Loading...
01/11 12:01
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary highlights strong financial performance, strategic partnerships, and optimistic guidance. The company's focus on asset sales, cost reduction, and strategic investments, along with a positive outlook for key markets like Hawaii, supports a positive sentiment. Despite some challenges, such as market volatility and a potential government shutdown, management's confidence and clear strategic direction indicate a positive stock price movement. Considering the market cap, the stock is likely to see a positive reaction in the 2% to 8% range over the next two weeks.
RevPAR (Revenue Per Available Room) $181, representing a 6% decline over the prior year or down 5% excluding the Royal Palm South Beach. The decline was attributed to a meaningful drop in group demand, tough year-over-year comparisons, incremental disruption from Hawaii renovations, and softer leisure and government demand.
Total Hotel Revenues $585 million, reflecting the overall performance of the portfolio.
Hotel Adjusted EBITDA $141 million, translating into a hotel adjusted EBITDA margin of 24.1%. Despite softer top-line results, cost discipline kept expense growth relatively flat for the quarter.
Adjusted EBITDA $130 million, reflecting the company's operational performance.
Adjusted FFO (Funds From Operations) Per Share $0.35, indicating the financial health and cash flow generation of the company.
Liquidity $2.1 billion, achieved by extending and upsizing the corporate credit facility to address 2026 debt maturities.
Capital Investments $325 million deployed across best-performing assets with returns approaching 20%. This includes renovations and repositioning projects such as the Royal Palm South Beach, which is expected to double its EBITDA from $14 million to $28 million upon stabilization.
Expense Growth Relatively flat for the quarter, marking the third consecutive quarter with expense growth of 1% or less.
Dividends $0.25 per share for the fourth quarter, translating to an annualized yield of approximately 9%.
Royal Palm Renovation: A $103 million renovation and repositioning project in South Beach, Miami, expected to generate a 15%-20% IRR and double the hotel's EBITDA from $14 million to $28 million upon stabilization. Construction is on schedule and on budget, targeting reopening ahead of the 2026 World Cup.
Hawaii Hotels Renovation: Final phases of guestroom tower renovations at Hawaii hotels to be completed in early Q1 2026.
Hilton New Orleans Riverside Renovation: Second phase of guestroom renovations upgrading 428 guestrooms in the Main Tower, with remaining 489 guestrooms to be completed over the next 1-2 years.
Group Revenue Growth in Key Markets: Group revenue pace for Q4 is up 12% year-over-year, with double-digit increases in major markets like Orlando, New York, San Francisco, and Puerto Rico.
RevPAR Growth in Key Markets: Significant RevPAR growth in markets like San Francisco (14%), New York (4%), and Puerto Rico (12%).
Cost Discipline: Expense growth held flat for the third consecutive quarter, with less than 1% growth.
Credit Facility Upsizing: Corporate credit facility extended and upsized, increasing total liquidity to $2.1 billion to address 2026 debt maturities.
Portfolio Refinement: Focus on divesting 15 non-core hotels and concentrating ownership in 20 high-quality assets, enhancing portfolio metrics like RevPAR and margins.
Capital Recycling: Invested $1.4 billion since 2018 in core hotels, upgrading 8,000 guestrooms and repositioning strategic assets.
Decline in Group Demand: The company experienced a meaningful decline in group demand during the third quarter, driven by tough year-over-year comparisons, incremental disruption from renovations in Hawaii, and softer leisure and government demand.
Government Shutdown Impact: The extended government shutdown has negatively impacted both group and transient demand in several core markets, including Hawaii, D.C., and San Diego, reducing room revenue expectations by approximately $2.5 million and dragging October RevPAR performance by 180 basis points.
Renovation Disruptions: Ongoing renovation projects, such as those in Hawaii and Miami, have caused operational disruptions, impacting revenue and occupancy rates in the short term.
Softness in Leisure Demand: Weaker-than-expected leisure demand in the fourth quarter is further compounding revenue challenges, particularly in the context of the government shutdown.
Economic Pressures on Lower-End Consumers: Economic uncertainty and higher interest rates are placing pressure on lower-end consumers, potentially impacting demand for lodging services.
Transaction Market Challenges: The transaction market remains episodic, making it difficult to divest non-core assets and recycle capital efficiently.
Debt Maturities and Financial Obligations: The company faces significant debt maturities in 2026, requiring proactive refinancing and financial management to maintain liquidity and operational stability.
Q4 RevPAR Growth: Expected to range between negative 1% and plus 2%, or positive 1% to positive 4% excluding Royal Palm.
2025 Full Year RevPAR Growth: Expected to be down around 2% at the midpoint of a range between negative 2.5% to negative 1.75%, or down 1% at the midpoint excluding Royal Palm South Beach.
2025 Adjusted EBITDA Forecast: Lowered by $12.5 million at the midpoint to $608 million, within a tightened range of $595 million to $620 million.
2025 Adjusted FFO per Share: Expected to be $1.91 at the midpoint within a range of $1.85 to $1.97 per share.
2026 Outlook: Optimistic about 2026 and beyond, supported by expectations for lower interest rates, a more favorable regulatory environment, and a renewed investment cycle. Major events like the World Cup, Super Bowl, and Boston's 250th anniversary celebrations are expected to boost economic and travel growth.
2026 Strategic Investments: Investments in renovations and repositioning projects are expected to drive stronger economic and travel growth, with a clear path for RevPAR acceleration and sustainable long-term growth.
Group Revenue Pace for Q4: Currently up over 12% year-over-year, with double-digit increases for several major group houses.
2026 Major Events Impact: Events like the World Cup, Super Bowl, and Boston's 250th anniversary celebrations are expected to drive stronger economic and travel growth.
Fourth Quarter Cash Dividend: On October 23, a fourth quarter cash dividend of $0.25 per share was declared to stockholders of record as of December 31, translating to an annualized yield of approximately 9%.
Top-off Dividend: To preserve liquidity for strategic initiatives, reinvestment in the portfolio, and deleveraging the balance sheet, no top-off dividend for 2025 is expected, preserving over $50 million based on the midpoint of updated FFO guidance.
The earnings call summary highlights strong financial performance, strategic partnerships, and optimistic guidance. The company's focus on asset sales, cost reduction, and strategic investments, along with a positive outlook for key markets like Hawaii, supports a positive sentiment. Despite some challenges, such as market volatility and a potential government shutdown, management's confidence and clear strategic direction indicate a positive stock price movement. Considering the market cap, the stock is likely to see a positive reaction in the 2% to 8% range over the next two weeks.
The earnings call presents a mixed picture: strong RevPAR growth in key markets and a robust shareholder return plan are offset by lowered guidance for RevPAR and adjusted EBITDA, and challenges in Hawaii. The Q&A reveals management's confidence in asset sales and refinancing, but there are uncertainties in group bookings and labor costs. The market cap suggests moderate reactions. Overall, the sentiment is neutral, reflecting balanced positive and negative factors.
The earnings call reveals a mixed picture with negative elements outweighing positives. EPS missed expectations significantly, and RevPAR declined. Despite share repurchases and dividends, guidance was lowered across key metrics, and management expressed uncertainty about asset sales. The Q&A highlighted concerns about geopolitical factors and slow recovery in Hawaii. The market cap indicates moderate sensitivity, suggesting a stock price decline between -2% to -8% over the next two weeks.
The earnings call presents a mixed picture: strong total hotel revenues and positive RevPAR growth in some areas are offset by challenges like labor issues and RevPAR declines in key locations. The Q&A section reveals uncertainty in asset sales and market variability, but management remains cautiously optimistic. The share repurchase program and high dividend yield are positives, but the lack of clear guidance on asset impairments and weak group pace for Q2 and Q3 temper enthusiasm. Given the market cap, the stock is expected to have a neutral reaction.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
