Park Hotels & Resorts Inc. (NYSE:PK) Q4 2022 Earnings Call Transcript

Tom Baltimore: Yes. It’s way too early to talk about how we’re going to capitalize it. Other than to say that we’ve got options on 2 sites that we are going to move forward on. We’re working through the entitlement process. It’s certainly a few years out. It’s not something that will require capital in ’23 or ’24. And I’d leave it at that. Other than to say, adding another tower to that world-class resort coupled with the 1,000 rooms of timeshare in addition to the nearly 3,000 rooms we have and the incremental amenities being talked about will only continue to strengthen it for generations to come.

Aryeh Klein: Thanks a lot for the color.

Tom Baltimore: Yes, thank you.

Operator: Our next question comes from the line of Chris Woronka with Deutsche Bank. Please proceed with your question.

Chris Woronka: Hey, good morning, guys. Good morning, Tom.

Tom Baltimore: Good morning.

Chris Woronka: Questions is kind of on — we like to focus on margins a lot, right? There’s been a lot of talk about reimagining the operating model as such. And there’s also been a lot of, of course, pluses and minuses, mostly minuses on inflation. But how do you look at this thing heading into this year and even beyond where — have you — is the reimagination of the operating model done? And do we ever get to a point where now we’re bringing back a little bit more housekeeping or restaurant hours and just the question if the occ comes back, and I understand your margin guidance for this year, and it’s impressive to be honest. But with more of that coming back and the service-oriented things coming back. How do you get — is there any more to go? Or is this just we have to get all the group business back? We have to get all the occ back, and that’s what gets us to back to where we want it to be in 2019 on margin.

Tom Baltimore: Yes, it’s a great question. And Chris, you and I both have we’ve been around lock a little bit and initially, you started out going down what I call the amenities creep. And every time things start to look better; the brands want to add back more. I do think the pandemic forced all of us to think about the business differently using technology, whether it’s digital key, whether it’s reimagining room service with a knock and drop which have been widely accepted and I think, appreciated by guests. I believe in the Marriott call, the CEO made reference to different levels of housekeeping service and that now being finding the right balance with both stakeholders, whether that’s employees and whether it’s guest. And so I think you’re going to see permanent changes and I think what we’ve got to do as an organization and as an industry is to continue to be relentless in figuring out what drives customer satisfaction and intent to return, but also figure out a way to make sure that we’ve got an operating model that makes economic sense.