Host Hotels & Resorts (HST) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 4, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Host Hotels & Resorts First Quarter 2023 Earnings Conference Call. Today’s call 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 comparable 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 are 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 kicked off the first quarter of 2023 with meaningful outperformance, delivering a RevPAR improvement of 31% compared to the first quarter of 2022, exceeding the top end of our first quarter RevPAR guidance by 4 percentage points. During the first quarter, we delivered adjusted EBITDAre of $444 million and adjusted FFO per share of $0.55.

Our comparable hotel EBITDA of $439 million in the first quarter was 18% above 2019 and 44% above 2022, driven by both occupancy increases and continued rate strength, particularly in the group business segment at our downtown hotels. First quarter comparable hotel EBITDA margin of 32.5% was meaningfully ahead of 2022 and exceeded 2019 for the fourth consecutive quarter. Our strong performance in the first quarter, coupled with our improved outlook for the year, allowed us to substantially raise and tighten our full year RevPAR growth guidance range to 7.5% to 10.5%, nearly doubling the midpoint of our full year expected RevPAR growth to 9% from 5% last quarter. This marks the fourth consecutive quarter since the onset of the pandemic that we have achieved RevPAR, adjusted EBITDAre and EBITDA margins ahead of 2019. And at the midpoint, our full year 2023 RevPAR guidance is 7% above 2019.