Host Hotels & Resorts, Inc.
CEO : Mr. James F. Risoleo
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 26.6% YoY | 125.3% | -53.3% | 2023-02-16 |
Jim Risoleo says,
Financial Performance
- Delivered adjusted EBITDAre of $1.498 billion for the full year 2022
- All owned hotel EBITDA of $1.573 billion for the full year 2022
- All owned hotel RevPAR of $196 for the full year 2022
- Delivered adjusted EBITDAre of $364 million and adjusted FFO per share of $0.44 for Q4 2022
- All owned hotel EBITDA of $373 million in Q4 2022 was 5% above 2019
Corporate Responsibility
- Introduced 2050 vision of becoming a net positive company in 2022 Corporate Responsibility Report
- 10 LEED certified properties, including three LEED Gold hotels, plus corporate headquarters
- Named to Dow Jones Sustainability Index World for the fourth consecutive year and DJSI North America for the sixth consecutive year
- Included in S&P’s Global Sustainability Yearbook and named one of America’s most responsible companies by Newsweek
Capital Allocation and Repurchase Program
- Repurchased 1.7 billion shares at an average price of $15.93 per share through common share repurchase program in Q4 2022
- $973 million remaining capacity under the repurchase program
Travel Industry Outlook
- Leisure rates remain well above 2019 levels, with transient rates at resorts 52% above 2019 in Q4 2022
- Booked 400,000 group rooms for 2023, with total group revenue pace down only 70 basis points to the same time in 2019
- Revenue driven by business transient demand improved 440 basis points compared to 2019 on a quarterly sequential basis
Impact of Hurricane Ian
- Hurricane Ian impacted Q4 2022 RevPAR growth by 220 basis points, adjusted EBITDAre by $15 million, and all owned hotel EBITDA margin by 40 basis points
- Total property damage and remediation costs for all impacted properties in Florida estimated to be between $200 million and $220 million
- Insurance coverage is sufficient to cover substantially all property damage and near-term loss of business
Portfolio Reinvestment
- 2023 capital expenditure guidance range is $600 million to $725 million, which reflects approximately $275 million of investment for redevelopment, repositioning, and ROI projects
- Final property, the Washington Marriott and Metro Center, is underway and expected to be completed in May 2023
Sourav Ghosh says,
Guidance for 2023
- First quarter RevPAR growth expected to be between 24% and 27% with remaining three quarters year-over-year RevPAR changes expected to be down low-single digits at the low-end and up low-single digits at the high-end of guidance range
- Full year guidance anticipates comparable RevPAR growth of between 2% and 8% over 2022
- Comparable EBITDA margins expected to be down 360 basis points year-over-year at the low-end of guidance and down 210 basis points at the high-end
Business and Group Mix
- Transient revenue up 60 basis points to Q4 2019, driven by 22% rate growth
- RevPAR growth for Thanksgiving and festive season up 5% and 6% over 2019, respectively, driven by rate growth of over 30% for both periods
- Business transient revenue down 18% to Q4 2019, driven by 2% rate growth, targeting high single-digit business transient rate growth in 2023
- Group room revenue up 2% above Q4 2019 driven by 10% rate growth, group room demand down 8% to 2019
- Corporate group revenue up 6% in Q4, surpassing 2019 for the second quarter in a row, driven by a 14% rate increase
- Association group revenue down 16% in Q4 compared to 2019 despite rate growth of over 7%, meaningful pickup in booking activity for future years in the month of December
- SMERF group revenue up 29% over 2019 driven equally by a 14% increase in rooms sold and a 13% increase in rate
Margins and Expenses
- Fourth quarter all owned hotel EBITDA margin came in at 29.5%, which is 110 basis points better than the fourth quarter of 2019
- Expect comparable hotel EBITDA margins to be down year-over-year, but margins in 2023 to be only slightly down to 2019 despite lagging occupancy and four years of inflationary pressures
- Wage rates up 5% in 2023, from 2019 through 2023, expect wage rates and utilities to increase 20% and insurance to increase approximately 100%
- Attrition and cancellation fees to revert to historical levels
Balance Sheet and Liquidity Position
- Weighted average maturity is 5.2 years at a weighted average interest rate of 4.4%, no significant maturities until April 2024
- Total available liquidity is $2.4 billion, including $200 million of FF&E reserves and full availability of $1.5 billion credit facility
- Ended 2022 at 2.4x net leverage, S&P and Fitch revised issuer outlooks to positive from stable
Q & A sessions,
Group Segment
- Group pace at 84% of 2019 actual with an increase in definite room nights
- Total group revenue pace up by 17%
- Expected to continue with short-term nature of bookings
Business Transient Segment
- BT room nights down by 20% in Q4 2022 from Q4 2019, but bookings picked up by 500 basis points since Q3
- BT revenue down by 18% due to rate improvement
- Expect to see high single-digit rate increases
- Small and medium-sized businesses driving the business transient recovery
Acquisition and Capital Allocation
- Invested $1.5 billion in assets from 2020 to 2022
- No plans to acquire assets in the next 60 to 90 days
- Possibility of investing across different markets in 2023 and 2024 as CMBS loan maturities approach
- Repurchased 1.7 billion shares in Q4 2022
Overall Financial Performance
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No bad stock 