Park Hotels and Resorts Reports Strong Q4 Growth That Is Slightly Ahead of Expectations

Park Hotels and Resorts reported results that were slightly ahead of our expectations, leading us to reaffirm our $26.50 fair value estimate for the no-moat company. Occupancy improved to 67.7% from 52.1% in the fourth quarter of 2021, though that is still below the 80.6% level reported in the fourth quarter of 2019. Average daily rate increased 12.7% year over year and 8.4% over the fourth quarter of 2019. As a result, revenue per available room, or RevPAR, increased 46.7% year over year, which is slightly better than our estimate of 41.7% growth and is just 8.9% below the 2019 level. EBITDA margins improved 620 basis points year over year to 25.8%, also slightly better than our estimate of EBITDA margins of 24.6%. Park reported adjusted funds from operations, or FFO, of $0.45 per share in the fourth quarter that came in 4 cents above our $0.41 estimate and 40 cents ahead of the $0.05 figure the company reported in the fourth quarter of 2021.