Park Hotels & Resorts said that it had “shifted to the recovery phase” as it began the process of reopening its hotels.
The Reit said that it did not expect to see a “meaningful increase in demand” for its portfolio until there were medical solutions in place, whether that was vaccines and/or therapeutics.
At the end of the second quarter the group had 53% of its total room count open and said that it expected to increase that to 80% in the third quarter.
Tom Baltimore, chairman, president & CEO, told analysts: “The second half of 2020 will certainly continue to be a challenge year for us. If anything, given what's happening, you could make a case that, that leisure demand could, get extended into the third quarter.
“There's about 14,000 rooms or about 47% of our portfolio, where it's a strong drive, too. So we do expect as people want to get out, that will certainly benefit from that. But no doubt, the second half of the year will continue to be challenged until those medical solutions are in place and confidence is restored.”
Baltimore said that the group had moved “quickly” in March and April, suspending operations at 38 of its 60 hotels, reducing its capital spend by over 75% and drawing down $1bn from its revolver.
The Reit ended the quarter with over $1.6bn of liquidity available, which the CEO said equated to over two years of runway “under the most severe circumstances”.
Park reported a 96% revpar decline in the second quarter. For the hotels that remained open, it saw slightly better results each month, with occupancy averaging 14% in April, 20% in May and increasing to 30% in June.
Baltimore said that the group would continue to sell non-core assets, commenting on a ‘Covid discount’ of around 20%, having improved from 30% to 40% “as we get closer and there's more evidence that there will be therapies and vaccines”.