Host Hotels & Resorts, Inc. (HST) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary shows positive financial performance with revenue growth in several areas, including golf and business transient revenue. The Q&A highlights strong transient revenues from the World Cup and significant returns from non-room investments. Despite weather impacts, rebookings in Maui and Oahu are progressing well. The company remains disciplined in capital allocation, prioritizing shareholder returns. While there is some uncertainty in the macro environment, the overall sentiment is positive with strong group bookings and a disciplined approach to acquisitions.
Key Financial Performance
Adjusted EBITDAre $543 million, an increase of 5.6% over last year. The increase was supported by $7 million of business interruption proceeds related to Hurricanes Helene and Milton, compared to $10 million in the first quarter of 2025.
Adjusted FFO per share $0.67, an increase of 4.7% over last year. The increase was supported by business interruption proceeds and operational improvements.
Comparable hotel total RevPAR Improved 4.6% compared to the first quarter of 2025. The growth was driven by rate growth and continued strength in out-of-room spending.
Comparable hotel RevPAR Improved 4.4% year-over-year. The growth was driven by rate growth and resilient demand despite weather impacts and tough comparisons to last year.
Comparable hotel EBITDA margin Improved by 70 basis points year-over-year to 32.7%. The improvement was driven by revenue growth outpacing wage and benefit increases.
Transient revenue Grew by 5.5%, driven by rate growth, particularly at resorts. Easter in early April compressed spring break demand in March, contributing to 9% transient revenue growth at resorts.
Group room revenue Increased by 2.4% year-over-year, driven by improvements in both demand and rate.
F&B revenue Grew 5%, driven by recently repositioned outlets and strong banquet and catering contributions.
Other revenue Increased by 6%, driven by strength in golf and spa operations.
Banquet and catering revenue Increased by 3%, led by properties such as San Diego, San Francisco Marriott Marquis, San Antonio Marriott Rivercenter, and Ritz-Carlton Amelia Island.
Outlet revenue Grew 8%, driven by recently renovated restaurants at properties like New York Marriott Marquis and Grand Hyatt San Diego.
Spa revenue Increased by 4%, driven by improved capture at Ritz-Carlton Amelia Island and Westin Kierland.
Golf revenue Grew 9%, led by strong performance at Naples and Phoenix golf courses despite impacts in Maui.
Business transient revenue Increased by 4% year-over-year, driven by strong rate growth and a mix shift from government to corporate-negotiated customers.
Definite group room nights 1.1 million group room nights sold in the first quarter, with total group revenue pace up nearly 4% year-over-year.
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Operating Highlights
Hyatt Transformational Capital Program: More than 80% complete, tracking on time and under budget. Renovations completed at 4 of 6 hotels, with the Grand Hyatt Washington, D.C. nearing completion and the Manchester Grand Hyatt San Diego expected to be substantially complete by year-end.
Marriott Transformational Capital Program: Guestroom renovations at the New Orleans Marriott are in progress, with additional renovations at The Ritz-Carlton Naples, Tiburon, and the Westin Kierland starting soon. The program is over 25% complete, on time, and under budget.
Four Seasons Orlando Condo Development: 20 of 31 units sold, deposits and purchase agreements for 8 of 9 villas. Project is on budget and expected to sell out by year-end.
Transient Revenue Growth: Increased by 5.5%, driven by rate growth and leisure demand, particularly at Florida and Phoenix resorts.
Group Revenue Growth: Up 2.4% year-over-year, with strong performance in San Francisco due to citywide events and the Super Bowl.
World Cup and Special Events Impact: Transient revenue pace for World Cup markets is up nearly 40% year-over-year, with significant demand expected closer to match dates.
Comparable Hotel RevPAR: Improved by 4.4% year-over-year, driven by rate growth and out-of-room spending.
Comparable Hotel EBITDA Margin: Increased by 70 basis points to 32.7%, supported by revenue growth.
Capital Expenditure Guidance: Set at $545 million to $655 million for 2026, including redevelopment and ROI projects.
Share Repurchase Program: Repurchased 4 million shares at an average price of $18.97 per share, totaling $75 million in Q1.
Dividend Strategy: Declared a quarterly dividend of $0.20 per share and a special dividend of $0.72 per share, distributing a $500 million taxable gain from the sale of two Four Seasons resorts.
Corporate Responsibility: Recognized in the Dow Jones Best-in-Class World Index for the seventh consecutive year, ranking #3 globally in the sector.
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Risk or Challenges
Weather-related disruptions: The Kona Low rainstorm in Hawaii caused property damage and impacted demand at Maui resorts, requiring $20-$30 million in property damage reconstruction and $5 million in remediation costs. While insurance is expected to cover losses beyond the deductible, the total impact is still being evaluated.
Geopolitical uncertainty: Ongoing geopolitical uncertainty has influenced travel patterns, with travelers favoring U.S. luxury destinations over international ones. This could impact international demand and revenue streams.
Labor cost pressures: Wage rates are expected to increase by approximately 5%, which constitutes about 50% of total comparable hotel operating expenses, potentially impacting profit margins.
Special events dependency: Revenue growth is partially dependent on special events like the World Cup and America 250 celebrations. Any changes in these events could affect revenue projections.
Short-term group booking trends: Modest improvements in short-term group booking trends are expected, but any stagnation or decline could impact group revenue growth.
Supply chain and renovation disruptions: Ongoing renovations and capital programs, while on time and under budget, could face unforeseen delays or cost overruns, impacting operational efficiency and financial performance.
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Guidance & Outlook
2026 Comparable Hotel RevPAR Growth: The company has raised its 2026 comparable hotel RevPAR growth guidance range to 3% to 4.5% over 2025, and its comparable hotel total RevPAR growth guidance range to 3.5% to 5% over last year.
Leisure Demand and Special Events: Strong leisure demand is expected, bolstered by special events such as the World Cup and America 250 celebrations, with transient revenue pace up 6% for Memorial Day weekend and nearly 50% for the July 4 weekend compared to last year.
Group Revenue and Booking Trends: Definite group room nights for 2026 stand at 3.5 million, with total group revenue pace up nearly 4% year-over-year. Group booking pace is strongest for the second and fourth quarters.
Capital Expenditures for 2026: Capital expenditure guidance for 2026 is $545 million to $655 million, including $250 million to $300 million for redevelopment and ROI projects, $20 million to $30 million for property damage reconstruction in Hawaii, and $15 million to complete the Four Seasons Orlando condo development.
Maui EBITDA Contribution: Maui is expected to contribute approximately $120 million of EBITDA in 2026, with a 35 basis point contribution to full-year RevPAR growth.
World Cup Impact: The World Cup is expected to provide a 60 basis point lift to full-year RevPAR growth, with transient revenue pace in World Cup markets up nearly 40% year-over-year.
Adjusted EBITDAre Guidance: The 2026 full-year adjusted EBITDAre midpoint is $1.810 billion, reflecting a $40 million improvement over prior guidance, driven by first-quarter outperformance and a slightly more optimistic view of the second half of the year.
Comparable Hotel EBITDA Margins: Comparable hotel EBITDA margins are expected to improve by 20 to 50 basis points year-over-year, with a midpoint of 29.5%, reflecting productivity gains and capital allocation decisions.
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Shareholder Return Plan
Quarterly Common Dividend: The Board of Directors authorized a quarterly common dividend of $0.20 per share, payable on July 15 to stockholders of record on June 30.
Special Dividend: A special dividend of $0.72 per share was authorized, representing the distribution of the approximate $500 million taxable gain from the sale of two Four Seasons resorts in the first quarter of this year.
Share Repurchase Program: Repurchased 4 million shares of common stock at an average price of $18.97 per share for a total of $75 million in the first quarter. Since 2017, a total of 73.2 million shares have been repurchased at an average price of $16.76 per share, amounting to approximately $1.2 billion.
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Key Q&A
Q:What is the impact of the World Cup on transient revenues or bookings, and how does it align with gross RevPAR expectations?
A:Transient revenues or bookings in World Cup markets are up 40%. Majority of bookings happen within a 45-day window, with 40% of occupancy booked in the last week leading up to matches. The 60 basis point gross RevPAR pickup is expected to occur 2/3 in Q2 and the remainder in Q3, with variability due to knockout rounds.
Q:What are the returns on non-room versus room investments, and how do they impact the business?
A:The transformative renovations of over $2.1 billion have resulted in a 9-point yield index gain on 21 stabilized assets. Non-room investments, such as banquet, catering, spa, and outlet renovations, have shown meaningful returns. Examples include the AVIV Restaurant and the View at the New York Marriott Marquis, both exceeding expectations. The Marriott Marquis renovation increased EBITDA from $65 million in 2018 to $100 million in 2025.
Q:What is the RevPAR and EBITDA impact in Maui and Oahu due to weather disruptions, and how are rebookings progressing?
A:The overall weather impact was 120 basis points, with 80 basis points from Hawaii and 40 basis points from Winter Storm Fern. Maui's EBITDA impact was around $5 million, and Oahu's was about $1 million. Rebookings are picking up in late April, May, and June, with Maui pacing ahead of initial expectations and maintaining a $120 million EBITDA guide.
Q:How did external factors like weather and safety concerns influence demand in Q1, and what is the outlook for bookings?
A:Strong demand in Florida and Arizona resorts was influenced by weather and safety concerns in Mexico. Affluent customers showed no pullback, and transient pace for upcoming holidays like Memorial Day is strong. Group booking pace for Q2 and Q4 is in the high single digits, with 280,000 room nights picked up in Q1 for the remainder of the year.
Q:What is the outlook for the transaction market and capital allocation priorities?
A:Host remains disciplined and return-focused, prioritizing dividends, share repurchases, portfolio reinvestment, and opportunistic acquisitions. The uncertain macro environment makes risk-adjusted returns for acquisitions challenging. Host has returned $1.2 billion through share buybacks since 2017 and continues to test the market for dispositions and acquisitions.
Q:What is the recovery outlook for San Francisco, and how are AI and office fundamentals impacting the market?
A:San Francisco is recovering, with RevPAR up 26% in Q1 and over 70% EBITDA growth. AI-related companies are driving office recovery, benefiting both city center and airport properties. Host's assets in San Francisco are well-positioned for diversified demand and are expected to see continued growth.
Q:What is the confidence level in achieving Maui's $120 million EBITDA target, and what are the key factors?
A:Maui's RevPAR would have been in the high single digits without the storm impact. The $120 million EBITDA target requires close to 9% RevPAR growth, supported by strong group booking pace, particularly in Q4, and rebookings from storm cancellations.
Q:How has the Bonvoy program's economic split change impacted Host's performance?
A:The changes in the Bonvoy program have been beneficial to Host, particularly due to high redemption rates in its portfolio. However, the exact quantification of the benefit is not available.
Q:What are the building blocks for expense management in Host's annual guidance?
A:Wage and benefit growth was 4.5% in Q1, driven by productivity improvements and labor management systems. Despite a 5% increase in wage rates, productivity gains have kept absolute wage and benefit growth lower. Rooms and food and beverage profit margins have improved due to these efficiencies.
Q:What is the outlook for acquisitions and dispositions, and how does it align with capital allocation strategy?
A:Host is open to both acquisitions and dispositions but remains disciplined. Dispositions are tested regularly, and the company is prepared to sell assets at the right price. Acquisitions are evaluated for risk-adjusted returns, and Host is positioned to act opportunistically with its strong balance sheet.
Q:Review of Unclear Management Responses
A:Management avoided directly quantifying the benefit of the Bonvoy program changes, stating that they could provide ranges at a later time but did not have the information readily available.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
America index
America sector
Austin Hyatt
Capital Program
Capital Programs
Class
Grand Hyatt
Hyatt Regency
Low rainstorm
Marriott Transformational
Maui
North America
Program renovation
Regency Reston
RevPAR hotel
RevPAR rate
Seasons Orlando
Transformational Capital
asset program
company
completion
destination
fact
guarantee Transformational
hotel RevPAR
impact storm
market recovery
price share
renovation hotel
share repurchase
stockholder
world
HST Transcript
Host Hotels & Resorts, Inc. (HST) Q1 2026 Earnings Call Transcript
Positive5-7
The earnings call summary shows positive financial performance with revenue growth in several areas, including golf and business transient revenue. The Q&A highlights strong transient revenues from the World Cup and significant returns from non-room investments. Despite weather impacts, rebookings in Maui and Oahu are progressing well. The company remains disciplined in capital allocation, prioritizing shareholder returns. While there is some uncertainty in the macro environment, the overall sentiment is positive with strong group bookings and a disciplined approach to acquisitions.
Host Hotels & Resorts, Inc. (HST) Q4 2025 Earnings Call Transcript
Positive2-19
The earnings call summary indicates strong financial performance, with growth in revenue and EBITDA, positive shareholder returns, and strategic capital programs with Marriott and Hyatt. The Q&A session provided additional details on asset sales, acquisitions, and capital allocation, reflecting management's opportunistic approach. Despite some uncertainties in asset acquisition specifics, the overall sentiment remains positive due to revenue growth, optimistic guidance, and strategic partnerships.
Host Hotels & Resorts, Inc. (HST) Q3 2025 Earnings Call Transcript
Positive11-6
The earnings call reflects a positive sentiment with strong group revenue growth in key markets, optimistic 2026 outlook, and increased EBITDA guidance. Despite some uncertainties in specific metrics, management's focus on strategic capital investments and strong liquidity position supports a positive outlook. The Q&A session further reinforced optimism with stable bookings and positive market dynamics, contributing to a positive stock price movement prediction over the next two weeks.
Host Hotels & Resorts, Inc. (HST) Q2 2025 Earnings Call Transcript
Unknown7-31
The earnings call presents a mixed picture: while transient revenue and Maui recovery are positive, group room revenue has decreased, and EBITDA margins have declined. The Q&A highlights concerns about group dynamics and wage growth, with management showing caution. Despite some optimistic guidance, the lack of robust transaction activity and unclear management responses contribute to a neutral sentiment.
HST Slides
HST Report
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