December 2023
Dear Stakeholders,
Park Hotels & Resorts Inc. ("Park" or the "Company") is pleased to present our sixth annual Corporate Responsibility Report ("Report"), which highlights our Environmental, Social and Governance ("ESG") initiatives for 2022. Despite the unprecedented challenges faced over the past three years, we have remained steadfast in our commitment to ESG principles, both in the near term and for the long-term benefit of our stakeholders, and we are excited about Park’s progress as we continue to advance ESG initiatives and policies for our Company.
2022 was a pivotal year for the lodging industry and for Park. Once the country moved past the initial impacts from the Omicron variant of the COVID-19 virus in the first quarter, we witnessed a broad based recovery throughout the remainder of the year. The pent-up demand across all travel segments fueled a robust re-acceleration of our business, allowing individuals and groups to reconnect in person with their business associates, family and friends through travel. Serving as a significant milestone and marking the end of 27 months of operational disruption related to the COVID-19 virus, in the first half of 2022, we celebrated the successful reopening of our last two properties that had remained suspended related to the pandemic.
Similar to 2021, climate change exerted a damaging impact on the economy during 2022, making the transition to decarbonization more critical than ever. In 2022, the United States experienced 18 weather or climate-related disasters, each causing approximately $1 billion or more in damages.1 In September, Hurricanes Fiona and Ian, which occurred within ten days of each other, impacted our properties in Puerto Rico, Key West and Orlando, and Hurricane Nicole impacted our Florida assets in mid-November. Fortunately, our proactive risk management program played a crucial role in safeguarding our properties, guests, property teams and communities, and we are pleased to report that we did not have any insurance claims related to weather or climate disasters in 2022. By implementing hurricane preparedness procedures such as having pre-storm emergency preparedness coordination calls, supplemental emergency generators, first responder recovery partners and a designated Park engineer on-site before the storms, we successfully mitigated potential damage and business interruption. This preparedness extends beyond natural disasters, as our "Risk Binder" outlines best practices for risk mitigation across various scenarios, including cybersecurity, personal safety, terrorism and more. We pride ourselves on our risk management program, and we strongly believe that our proactive efforts and collaboration with talented management and outside professional partners have allowed us to navigate these challenges and provide positive outcomes for our business, associates and the communities we serve. Park's culture of risk management starts at the corporate level with Park's Board of Directors and extends to the team members employed by our operating partners at our hotels and resorts.
From an environmental perspective, our environmental ESG subcommittee, the Green Park Committee, continued to focus on near- and long-term planning that is expected to improve our portfolio’s overall efficiency and to effectuate our commitment and strategy for decarbonization. During 2022, we conducted intensive energy and water audits at 19 of our hotels, identifying areas for efficiency improvement by asset. Recommendations from these audits have been incorporated into our capital improvement plans, and we spent much of 2022 working to execute these initiatives. We allocated close to $17 million across 100 efficiency-related projects during 2022. As part of our efforts, we are proud to have received five ENERGY STAR certifications for superior energy performance in 2022 and six certifications in 2023 as of the date of this Report. Furthermore, we are honored to have been named an ENERGY STAR Partner of the Year for environmental management in 2023 as well as the Nareit Leader in the Light winner for hospitality for our sustainability-related efforts in both 2022 and 2023.
As expected, our reported environmental consumption increased in 2022 compared to 2021 due to increasing demand levels across our portfolio following three years of pandemic-related disruption. However, we are pleased to report that overall environmental intensity on a like-for-like basis remained notably lower than pre-pandemic levels, reflecting our commitment to responsible resource use. Our energy intensity in 2022 decreased by 16% compared to 2017 on a like-for-like basis, while like-for-like greenhouse gas emissions ("GHG emissions") intensity decreased 18% compared to 2017. In addition, we took an important step in our quality assurance process by undergoing third-party verification of select 2022 environmental data: total energy, total water and Scope 1 and 2 GHG emissions. We believe that our comprehensive systems of data collection, management and third-party verification demonstrate our commitment to maintaining the highest standards in data accuracy and reporting.
We also made meaningful enhancements to our social initiatives throughout 2022. In alignment with our Diversity & Inclusion Steering Committee’s mission statement, we continued to focus on increasing diversity within our organization, resulting in a 10% increase in minority associates and a 5% increase in female associates in 2022. In addition, as part of our commitment to advancing diversity, equity and inclusion ("DEI") at both Park and across our industry, we were pleased to be a founding sponsor of Nareit’s Dividends Through Diversity, Equity and Inclusion ("DDEI") Giving Campaign in 2022. As co-chair of the Nareit-led DDEI initiative, I am thrilled to see DEI rise to the forefront of many companies’ priorities and look forward to collective progress across our industry. Focusing on inclusion and belonging at Park, we listened to feedback from our associates for increased social interaction coming out of the pandemic and have implemented various engagement events, including weekly breakfasts for all associates, quarterly happy hours, periodic lunches, the continued implementation of Associate Appreciation Week, in-person wellness initiatives and increased leadership touchpoints with our management-level Executive Committee. We remain committed to ongoing employee engagement through surveys, periodic compensation analyses throughout the year to ensure all associates are being paid appropriately with no difference due to race or gender and additional pulse surveys on relevant topics to our associates. We also continue to prioritize leadership development opportunities through trainings with subject experts that are open to all associates as well as our intensive Leadership Development Program to invest in our next generation of high-potential leaders.
For the external community, we were thrilled to reinstate in-person charitable events through our Park Cares Committee following a hiatus during the pandemic. We organized a back to-school supplies drive for underprivileged local youth through the Arlington Partnership for Affordable Housing ("APAH") for the second consecutive year, and we collected toys and clothing for children in need through the National Capital Area’s Salvation Army Angel Tree program, an initiative we have supported since 2018. We also continued to partner with Don Bosco Cristo Rey High School to sponsor students from underprivileged areas with work study internships. Along with in-kind donations to Park Cares initiatives, 85 Park associates donated their time to our community partners during work hours, amassing approximately 520 volunteer hours during 2022.
On the governance side and in recognition of the growing importance of ESG to all stakeholders, we established a formal Environmental, Social & Governance Committee (the "ESG Committee") in March 2022 and renamed two of our committees of our Board of Directors ("Board") to better reflect our oversight of ESG matters. In recognition of the advantages of having a gender diverse perspective for Park’s governance and oversight, our Board has committed to identifying an additional professional with a diverse gender identity as a nominee and anticipates nominating such a person to the Board by the end of 2024 . We also introduced an ESG scorecard in order to incorporate ESG factors into our executive compensation, and we published our performance relative to our scorecard in our 2023 Proxy Statement. We are pleased to report that we achieved our "target" score for our 2022 ESG scorecard initiatives and accomplishments.
Our commitment to transparency and reporting remains a priority. We routinely engage with and respond to various frameworks and ESG reporting agencies, and we align with globally recognized sustainability frameworks and standards such as the Global Reporting Initiative ("GRI"), the Sustainability Accounting Standards Board ("SASB"), the UN Sustainable Development Goals ("SDGs") and the Task Force on Climate-Related Financial Disclosures ("TCFD"). We participated in the Global Real Estate Sustainability Benchmark ("GRESB")real estate assessment for the fourth consecutive year and were awarded our highest score thus far of 80 points overall. As we think about future disclosures, particularly related to our environmental reduction targets, we continue to employ our prudent approach as we evaluate the ever-changing regulatory and legislative backdrop. While we wait for pending legislation on climate-related disclosures, we remain dedicated to working toward our existing internal 2030 environmental reduction goals and will work to continue the significant progress we have already made toward reducing energy and GHG emissions intensity, among other metrics and targets.
In closing, I want to express my sincere gratitude to our associates, partners and stakeholders who have supported our ESG initiatives. Your commitment and collaboration are instrumental in driving positive change. We look forward to continuing this journey together, creating a sustainable future for Park and our communities.
Thomas J. Baltimore, Jr.
Chairman, President and Chief Executive Officer