Host Hotels & Resorts (HST) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

November 3, 2022 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Host Hotels & Resorts Third Quarter 2022 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the call over to Jaime Marcus, Senior Vice President of Investor Relations.

Jaime Marcus

Thank you, and good morning, everyone.

Before we begin, please note that many of the comments made today are considered to be forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements.

In addition, on today's call, we will discuss certain non-GAAP financial information, such as FFO, adjusted EBITDAre and hotel-level results. You can find this information together with reconciliations to the most directly comparable GAAP information in yesterday's earnings press release, and our 8-K filed with the SEC, and in the supplemental financial information on our website at hosthotels.com.

With me on today's call will be Jim Risoleo, President and Chief Executive Officer; and Sourav Ghosh, Executive Vice President and Chief Financial Officer.

With that, I would like to turn the call over to Jim.

Jim Risoleo

Thank you, Jaime, and thanks to everyone for joining us this morning. We delivered strong performance during the third quarter turning a number of milestones in the recovery. Total food and beverage in group revenues exceeded 2019 for the first time since the onset of the pandemic and our EBITDA margin was 250 basis points better than 2019. During the third quarter, our adjusted EBITDAre was $328 million and our adjusted FFO per share was $0.38. Our all owned hotel EBITDA of $341 million in the third quarter was 15% above 2019, driven by continued rate strength, elevated out of room revenues and tight expense controls. All owned hotel revenues in the third quarter increased 4.9% over the third quarter of 2019 while all owned hotel operating expenses were up only 1.2%.

All owned hotel RevPAR for the third quarter was $192, a 1.4% improvement over the third quarter of 2019. As a reminder, this is now the second consecutive quarter RevPAR has exceeded 2019 levels since the onset of the pandemic. While macroeconomic concerns continued to dominate the headlines, we are not seeing any signs of weakness in our business. When digress to 2008, the banking system is in good shape, levers levels are reasonable and consumers still have $1.7 trillion in excess savings with the majority concentrated in the top income brackets which gives us confidence to recovery in the lodging industry is sustainable. In a poll released by the Global Business Travel Association last month, the majority of companies indicated that they are not limiting travel specifically due to economic concerns and 78% of the participants expect volumes to increase in 2023.