Investor Presentation NAREIT – NOVEMBER 2017 Waldorf Astoria Orlando Hilton Chicago Hilton Hawaiian Village Waikiki Beach Resort
Mission To be the preeminent lodging REIT, focused on consistently delivering superior, risk-adjusted returns for stockholders through active asset management and a thoughtful external growth strategy, while maintaining a strong and flexible balance sheet 2 |
Pillars of our Corporate Strategy Aggressive Asset Management Continually improve property level operating performance Consistently implement revenue management initiatives to optimize market pricing / segment mix Prudent Capital Allocation Allocate capital effectively by leveraging scale, liquidity and M&A expertise to create value throughout all phases of the lodging cycle Employ an active capital recycling program — expanding our presence in target markets with a focus on brand and operator diversification, while reducing exposure to slower growth assets/markets Target value enhancement projects with strong unlevered ROI yields Strong and Flexible Balance Sheet Preserve a strong and flexible balance sheet, with a targeted leverage ratio of 3x to 5x Maintain strong liquidity across lodging cycle and access to multiple types of financing Aspire to achieve investment grade rating 3 |
Park Hotels & Resorts Overview Casa Marina, a Waldorf Astoria Resort 4 |
Company Highlights Premium TTM Park Hotels & Resorts is a leading lodging real estate company with a diverse portfolio of iconic and market-leading hotels and resorts with significant Brands Performance (1)(2) underlying real estate value in top U.S. and international markets Leading Properties $2.8 billion Total GAAP Revenue 67 premium-branded hotels and iconic resorts $760 million 35,000+ competitively positioned and well-maintained rooms Adjusted EBITDA (4) 85%+ of rooms in luxury and upper-upscale segments 64% / 85% $1.4 bn of CapEx or $47k per room invested since 2011 (3) Top 10 / Top 25 Assets Contribution to 81% of CapEx targeted towards guest rooms, lobbies and other guest- Adjusted EBITDA (4) facing areas (3) 80% 29 properties with 25k+ sq. ft. of meeting space and 10 properties Total Occupancy with 125k+ sq. ft. of meeting space $201 Top Markets Total ADR $162 Prime U.S. and international markets with high barriers to entry Room RevPAR ~90% of room exposure in the United States $202 72% of rooms in CBDs of major cities and resort / conference destinations Avg. Room RevPAR of Top 10 Assets (1) Trailing twelve months (“TTM”) data is for the twelve months ended 9/30/17 (2) Occupancy, ADR and RevPAR excludes Unconsolidated JVs; EBITDA figures include pro rata share from Unconsolidated JVs and reflect pro forma for new management contracts. Note that all figures, unless otherwise stated, are shown on a pro forma basis (3) Represents CapEx made in our consolidated hotels from 2011 to YTD September 2017 during our period of ownership only (4) Net income during this period was $2,587mn. See Appendix for definitions and reconciliations of these measures to comparable 5 | GAAP measures
3Q17 Highlights: Hawaii Remains Solid; SF, Orlando Strong Operating Results -0.1% decrease in Comparable RevPAR for the portfolio -120bps decrease in Pro forma Comparable Hotel Adjusted EBITDA margins for the portfolio (1) -1.8% decrease in Pro forma Comparable Hotel Adjusted EBITDA (1) -0.3% decline in Transient revenues; business transient weakness (-3.2%), offset by strong leisure revenues (+4.2%) +0.1% increase in Group revenues; group tour and SMERF business offset weak corporate and convention business Top Markets RevPAR Performance Hawaii: +1.6% increase in RevPAR; continued strength in transient offset a weaker group quarter San Francisco: +4.4% increase in RevPAR from strong in-house group and contract business Orlando: +3.1% increase in RevPAR from strength in both transient and group from displaced guests impacted by Hurricane Irma Chicago: -5.9% decrease in RevPAR from convention-related group weakness and difficult year-over-year comps New York: - 7.8% decrease in RevPAR; displacement from suites relocation combined with transient weakness 6 | (1) See Appendix for definitions and reconciliations of these measures to comparable GAAP measures
2017 Hurricane Impact Financial Impact Estimated $20 mn in financial exposure including deductibles and uninsured expenses o Caribe Hilton removed from comparable operating statistics o 3Q 2017 -10bps decrease in comparable portfolio RevPAR o No impact to Adjusted EBITDA o 4Q 2017 Estimated $5 mn impact to comparable Adjusted EBITDA , or just $0.02 per share (AFFO) o Damages & Insurance Key West (3% of Adjusted EBITDA) Two hotels, the 311-room Casa Marina, a Waldorf Astoria Resort and 150-room The Reach, a Waldorf Astoria o Resort, currently open and operational $5 mn combined deductible, including property and business interruption o Estimated $15 mn+ in damages o Puerto Rico (less than 1% of Adjusted EBITDA) 748-room Caribe Hilton remains closed; expected to remain closed through 2018 o $11 mn deductible, including property and business interruption o Estimated $50 mn+ in damages o 7 |
Seasoned and Experienced Management Team Chairman, President & CEO Tom Baltimore SVP, Design EVP, CFO & EVP, Asset SVP, GC EVP, CIO SVP, HR Treasurer Management Construction Matt Sparks Tom Morey Jill Olander Guy Lindsey Sean Dell’Orto Rob Tanenbaum SVP, Asset SVP, CAO SVP, Management Investments Darren Robb Dexter Wood John Boettger SVP, Strategy Park Hotels & Resorts Ian Weissman Headquartered in McLean, VA ➢ SVP, Tax 25 years average experience among senior ➢ Scott Winer management team Total of ~80 employees at Headquarters ➢ 8 |
Park Trades at a Discount Despite Relative Outperformance 40.0% 27.2% 30.0% 20.0% While Park has outperformed its 14.1% 13.5% 12.9% 8.5% 8.0% 7.0% peers, on a weighted average 10.0% YTD TTR 1.0% basis, by 500 bps YTD (generating 0.0% -2.0% a 13.5% total return)… -10.0% -20.0% -30.0% -31.5% -40.0% PK PEB XHR CHSP HST SHO RHP DRH LHO AHP 17.0x 15.9x 16.0x 15.0x 14.3x 13.6x 14.0x '17 EBITDA Multiples 13.3x …the stock continues to trade at 12.6x 13.0x 12.3x 12.2x 12.1x 11.9x a discount to the group ( 12.2x 12.0x ’17 EBITDA vs. 12.8x for peers) 10.6x 11.0x 10.0x 9.0x 8.0x 7.0x PEB CHSP RHP SHO HST DRH PK LHO XHR AHP 9 | Market data as of 11/7/17
Portfolio Overview Hilton San Francisco Union Square 10 |
Diversified Exposure to Attractive Markets High Barrier to Entry Urban Select Suburban and Landmark Resorts and Convention Hotels Strategic Airport Hotels Hilton Hawaiian New York Hilton Hilton San Francisco Hilton Waikoloa Hilton Boston Logan Village Waikiki Beach Hilton Short Hills Midtown Union Square Village Airport Resort 304 Rooms 1,907 rooms (1) 1,919 rooms 1,230 rooms (2) 599 rooms 2,860 rooms Waldorf Astoria Casa Marina, a Orlando/ Hilton McLean Tysons Hilton New Orleans Hilton Chicago Hilton Miami Airport Waldorf Astoria Resort Hilton Orlando Corner Riverside 1,544 rooms 508 rooms 311 rooms Bonnet Creek 458 rooms 1,622 rooms 1,511 rooms (1) As of 9/30/17; room count reduced by 22 rooms during 3Q 2017. Current room count includes approximately 25 rooms that becam e part of Hilton Grand Vacations (“HGV”) as part of the spin -off and that we have exclusive rights to occupy and operate through December 2017 (2) As of 9/30/17; room count reduced by 14 rooms during 3Q 2017 that became part of HGV as part of the spin-off. Current room count includes 586 rooms that became part of HGV as part of the spin-off and that we reserved exclusive rights to occupy and operate. On various dates until December 2019, we are required to release these rooms back to HGV for its renovation and use 11 |
Diversified Exposure to Attractive Markets 68% of Total Portfolio rooms located in Top 25 Markets (1) 28% of Total Portfolio rooms located in resort destinations Washington Colorado Kansas/Missouri Illinois 3 Hotels | 1,621 Rooms 1 Hotel | 159 Rooms 2 Hotels | 465 Rooms 4 Hotels | 2,743 Rooms 2% Hotel EBITDA <1% Hotel EBITDA 1% Hotel EBITDA 6% Hotel EBITDA Utah Massachusetts 1 Hotel | 499 Rooms 1 Hotel | 599 Rooms 1% Hotel EBITDA 2% Hotel EBITDA Northern California New York 7 Hotels | 4,513 Rooms 1 Hotel | 1,907 Rooms 15% Hotel EBITDA 6% Hotel EBITDA Nevada New Jersey 1 Hotel | 190 Rooms 3 Hotels | 839 Rooms <1% Hotel EBITDA 1% Hotel EBITDA Southern California DC/VA 6 Hotels | 2,888 Rooms 5 Hotels | 2,120 Rooms 6% Hotel EBITDA 3% Hotel EBITDA Arizona Tennessee 2 Hotels | 745 Rooms 1 Hotel | 130 Rooms 1% Hotel EBITDA <1% Hotel EBITDA Hawaii Georgia 2 Hotels | 4,090 Rooms 2 Hotels | 748 Rooms 23% Hotel EBITDA 1% Hotel EBITDA Texas Louisiana Florida 1 Hotel | 259 Rooms 2 Hotels | 1,939 Rooms 7 Hotels | 4,711 Rooms 1% Hotel EBITDA 8% Hotel EBITDA 16% Hotel EBITDA International HILTON WALDORF ASTORIA DOUBLE TREE EMBASSY SUITES CURIO HILTON GARDEN HAMPTON INN 15 Hotels | 4,239 Rooms 5% Hotel EBITDA Note: Pro forma 2016 Hotel EBITDA includes pro rata share of Pro forma Hotel Adjusted EBITDA from Unconsolidated JVs (1) Top 25 Markets as defined by STR Global 12 |
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