Park Hotels & Resorts Inc. (NYSE: PK) today announced an update on measures it is taking, independently and in coordination with its hotel management companies, to mitigate the effect on its business from the national emergency that has arisen as a result of the COVID-19 virus. The updates are as follows
- Park and its hotel management companies have suspended or commenced the suspension of operations at nearly half of Parks 60 hotels in order to minimize Parks ongoing expenditures during the current low occupancy caused by the COVID-19 disruption. Parks remaining hotels are currently expected to remain open under reduced operations so long as incremental savings are achieved.
- Park and its hotel management companies have been proactively pursuing alternative sources of revenue from applicable government authorities and hospitals such as providing temporary lodging for first responders, other medical personnel, military personnel, displaced guests and residents of communities where Parks hotels are located.
- Park has drawn the remaining $650 million of its $1 billion unsecured revolving credit facility as a precautionary measure, with the result that Parks cash on hand is now approximately $1.3 billion. On April 15, 2020, Park will pay from these funds its previously announced quarterly dividend of $0.45 per share to stockholders of record on March 31, 2020.
Park owns some of the largest hotels in San Francisco, New York, Honolulu, New Orleans and Chicago and we are proactively seeking opportunities for these market-leading assets and other major Park assets to support their cities, the COVID-19 responder community and others, said Thomas J. Baltimore, Jr., Chairman and CEO of Park. As well, we have further fortified Parks ability to endure the COVID-19 disruption by drawing on our credit facility and now have $1.3 billion in funds to wait out this difficult period and meet our commercial obligations as needed. Our lenders have been invaluable partners to us through this time and we thank them for their ongoing confidence in Park.
Parks revolving credit facility bears interest at variable rates at Parks option. The weighted average interest rate for the entire revolving credit facility draw, which includes Parks previously announced $350 million draw initiated on March 16, 2020, is 2.46%.
Park Hotels & Resorts Inc. (NYSE: PK) is the second largest publicly traded lodging real estate investment trust with a diverse portfolio of market-leading hotels and resorts with significant underlying real estate value. Parks portfolio currently consists of 60 premium-branded hotels and resorts with over 33,000 rooms located in prime U.S. markets with high barriers to entry.