On July 31, 2024, Host Hotels & Resorts Inc (HST, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Host Hotels & Resorts Inc, the largest lodging real estate investment trust (REIT) in the United States, owns 77 predominantly urban and resort upper-upscale and luxury hotel properties representing nearly 42,000 rooms, mainly in the United States.
Performance Highlights
Host Hotels & Resorts Inc reported revenues of $1,466 million for Q2 2024, a 5.2% increase from $1,393 million in Q2 2023, aligning closely with the analyst estimate of $1,467.41 million. However, the company's diluted earnings per share (EPS) came in at $0.34, falling short of the analyst estimate of $0.35 but marking a 17.2% increase from $0.29 in the same quarter last year.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | Percent Change |
|---|---|---|---|
| Revenues | $1,466 million | $1,393 million | 5.2% |
| Net Income | $242 million | $214 million | 13.1% |
| EBITDAre | $502 million | $446 million | 12.6% |
| Adjusted EBITDAre | $476 million | $446 million | 6.7% |
| Diluted EPS | $0.34 | $0.29 | 17.2% |
| NAREIT FFO per diluted share | $0.57 | $0.53 | 7.5% |
| Adjusted FFO per diluted share | $0.57 | $0.53 | 7.5% |
Operational Insights
Host Hotels & Resorts Inc's comparable hotel Total RevPAR (Revenue per Available Room) was $368.25 for Q2 2024, a slight increase of 0.5% from $366.60 in Q2 2023. Comparable hotel RevPAR was $224.29, up 0.1% from $224.02 in the same period last year. The company attributed the modest growth to strong group business driving increases in banquet and catering revenues, despite a slower-than-anticipated recovery in Maui and a shift in leisure demand to international destinations.
"Host delivered comparable hotel Total RevPAR growth of 0.5% over the second quarter of 2023, as group business continued to drive increases in banquet and catering revenues. Comparable hotel RevPAR increased 0.1% for the quarter as a result of a slower-than-anticipated recovery in Maui and the current shift in leisure demand to international destinations," said James F. Risoleo, President and Chief Executive Officer.
Strategic Acquisitions and Financial Moves
During the quarter, Host Hotels & Resorts Inc made significant acquisitions, including the 1 Hotel Central Park for $265 million and The Ritz-Carlton O’ahu, Turtle Bay for $680 million. These acquisitions are expected to diversify the company's portfolio and contribute to future EBITDA growth.
Additionally, the company repurchased $50 million of common stock and completed several financing transactions, including the repayment of $400 million of Series G senior notes and the issuance of $600 million of Series K senior notes at 5.7%.
Balance Sheet and Liquidity
Host Hotels & Resorts Inc maintains a robust balance sheet with total assets of $12.8 billion and a debt balance of $4.9 billion. The company has a weighted average maturity of 4.7 years and a weighted average interest rate of 4.9%. Total available liquidity stands at approximately $1.4 billion, including $970 million available under the revolver portion of the credit facility.
Challenges and Outlook
The company faced challenges due to the slower recovery in Maui following the August 2023 wildfires and a shift in leisure demand to international destinations. These factors impacted RevPAR growth and operating profit margins. However, the receipt of $21 million in business interruption proceeds related to the Maui wildfires partially offset these impacts.
Looking ahead, Host Hotels & Resorts Inc has adjusted its full-year guidance due to the ongoing recovery challenges in Maui and moderating leisure transient demand. The company expects operating profit margins to remain flat compared to 2023, with comparable hotel EBITDA margins expected to decline due to increased wages, real estate taxes, and insurance costs.
For more detailed financial information, readers are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Host Hotels & Resorts Inc for further details.
