the World Cup, and the America 250 celebrations in New York, Boston, and Washington, D.C., are expected to benefit demand across several of our core markets. Furthermore, new hotel construction remains muted, keeping supply growth at historical lows, and supporting healthy operating fundamentals for the next several years. While we remain optimistic about the setup for the year, with easier year-over-year comparisons and major event-driven demand, our guidance remains cautious, with the potential for geopolitical or macroeconomic volatility continuing to drive uncertainty around booking decisions and impacting short-term group pickup trends and international inbound demand, particularly from Canada. Sean will provide additional detail on earnings guidance later in the call. In summary, 2025 was another year of meaningful progress for Park Hotels & Resorts Inc., one in which we advanced our strategic priorities, continued to reshape the portfolio, and strengthened the foundation for long-term growth. Our disciplined approach to capital allocation by accelerating non-core dispositions or reinvesting in our highest-quality assets continues to unlock embedded value across the core portfolio. The transformation underway at Royal Palm, the substantial renovation work at our two iconic Hawaiian resorts and New Orleans, and a broader base momentum across several of our core markets further reinforce our conviction in the earnings power of our core portfolio. As we move into 2026, we remain laser-focused on completing our transition to a streamlined portfolio of 21 high-quality hotels located in premium gateway cities and resort markets, and we are confident in the long-term growth opportunities for Park Hotels & Resorts Inc. And with that, I will turn the call over to Sean M. Dell'Orto.
Sean M. Dell'Orto: Thanks, Tom. For the fourth quarter, RevPAR was approximately $182, representing a nearly 1% year-over-year increase, nearly 3% when excluding Royal Palm. The core portfolio excluding Royal Palm continued to demonstrate meaningful operational strength, delivering a RevPAR increase of 6% to nearly $216, or nearly 1,500 basis points higher than our non-core portfolio, underscoring the resilience of our highest-quality assets. Core hotel Adjusted EBITDA margin also improved materially, expanding 230 basis points to 30%, in sharp contrast to the non-core portfolio, which recorded a 280 basis point contraction to 10%. Overall, core hotel Adjusted EBITDA increased 13%, or nearly $18,000,000 over the prior-year period, despite an over $4,000,000 headwind from Royal Palm being closed, while the non-core portfolio declined 28%, creating an approximately $4,000,000 drag on quarterly earnings. These results underscore the strength and durability of our core portfolio and highlight the value-accretive nature of our portfolio reshaping initiative. For the full year, RevPAR came in slightly ahead of expectations, declining 2% versus 2024, while hotel Adjusted EBITDA margin was 26.5%, reflecting a 130 basis point reduction from the prior year. As expected, the Royal Palm renovation remained the primary headwind, contributing a 110 basis point drag to full year RevPAR growth and approximately 15 basis points of margin pressure. From a CapEx standpoint, in 2025, we invested nearly $300,000,000 across the portfolio, including roughly $110,000,000 during the fourth quarter. Earlier in the year, we completed nearly $75,000,000 of guest room renovations that began in 2024 at our two Hawaiian properties, the Rainbow Tower at Hilton Hawaiian Village and the Palace Tower at Hilton Waikoloa Village. The second and final phase of guest room renovations for the Rainbow Tower, which commenced in Q3 of last year, is expected to be completed in a few weeks, while the final phase for the Palace Tower, which also commenced in Q3 last year, delivered last month, bringing the total investment to the second phase across both Hawaii properties to approximately $85,000,000. In addition, we completed the second of three renovation phases totaling more than $30,000,000 at the Hilton New Orleans Riverside last month, with the third and final phase scheduled for completion in December. Looking ahead, we expect a lower level of capital investment for 2026, with $230,000,000 to $260,000,000 of spend planned, which includes completing the $108,000,000 comprehensive redevelopment of the Royal Palm. In addition, we are excited to launch a full-scale renovation of the Ali'i Tower at Hilton Hawaiian Village, expected to encompass all 348 guest rooms, the tower lobby, its private pool, and the addition of three new keys. Total investment for the project is expected to be approximately $96,000,000. To expedite the construction schedule, we plan to suspend operations in the self-contained tower beginning in the third quarter of this year, with a reopening planned for the middle of next year. Overall, we expect renovation-related disruption at Hilton Hawaiian Village to be $1,000,000 to $2,000,000 in 2026, representing a 10 basis point impact to portfolio RevPAR. Once completed, nearly 80% of the resort’s nearly 2,900 rooms will have been newly renovated, materially enhancing the long-term competitiveness of our iconic resort. Turning to the balance sheet, as of year-end 2025, our liquidity was approximately $2,000,000,000, including $200,000,000 of cash, $1,000,000,000 of available capacity under our revolver, and $800,000,000 of an undrawn delayed-draw term loan. As we noted last quarter, we continue to make meaningful progress towards strengthening our balance sheet. While our long-term focus remains on further reducing leverage, as we execute non-core asset sales, proceeds are expected to be used to pay down debt, while organic growth from our core portfolio is expected to further reduce leverage toward our targeted goal of below five times over the next couple of years. With respect to our 2026 maturities, we intend to draw on the delayed-draw term loan to fully repay the $121,000,000 mortgage loan secured by the Hyatt Regency Boston in June, and then draw the remaining capacity in September in combination with proceeds from a planned mortgage financing for our Bonnet Creek complex in order to fully repay the $1,275,000,000 CMBS financing on Hilton Hawaiian Village which matures in early November. We are currently in active discussions to originate a $650,000,000 floating-rate delayed-draw mortgage for our Bonnet Creek complex, including both the Signia and Waldorf Astoria properties, and expect closing to occur later this quarter. We expect the blended spread over SOFR between the Bonnet Creek mortgage loan and the term loan to be approximately 220 to 225 basis points. Turning to guidance, as Tom noted, we are establishing a full-year 2026 RevPAR growth range of flat to up 2%, with expense growth expected to be low single digits for the full year. With respect to earnings, Adjusted EBITDA is forecast to be $580,000,000 to $610,000,000, and Adjusted FFO per share is expected to be in the range of $1.73 to $1.89. We expect Q1 to be the most challenging quarter of the year due to difficult year-over-year comparisons. New Orleans, due to lapping the Super Bowl last year, and Miami together represent an expected 450 basis point drag on RevPAR during the quarter, translating to an approximate $12,000,000 headwind to earnings relative to last year. Partially offsetting this pressure, we expect double-digit RevPAR growth at Bonnet Creek, Puerto Rico, and San Francisco, supported by strong group pace for each along with the Super Bowl in the Bay Area, as well as low single-digit growth at both of our Hawaii hotels driven by improving leisure transient demand following their extensive room renovations. There are also a few key assumptions embedded in our guidance that are worth highlighting. First, with respect to the Royal Palm reopening and its impact on 2026 results, as Tom mentioned earlier, we are working diligently toward a targeted grand opening in early June. However, given the challenges associated with securing advanced bookings without absolute certainty to opening ahead of the World Cup matches beginning in mid-June, our guidance does not assume any material benefit from World Cup-related demand at the hotel. Overall, we expect Royal Palm to generate approximately $3,000,000 to $4,000,000 of hotel Adjusted EBITDA this year compared to the nearly $28,000,000 expected at stabilization, and approximately $5,000,000 reported in 2025 when the hotel was opened during high season prior to its closure in May. Second, with respect to asset sales, our guidance excludes any impact from potential non-core dispositions in 2026 outside of what we have already closed. While we remain fully committed to selling the majority of our non-core hotels during the year, the timing of transactions remains uncertain, making the earnings impact difficult to estimate. For context, the remaining 13 non-core hotels generated approximately $60,000,000 of hotel Adjusted EBITDA in 2025, or just 9% of total hotel Adjusted EBITDA. Finally, Adjusted FFO guidance reflects the successful refinancing of approximately $1,400,000,000 of debt during the back half of the year at a blended interest rate of approximately 5.5%. On an annualized basis, this refinancing is expected to increase interest expense by roughly $20,000,000, of which $9,000,000 is included in our guidance given the anticipated timing of the refinancing. Finally, in 2025, we returned a total of $245,000,000 of capital between $200,000,000 of dividends and $45,000,000 of share repurchases. And over the past three years, we have returned $1,300,000,000 of capital, including stock repurchases of over 12% of total outstanding shares. With respect to this year's first quarter dividend, on February 13, we declared a cash dividend of $0.25 per share to be paid on April 15 to stockholders of record as of March 31. At current trading levels, this quarterly fixed dividend translates to an annual yield of over 8.5%. This concludes our prepared remarks. We will now open the line for questions. Operator, may we have the first question, please?
Operator: Ladies and gentlemen, we will now begin the question-and-answer session. Our first question comes from the line of Smedes Rose with Citi. Please proceed.
Smedes Rose: Hi. Good morning. Or good afternoon rather. I wanted to ask you just a little bit more about how you think earnings could roll out over the course of the year at your Hawaii properties? I know, obviously, the fourth quarter was a pretty easy comp. But just in terms of how you're looking at group pace, given, I think, the convention center is closed in Honolulu. Just kind of what are you seeing on the trajectory? And the real question is what do you think those properties can contribute this year in terms of EBITDA?
Sean M. Dell'Orto: Yes, Smedes. So this is Sean. You know, yes, certainly had a good comp in Q4 for Hawaii. With the convention center closed, that is about 50,000 room nights typically that the property gets from citywide commission-related business. We have probably done a good job, though, of replacing that as best possible with about 60% of that lost or at least ultimately converted into in-house group, as well as about 20,000 room nights booked through crew business, contract business. They have done a good job to kind of replace that for this year. You know, in the end, I think Hawaii, both Hawaiian Village and Waikoloa combined, should be kind of on the higher end of our guide of RevPAR growth, the 2% range. You know, again, with the convention center being out, and kind of some early disruption from the ending of phase two at Hawaiian Village, I think you will see some rate growth, but not tremendous, again, just given the mix change there. I think you will see certainly some decent growth overall at the EBITDA level, kind of in the mid-single digits or so growth combined for the properties. Waikoloa certainly has an easier comp, certainly had challenges last year, and we certainly expect to see that materialize into probably low double-digit growth on the EBITDA level for Waikoloa overall. Blended together, again, kind of a top-line top of the end of the range, 2% growth plus or minus on the RevPAR, translating into kind of mid-single digit growth for the combined properties.
Thomas Jeremiah Baltimore: It is Thomas Jeremiah Baltimore. Agree with everything that Sean just outlined. If I could just add a comment about Japanese visitation, obviously, relatively flat last year. But we are seeing some green shoots and certainly believe that we will be in kind of mid-single digit growth in terms of visitation, perhaps somewhere in the 750,000 visitors to Hawaii, which is certainly continued progress. Obviously, we would like for that to accelerate as much as possible, but we are seeing green shoots there. And as we sort of look at and get the data on various forecasts, it looks like that continues at 5% to 6% into 2027 as well. So we see both of those as certainly encouraging tailwinds as well.
Smedes Rose: Great. And then, Tom, could you maybe just comment portfolio-wise, just kind of like what you are seeing on the pace of group revenues for this year?
Thomas Jeremiah Baltimore: Portfolio-wide, if you exclude, obviously, Miami and Hilton Hawaiian Village and obviously a tough comp in New Orleans, up about 3% for the year in 2026. And then if you look out to 2027, just our core portfolio alone, we are about 4%, 4.5%. So very encouraging from that standpoint.
Smedes Rose: Okay. Thank you. Appreciate it.
Operator: The next question comes from the line of Duane Pfennigwerth with Evercore ISI. Please proceed.
Duane Pfennigwerth: Hey. Thanks. Good morning. And sorry if I am making you repeat anything. But just on the sequential for Hilton Hawaiian Village, I think we are going from, like, a plus 20 to a low single. So can you just speak to what would be driving that specifically for March?
Sean M. Dell'Orto: For the Q1, Duane?
Duane Pfennigwerth: Yes. Aren't we pacing at a very high rate in 4Q to a low single-digit rate? So just why the change sequentially?
Sean M. Dell'Orto: You have a group pace down in Hawaiian Village. Again, speaking to while they have replaced business here and there from the convention center, but pace down 37% in Hawaiian Village for Q1, certainly a big driver there for kind of how, even though it certainly is lapping Q1's performance, it is roughly kind of in that flattish range for the quarter.
Duane Pfennigwerth: Okay. That is helpful. And then just on Miami, can you talk about any refinement to your estimate on when that will be up and running? And how do you think about capturing some of the World Cup demand just given you may reopen kind of close to that time frame. In other words, it is probably hard to commit to that now. But maybe, you know, as you gain confidence in the reopening, just how you think about that from a positioning and revenue management perspective?
Thomas Jeremiah Baltimore: Yes. A couple things, Duane. I have been down to Miami quite a bit and toured the property, and I—obviously, I say this with humility, but also with great confidence. I think we have demonstrated a track record really second to none in our sector in terms of being able to handle these types of very complex projects. If you think about Bonnet Creek and the success and the complexity of that, this really mirrors that. Carl Mayfield, who heads our design and construction team, is personally on-site at least two or three days a week. We have got somewhere between 275 and 325 construction workers working six days a week, one to two shifts, and they are very confident doing everything humanly possible to get done in that June time frame. I will be down there this weekend and touring again Monday morning. So as Sean said in his prepared remarks, as you think about us opening in early June plus or minus, then obviously the World Cup. You know, the ability to be able to sell and commit, that makes it a little more challenging, just given the amount of demand expected and how well, I think, we all believe Miami will do. With the World Cup, we think, obviously, getting open, we will be able to capture and certainly be able to capture at very attractive rates. So very, very bullish. Very excited about the project. And as Sean also noted, I mean, we are not being overly ambitious in terms of the impact that this hotel will have on the overall performance for the year. So if anything, we have been conservative. That is intentional. And we are certainly hoping that we can exceed that. But, again, remain enthusiastically excited about this transformation. We cannot wait to host many of you next weekend as you can see for yourself the progress and the real-time work that is underway there. And we are, you know, a hundred days plus or minus from completion, and doing everything we can to make that happen.
Duane Pfennigwerth: Okay. Thank you.
Operator: The next question comes from the line of Rich Hightower with Barclays. Please proceed.
Rich Hightower: Hey, good afternoon, guys. Good afternoon. Good to be on the Park Hotels & Resorts Inc. call again. So, Sean, I know that you kind of laid out a little bit of the color on the first quarter specifically with respect to the cadence of growth in 2026. And then obviously, there was some color on Hawaii specifically. But if you guys would not mind, maybe just help us understand how that works kind of, you know, broadly for the portfolio over the course of all the different quarters of the year within the context of that flat to 2% RevPAR guide.
Sean M. Dell'Orto: Sure, Rich, and welcome back. Great to hear your voice on the call here. Yes, with respect to kind of the quarterly cadence, as you think about, you know, Q1 is certainly one where we think it is the weaker quarter of the year where it is probably performing a little bit better than expected, but certainly came in the year with a kind of a belief that it would be down slightly. Maybe it ultimately gets to flat. We will see, but it is certainly in the bottom end of the range. As we think about, it certainly should pick up. You are lapping some of this Q1. Q2 and Q3 disruption from last year’s, you know, policy initiatives, whether it is tariff-related, Doge, obviously, the Canadians and their kind of decline in travel into the states. You know, you start to see those impacts of that in Q2 and Q3. And so while lapping that on top of a World Cup that we believe, you know, our exposure in New York and Boston particularly, could probably drive about 30 to 35 basis points for the year. So certainly, it is some positive impact we are thinking of as well. So those should ultimately drive towards, in kind of Q2 into Q3, you know, the higher end of the range, I should say, for the year. And then Q4 is one where we have got group pace down 8%. So as Tom mentioned, you know, if you exclude a couple of properties, you know, we are certainly up, but I would say overall portfolio is down slightly. The big driver for that is Q4. And so while there is work to be done and there is certainly some potential upside in terms of pickup, in-the-year, for-the-year pickup, I think that is kind of where our conservatism comes in as well. We certainly think we have got about $20,000,000 or so of revenue more pickup than last year. And so when we have seen kind of last couple of years how things have gone, we certainly want to take a little bit more cautious tone to that, looking at the pace being down about 8% for group in Q4. So that ends up, you know, making Q4 a little bit more closer, we think, to the bottom of the range for sure.
Rich Hightower: That is great color. Thank you. And I guess my follow-up is a follow-up on the expense side of it. So you have got a 2% to 3% kind of total OpEx guidance for the year. I think we heard earlier in the week that, you know, labor, you know, could run around four to five. And so just how do you feel about the potential flex on that guidance range? And also, think within the context of a union renegotiation in New York later this year. Thanks.
Sean M. Dell'Orto: Yes, you are right. We are in that low single-digit kind of growth. And certainly, with the CBAs that have been renewed or ultimately upcoming, we certainly see something in the mid-single digits type growth as you talk about with labor. But offsetting that, you have got, again, if you are kind of looking at top line and revenue-based type of fees and everything else, you are going to see lower end of the range there. We talked about doing deep dives at our properties last year. A lot of that came through multiple, you know, kind of the back half of the year, and so we certainly get the benefit of the full-year impact of that this year. So that is a nice little offset, we think, as well, to the labor growth, as well as, I think, fixed costs will continue to be one where we see certainly below inflationary type growth. Insurance, you know, another good year. You know, no big claims certainly from us, but, you know, I think across the board there, with events from hurricanes and the like. Absent the fires in LA in the beginning of the year, but ultimately, it is not to a point where I think, you know, underwriters will need to kind of look to grow their premiums. I think it will certainly be a favorable market. We certainly expect to see continued improvement there as well along with, you know, with taxes, we think would ultimately, while it can be choppy at times, you know, ultimately be in check for the year. So those are, I think, sort of some of the offsets that get us down to what we are talking about.
Rich Hightower: That is great. And congrats on the big promotion, by the way.
Sean M. Dell'Orto: Thank you. Appreciate that.
Operator: The next question comes from the line of Ari Klein with BMO Capital Markets. Please proceed.
Ari Klein: Thanks and good afternoon. Just a little on the non-core asset sales, what is the level of interest you are seeing in those assets? And how quickly do you think you can move there? And then obviously, focus is on selling those non-core hotels. But is there or could there be some consideration to selling any of the core hotels if an opportunity arose?
Thomas Jeremiah Baltimore: Ari, a lot to unpack there. Let me try to frame it a little bit for you. We have been laser-focused, as we said, I think, a couple times in the prepared remarks, in continuing to really reshape the portfolio. I think it is important to remind listeners, you know, the core hotels account for 90% of the EBITDA in the company and 90% of the value. If you take sort of RevPAR, the core RevPAR is around $215 to $218. That is about 69% plus or minus higher than the non-core. The core hotels generate about $40,000 in EBITDA per key and 30% EBITDA margins, whereas non-core RevPAR of approximately $129 plus or minus, and about 14% margins and about $10,000 in EBITDA per key. So, I mean, a really stark contrast, hence the reason that we are so aggressively working, and we have been working. I think it is also important to note, you know, we have sold or disposed of 51 assets. And I think people sometimes forget that includes 14 international joint ventures in Dublin, in Brazil, two in Germany, The Netherlands, South Africa, many complex assets here in the U.S. So the team is skilled. The team is experienced. We have done it in the worst of times. We were selling during the pandemic. We have been selling post-pandemic. There are buyers. I think everybody knows that we are a net seller. And so in some situations, some of the assets have short-term ground leases or joint ventures or low tax basis. So, you know, every single one has a story. But we have got aggressive workstreams underway. Our investments team and our legal team are working incredibly hard. And we are confident that we are going to get it solved. We have made significant progress before. We can handle this. And the goal is to get as many of them, if not all of them, done this year. We do have a few that are involved in a dispute, obviously. So those will probably lag. But the other 10 hotels, we are aggressively working every day late into the evenings, and multiple discussions are underway. And we look forward to keeping investors informed, and we look for, most importantly, closing them, using those proceeds to pay down debt, and really reinvest back into the core portfolio where we are confident we can generate outsized returns. We believe, obviously, that we can generate higher yields from development projects than we can from acquisition projects at this time.
Ari Klein: Thanks for that color. And then maybe just a follow-up on Miami and the Royal Palm. How quickly or how much in front of the actual opening can you actually start to take bookings? Especially in front of a massive event like the World Cup? And then just the pathway towards getting to those stabilized EBITDA levels. How long do you think it takes to get there? Is it 2027, 2028, or beyond, I suppose?
Thomas Jeremiah Baltimore: Yes. Well, we are, I guess, first, we are confident obviously in being able to take what was $14,000,000 in EBITDA from a tired and certainly an asset that needed really a transformational renovation to $28,000,000 on a stabilized basis. We certainly would think a couple of years is not unreasonable, just given the extraordinary amount of development and activity occurring, and I do not need to tell anyone on this phone not only from a business standpoint, but the number of people relocating to the region as well. And proximate to us is probably $4,000,000,000 of development activity, not all of that hotels, but other asset classes as well. So we remain very, very bullish on Miami as we look out. Regarding your question, obviously, as to how quickly we can get open, we are in frequent contact, obviously, with both planning, both the approval process from the regulators, and as soon as we are ready and as soon as we get the signal, we will be up and running. We have kept, obviously, our general manager who is on every day. We have kept, obviously, the key leadership team of the operating group. So we will be able to pivot and move very quickly. And, again, as Sean noted in his prepared remarks, you know, north of 50% of the guest rooms are already complete. So we are making great progress and are working around the clock and going to do everything we can to make that date.
Operator: The next question comes from the line of David Brian Katz with Jefferies. Please proceed.
David Brian Katz: Morning or afternoon. Thanks for taking my question. If we are laying out a 2026 where you are likely to be successful getting divested of your non-core hotels, my expectation is those earnings levels are such where they would be meaningfully delevering events for Park Hotels & Resorts Inc. Do you think—without getting ahead of ourselves—2027 could be a year of potentially playing offense and maybe getting ready to buy something?
Thomas Jeremiah Baltimore: Nothing, David, would make me and this team more excited than to be able to make that pivot from playing defense to offense. And I think you really hit the nail on the head. We have been working our tails off, and as you know, you have been along the journey with us. And you have watched the effort. And I think there are a few doubters out there, but I think you can remind people through the pen of just the hard work and the heavy lifting and the complexity of work that we have done in reshaping, not only the 51 hotels that we have sold, but also keep in mind, we were self-operating five hotels, and we also had three laundry facilities that have subsequently been closed. So the team is tested. It is experienced. We share that belief. And the sooner we can substantially reduce the non-core so that it is no longer not only an overhang but even a discussion point, gives us the opportunity, I think, for consideration for rerating of the company, hopefully our multiple, and allows us to go on offense. There are a lot of interesting opportunities that I think are out there today, and I think there will be more in the future. And I think getting down to low twenties in terms of our core portfolio gives us a lot of optionality. The other thing to keep in mind is, you think about some of our core assets in Bonnet Creek and the two iconic resorts in Hawaii and all the capital that we are putting—I think about also what we are doing in Miami—we own all of that fee simple. Very rare. And all of that, we think, is also going to be advantageous for Park Hotels & Resorts Inc. and gives us a lot of optionality as we can think about where it makes sense to continue to grow and, in some cases, to monetize, if that makes sense.
David Brian Katz: It does. And it sounds like a couple of the assets are in some form of dispute, but is it reasonable to expect that most of the assets that are non-core are going to get done within 2026?
Thomas Jeremiah Baltimore: Yes. Yes. That is the goal. That is the mission. We know what is at stake, and we are working as hard as we can. Obviously, there are things that happen beyond our control, David, but I think you have seen the effort. You and others have witnessed the amount of work that we have done in this respect. And it has not been easy, but we are up to the task.
David Brian Katz: Got it. Thank you.
Operator: The next question comes from the line of Chris Jon Woronka with Deutsche Bank. Please proceed.
Chris Jon Woronka: Hey, good afternoon, guys. Thanks for taking the question. Maybe just to double-click back to the asset sales. I guess, Tom, is there a way—you are really talking about 10 hotels if we exclude the three leases. Is there a way you could maybe bucket the type of buyers that you are working with or characterize them? We see headlines about isolated struggles on the private side, and investors are wondering whether any of that is a roadblock to moving any of those assets.
Thomas Jeremiah Baltimore: Yes, Chris, it is a great question. I would say one thing globally. There is plenty of equity capital. That is the first comment. The second, there is plenty of debt capital and private credit. So there is no issue there. There are also interested buyers, whether they be small family offices, owner-operators, or deep value entrepreneurs. And look, some of the buyers tend to have a little sharper elbows in this kind of situation because they realize in some cases these are deeper turns and some reposition opportunities. But there is more than an adequate buyer pool out there. Some markets are a little tougher. I would say, obviously, Chicago and LA are a little tougher than San Francisco right now for all the obvious reasons. But there are buyers. Not our first rodeo. It is up to us to figure it out and solve it. You do not want to hear excuses. Our investors do not want to hear excuses. And we know what is required to do. And at the same time, we have got to make sure that we are getting fair value and that we are executing as quickly and as efficiently as we can. But there are workstreams underway on all of them. There are some that have short-term ground leases or low tax basis. It is a little bit of all of that. But that is no different than what we experienced candidly within the 51 assets that we have sold, particularly some of those more complicated international assets that we sold a few years ago.
Chris Jon Woronka: Fair enough. Thanks, Tom. Then as a follow-up, obviously, you have the New York labor contract coming up. I think, Tom, you might have mentioned in the past that once you get through that and you kind of understand what the new math looks like, you might consider a longer-term plan there. That could include a lot of different things, maybe conversation with Hilton. Is there anything you could add to that at this point, as we move closer to the union reset?
Thomas Jeremiah Baltimore: Yes. Obviously, I am going to be careful here, Chris. You can imagine. I would make a couple of observations. We have got an excellent operating team on-site. You saw the results that we delivered last year. New York was incredibly strong. Record fourth quarter, up, you know, 5% to 7% for the year. We are encouraged as we sort of look out here in 2026. I do not think it is in anybody's best interest across the city for protracted negotiations or any kind of strike. We are one seat at the table. There are a lot of other owners also involved in this. You have also got, obviously, the World Cup, and we are going to be on the world stage. And I think, you know, as we think about tailwinds for us, being the largest hotel in the city, there is probably a little bit of upside opportunity there from a demand standpoint. So we are encouraged. We think it will get done. We have assumptions in our guidance as to what we think that impact will be. And obviously, we are not going to negotiate publicly, but we think we have got it covered from that. And as we think about the hotel, we are doing some modernization work on the infrastructure. We will then huddle with Hilton. We will look internally as to what we think makes the most sense. But no doubt, when you think about you have only got really two big boxes in New York that can handle large groups, we think that gives us a unique positioning and a unique opportunity for us over the intermediate and long term. And, again, we had an outstanding year in 2025, and we are very, very encouraged as we look out 2026 for the New York Midtown.
Chris Jon Woronka: Very good. Appreciate all that color. Thanks.
Operator: The next question comes from the line of Daniel Brian Politzer with JPMorgan. Please proceed.
Daniel Brian Politzer: Hey, good afternoon, everyone, and thanks for taking my questions. First, I just want to touch on the RevPAR range. It came in a little bit lower than we were expecting. It sounds like there is a fair degree of conservatism in there. You are baking in the possibility of macro and political uncertainty. But perhaps you could paint a picture of the areas of conservatism in the guide, specifically as it relates to some of the properties or markets where you are most excited.
Sean M. Dell'Orto: Certainly. Look, I think again, I will start with just from a macro standpoint in terms of—I talked about the quarterly cadence with Rich earlier and just kind of what that and it being down 8% means. When you think about Q4, that is kind of where a good point of conservatism would be. You think about where we see some of that softness in Q4. It is back to Hawaiian Village. It is down about 50% on pace in Q4. Midtown, while it has got a good setup for the year overall, down 6% for the year in pace. Its weakest quarter is Q4. So I think going into that, that is where we kind of feel—they are obviously bigger impact hotels. We continue to find a way to make sure that we use caution against some of the near-term in-the-year, for-the-year pickup trends as we get through the rest of the year. But, yes, there is certainly a case to be made that things could be better. Ultimately, based on what we have seen in the past, those are the time period and markets we are a little bit more hesitant on right now.
Thomas Jeremiah Baltimore: I would also add, if you sort of step back, you can paint a rosier picture. The tailwinds for 2026 are encouraging. We all expect a more accommodative Fed and perhaps lower interest rates. We are lapping Doge, Liberation Day, government shutdown. You have got the major events, obviously, World Cup. You have got America 250 celebrations. Deregulation, fiscal stimulus, that is all encouraging. We have got the massive AI investment cycle, and what we all hope and expect will be productivity gains at some point. Easing inflation—did not show quite that way today in the PCE report—but there are also risks out there. You have got geopolitical, inflationary pressures are still there. International travel really has not rebounded yet. We are seeing some green shoots, but we are certainly still down pre-pandemic. And the consumer is cautious, and we have got a K-shaped economy right now. So we think it was prudent to be conservative and cautious for all the reasons that Sean outlined, particularly quarter by quarter, and the macro. Yes, you should think about tailwinds, but there are some headwinds out there. And if you think about what has happened the last few years in the sector, the first quarter came out to be pretty good. And then, for many of us, if not all of us, we saw somewhat of a downward trend. So we think right now it makes sense to just be a little more measured, a little more cautious coming out of the box. But we are crystal clear as to the business priorities for Park Hotels & Resorts Inc., what we are focused on: selling non-core, investing in our core portfolio, paying down debt, looking for all of the operational efficiencies we can, and really outperforming. We would rather have a lower bar and outperform. And we are aligned as a management team there and really focused on continuing to deliver for shareholders.
Daniel Brian Politzer: Got it. Thank you. That is helpful. And then just for my follow-up, on capital allocation and leverage. Sean, you mentioned the target of five times in the next couple of years. How do you think about the near-term allocation of capital between project and investment opportunities, share repurchases, or even the dividend?
Sean M. Dell'Orto: Well, I think as we sell the non-core, we have been focused on redeploying that capital towards deleveraging. So that is the main focus and certainly helps bring us to that target. With that, the investments we made already and that we continue to make with things like Royal Palm and some other projects we have lined up, we think those drive nice returns for us, and over the next couple of years as those ramp up along with a longer recovery in Hawaii back to kind of where we were, achieving EBITDA levels in 2023. Those are the things that we think organically get the growth to help bring us towards that five times target.
Daniel Brian Politzer: Got it. Thanks so much.
Operator: The next question comes from the line of Cooper R. Clark with Wells Fargo. Please proceed.
Cooper R. Clark: Great. Thanks for taking the question. Curious if you could speak to the RevPAR uplift from the World Cup and America 250 celebration that is currently embedded in guide and if, on the World Cup, that uplift is mainly just coming from the Hilton Midtown asset?
Sean M. Dell'Orto: Yes. I think for the full year, for the portfolio, the impact, we estimate somewhere in that 30 to 35 basis points. Probably about 20 of that or so would come from New York, another, call it, 10 from Boston and five from kind of other markets that are not as big for us but that ultimately obviously have matches going on there.
Cooper R. Clark: Great. Thanks. And then appreciate some of the earlier color on individual projects and puts and takes, but curious if you could talk about the total RevPAR disruption and EBITDA disruption from renovations this year. How that compares to 2025? And then maybe how we should be thinking about potential tailwinds from renovation in 2027 as you look out?
Sean M. Dell'Orto: Yes. Certainly. I mean, obviously, Royal Palm is the big one. It is certainly a big benefit. It certainly helps the portfolio in the back half of the year after it opens up. In the first part of the year, you are talking about 300 basis points of RevPAR impact within the quarters. Altogether, though, if you kind of remove Miami, it just has about a 30 basis point impact to the full-year guide. So it is a little bit of first half, second half there. Other projects are not nearly as disruptive to the portfolio, maybe to the tune of 20 to 30 basis points of impact. Certainly, going forward, clearly, Miami will continue to have an outsized impact to the portfolio. We certainly expect to see that in kind of 100-plus basis point positive impact to the portfolio going forward as it ramps back up. And I think certainly we expect to see some nice recovery in the Hawaiian assets from the investments we made, and New Orleans already is getting good reception for meeting planners, winning business based on the product we have there. We certainly expect that to be a nice tailwind for us over the next year or two.
Cooper R. Clark: Great. Thank you.
Operator: The next question comes from the line of Robin Margaret Farley with UBS. Please proceed.
Robin Margaret Farley: Great. Thanks. I just wanted to get a little more color around the new project in Hawaii, the renovation. You mentioned $1,000,000 to $2,000,000 of disruption in 2026. So I think that starts midyear. If we think about what that tower specifically generates in EBITDA, would that mean sort of $3,000,000 to $4,000,000? And where do you think that goes after the renovation? And then, if I remember at Hilton Hawaiian Village, there is an underdeveloped parcel there. If there were stores or something on it that I think you have talked about as being a site for potential future development. Does the additional renovation here in Hawaii suggest more investment going forward in Hawaii?
Thomas Jeremiah Baltimore: Yes, Robin, lots to unpack there. Listen, I think the big message is we are absolutely committed to Hawaii, particularly Hilton Hawaiian Village. Twenty-three acres, fee simple, iconic. We have obviously renovated the Tapa Tower, 1,100 keys. We have just finished Rainbow Tower, north of 800 keys, plus or minus. Ali'i Tower, as Sean mentioned, 351 keys. We think we can add another three keys there. It is self-contained, so it is a higher-end product on the campus at the village there. And so we really think that this is the window to renovate that. Obviously, there is a gym, a self-contained restaurant. So we really believe that the window that we have identified, that the disruption will be minor, the couple million dollars that we mentioned, and that this is the window to get it done. So excited about it. Thrilled about it. It is really separate from the AMB Tower. The AMB Tower is more opportunistic. We wanted to grab that last site. We are still finishing up the final entitlements. We have no intention of proceeding with that project at any time soon until, obviously, demand has fully recovered. We think that is a long-term, and I emphasize long-term, play at a future date. We have no intention of proceeding with that at this point. But Ali'i Tower, we think, is prudent. We think that is going to continue to really give not only tailwind but significant lift and a way to distinguish the property even further from its competitive set. So we are excited about getting that done. And as Sean noted in his prepared remarks, north of 80% of the rooms at what is already a 2,900-room campus and village would be completed and fully renovated, which we think really helps us as we look to 2027 and beyond. So, hopefully, that gives you a good framework.
Robin Margaret Farley: Very helpful. Thank you. Just one quick follow-up on the Ali'i Tower. If I remember, it has its own entrance and pool area. Is there a thought or potential for that to be a different brand or like a different price point after the renovation, a hotel within a hotel?
Thomas Jeremiah Baltimore: Yes. It is certainly something that we have looked at from time to time. No doubt it will have an elevated price point. Whether or not it is a hotel within a hotel is something that the asset management team here at Park Hotels & Resorts Inc. and our operating partners at Hilton will look at. We have studied that from time to time. It clearly is the most elevated product, and we are going to take it to the next level. And I am really, really excited about the work that is going to commence there and get done, certainly by 2027.
Robin Margaret Farley: Great. Thank you.
Operator: The next question comes from the line of Jay Kornreich with Cantor Fitzgerald. Please proceed.
Jay Kornreich: Hey, thanks so much. Obviously, a lot of ground already covered here, but just curious on the out-of-room F&B spend, which has been quite strong. What are you seeing from customers and groups there and how much revenue growth could there be from the out-of-room spend this year?
Sean M. Dell'Orto: Yes. Sure. I mean, you are right. It has been very strong. I would say on total, it is probably about 40 to 50 basis points above where our RevPAR is, translating to total RevPAR. And we think the same this year as we think about the guide as well. Big drivers: in-house group as well as even SMERF will help to drive banquet and catering a decent amount this year. Outlet spend in the resorts has been strong, headlined by our Dorada restaurant, for example, in Casa Marina, which we opened up last year and drove outlet spend up 40% in that property. It is now fully open for the high season this year. So we expect to see continued growth in those areas. Other things are a little bit more in line—single-digit, low single-digit type growth—whether it is parking and other fees. But for the most part, it is banquet and catering. The groups continue to spend. We do not see much pressure from that, as well as in the resorts—certainly the higher-end properties—you see the benefits of the higher-income guests who are spending in the outlets.
Jay Kornreich: Okay. Great. I appreciate the color. I will leave it there. Thank you.
Operator: This concludes the question-and-answer session. I would like to turn the call back over to Thomas Jeremiah Baltimore for closing remarks.
Thomas Jeremiah Baltimore: Well, I appreciate all of you taking time today. I look forward to seeing many of you at the Citi Conference in another week or so. And I also just want to take a moment to congratulate my partner, Sean Dell’Orto, on his promotion. Well deserved. Sean has been just an extraordinary CFO, a great business partner, great leader. I know that I speak for the Board and myself. We are thrilled that Sean is taking on the COO title in addition to the CFO title. I look forward to working with him for many years to come. So congratulations, Sean. And I look forward to seeing all of you in the near future.
Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.