Why Park Hotels & Resorts Stock Fell 10% in the First Hour Monday
Shares of Park Hotels & Resorts (NYSE: PK), a hotel real estate investment trust (REIT), dropped from the get-go on Monday, falling as much as 10% within an hour of the market opening. The reason for the drop was pretty obvious: The REIT reported earnings in the morning.
Hotels, even the high-end variety that Park owns, have an effective lease length of one night. So when the economy hits a rough patch, the impact on hotels is incredibly quick. COVID-19 started to become an issue early in the year, but really began to pick up steam in the second half of the first quarter. Thus, Park Hotels & Resorts' first-quarter earnings only tell part of the story of how bad the business is today.
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Source Fool.com
