Host Hotels & Resorts (HST) 7 Nov 24 2024 Q3 Earnings call transcript

Host Hotels & Resorts, a leading hospitality company, recently held its third-quarter 2024 earnings call, providing insights into its performance and future outlook. The call, led by Senior Vice President of Investor Relations, Jaime Marcus, featured updates from President and CEO, James Risoleo, and Executive Vice President and Chief Financial Officer, Sourav Ghosh. The call highlighted the company's resilience in the face of challenges, including Hurricanes Helene and Milton, and its strategic focus on growth and innovation.

Resilience in the Face of Natural Disasters

Host Hotels & Resorts demonstrated its resilience in the face of Hurricanes Helene and Milton, which caused significant damage to some of its properties, notably The Don CeSar. Despite the challenges, the company's quick response and strategic investments in resiliency measures paid off, allowing for a phased reopening of the property and minimizing water intrusion. This incident underscores Host Hotels & Resorts' commitment to ensuring the safety and well-being of its employees and guests, while also highlighting its ability to adapt to unexpected circumstances.

Strategic Acquisitions and Capital Allocation

The company's strategic acquisitions, including the 1 Hotel Nashville and the Embassy Suites by Hilton Nashville Downtown, have contributed to its growth, with investments totaling $1.5 billion and a blended 13.6x EBITDA multiple based on estimated 2024 results. These acquisitions not only enhance Host Hotels & Resorts' portfolio but also underscore its commitment to strategic capital allocation, with a focus on acquiring iconic and irreplaceable real estate assets.

Financial Performance and Outlook

In terms of financial performance, Host Hotels & Resorts reported adjusted EBITDAre of $324 million and adjusted FFO per share of $0.36 for the third quarter. While these figures reflect a decrease compared to the same period in 2023 due to business interruption insurance proceeds, the company's operational results demonstrated resilience, with a year-over-year comparable hotel total RevPAR improvement of 3.1%. Looking forward, the company anticipates a phased recovery in Maui, where wildfires have impacted revenue, and expects total RevPAR for 2025 to be nearly 5% ahead of the same time last year.

Strategic Investments and Future Outlook

Host Hotels & Resorts is also investing in its properties, with a capital expenditure guidance range of $485 billion to $580 billion for 2024. This includes investments for redevelopment, repositioning, and ROI projects, renewal and replacement projects, and property damage reconstruction. The company's focus on reinvesting in its assets and strategic acquisitions positions it well for future growth, particularly in the context of a recovering hospitality market.

In conclusion, Host Hotels & Resorts' third-quarter 2024 earnings call underscored its resilience in the face of challenges, strategic focus on growth, and commitment to capital allocation. With a strong balance sheet, geographically diversified portfolio, and continued reinvestment in its assets, the company is well positioned for future growth and value creation. As it navigates the recovery of its Maui properties and continues to invest in its portfolio, Host Hotels & Resorts remains a key player in the hospitality industry, demonstrating both resilience and innovation in a rapidly evolving market.