The global economy has been damaged by the COVID-19 pandemic, with few sectors pummeled as badly as hospitality. Take Park Hotels & Resorts (NYSE:PK), which just reported a quarter that showed steep declines in key metrics and large numbers with minus signs in front of them.
For the second quarter of 2020, the hospitality real estate investment trust (REIT) saw its total revenue fall off a cliff, plummeting by 94% on a year-over-year basis to $42 million. The company's bottom line as reported under generally accepted accounting principles (GAAP) swung into the red to $261 million ($1.10 per share) from the Q2 2019 net profit of $84 million.
Adjusted funds from operations (AFFO) -- considered the most accurate measure of profitability for REITs -- also flipped negative for Park Hotels, to a loss of $175 million ($0.75 per share) from the year-ago profit of $164 million.
Those results missed the average analyst estimates by a mile. Expectations were for just over $66 million on the top line and a per-share net loss of only $0.47.
With the pandemic currently worsening in the U.S., many Americans are barely leaving their houses, let alone getting out for a nice holiday that includes a hotel stay. The drop in tourism and closures mandated by various authorities have put a tight squeeze on the company's operations.
"Without a doubt, the last five months have been the most challenging period our industry has ever faced as we continue to deal with widespread fear and uncertainty over COVID-19," said Park Hotels CEO Thomas Baltimore.
On Thursday, following the previous day's after-market release of the Q2 results, Park Hotels' stock closed marginally lower by 0.5%.