Greetings and welcome to the Park, Hotels and Resorts First Quarter 2025 Earnings Conference Call. At this time, all participants are in the listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to turn the floor over to your host, Ian Weissman, Senior Vice President, Corporate Strategy. Ian, please go ahead.

Thank you, operator, and welcome everyone to the Park, Hotels and Resorts first quarter 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 with the SEC, specifically the most recent reports on Form 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information such as FFO and adjusted EBITDA. You can find this information together with reconciliations for the most directly comparable GAAP financial measure in this morning’s earnings release, as well as in our 8-K 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 basis. This morning, Tom Baltimore, our Chairman and Chief Executive Officer, will provide a review of Park's first quarter performance and strategic initiatives as well as updates on our 2025 outlook. Sean Dell’Orto, our Chief Financial Officer, will provide additional color on first quarter results and 2025 guidance. Following our prepared remarks, we will open the call for questions. With that, I would like to turn the call over to Tom.

Thank you, Ian, and welcome, everyone. I'm pleased to report that we delivered better-than-expected performance in the first quarter with RevPAR essentially flat despite a tough comparison to last year when our portfolio significantly outperformed in almost every market, resulting in nearly 8% RevPAR growth compared to the first quarter of 2023. Our Bonnet Creek complex in Orlando and Casa Marina resort in Key West continued to lead the portfolio following their transformative renovations with first quarter RevPAR increasing by 14% and 12%, respectively, and we were very pleased to see broad-based strength in several of our core markets with Miami, New Orleans, Puerto Rico, Washington, D.C. and San Francisco reporting above industry average RevPAR gains. Results from our Hilton Hawaiian Village Hotel, which continues to recover from the labor strike last fall, offset these gains, causing a 420 basis point drag on our first quarter results. From a capital allocation perspective, it was another productive quarter as we remain laser focused on allocating capital to unlock the embedded value in our portfolio and maximize shareholder returns. We initiated over $80 million of capital improvements during the quarter, while we plan to execute the second phase of renovations at both of our Hawaii hotels during the third quarter alongside with the second phase of main tower guest room renovations at the Hilton New Orleans Riverside. We're also excited to announce the upcoming $100 million transformative renovation of the Royal Palm South Beach, Miami. With the hotel having recently suspended operations, construction is expected to begin within the next few weeks. The renovation will include a complete refurbishment of all 393 guestrooms, along with the addition of 11 new rooms. All public spaces will be reimagined, including a new lobby bar, reconcept of food and beverage outlets and expanded meeting spaces designed to enhance the overall guest experience. Forecasted returns are in excess of 15% to 20% with the expectation of doubling the hotel's EBITDA once stabilized. In 2025, we expect to invest a total of $310 million to $330 million on capital improvements as we continue to reinvest in our iconic portfolio with the confidence that we can generate higher development yields compared to acquisition yields. We also achieved a major milestone in the entitlements process for the planned 515 room tower and related campus expansion at Hilton Hawaiian Village. In mid-April, the City Council of Honolulu approved our discretionary entitlement applications for the project, subject to certain conditions, which we expect to be able to satisfy. We also expect to receive final administrative approval of the project by the end of this year. Additionally, given the historically wide disconnect between public and private market valuations, we remain active in repurchasing shares during the quarter at a material discount to net asset value, having bought back approximately 3.5 million shares for a total purchase price of $45 million and approximately 11.5 million shares over the past year. Finally, despite a very challenging transaction market, we continue to make progress toward our strategic initiative of selling $300 million to $400 million of non-core hotels this year. We have several assets in various stages of the marketing and disposition process, including a pending sale of a non-core hotel at very attractive pricing. However, given the current market uncertainty, we make no assurances as to whether or when the transaction will close. As a reminder, since 2017, we have sold or disposed of 45 hotels for over $3 billion, an effort that has materially reshaped our portfolio and strengthened our long-term growth path. Turning to operations. We are very pleased with the performance of our Bonnet Creek complex in Orlando, following our $220 million comprehensive renovation and meeting space expansion project. Results for the complex continue to come in well ahead of expectations with a 32% RevPAR increase in Q1 at the Waldorf Astoria, driven in large part by a surge in transient revenues of nearly 65%, while the hotel grew market share by nearly 30%. Looking ahead, the outlook for our Orlando hotels remains very strong, with group revenue pace up 9%, while the overall market is expected to witness tailwinds from the opening of Universal's new Epic Theme Park, which is anticipated to accelerate leisure transient demand into the market after its expected opening this May. EBITDA for the complex is currently forecasted to exceed $90 million in 2025, a $30 million increase over 2023. In Key West, Casa Marina delivered another strong quarter with RevPAR up 12%, driven by a 680 basis point increase in occupancy and nearly 4% growth in ADR despite lapping an impressive first quarter performance last year when RevPAR growth was over 34% compared to 2023. The hotel also continued to outperform its competitive set, posting a RevPAR index above $112 million. At the reach, RevPAR held steady year-over-year, following a 7% increase in the first quarter of last year over 2023. The hotel continued to outperform, achieving an impressive RevPAR index of 119, exceeding its competitive set in March by nearly 300 basis points in occupancy and nearly $100 in rate. As we move through the second quarter, we are seeing continued solid performance from both Key West properties with RevPAR expected to trend up, low single digits fueled by Casa Marina's continued momentum, strong group booking patterns and the favorable timing of the Easter holiday shift into April. Turning to Hawaii. RevPAR across our two properties declined by 15% during the quarter as our Hilton Hawaiian Village Hotel continues to ramp up following the labor strike in Q4, and marginally softer inbound travel from abroad also weighed on results with arrivals from Japan down 6% and Canada down 1.5%. However, we were very encouraged that U.S. domestic visitation remained flat year-over-year, supported by increased airlift from major U.S. carriers including new domestic routes into Honolulu announced by both Delta and American earlier this year, which continues to drive healthy inbound travel from the Mainland. At our Hilton Waikoloa Village Hotel in the Big Island, RevPAR declined just 2.5% during the quarter, while Q2 RevPAR growth is expected to accelerate to mid-single-digit range driven by the nearly 90% increase in group revenue pace during the quarter. Additionally, we continue to see benefits from our recent capital investments at both of our Hawaii hotels. At Hilton Hawaiian Village, we completed Phase 1 of the Rainbow Tower renovation in February, which included a full upgrade of 392 guestrooms and the addition of 12 new guest rooms at Waikoloa Village. Phase 1 of the Palace Tower renovation was finalized, upgrading 197 guestrooms and expanding the inventory with six new guest rooms. We were pleased to see meaningful rate premiums of 25% to 30% with the renovated rooms at both resorts in the first quarter, a clear reflection of the quality and impact of the investments made at both resorts. We plan to kick off the final phase of both the Rainbow Tower and Palace Tower guestroom renovations during the third quarter, with the project extending into early next year. Looking ahead, the long-term outlook for Hawaii remains very favorable, supported by limited new supply expected through at least 2029 and the anticipated improvement of inbound travel from Japan as the dollar-yen exchange rate normalizes. Hawaii is one of the most dynamic and resilient resort markets in the country with over 3,500 simple guestrooms and a huge discount to replacement cost, Park remains well positioned to deliver above-average long-term growth for shareholders. With respect to fundamentals over the balance of the year, the near-term outlook for U.S. lodging fundamentals remains uncertain as the ongoing global trade war continues to delay decision-making and amplify geopolitical tensions, causing booking windows across most segments to narrow significantly, disrupting cross-border leisure travel load. April results have been mixed with preliminary RevPAR growth of 1.6%, driven by double-digit gains in New York, Orlando, and San Francisco, which benefited from exceptionally strong group trends, while preliminary RevPAR in Puerto Rico increased by 25%, offset by weaker performance in Hawaii, Chicago, Seattle, New Orleans and Washington, D.C. Despite the modest decline in a select few markets, we continue to see pockets of strength in many of our resort and urban hotels. While concerns persist about a significant slowdown in both the international and government-related demand, neither has had a meaningful impact on our performance. International demand represents just 10% of total room nights, while government-related business accounts for only 3% of overall room rates. Based on our current forecast, Q2 RevPAR growth is expected to be relatively flat year-over-year or approximately 290 basis points lower than initial forecast with Hilton Hawaiian Village representing roughly 80% of the reduction. Despite ongoing macro uncertainty, we remain laser focused on factors within our control and continue to work closely with our operators as they develop contingency plans for managing operating expenses in the event of further demand softening. Additionally, while the transaction market remains episodic, we will remain prudent capital allocators, advancing our strategic objective of selling non-core hotels to further deleverage the balance sheet and support our robust ROI pipeline. Sean will provide greater details about guidance in his remarks. Overall, I am incredibly proud of the progress we've made in elevating the overall quality of our portfolio, positioning the company for sustained long-term growth and returning capital to shareholders. Our targeted capital investments are delivering strong results, reinforcing the overall quality of our portfolio and the significant embedded value within our real estate. And with that, I'd like to turn the call over to Sean.

Thanks, Tom. Overall, we are pleased with our first quarter results, with Q1 RevPAR exceeding expectations with reported results of $178, representing a modest 70 basis point decline over the prior year period. Difficult year-over-year comparisons were the primary driver of the decline following last year's nearly 8% growth rate with hot occupancy falling by 210 basis points during the quarter, although offset by continued rate strength with ADR up over 2.3%. Total hotel revenues for the quarter were $608 million and hotel adjusted EBITDA was $151 million, resulting in a nearly 25% hotel adjusted EBITDA margin. Total expenses were up 3.3% during the quarter with the majority of the increase related to nearly $10 million of employment tax credits and other relief grants received in Q1 of last year. Excluding these items, total comparable operating expenses increased just 1% over the prior year period. Adjusted EBITDA for the quarter was $144 million and adjusted FFO per share was $0.46. With respect to our dividend, on April 15, we paid our first quarter cash dividend of $0.25 per share and on April 25, we declared our second quarter cash dividend of $0.25 per share to be paid on July 15 to stockholders of record as of June 30. The dividend currently translates to an annualized yield of approximately 10%. Turning to guidance. As we navigate the increasingly complex global economic landscape and evaluate the impact of the escalated trade war on global travel, we have revised our full year outlook to reflect a modest slowdown in demand. As a result, we are lowering our RevPAR growth forecast by 100 basis points at the midpoint to a new range of negative 1% to positive 2%, maintaining a wider than normal range to account for the ongoing uncertainty. Note that most of this adjustment reflects a slower-than-expected recovery at Hilton Hawaiian Village, coupled with modestly weaker transient demand over the next quarter or two. Hilton Hawaiian Village, along with the overall portfolio will benefit from easier year-over-year comparisons in November and December following last year's labor strike there and in a few of our other markets. This, along with an 18% increase in Q4 group revenue pace for the portfolio should help to support low to mid-single-digit RevPAR gains during the fourth quarter. With respect to earnings, we are lowering our adjusted EBITDA forecast by just 3% at the midpoint to a new range of $590 million to $650 million. While hotel adjusted EBITDA margin range is now 25.6% to 27.2% or down just 50 basis points from our initial range. And finally, adjusted FFO per share was reduced by $0.11 at the midpoint to a new range of $1.79 to $2.09 per share. Additionally, as a reminder, and included in our original guidance, renovation-related displacement at the Royal Palm South Beach Hotel is expected to reduce RevPAR growth by approximately 110 basis points for the year. This concludes our prepared remarks. We will now open the line for Q&A. To address each of your questions, we will ask to limit yourself to one question and one follow-up. Operator, may we have the first question, please?

Our first question today is coming from Floris Van Dijkum from Compass Point. Your line is now live.

Hey good morning guys. Thanks for taking my question. Tom, maybe if you could comment a little bit on the planned asset sales and how confident you are in the current market environment and being able to achieve decent prices as well as having willing buyers.

Yes, it's a great question, Floris. And look, we've got tremendous uncertainty right now for all the reasons that we all know, geopolitical; obviously, the tariffs, obviously leading to trade wars and uncertainty is the enemy of decision-making. So I think for many business leaders men and women there probably hesitant, they're probably pausing in many situations and certainly being cautious. No difference than what certainly we're seeing and probably a lot of our peers, hence the reason that I think everybody has been sort of a little more cautious on forward guidance. I would say that this team has really separated itself in being able to transact even under the worst of circumstances. If you think back since the spin, as we pointed out, we have sold or disposed of 45 hotels, including 14 international for north of $3 billion. We do have one asset under contract, very attractive pricing. And look, we are cautiously optimistic, but we're not going to comment and give any details until it closes. We just think that's the prudent thing to do, but we also have a number of other assets that are at various stages of the marketing process. There's plenty of liquidity. There's plenty of equity capital. There's plenty of debt capital and if I'm a small family office, owner-operator, midsized PE firm, these periods of dislocation, I think can be a really unique opportunity to certainly buy assets. So we are being very targeted. We're being very focused. And I think we've again demonstrated every year that we've been able to sell assets. We've raised the bar a little higher this year, but we're still working our butts off to get as many sales done this year as we can. And we are confident that we will achieve our objectives.

Thanks, Tom. Can you provide more details about Hawaii? RevPAR was down around 15% in the quarter, and it had a 420 basis point impact on overall results. Considering the strike disruption in the fourth quarter and the recent renovations, how quickly do you anticipate a recovery? Also, how reliant are you on international tourists for that recovery?

The ramp-up is taking a bit longer as we recover from the strike, which lasted 45 days and certainly impacted us. We are seeing some sequential improvement; in Q1, Hilton Hawaiian Village was down approximately 15%. In April, we saw a decrease of about 7%, and we believe the quarter will likely show a decline in the high single digits to low double digits. However, we’re optimistic about the third quarter, expecting mid-single-digit growth in RevPAR. Additionally, we anticipate a favorable comparison in Q4, which supports our outlook for strong performance. Regarding Hawaii, our confidence for the long term is robust, considering the limited supply growth and the market's historical performance, where RevPAR has outperformed the U.S. average by 120 basis points over the past two decades. We are taking a strategic and thoughtful approach to our renovations, with Carl Mayfield and his team being among the best in the industry, ensuring minimal disruption as we continue our phased renovations. We have secured all necessary supplies and are on track to complete these renovations on time and within budget, as we have successfully managed in the past, especially given the nature of our portfolio.

Thanks, Tom. Appreciate it.

Thank you. Next question is coming from David Katz from Jefferies. Your line is now live.

Hey good morning everybody. Thanks for taking my question. Look, I wanted to just follow up on the prior conversation about asset sales and the market will be what it will be, but it does look like you've sort of trimmed your core hotels to a smaller number, right, 25 to 20, if I'm seeing that correctly. Maybe we should just talk about that and sort of what's going on with the 5 and sort of how we're thinking about that change, please?

Yes, that's a great question, David. As a team, we have been working very hard to reshape our portfolio. In terms of capital allocation, we are focusing on the top 20 assets, which represent about 85% to 90% of the company's value. We have decided that these are our core assets, and for the remaining assets, we aim to recycle that capital by selling them. The proceeds will be used to pay down debt and reinvest in strategic projects in locations like Hawaii, New Orleans, and Miami. Additionally, during periods of market dislocation, we are prepared to buy back stock. Over the last 2.5 years, we have bought back 26.5 million shares, demonstrating our prudent approach to capital allocation. We are confident in those 20 hotels as our core and are actively working to sell the non-core assets. The strategies may vary; for instance, last year, we closed a hotel in Oakland due to its non-performing status, and we are searching for solutions regarding other short-term ground leases. Our goal is to streamline our core portfolio down to those 20 hotels, where the company’s true value is located.

Understood. If I could follow up quickly regarding the planned CapEx, particularly for Miami, which is significant, it appears that you've already started this process. Could you discuss how much of that cost and the timing are already determined, considering the limited visibility in the market? Thank you.

Yes, that's a great question, David. As I mentioned earlier, you have seen what we've accomplished in Orlando with Bonnet Creek and its successful performance despite its complexity. Respectfully, there's no other team in the lodging REIT industry that has the same level of experience and capability. In Miami, we have carefully studied the situation over the past year. We have taken control of several subcontractors, secured a general contractor, obtained the necessary permits, and suspended current operations. We are in the process of preparing the site and installing fencing, and we are confident we will complete everything before June of next year for the World Cup. We are excited about this complete transformation, which includes upgrades to guest rooms, public spaces, the lobby, the pool area, and food and beverage outlets. We believe there's a significant opportunity not only for 15% to 20% unlevered returns but also to potentially double our EBITDA. With high-end competitors entering the market like The Albers, Rosewood, The Aman, and Andaz, we see a great chance to significantly increase rates, especially given the prime location mid-beach next to the Loews. While we acknowledge some near-term disruption, we believe this is the right decision for the intermediate and long term, providing real value creation for our shareholders. We are strongly convinced that we can achieve higher development yields compared to acquisition yields, which aligns well with our team’s strengths.

Appreciate it. Thanks very much. Good luck.

Thank you. Our next question is coming from Duane Pfennigwerth from Evercore ISI. Your line is now live.

Hey. Thanks. Hey, good morning. Just wonder if you could give us your updated views on markets that you expect to lead this year and the underlying demand drivers and correspondingly the markets that you expect will lag in your portfolio, and has that pecking order changed since one quarter ago?

Well, look, we've talked about Hawaii. We think obviously Hawaii is going to continue to ramp up. The Hilton Hawaiian Village obviously is on that. Given the post-strike Hilton Waikoloa, we still are very bullish on that. We've obviously got significant increase in group business there, what's happening in Orlando and the double-digit increase that we've seen at Bonnet Creek, we expect that's obviously going to continue to be a really strong performer. Key West, obviously, again, given the transformative renovations there and what we're doing and how well they did last year, we still continue to be very encouraged. New York City, I mean New York is up April 16%, 17% and we feel good about it in the second quarter. And it continues, obviously, you've had very little supply added in New York and continue to be cautiously optimistic there. Caribe has been on fire and continues to perform very well for us. There we're expecting obviously Denver, given the management changes that we've made there, certainly to see sequential improvement there as we sort of look out. So we're overall, if you think about the first quarter, taking out Hilton Hawaiian Village from that standpoint and given the tough comp, I mean it would have been obviously a very strong nearly 4% increase in RevPAR for us. And given the fact that we've been so disciplined and I give a huge credit to our asset management team to Sean's leadership as well. As we look on the cost side, I mean we were up about 3.3% in expenses, but when you take out the one time anomalies, we were only up about one for a little over 1%. So I mean it's not just the top line of those markets, but it's the discipline as well on the cost side. And so I think we've done a really good job on that front, and you'll see that kind of energy and effort to continue as we move forward.

Thanks, Tom. And if I could just follow up on one of those on New York. There's been so much intense media focus on potentially softer international inbound, less Canadian travel, etcetera. And so what do you think some of that media might be missing in terms of demand drivers to a market like New York? And thanks for taking the questions.

Yes, listen, New York, one of the great cities of the world, as we all know. And there's no doubt when you think about the frustration, the energy around the tariffs right now, there are going to be some obviously we saw a little bit of decline in the Japanese coming into Hawaii. That's still ramping up, but still, certainly still a little over 50% below where we were in 2019. International accounts for about 10% of our business overall. If you think about pre-pandemic inbound into the U.S. was about 79 million. I think we're back to somewhere between 70 million and 72 million. About half of that comes from Canada and Mexico. Mexico has been pretty consistent; it hasn't seen a fall off. You've seen a little bit of fall off in Canada. And we're all hopeful just given the strong alliance and relationship that will get resolved and that will sort of resume. But certainly, in the near term that is a little dilutive, but again for us it's less than 2%. So it's really not that significant to park and into our portfolio.

Thank you.

Thank you. Next question today is coming from Patrick Scholes from Truist Securities. Your line is now live.

Thank you, operator. Hi, good morning everyone. Question for you on the group pace. On the prior earnings release, it had been tracking six. Now it's one plus one for the year. I wonder if you can kind of give us an apples to apples for 2Q to 4Q. I know or suspect that Q1 benefited from the ether shift. So when you take that out, you sort of naturally the rest of your might have been softer. But how does that +1 for 2Q to 4Q compare to your prior projection? Thank you. Hopefully that makes sense.

Yes, Patrick, I believe so. Hopefully, we'll provide a response that aligns with your thoughts. Looking at the pace, I would say that for Q2, it’s roughly just slightly down 0 to 1%. For Q3, it’s a bit weaker, down 10%. Hawaiian Village is a significant factor in that, along with New Orleans and Chicago, which are both coming off strong Q3 performances from last year. Chicago had the D&C last year, so it's comparing to that. Aside from those markets, the overall group pace in Q3 appears to be pretty healthy. Q4 is expected to be a very strong quarter for us, up 18%. Many factors are contributing positively to this pace across the board, with not many properties pulling down the expected performance for Q4. In terms of near-term trends, I haven’t seen much decline. The definite bookings we have, which account for about 90% of our forecast, have remained stable. There have been occasional cancellations and some adjustments, but these have been balanced out by positive rebound in other areas. Overall, the group outlook for the year aligns well with our guidance, reflecting confidence in our year-end bookings, which likely isn’t unique to us. The sales teams feel optimistic, although, as Tom mentioned, the existing uncertainties have led to some hesitancy in decision-making.

Okay, so when you said confidence, you mean is confidence or more. Sounds like there's not confidence. I just want to be clear.

Thank you. I think there's confidence out there that to kind of pick up the remaining reach in the portfolio. We've obviously hedged a little bit of that in our guidance forecast, but anything too. I think the teams are generally positive on potentially transient side if to kind of cover for some of that.

Okay, thank you. If I could flip in one, one more. What are you seeing for a 26 and 27 group trends and how has that changed since you last reported? Thank you. And then I'm all set.

I won't speak to 27. For 26, we have seen a drop-off again. I think as you think through some of the decision-making issues we're dealing with, I think you're seeing that play into it right now. I think it's more kind of the early parts of 26.

Thank you. Next question today is coming from Smedes Rose from Citi. Your line is now live.

Hi. Thanks. It’s Smedes. I just wanted to circle back on the Hilton Hawaiian Village. Sounds like sort of quite a few moving pieces there. And so, I mean, do you think realistically you could come in ahead of what you did in 2024 there on an EBITDA basis? I think you did a little over 160 million. It seems like from what you're saying that might be hard to achieve. But I just kind of want to maybe, I'm not reading what your remarks are.

Yes. I mean it's hard to say right now. Smedes, could we get close to it? I think that's possible. But I think again, it goes back to the macro uncertainty. I mean if you get better visibility and better clarity and confidence resumes at a higher level, I see no reason that we don't get back closer to sort of more normalized behavior if we end up in an all-out trade war or something along those lines. And God forbid we head to a more softer and sort of recessionary-type environment. We are not seeing that at all. This isn't 9/11. This is not the great financial crisis. This is not obviously the global pandemic. But, assuming things sort of normalize or is close to normal then we're certainly well positioned, whether we get back exactly this year. We are very bullish on Hawaii over the intermediate and long-term fee simple, the barriers to entry. You can't replicate what we have. Obviously, negative supply growth over the last 20 years. Obviously outperformance from a RevPAR standpoint versus other resorts over the last 20, the last 20 years. So it's where if you're going to be over-indexed from our standpoint. You want to be over-indexed in Hawaii.

Okay, thank you. And then I just wanted to ask you. It looks like you took a $70 million impairment in the quarter. Can you just talk about what that was related to?

Yes. It's related to an asset, obviously, as our accounting. And as our team is to look at what we think to be the true value of that subject asset, we made the decision that it was appropriate to write it down and have recognized that accordingly.

Okay, so you can't say which one, I guess.

Yes, not at this point.

Okay, alright. Thank you.

Thank you, Smedes.

The next question today is coming from Chris Woronka from Deutsche Bank. Your line is now live.

Hey Tom, good morning. I want to revisit the asset sales for a moment. It seems everyone is interested in understanding favorable pricing outcomes. What is your definition of that? I assume it's based on some form of NOI or EBITDA, possibly factoring in avoided CapEx. I think that's the right perspective rather than using other metrics like pricing per room. Any insights you could share would be appreciated. Thanks.

Yes, that's a great question, Chris. First, the assets we're looking to sell are non-core. We're seeking attractive pricing, certainly at multiples higher than our current trading levels, which are quite low. We believe we can sell at a better multiple that will provide price discovery for the market while also saving on capital expenditures. This will allow us to strategically reallocate that capital back to our core portfolio, pay down debt, or buy back stock when it makes sense. Given the market dislocation, we've been active in all areas, managing our balance sheet and reinvesting in the portfolio as well as repurchasing stock. We're very confident that the transactions in the pipeline will be very attractive and accretive compared to our current trading position.

Okay. That's great to hear, Tom. And then as a follow-up, I think Sean may have mentioned that your comparable OpEx kind of ex the noise last quarter was just up 1%. We know that several of your hotels had some labor resets late last year that would have pushed that number up. So where are you finding the offsets to savings? And can that continue and kind of implementing any contingency plans with your operators? Thanks.

Yes, Chris, I'll address that. During our processes last year, we faced challenges with budgeting and identifying savings across the board, and I believe the teams have managed to navigate that successfully. A factor to consider here is the mix; lower occupancy combined with higher average daily rates has certainly contributed positively to our results in the first quarter. As we plan for contingencies in the future, we are actively collaborating with the operators. While there may be some uncertainty looking 90 days ahead, we are experiencing strong performance in the near term. However, it's a complex situation for the teams at the properties as they need to adapt their staffing in response to this dynamic. Overall, I think they're doing an excellent job managing staffing and efficiency, despite the challenges arising from some of the labor contracts we renewed last year. Looking ahead, we anticipate some offsets related to fixed costs, particularly in insurance, which is currently favorable for insurers. As we approach our renewal on June 1, we are optimistic about achieving a favorable outcome there. This perspective contributes to our strategy for maintaining expenses at reasonable levels. That said, we are still facing 4% to 5% wage growth, and we're actively seeking cost offsets wherever possible.

I want to acknowledge the strong leadership from Sean and our asset management team, who are working closely with our operators. It's also about getting back to basics and maintaining a relentless focus on how to mitigate and manage our challenges. During the pandemic, we faced serious difficulties, but we navigated through them effectively, comparable to anyone else in the sector. Our team is experienced and has encountered a wide range of situations. Those who make comments suggesting our costs will always be higher due to union influences are mistaken. With some additional research, they would see the discipline and talent within our team, which continues to drive our success. I'm very proud of them, and we expect to demonstrate even more strength when our insurance situation improves compared to our peers.

Okay, very helpful. Thanks.

Thank you. Your next question today is coming from Jay Kornreich from Wedbush Securities. Your line is now live.

Hi, thanks good morning. I wanted to first just drill down a little bit further in Orlando, which continues just to perform exceptionally well. And just curious if you can provide just further details as what's driving the strength there and how much of a positive tailwind to opening of Epic theme park in produce? And if there's any opportunity for Bonnet Creek complex to produce even more than the $90 million you forecasted?

Yes. We certainly expect that we will exceed the $90 million. It's just if you think about Orlando, people often think about Vegas that has about 45 million visitors. You've got 74 million visitors, plus or minus into Orlando. You have obviously, Epic where Universal has put in $6 billion or more. I think as the publicly disclosed number, the excitement around that, the first park to open in decades. You've also got Disney coming on the heels talking about another $60 billion plus or minus. Now I'm not sure all that theme park that's going to be some shifts in, but with that kind of backdrop, and given it's a strong hub for convention as well, we are very, very bullish on Orlando. Bonnet Creek, in particular, now given the additional meeting space that we added at both the Waldorf as well as Signia, we have the ability to be able to layer in groups that we didn't have the ability before and then also having a championship golf course. And of course, being a Condé Nast winner last year, a top 10 performer. We're getting rave reviews and the on-site management team is just continues to do an exceptional job. So we are very, very bullish both near term and over the intermediate and long-term in Orlando. And certainly, again, if you look over the last 20 years and sort of RevPAR growth over the national average, there are several markets, obviously led by Hawaii, Key West, Orlando, Miami, all markets that Park is anchored and where Park has a great footprint. We would encourage investors and listeners to do a little bit more work on that front and see that, and you'll see that there's a I think, a real competitive advantage for Park as we look out.

I appreciate all that color. And then just one more follow-up, just going back to more of the macro landscape. And just given the uncertainty right now, are you seeing any change in behavior from your transient customers since April, whether I guess to be corporates pulling back on business travel or business transient travel or changes in leisure customers traveling to or spending a resource? Or are you really just not seeing much change at all at this point?

We experienced a 3% decline in March, largely due to the timing of Easter. However, we anticipate that by the end of April, our numbers will exceed 1.6%. New York performed very strongly, up 18%, while Bonnet Creek saw an 8% increase, Caribe was up in the mid-20s, and Casa rose by another 14-15%. This situation is not indicative of a recession, although there is some caution and areas of softness. We all share these concerns amid the current uncertainty. While we'd prefer clearer visibility, the job market remains strong, as reflected in last week’s report. I hope that the ongoing trade discussions yield positive results soon, as this would enhance confidence moving forward.

Okay, thanks very much.

Thank you. Our next question today is coming from Robin Farley from UBS. Your line is now live.

Great. Thank you. My question was really kind of similar to the last question. In your intro remarks, you mentioned, I think you used the phrase modestly weaker transient. And then you talked about some of the challenges with the group, maybe some tougher comps later in the year. I guess if you had to sort of rank where the strength or softness is between group and leisure transient and business transient, how would you sort of break down? I mean, it sounds like, obviously, there's a lot going on in the world and maybe they're all a little bit softer than you thought? Or I guess if you were ranking the three. Thanks.

I believe the group side is showing strength with a solid foundation that eases concerns about our base in this environment. On the leisure side, excluding Hawaiian Village, we're seeing about an 8% increase for the month, and we performed better than our slightly reduced forecast by approximately 160 basis points. It feels like people are responding positively, reminiscent of the post-COVID period, particularly benefiting short-term transient and leisure markets. I would rank leisure second in potential opportunities, especially as we look into the summer. While there may be challenges, many markets are experiencing strong leisure demand during this season. Business transient, particularly from government and some other sectors, is under pressure, but corporate negotiated bookings are showing a narrow and solid performance despite a short booking window.

Thanks for the clarification, April. April would naturally perform well in many leisure markets due to Easter. Regarding May and June, which don’t have a significant calendar shift, do you believe leisure is still performing well beyond the Easter influence?

I would say that June is in a better position than May right now. May seems to be a weaker month for us in the quarter, while June has shown improvement with a stronger group presence and a better leisure profile.

Okay, great. Thank you.

Thank you. Your next question today is coming from Chris Darling from Green Street. Your line is now live.

Thanks, good morning. Tom, I wanted to go back to the discussion around capital allocation. Just curious how you think about pursuing incremental share repurchases relative to perhaps bolstering your liquidity position? Obviously, a more certain economic outlook today and you think about some of the debt maturities coming due next year.

Yes. Chris, it's a great question. Sean and I spend a lot of time and the team really steady. I mean, obviously, we'd like to the extent possible take proceeds. And if we're buying back stock, we want to do it on a leverage-neutral basis, we clearly want to continue investing back into the core portfolio as we've talked about it and obviously continuing to manage carefully the balance sheet. I mean we've got over $1.2 billion in liquidity. Please keep in mind, obviously, the CMBS loan for Hilton Hawaiian Village matures in November, December of next year. We have a plan, and we have optionality. Remember, during the pandemic, we did three bond deals. We pushed out maturities. We paid off all the banks, and all the banks made fees. We have great banking relationships. We're not reliant on the banks and we are carefully studying it. And you'll see significant progress made on that maturity this year, and we're confident that we'll get it addressed. So no fear or concern from that standpoint. Having said that, when you're trading at this kind of pricing, we certainly think buying back stock at these levels is certainly among the best investment decisions that we can make and buying back into this core portfolio at this kind of pricing. So it's a balancing act. I think we've demonstrated it, and we'll be careful and thoughtful about it. And I think we've demonstrated that over time.

That makes sense. Appreciate the thought. Thank you.

Our next question is coming from Dany Asad from Bank of America. Your line is now live.

Hi, good morning everybody. So maybe one more question on leisure if you don't mind. Are you seeing any different patterns of behavior from your consumers staying at your higher-end properties relative to non-luxury resorts?

Not in particular, Dany. I mean clearly, you certainly see better pricing out of the luxury side. You're certainly seeing places like Hawaiian Village, where we're opening up channels to obviously drive more volume there to guys we're trying to recover, which is attracting a little more of a discount leisure. But I think outside of that, I don't think the patterns have really changed much and the behavior.

Okay. And then one more, just your non-rooms revenue grew about 200 basis points ahead of RevPAR for the quarter. Was there anything unique to Q1 that would drive this? And just how should we think about RevPAR versus out-of-room spend for the balance of the year with the updated outlook?

We experienced a strong contribution from group catering, which increased by 9% in Q1. I estimate that this contributed between 50 to 100 basis points to our overall RevPAR. However, as we approach Q3, the group pace is slightly weaker. The overall strength for the year, particularly in Q1, can be attributed to a shift in the mix toward more in-house corporate and convention events. This year, we are seeing an improvement in food and beverage production from catering services. In contrast, the convention business primarily provides room blocks, which often leads to attendees dining elsewhere. This represents a significant change for us this year.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

We really appreciate everybody taking time today, and we look forward to seeing you all at upcoming conferences.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.