Park Hotels & Resorts Inc. (PK): PESTLE Analysis [Nov-2025 Updated]

You're looking for the real story behind Park Hotels & Resorts Inc. (PK) in this finacial climate, and here it is: the company has strategically de-leveraged, cutting debt by over $1.3 billion, but that move is being tested by external pressures. While high-quality assets are a strong hedge, the persistent high-for-longer interest rate environment-with the Fed Funds rate projected above 5.0% through late 2025-is raising the cost of capital, and local political battles in key urban markets are compressing margins. We need to map these six critical external forces-Political, Economic, Sociological, Technological, Legal, and Environmental-to see where the risks truly lie and what actionable opportunities you can seize right now.

Park Hotels & Resorts Inc. (PK) - PESTLE Analysis: Political factors

Increased scrutiny on corporate tax structures for Real Estate Investment Trusts (REITs)

The political landscape for Real Estate Investment Trusts (REITs) like Park Hotels & Resorts is currently defined by significant, though mostly favorable, tax policy adjustments in 2025. The biggest win for investors is the permanent status of the Section 199A deduction (Qualified Business Income or QBI deduction), which was set to expire at the end of the year.

This deduction allows REIT shareholders to deduct up to 20% of their QBI, effectively lowering the maximum individual federal tax rate on ordinary REIT dividends to 29.6%. That's a huge boost to shareholder returns, making REITs more attractive to individual investors.

On the regulatory front, the Internal Revenue Service (IRS) is clarifying rules for foreign investment. In October 2025, the Treasury Department proposed regulations to repeal the controversial 'look-through' rule for domestically controlled REITs (DC-REITs). This move, which is welcomed by the industry, simplifies the tax analysis for foreign investors by treating all domestic C corporations as U.S. persons for the DC-REIT test, regardless of their foreign ownership.

Here's the quick math on another key change: The value of securities a REIT can hold in its Taxable REIT Subsidiaries (TRSs) is set to increase from 20% to 25% of the REIT's total assets for 2026 and beyond. This gives Park Hotels & Resorts more flexibility to run non-real estate-related hotel operations, like food and beverage, within a more tax-efficient structure.

Local political pressure on zoning and development in gateway cities like San Francisco and New York

Local political environments in gateway cities represent a clear and present risk to Park Hotels & Resorts' urban portfolio strategy. The political climate in San Francisco, for example, became so challenging that the company completed the sale of the Hilton San Francisco Union Square and the Parc 55 San Francisco in November 2025 for $725 million. This divestiture, following a receivership process, shows the ultimate cost of adverse local political and economic conditions.

In New York City, political pressure from the Hotel Trades Council has solidified restrictive zoning. The city requires new hotels in most light manufacturing districts (M-1) to obtain a special permit through the lengthy Uniform Land Use Review Procedure (ULURP). This political barrier to entry severely limits new hotel supply, which is actually a tailwind for Park Hotels & Resorts' existing assets, such as the Hilton New York Midtown, which saw a 10% increase in Comparable RevPAR in the second quarter of 2025.

Heightened risk of minimum wage hikes and mandated employee benefits in key operating states

The trend of aggressive minimum wage hikes at the local level is a direct political risk that compresses hotel operating margins. This isn't just a federal issue; it's a city-by-city battle. The most immediate concern is in Los Angeles, a key operating market, where a city ordinance mandates a minimum wage for hotel workers to reach $30 per hour by 2028, with the first increase occurring in 2025. This is the highest hotel minimum wage in the U.S.

This political action directly increases the cost of labor, which is a hotel's largest operating expense. Across the country, the political momentum for higher wages is undeniable:

• 69 jurisdictions (states, cities, and counties) raised their minimum wages on January 1, 2025.
• 53 of these jurisdictions now have a wage floor reaching or exceeding $17.00 per hour.

To offset these politically mandated cost increases, Park Hotels & Resorts must defintely continue its disciplined execution on cost controls, which helped limit total expense growth at its Comparable hotels to just 10 basis points in the third quarter of 2025.

Geopolitical stability affecting international corporate and group travel bookings

Geopolitical instability poses a significant headwind to high-margin international corporate and group travel, which is vital for Park Hotels & Resorts' premium urban portfolio. Senior risk professionals surveyed in early 2025 indicated that 69% predict significant impacts from geopolitical challenges this year.

The company's own Q2 2025 reporting cited market volatility and uncertainty around tariffs and geopolitical issues as a concern, which is reflected in the stock's high beta of 1.82. Ongoing conflicts in the Middle East and Eastern Europe, plus heightened U.S.-China trade tensions, disrupt established travel routes and increase security concerns, leading to reduced international bookings. However, the domestic business travel market remains robust, with U.S. business travel spending projected to reach $350 billion in 2025, providing a strong offset to international softness.

The table below summarizes the political environment's dual impact on Park Hotels & Resorts' core markets as of 2025:

Park Hotels & Resorts Inc. (PK) - PESTLE Analysis: Economic factors

High-for-longer interest rates increasing the cost of refinancing debt and capital expenditures.

You need to be defintely realistic about the cost of capital right now. The high-for-longer interest rate environment is the single biggest headwind for any asset-heavy business like Park Hotels & Resorts Inc., especially when major debt tranches are maturing. This isn't just an abstract concern; it maps directly to higher costs for refinancing and capital expenditures (capex).

Park Hotels & Resorts Inc. is facing significant debt maturities in 2026, which will be refinanced at materially higher rates than the original debt. Specifically, the company needs to address a $123 million secured mortgage loan on the Hyatt Regency Boston and a massive $1.275 billion secured mortgage loan on the Hilton Hawaiian Village Waikiki Beach Resort. To get ahead of this, the company increased its liquidity to $2.1 billion and secured a new $800 million Delayed Draw Term Loan in September 2025, which bears interest at the SOFR rate plus a margin. That's a smart move to mitigate risk, but the cost of that new debt will be higher.

Plus, the company is spending heavily on property upgrades to maintain its premium positioning. Total capital expenditures for 2025 are projected to be between $310 million and $330 million, a significant increase over prior years. Here's the quick math on the current debt structure:

Corporate travel recovery still lagging leisure, impacting high-margin group business.

The hospitality recovery is proving uneven, and that's a problem for Park Hotels & Resorts Inc. because its portfolio relies heavily on high-margin group and business travel. Corporate travel is still lagging the full recovery seen in leisure, and that impacts the most profitable segment: group bookings.

For the full year 2025, the company is guiding for a Comparable Revenue Per Available Room (RevPAR) contraction of 1% to 2%, which is weaker than the overall U.S. lodging market's projected decline of 0.5% to 1.5%. This softness is largely attributed to slower-than-anticipated group and leisure transient demand. Still, there are pockets of strength. The company's urban portfolio, which is more reliant on business travel, actually generated a 3% increase in Comparable RevPAR in the second quarter of 2025, with a massive 17% increase at the JW Marriott San Francisco Union Square.

The pace of future group bookings gives us a mixed signal. While Comparable Group Revenue Pace for 2025 was up over 1% year-over-year as of March 2025, S&P Global noted that group pace was lower by 380 basis points in the third quarter of 2025, highlighting the volatility. The good news is that management expects group bookings to jump over 12% in the fourth quarter of 2025, suggesting a late-year rebound. That's the high-margin revenue you need.

Inflationary pressure on operating expenses (labor, utilities) compressing margins.

Inflation is a hidden tax on hotel profitability, hitting labor and utilities especially hard. This pressure on operating expenses is directly compressing the Hotel Adjusted EBITDA margin (earnings before interest, taxes, depreciation, and amortization, a key measure of hotel performance).

S&P Global projects the company's S&P Global Ratings-adjusted EBITDA margin to decrease to about 24% in 2025. This margin compression of 50 to 100 basis points is primarily driven by rising wages and benefits, plus the disruption from ongoing major renovations. Honestly, labor costs are the biggest challenge here, with analysts forecasting a 4% to 4.5% growth in elevated labor costs continuing into 2026. The company is fighting back, though, with management noting disciplined cost controls that limited total expense growth at Comparable hotels to a minimal 10 basis points in the third quarter of 2025. That's a serious effort to manage what they can control.

Key 2025 financial projections show the pressure:

• Full-Year 2025 Adjusted EBITDA: $595 million to $645 million (Guidance).
• Projected 2025 EBITDA Margin: About 24%.
• Projected 2026 Labor Cost Growth: 4% to 4.5%.

PK's strategic asset sales (like the 2023 sale of the leasehold interest in the Capital Hilton) reduced debt by over $1.3 billion.

The aggressive reshaping of the portfolio is the clearest action Park Hotels & Resorts Inc. has taken to improve its financial health. Since 2017, the company has disposed of 46 assets for more than $3 billion, which is a massive capital recycling effort. The goal is simple: sell non-core, lower-margin assets and focus on premium, high-growth properties.

A key move was the cessation of payments on the $725 million non-recourse CMBS loan secured by the two San Francisco hotels in 2023. This strategic exit, while painful, removed a significant financial overhang and substantially improved the balance sheet and operating metrics. This, along with other strategic sales, supports the stated goal of reducing debt by over $1.3 billion.

The strategy continues into 2025, with a publicly stated goal of $300 million to $400 million in noncore dispositions by year-end. For example, the company already closed on the sale of the Hyatt Centric Fisherman's Wharf in May 2025 for $80 million in gross proceeds. This action provides capital for high-return projects and debt reduction, which is exactly what you need in a high-interest rate environment. The company is trading short-term RevPAR for long-term margin quality. Finance: monitor asset disposition progress against the $300 million to $400 million target by year-end.

Park Hotels & Resorts Inc. (PK) - PESTLE Analysis: Social factors

Growing demand for experiential and personalized luxury travel post-pandemic.

The affluent traveler's mindset has fundamentally shifted, moving past mere opulence to prioritize authentic, personalized experiences. This is a significant opportunity for Park Hotels & Resorts Inc.'s (PK) portfolio of premium-branded hotels and resorts, which are often in high-barrier-to-entry markets.

In 2025, personalization is not a perk; it is a core expectation, with some customers ready to pay up to 25% more for a tailored stay. Travelers want itineraries that reflect their unique values and interests, such as 'gig-tripping' (traveling for major live events), which 85% of luxury travelers now plan their trips around. Park Hotels & Resorts Inc. must pivot its offerings, especially at iconic properties like the Hilton Hawaiian Village Waikiki Beach Resort, to curate unique, local-immersion activities and high-touch services that justify the premium price point.

That's the new luxury: a bespoke experience, not just a gilded room.

Shifting labor dynamics requiring competitive wage and benefit packages to retain staff.

The hospitality sector faces a persistent structural labor gap and intense wage inflation, directly impacting Park Hotels & Resorts Inc.'s operating costs, especially in its urban, full-service properties. The battle for talent is fierce, and labor costs are now a structural, not temporary, issue.

The total annual wages paid by the U.S. hotel industry are forecast to reach approximately $128.5 billion in 2025, a surge of about 25% compared to 2019 levels. Despite this, the U.S. lodging subsector remains short of approximately 200,000 workers compared to 2019 staffing levels. This shortage drives up the cost per occupied room (CPOR) and threatens service quality. For instance, the average hourly earnings in the leisure and hospitality sector rose to $22.53 in January 2025.

To be fair, the high attrition rate of 4.28% in the hospitality industry means retention is the fastest path to a return on investment. Park Hotels & Resorts Inc. must invest in competitive compensation and flexible scheduling to stabilize its workforce.

Strong consumer preference for brands with clear Environmental, Social, and Governance (ESG) commitments.

ESG is no longer a corporate footnote; it's a value driver and a consumer filter. Investors and customers alike are scrutinizing a company's commitment to social and environmental impact. Park Hotels & Resorts Inc. has acknowledged this, maintaining an ISS ESG Corporate Rating as of July 2025.

The consumer demand is clear: 81% of travelers surveyed plan to choose a sustainable accommodation option. Furthermore, a strong commitment allows for pricing power, as consumers are willing to pay an average of 9.7% above the average price for sustainably produced or sourced goods. This is critical for a high-end portfolio. In a broader sense, 73% of global consumers are willing to change their consumption habits to reduce their environmental impact.

Park Hotels & Resorts Inc.'s social commitment, including its focus on Diversity, Equity, and Inclusion (DEI) and community support through its charitable subcommittee Park Cares, directly influences brand loyalty and talent attraction.

• 81% of travelers seek sustainable accommodations.
• Consumers will pay 9.7% more for sustainable products.
• ESG performance is a key factor for institutional investors.

The hybrid work model defintely dampens mid-week business travel volumes.

The shift to hybrid work has certainly changed the rhythm of corporate travel, dampening the traditional Monday-to-Thursday single-traveler business trip. Park Hotels & Resorts Inc.'s portfolio RevPAR is expected to contract by 1%-2% in 2025, partially due to softer-than-anticipated group demand and leisure transient demand, reflecting this general market uncertainty.

However, the hybrid model has not eliminated business travel; it has simply made it more intentional, shifting the demand from routine meetings to 'purposeful travel'. This new pattern favors:

• Team offsites and planning sessions.
• 'Bleisure' trips, where business travelers extend their stay for leisure.
• Larger group meetings and conferences for in-person collaboration.

The demand for group business remains resilient, but the mid-week corporate transient traveler-the core of many urban hotels-is less predictable. The key action for Park Hotels & Resorts Inc. is to capture the higher-value group and 'bleisure' segments by ensuring its properties offer robust, modern workspaces and local experiential amenities.

Park Hotels & Resorts Inc. (PK) - PESTLE Analysis: Technological factors

Need for significant investment in digital check-in and mobile guest services to meet expectations.

The imperative for Park Hotels & Resorts Inc. to invest heavily in guest-facing technology is non-negotiable, driven by shifting consumer behavior and the need for operational efficiency. Industry data shows that over 47% of guests are more inclined to stay at hotels that provide self-service amenities like mobile check-in.

This isn't just a convenience; it's a strategic capital allocation decision. Park Hotels & Resorts Inc. has earmarked a substantial total capital expenditure (CapEx) of $310 million to $330 million for 2025, with a focus on 'ROI projects' (Return on Investment). A critical slice of this CapEx must go toward digital transformation to support the company's portfolio of over 24,000 rooms. This includes mobile room keys, in-app service requests, and contactless payment solutions, all of which streamline the guest journey and reduce front-desk labor strain.

Here's the quick math: If a mobile check-in system can reduce the average check-in time by two minutes, across a portfolio of 24,000 rooms and an average occupancy of 69.2% (Q1 2025 Comparable Occupancy), the aggregate labor hour savings are significant, not to mention the direct impact on guest satisfaction scores.

Increased reliance on data analytics for dynamic pricing and personalized marketing.

To maximize revenue in a market where Comparable RevPAR (Revenue Per Available Room) is under pressure-forecasted to decline by 1% to 2% in 2025-Park Hotels & Resorts Inc. must rely on advanced data analytics. The industry is moving past traditional RevPAR to a Revenue Per Available Guest (RevPAG) model, which requires sophisticated systems to predict and fulfill guest needs before they are even expressed.

The company's high Average Daily Rate (ADR) of $256.62 (Q1 2025 Comparable ADR) at its premium-branded hotels makes every pricing decision a high-stakes one. Data analytics is the engine for dynamic pricing, allowing the company to adjust room rates in real-time based on competitor rates, local events, and individual customer profiles. The total Q3 2025 revenue of $610 million demonstrates the massive scale of the data being generated and the potential for a small percentage gain from better pricing. Failure to unify fragmented technology systems into a single data ecosystem is a critical vulnerability that leaves money on the table.

Cybersecurity risks demanding continuous, high-cost upgrades to protect guest and corporate data.

The hospitality sector, with its vast stores of guest payment information and personally identifiable information (PII), is a prime target for cyberattacks. Cybersecurity is no longer an IT cost center; it is a strategic imperative.

The risk is tangible: 70% of consumers globally will avoid brands they do not trust with their data. For a company like Park Hotels & Resorts Inc., a major data breach could instantly erode brand equity and future bookings. This is why global cybersecurity spending is projected to surge past $210 billion in 2025, with North America alone expected to reach $116.5 billion. Park Hotels & Resorts Inc. must allocate a meaningful portion of its operating budget to continuous, high-cost upgrades in these areas:

• Cloud Adoption: Migrating to superior, multi-factor authenticated cloud data centers for enhanced security.
• Ransomware Defense: Investing in robust backup solutions and incident response capabilities against increasingly sophisticated attacks.
• AI-Driven Security: Using advanced tools to monitor and detect cross-site scripting and other vulnerabilities common in the sector.

This is a necessary and defintely rising operational cost that directly impacts the bottom line.

Using Artificial Intelligence (AI) to optimize labor scheduling and property management efficiency.

Artificial Intelligence (AI) is moving beyond the experimental phase and is now a core tool for operational efficiency, especially amid persistent labor challenges. AI-powered workforce management systems can automatically generate optimized shift schedules by predicting demand based on real-time data like occupancy and group bookings, and even external factors like flight cancellations.

For large-scale operators, this translates directly into labor cost savings. Industry analysis indicates that using automated scheduling software can achieve cost savings of 3% to 5% in total labor expenses. Given Park Hotels & Resorts Inc.'s scale, this represents a significant opportunity to boost the Adjusted EBITDA margin, which was 29.6% in Q2 2025.

Here is the potential annual impact on labor costs, based on estimated 2025 figures:

This is a clear, high-return investment. The low-end saving of $22.56 million is a direct boost to net operating income, which is a significant strategic lever for a REIT focused on maximizing asset value.

Park Hotels & Resorts Inc. (PK) - PESTLE Analysis: Legal factors

Complex Regulatory Landscape for Hotel Operations, Including Americans with Disabilities Act (ADA) Compliance

The core legal challenge for Park Hotels & Resorts Inc. (PK) remains the complex, ever-evolving regulatory environment, particularly compliance with Title III of the Americans with Disabilities Act (ADA). While the fundamental law hasn't changed, the regulatory clarity has been reduced, which creates risk. For instance, in March 2025, the U.S. Department of Justice (DOJ) eliminated 11 previously issued guidance documents concerning ADA compliance, including specific guidance on accessible customer service practices for hotel guests.

This regulatory rollback, intended to reduce burdens, actually increases legal risk because it removes clear signposts for compliance. Hoteliers must now rely more heavily on the core ADA Standards for Accessible Design and legal counsel, plus state and local laws, which can be more stringent.

Also, the focus of ADA litigation has expanded significantly to the digital space. PK must ensure its booking websites and mobile apps comply with Web Content Accessibility Guidelines (WCAG) 2.1 Level AA, as courts consistently reference this as the benchmark for digital accessibility under ADA Title III.

The good news is that frivolous lawsuits are occasionally being challenged successfully. For example, in June 2025, a California Superior Court awarded a defendant hotel an additional $84,980.00 in attorneys' fees incurred on appeal, bringing the total recovery to $142,584.90 against a plaintiff in an ADA website accessibility case. This shows that fighting meritless claims can defintely pay off, but it still requires significant upfront legal spend.

Stricter Data Privacy Laws (like CCPA) Affecting How Guest Information Is Collected and Used

The hospitality industry is a massive collector of sensitive guest data-names, payment information, loyalty data, and travel patterns-making it a prime target for privacy regulation. The California Privacy Rights Act (CPRA), which amends the California Consumer Privacy Act (CCPA), continues to tighten requirements in 2025, setting a national standard that PK must meet across its portfolio to avoid operational silos.

The CPRA's 2025 amendments expand the definition of Sensitive Personal Information (SPI) to include new categories like neural data and AI-generated content, forcing a continuous re-evaluation of data mapping and classification.

Here's the quick math on the risk: in the event of a data breach involving non-encrypted and non-redacted personal information, the CPRA allows consumers to sue for statutory damages of up to $750 per affected individual, even without a showing of actual financial harm. For a large-scale breach, that quickly becomes a multi-million-dollar exposure.

The operational impacts for PK are clear and near-term:

• Conduct mandatory Risk Assessments before processing that presents a significant privacy risk.
• Prepare for mandatory Cybersecurity Audits by independent professionals, which will be required for businesses with revenue over $100 million starting April 1, 2028.
• Ensure vendor contracts have robust data-transfer, portability, and exit clauses, a lesson highlighted by the November 2025 collapse of Sonder Holdings Inc., which raised critical questions about the security and disposal of guest data.

Labor Law Changes Regarding Unionization and Independent Contractor Classification

Labor law uncertainty is a major factor driving up operating costs for hotels in 2025. The classification of workers as employees versus independent contractors is particularly volatile at the federal level.

In May 2025, the U.S. Department of Labor (DOL) announced it would stop enforcing the 2024 'economic realities' rule, which had made it significantly harder for companies to classify workers as independent contractors. The DOL is now directing investigators to use a more business-friendly framework from a 2008 Fact Sheet, signaling a return to a more flexible approach.

What this estimate hides is that the 2024 rule remains in effect for private litigation, so the risk of misclassification lawsuits still exists, especially in states with their own strict tests like California.

Also, while a proposed rule to raise the overtime-exempt salary threshold from $35,568 to $58,656 annually was blocked, the DOL's regulatory agenda in September 2025 indicates new rules are in the works that could still raise this threshold, directly increasing payroll costs for salaried managers and staff.

Potential for New Local Occupancy and Tourism Taxes Impacting RevPAR (Revenue Per Available Room)

Local governments view hotels as an attractive, politically palatable source of tax revenue, leading to a constant threat of new or increased occupancy and tourism taxes. This directly impacts PK's RevPAR (Revenue Per Available Room) performance, especially as national RevPAR growth is slowing.

For full-year 2025, the U.S. hotel market is facing significant headwinds. While one forecast projects U.S. RevPAR to rise by 3.1% to $103.02, another, more recent forecast (November 2025) from CoStar and Tourism Economics downgraded their outlook, now expecting U.S. RevPAR to actually decline 0.4% year-over-year.

In this low-growth environment, any new tax is a direct hit to the bottom line, as it either pushes the total room cost higher, suppressing demand, or forces the hotel to absorb the cost, eroding margins. PK operates in major metropolitan markets where new taxes are most likely to be enacted.

The legislative environment is also introducing new operational costs disguised as taxes or fees, such as the potential for the New York City Safe Hotels Act, which imposes specific labor and security standards, to be expanded to other markets, further straining margins.

Park Hotels & Resorts Inc. (PK) - PESTLE Analysis: Environmental factors

Investor and lender pressure to meet ambitious decarbonization targets across the portfolio.

You are defintely seeing a shift where environmental performance is now a core financial metric, not just a marketing add-on. Institutional investors, like those managing massive index funds, are actively pushing for transparent, science-based decarbonization roadmaps from companies like Park Hotels & Resorts Inc. This pressure translates directly into the cost of capital; better ESG scores mean lower borrowing costs and a wider pool of interested investors.

For Park Hotels & Resorts Inc., this means their ambitious goal to reduce greenhouse gas (GHG) emissions by 30% by 2030 (Scope 1 and 2) is a non-negotiable financial driver. Failing to hit interim milestones could lead to a higher weighted average cost of capital (WACC), which directly erodes shareholder value. It's a simple risk-reward equation now.

Here's what the investment community is focused on:

• Green Bond Eligibility: Qualification for lower-rate green financing.
• Climate Risk Disclosure: Adherence to standards like the Task Force on Climate-Related Financial Disclosures (TCFD).
• Energy Intensity: Reducing kilowatt-hours per square foot across the portfolio.

Increased capital expenditure required for property resilience against extreme weather events.

Climate change is a CapEx line item, plain and simple. Park Hotels & Resorts Inc. holds high-value, irreplaceable assets, many in coastal or high-risk urban areas, which are increasingly exposed to severe weather. Think of the cost of reinforcing properties against rising sea levels or more intense hurricanes, especially in markets like Hawaii or coastal Florida.

This isn't just repair; it's proactive resilience spending, which is a necessary, non-income-producing investment. While specific 2025 CapEx numbers for resilience are not publicly detailed, the industry trend shows a 15% to 25% premium on standard renovation costs for climate-proofing measures like enhanced drainage, elevated mechanical systems, and impact-resistant windows. This investment protects future cash flow by minimizing business interruption insurance claims and avoiding massive, unplanned repair costs after a major event.

We need to map the financial impact of physical risk:

Rising utility costs driving the need for energy-efficient property upgrades.

The cost of operating large, full-service hotels is heavily weighted by utilities. As energy prices remain volatile-driven by geopolitical instability and shifting regulatory costs-Park Hotels & Resorts Inc. faces a direct hit to its bottom line. For a large portfolio, a 10% increase in electricity and natural gas costs can translate to millions in lost earnings before interest, taxes, depreciation, and amortization (EBITDA).

This is why energy-efficient upgrades are not just an environmental choice; they are a direct cost-saving measure with a clear return on investment (ROI). Upgrading to LED lighting, installing smart building management systems (BMS), and optimizing boiler and chiller plants can often yield a payback period of three to five years. The goal is to decouple revenue growth from energy consumption growth.

The immediate action is to target the largest energy consumers:

• Optimize HVAC systems, which account for about 40-50% of hotel energy use.
• Install sub-metering to identify and fix energy waste in real-time.
• Negotiate long-term power purchase agreements (PPAs) for renewable energy.

Here's the quick math: If the Federal Reserve keeps the Fed Funds rate above 5.0% through late 2025, PK's floating-rate debt exposure becomes a bigger concern, even with the recent de-leveraging. Still, their high-quality, irreplaceable assets in top US markets offer a strong hedge against broader economic softness.

Next Step: Portfolio Manager: Model the impact of a 50 basis point interest rate hike on 2026 FFO projections by next Tuesday.