Park Hotels & Resorts (PK) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Economic disruptions, including the impact from inflation, elevated interest rates or an economic slowdown or recession, may adversely impact and disrupt, our business, financial performance and condition, operating results and cash flows
2. 02We face various risks posed by our acquisition activities
3. 03We are subject to risks associated with the concentration of our portfolio in the Hilton family of brands. Any deterioration in the quality or reputation of the Hilton brands could have an adverse effect on our reputation, business, financial condition or results of operations
4. 04Contractual and other disagreements with or involving our current and future third-party hotel managers and franchisors could make us liable to them or result in litigation costs or other expenses
5. 05We are dependent on the performance of our managers and could be materially and adversely affected if our managers do not properly manage our hotels or otherwise act in our best interests or if we are unable to maintain a good relationship with our third-party hotel managers
6. 06Our hotel managers are dependent on information technology networks and systems, including the internet, to access, process, transmit and store proprietary and customer information, including personally identifiable information of hotel guests, including credit card numbers
7. 07Although the cybersecurity incidents that we and our third-party partners have experienced to date have not had a material effect on our business, financial condition or results of operations, such incidents could have a material adverse effect on us in the future
8. 08Costs associated with, or failure to maintain, brand operating standards may materially and adversely affect our results of operations and profitability
9. 09Our efforts to develop, redevelop or renovate our properties, in connection with our active asset management strategy, could be delayed or become more expensive, which could reduce revenues or impair our ability to compete effectively
10. 10Our hotels are geographically concentrated in a limited number of markets and, accordingly, we could be disproportionately harmed by adverse changes to these markets, natural disasters, climate change and related regulations, or terrorist attacks
11. 11If the insurance that we carry does not sufficiently cover damage or other potential losses or liabilities involving our properties, including as a result of terrorism and climate change, our profits could be reduced
12. 12We have investments in joint venture projects, which limit our ability to manage third-party risks associated with these projects
13. 13We depend on external sources of capital for future growth. Any disruption to our ability to access capital at times and on terms reasonably acceptable to us may affect adversely our business and results of operations
14. 14We could be materially and adversely affected if we are found to be in breach of a ground lease or are unable to renew a ground lease
15. 15Heightened focus on corporate responsibility may constrain our business operations, impose additional costs and expose us to new risks that could adversely impact our results of operations, financial condition and the price of our securities

Risks Related to Our Industry

1. 16We operate in a highly competitive industry
2. 17The lodging industry is subject to seasonal volatility, which is expected to contribute to fluctuations in our financial condition and results of operations
3. 18Governmental regulation may adversely affect the operation of our properties and our Company as a whole

Risks Related to Our Indebtedness

1. 19Certain of our debt agreements impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities or could result in foreclosure of our hotels

Risks Related to the Spin-Off

1. 20In connection with the spin-offs, Hilton and HGV indemnified us for certain liabilities. These indemnities may not be sufficient to insure us against the full amount of the liabilities assumed by Hilton and HGV, and Hilton and HGV may be unable to satisfy their indemnification obligations to us in the future

Risks Related to our REIT Status and Certain Other Tax Items

1. 21If we do not maintain our qualification as a REIT, we will be subject to tax as a C corporation and could face a substantial tax liability
2. 22We may face other tax liabilities that reduce our cash flows
3. 23Complying with REIT requirements may force us to borrow to make distributions to stockholders
4. 24Our transactions with our TRSs may cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms
5. 25If the leases of our hotels to our TRS lessees are not respected as true leases for U.S. federal income tax purposes, we will fail to qualify as a REIT
6. 26If any third-party hotel managers do not qualify as “eligible independent contractors” or if our hotels are not “qualified lodging facilities,” we will fail to qualify as a REIT
7. 27Changes to the U.S. federal income tax laws, including the enactment of certain tax reform measures, could have a material and adverse effect on us

Risks Related to Ownership of Our Common Stock

1. 28Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that stockholders might consider favorable
2. 29The stock ownership limits imposed by the Code for REITs and our amended and restated certificate of incorporation restrict stock transfers and/or business combination opportunities