Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to the Host Hotels & Resorts Fourth Quarter 2022 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Jamie Marcus, Senior Vice President of Investor Relations.

Jamie 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.

expressed filings risks SEC, cause or and to from our subject statements future revise in not differ numerous are to uncertainties those these described forward-looking with publicly these the are results obligated statements. As to we update and that could

non-GAAP and addition, hotel-level In certain today's as such we call, information on results. FFO, discuss will financial adjusted EBITDAre,

our most this earnings our directly together financial to filed and comparable press information find with supplemental information can SEC, the You website the yesterday's GAAP in release the and X-K with reconciliations at in hosthotels.com. on information

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

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

Jim Risoleo

Thank joining thanks you, morning. for to this everyone us And Jamie.

improvements year ended by rate strength. the We strong continued with our driven portfolio across operating

hotel EBITDA helped our owned year XXXX billion in For billion, X.XXX the guidance full delivered owned all of of full adjusted high-end of range. of $X.XXX achieve EBITDAre the RevPAR XXXX, $XXX, hotel year we all us which

we adjusted fourth quarter, and of $X.XX. delivered per the EBITDAre million of adjusted During FFO $XXX share

by owned room from X% million quarter $XXX Our above EBITDA out improvements. revenues, operating strength in fourth XXXX, the hotel all and of expense resulting driven rate of was efficiencies

the RevPAR owned over XXXX. a quarter fourth $XXX, improvement hotel for point of All the fourth approximately quarter XX-basis was

fourth hotel XXXX. yet XXXX since revenues hotel owned RevPAR of quarter As a levels owned Ian, quarter the third reminder, though fourth over the up consecutive X.X% fourth of the the pandemic. all Hurricane were quarter and the were by for EBITDA quarter operations in EBITDA onset impacted All margins, exceeded

points. were While down expenses XX operating all owned basis hotel

global strong operating in of over leader recognized In corporate a as XXXX, we addition course responsibility. continued to be to the delivering improvements

LEED Responsibility our is toward Report. our of in our environmental net introduced XXXX corporate which Corporate company, While XXXX LEED and detailed have certified hotels, of a social we total we work including plus positive XXXX vision XX Gold We our three a now targets, achieving becoming properties, headquarters.

to included were global named industries were fourth we and America sustainability year. year, for the we all sixth North Sustainability consecutive DJSI addition, consecutive for Index In which in Dow the the leaders recognizes the World across Jones

Additionally, of S&P's the we America's included Sustainability were once among most by world's companies again companies Newsweek. responsible named and sustainable one most in Yearbook Global

Subsequent of and incorporates leading in increase we pricing to sheet. restated no adding strength sustainability commitment industry amended Building Green incentives to reflects Consumption. ESG quarter-end, the agreement existing Renewable facility our including Certifications and and our initiatives, $X.X Energy to flexibility to credit our enhance billion and balance further The portfolio linked by

front, of share the at our program, quarter $XX fourth share On million. to per the our repurchase bringing during capital common quarter, $XX.XX average repurchased billion X.X allocation an repurchases price shares we total through the for

have approximately capacity under repurchase We the program. $XXX remaining million

remain several While continue state headlines, macroeconomic the for the to travel of we optimistic reasons. headwinds about dominate

First, well they levels. remain although XXXX leisure moderating, rates above are

in the XXXX quarter, in transient third our the fourth quarter. above resorts were to context, at compared For XX% rates XX%

fourth the same rooms total group down basis points XX is we quarter, in Second, XXXX. revenue to group booked for pace XXXX. time In only XXX,XXX the

sequential compared has segment demand points Third, while on basis driven XXXX XXX business to basis. transient been revenue by quarterly this improved uneven, a

this recovery, XX% pre-pandemic segment According of share a the today. they and Small demand reached in the Global our Business Travel, larger businesses transactions represent are business third by of and American corporate Express transient levels medium-sized quarter. to driving

to of results, on even our us XXXX our acquired our the XXx the full underwriting well at in XXXX period. XXx Our expectations. ahead put recent stabilization are acquisitions substantially continued year of we of our seven of plan EBITDA, to contribute and from bottom-end outperformance up Based hotels targeted to range ahead

XX.Xx since and on of $XXX activity our acquired XXXX, of million expenditures. $X.X a at foregone assets back billion multiple, XXx capital transaction of dispose have multiple estimated assets of including at EBITDA we EBITDA Looking $X.X billion

we noting current It hotel XXXX all more the XXXX XXXX our worth XXXX, owned that XXXX. moved XXXX is this comparison our to results hotel results all quarter, Comparing to from for of reflect operations. normalized as results our owned portfolio

considerable XX%, increased We capital associated with [indiscernible] X%, EBITDA by XX% our and have RevPAR key the assets projects. by avoided the by business per of disruption

to fourth to a impact margin impact On of that translates RevPAR all million hurricane basis million all quarter owned update, margin EBITDAre growth basis with XXX fourth points. hotel owned hotel starting Ian impact $XX an owned points, of we our an by of EBITDA our that back points adjusted our EBITDA quarter by the Moving RevPAR owned impacted full year by basis and $XX operations estimate hotel XX and basis EBITDA Hurricane all and hotel and all points. XX basis XX

replacing Reconstruction phased As critical Ritz-Carlton the major by point remaining will summer. a property Hyatt beginning the in Park of the closed, resilience strategy at equipment efficient introducing June. flood-proofing Ritz-Carlton, with reopening facilities elevating Water expect The reopen dry enhance remains Naples machinery. we the measures equipment, we the more reminder, a this and and to coconut November, targeting in opened and in Regency pool are

hotel have we planned the executing future avoiding operations. is are impacted by while otherwise addition, disruption that In projects capital closed, would

$XXX remediation estimate financial total of impacted all storm, While between the Florida we the be total to in impacts we properties million still damage the are and property evaluating costs for currently and million. $XXX

substantially damage loss of $XX our insurance of to this to million related plans. insurance have all Ritz-Carlton, $XXX resulting name covered we business. insurance deductible well year, costs. received coverage for our windstorm is cover the recovery sufficient million for approximately as $XXX near-term believe insured we on million We million current reopening Naples, Thus Based plans of potential for as in with per a $XX property our proceeds far the are approximately

points quarter colder transient of fourth Hyatt cancellations and from the Ritz-Carlton, the Point Continuing with strong compared Naples. during XXXX in XX fourth Coconut at hurricane and rate Florida to weather resulting was light with volume the for making quarter holidays, demand, up up results. Transient displacement increases lower basis revenue shortfall business

Revenue Coast. Francisco was the Orlando, by Hawaii, offset San Gulf Phoenix Florida and and in which driven declines growth

resort the rates Our Four at Hole continue $X,XXX XX% Jackson growth by to outperform had close with the the properties $X,XXX transient In to Seasons resorts we rate transient $X,XXX. quarter, led over Orlando Seasons fourth at and Four XXXX. with over X above

as bringing by room XXXX nights the Turning fourth growth. our group total sold In to is rate quarter, the sold XXX,XXX our second group consecutive for Group. group This driven XXXX rooms, revenue XX% exceeded rate million, quarter $X.X approximately hotels to group growth helped XXXX actual XXXX [indiscernible] lower contribution Total to XX% XX% and X% revenue represents for just which demand. of nights. group down offset to XXXX was room

the for since X-point time X% XXXX to improvement. rate of XXXX, X.X same at group represents room books representing In increase group on last year year, nights quarter. Group time XXX-basis books currently third the for XX% the compares which on definite million books room on is XXXX point the nights. last a This the full a year XXXX, the same have we to XX% up nearly

In last addition, the same revenue year. up XX% time group approximately pace to is

the have booking group encouraged books, base very given large are by the we on We trends. particularly short-term

our outlook in detail in operational more few minutes. discuss XXXX a will Sourav

we strategic operational all the our our growth improvements, delivering addition aimed which at continue of objectives profile portfolio. to EBITDA are In execute of three on elevating to

capital strategically include As a allocating through at share our model innovations, operating and managers, objectives reminder, comprehensive hotel our projects. with ROI redefining to hotels the market gaining development

we that to quarter As model. high-end points need back to with strategic to we it volumes business as of was achieved will order $XXX range, objective, $XXX still bulk expense relates to occupancy our of to is note the the have get of savings the to first associated below In important of of the million the XXXX. operating XX it redefining achieve the XXXX fourth quarter, and fourth the million

Turning to reinvestment. portfolio

capital renovation was is repositioning Fairmont which guestroom of for The million XXXX The $XXX lobby of Suites million delayed of Canyon the Lani. Naples, transformation construction approximately the completing projects. projects ROI at Ian. renovation tower $XXX by and include Kea Our expansion reflects million, to which guidance and expenditure transformational a filler Ritz-Carlton, investment $XXX Hurricane redevelopment, in Phoenician range expansion,

our Marquis by is capital expenditures Marriott Marriott underway, May. have that Center we out The XX capital in Washington completed we XX Metro completed Diego range. complete month. our and final low-end end this at of It in transformational XXXX program, guidance Marriott be actual to of and assets of To-date, worth the it is in the came and San we the the property, will noting expect

million $XXX which related restoration year, $XXX As to higher by capital midpoint we carryover be of capital our range million by which last such, reimbursed an the to is expect and claims. estimated insurance million of is driven to $XXX hurricane work, expenditures XXXX than

are results portfolio, XXXX. sheet balance allow ability performance remarks, XXXX, in of the proud our to and fortress quality will to continue confident our our and our my that are conclude extremely we reinvest the strong To our in we assets of we achieved us in

will With now Sourav. to that, I the turn call over

Sourav Ghosh

you, morning, and Thank everyone. Jim, good

go operations will fourth our full sheet. balance Jim's on Building quarter detail XXXX and on our into I year comments, guidance

of growth growth XX% for and Starting to of saw growth. the cancellations XX X% periods. season, the points in over of XX% the and continued by occupancy respectively, XXXX, overall Thanksgiving quarter sequentially was up to rate mix, by impacts with festive and season a both business flight over fourth weather from during Florida this X% XXXX, driven transient RevPAR holiday. driven revenue Despite cold increase basis rate festive

to transient improvement and occupancy. holidays is the XXXX a both driven by up of revenue King was This of XXXX. in Martin down weekend ahead, pace the XX% growth. was are quarter well. Day of quarter to by the a XXXX XXXX. above ahead achieved revenue that first start Break of Business XX% year, XX% Peasants' last Luther meaningful revenue Junior Looking X% when first business XXXX, was have transient quarter the of revenue Spring shaping down rate fourth driven from

transient As in we XXXX. high have single-digit discussed targeting previously, properties business growth are rate

fourth XXXX. quarter, in was pre-pandemic During York D.C. business San Washington York, demand with New and with X% Francisco, was by line and just monthly the behind driven seasonality transient New

by to of rate has the revenue XXXX quarter driven the XX% X% fourth growth. group. were the above revenues quarter XXXX Group This second room marks surpassed Turning levels.

down group room Phoenix achieved X% York above group XXXX, XXXX levels. and in properties demand to was overall demand New While

the San in XX% over XXXX. with The XX% booked a short-term booking by XXXX were rate Washington quarter, Group revenue of X% second D.C., the Diego, Francisco trend group rooms in and rooms the sold quarter the of for in row, York. up the quarter majority fourth increase. was the up for quarter, driven a surpassing quarter San New Corporate in continued The

was Maui, resort revenue hotels substantially Phoenix, performance corporate at New months in ahead All convention both up XXXX and of Orleans. by was driven properties. in quarter York Our rate X revenue Orlando, the driven and had New and group by

Association XX% losses volume X%. in Group Francisco, the revenue was quarter was decline Orleans. despite down to compared rate by XXXX New The growth and revenue of driven over San Boston fourth in

had However, levels. San and York New of group Phoenix ahead XXXX association Diego, demand

was fourth While association for in activity booking the of in month down in future we quarter, the pickup revenue years December. saw meaningful

rate. and a December. and military, Additionally, improved up equally or with fraternal sold in XX% each XX% October a increases in social, from groups New teams and in XX% XXXX X% and up the groups, D.C., Orleans. to Sports up rates by weddings Los Washington driven on over religious Wrapping Angeles to compared was month XXXX XX% revenue quarter in SMERF drove rooms sequentially increase in up educational, increase in

efficiencies owned of at in margins hotel increased Shifting EBITDA expenses, points that XXX strong margin is than XXXX. gears operating points quarter by revenues, We fact Hurricane the margins basis impacted XX.X%, came fourth to quarter. Ian expense in margin expansion with negatively fourth to out-of-room quarter combined better the rates attribute all our and the XX the basis model which fourth and despite

our at narrowed relative more to quarters continued margin and XXXX inflationary to expected, pressures normalized to staffing As due hotels. the levels prior gap

operating occupancy continue positive year-over-year still and which below meaningfully model ended efforts XXXX on on year pressure a redefine to to the rates basis. Our with up elevated wage results levels even the X% yield

a our trends return results results. As moving from current impacts believe closures release, to We we provide hotel our investors to this will our of level growth for due will in property better renovations portfolio that lasting presentation understanding presentation underlying properties of experienced or one-month with owned forward, detailed earnings and or damage. hotel longer all comparable cease without for

our in and Point the Regency comparable year to full closures Ian. our Coconut from by Hyatt Ritz-Carlton, removed have Naples caused XXXX We operations due forecast Hurricane

Current That we an optimistic potential the travel. headwinds and of slowdown to the the continue recovery. about XXXX. competing for macroeconomic margin Turning with be are economic for future our outlook to said,

to travel. depend Our business the resorts this will rated continued year business transient performance and our group, on international inbound of at improvement maintain our ability and high

macroeconomic we XXXX, low-end significant second while guidance assumes severe uncertainty the have in The assumes contemplates Given second provided a in range than which the the year. slowdown, wider slowdown of a of a a mild one. the half the high-end normal, half

the RevPAR For result bolster to first of growth due we comparisons full Omicron, XX% year between a is growth. which XX% quarter, expected expect be to easier as and to

digits low-single of digits at low-end year-over-year three at remaining our the range. range low-single quarters, high-end the to guidance the For we expect up changes of be our to RevPAR down

be trends, XXXX hotel January comparable increase preliminary a recent approximately a January to $XXX, over X.X% to ahead XXXX. and over RevPAR XX% expected increase is Looking January

Taken together, over of we comparable for X% anticipate and full between XXXX. the year, growth RevPAR X%

Additionally, and hotel increase to closer in levels XXXX. to staffing operating are are to stable costs comparison expected

when we only the margins high-end. in at we low-end and XXXX the result, of slightly is since margins our margins EBITDA we expect hotel be down reflects basis X.X%. consider CPI to to EBITDA particularly occupancy the the expense X.X% comparable points at years our XXX down a only of lagging evolve inflationary to our down down CAGR year-over-year, to despite model. that and pressures. portfolio It Though, basis to XXX core comparable versus As points total expect year-over-year XXXX This is the XXXX be guidance transform impressive operating efforts hotel four to CAGR be of you expect

driven million below which year-over-year occupancy $XXX is at fees, cancellation and XXXX attrition utility in The approximately levels. closer expenses, levels lower to and margin higher stable, our decline insurance by staffing and totaled XXXX hotels,

provided last our inflationary consider first the of you throughout and the noted limited lag margins at not were elevated we As the the year, hotels in the XXXX of services year, when particularly sustainable, many half staffing pressures.

range, compared XXXX, At adjusted of XX% X% year and the of a margin anticipate comparable hotel guidance RevPAR of billion. our comparable to midpoint EBITDA of full growth we EBITDAre $X.XXX

our pre-hurricane including hotels, adjusted year these Hyatt an hotel comparable Ritz-Carlton, full contribution important an the excluded set. includes business New Tower have at XXXX. in expected from from our note not XXXX additional included million in Naples XXXX Our EBITDAre Naples was Ian expected the Point $XX to $XX The that we interruption Coconut million to and is It guidance. contribution which estimated are two from be the proceeds from Hurricane

we we through we to aggregate, fees increase wage and historical In attrition rates utilities approximately X%. from In and XX% increase insurance and to to the XXXX, wage to XXXX, expect rates revert XXX%. expect expect XXXX XXXX, also In to increase levels. cancellation

fees occupancy XXXX. as were is still approximately quarter XX% cancellation and the approximately points benefits comprised XXXX context, attrition For and million, of our XXXX, $XX region fourth below comparable XX comprise and of of insurance total utilities X%, expenses, in and

balance to liquidity Turning our position. and sheet

maturity average maturities is rate a weighted average have until weighted of we no interest at X.X%, XXXX. Our years and significant April X.X

our last $X.X As net call, since our of total $XXX which credit call, our million positive X.Xx we and of leverage. today's XXXX revised full of S&P ended liquidity, availability issuer We from and in have to $X.X at facility. billion available And FF&E Fitch billion includes stable. reserves have both outlooks

Board level, a a XX, April approval stock our subject of our January, $X.XX dividend. XXXX. of March able $X.XX up, $X.XX regular Directors potential to share, to as to consideration included of quarterly per dividend dividend Wrapping record special quarterly though cash by dividend are of company's in of we dividends maintain the future All sustainable Board paid we stockholders factors. XX, of into at quarterly expect Directors to be to be common on authorized on which XXXX, a cash taking paid macroeconomic a The

our To the we we team continue well our to positioned are continue to believe and macroeconomic sheet in balance be environment. portfolio, and conclude, current outperforming, strategic our will

have questions. possible, one to happy yourself ensure be as questions limit your would take to question. we to that, address as To With please many we time

Operator

Instructions]. [Operator

go first Rose Please with question Citigroup. Our is Smedes ahead. from coming

SmedesRose

or I range group curious, macroeconomic a appreciate sort year are for of visibility are you specifically either that a I'm outlook. you guys the have? providing what you what business, year, would the side incorporates the wide the range slowdown And in of your that just of anything, seeing half suggest a if back on in

Jim Risoleo

signs business At any not this in we're weakness time, point segment. any seeing in of

I XXXX, XX% group end Rate think the performing million group with how mean, at we set X% up year nights very up, group well. actual. of the about Our of I encouraged was XXXX, ended is pace we're in exceptionally up. which was is X.X XXXX. room XXXX

million were the XXX,XXX-room X.X increase At night on since quarter That equates at room time XX%. we books year, nights. have same We the last XXXX of three. definite actual XX% room to nights that's a

the really total up, picked points we year. is XX% to group So up other think, thing is pace the same X and time that revenue I encouraging last

group go to we're and look down well. And pace. XX up is you set points at XXXX, revenue in how basis if we're really total relative So only set up back

of the the perform likely group to we're is the solid nature encouraged we have And the a continue. bookings of will year. So how short-term base expected as this result with books, on that

So no slowdown indication there. of any

to question was other related your business think I transient.

in improvements to continue We BT. see

about QX over is bookings of X, I we time. in X XX% XXX basis but saw about down think, a BT were quarter BT to going in XXXX, quarter evolve think pickup from to points. I nights room

up the to special piece in the in we was business to going encouraging on due down we high QX, see rate to transient side business were single-digit an corporate, transient from hold. is rate. where revenue bought increases is improvement XX% expect Again, So that so

transient was for-the-month in January, the pickup month demand. In very best by the business months strong for top accounts. It our

signs in comments, is was out, the no point I transient it of that weakness it would mentioned York in think his X% XXXX. one in where all. front very I And So business only below New City thing at Sourav encouraging

it of a uncertainty give was So today. the We felt macroeconomic weakness. to signs the range, on no prudent front that exists given

Operator

from question next Barclays. is ahead. coming Our Powell Please Anthony with go

Anthony Powell

bottoms-up many you a And be were I decline guess to follow-up that rather does if year you given XQ, points would percentage guidance a this that how adding mean, a to margin Just I build theoretical through XQ prior range imply to for that higher what question. RevPAR. potential midpoint? what for

Sourav Ghosh

let our a in slowdown. me start said is assumes by which our segment. midpoint the our is half a severe high-end, at The slowdown sort sort I'll us you so mild the would I a the over slowdown, are half. go way some And whether thinking a of of about is, in it's what year off remarks saying of prepared for the through my low-end, be it second guidance sort Anthony, second of effectively which slowdown. we is when at each moderate the look guidance

quarter. quarter meaningful we remarks, in for group And From are said compared more you XX% the half second XXXX year prepared fourth XXXX. pickup year, year recall, a will the had I in as quarter my the the had half for only alone, room And about pick the in up in in the the that nights as to the group perspective, may year pickup. assuming we see for the

in the in, group So for less is year are The a on you That's anticipation pickup. that's positive. so the if in obviously, slowdown, would year a group locked other rates, have the the sides in side. words, there is the

expect side, that On half second flattish. somewhat to the be we transient

leisure our in slightly down driven our rates convention resorts market. So being by with slightly flat downturn on hotels, the but somewhat up depending maybe to

flattish So second be overall, half. transient rates about and occupancy to for the

being year, again, all think our you a the flattish tied guidance when to so occupancy our rate couple effectively ends And the this up up really for of and full points is about midpoint.

in reality very is XXXX our about of similar expecting XXXX. of that performance -- going but think the you be EBITDA margin When are to in quarter-by-quarter, we distribution we is sort very saw

are from 'XX, EBITDA from of $XX in or XX% cadence is was I of So and QX. million in from our we about came had, expecting so about XXXX. XX% QX XX% from QX, what Very sort QX, think, similar it we

Operator

David Our with next is Katz coming question from Jefferies.

David Katz

to go clear in comment something on wanted your to about we're back I to and touched sure Jim, make just you it.

the paid. would if you ourselves of back you Could I are, XXx You bought and of a XXXX you run about to we on or normalized currently EBITDA talked go be. said or some in XXx sort just those hotels rate at based were about what found that about you those cap circumstances talk multiples rates think environment

Jim Risoleo

XXXX Well, expect performance to or David. properties, back we don't get at these of levels rate to

charge confident XXXX numbers EBITDA I a can't set the we We bought the a be years. when rate are multiple was And most for performance part, how today based did these very properties on what each the bit pullback. and of hotels with pleased you the But we are tell are that little the several last cap over the we the rate was. to what might There able of sustainable. message property

going we're today subject seeing maintain a today. affecting be current the to rates we it to to severe downturn very confident that that's not there just very consumer. to We're close able we're So the getting being feel that

Operator

Our next question is coming Street. Green Darling from with Chris

Chris Darling

pace provide an of some across focused your group update you group 'XX larger markets. on Can

data specifically and New then York, maybe about be thinking other points So as might San that Francisco, Orlando helpful well. any

Sourav Ghosh

Sure.

books the XXXX, and pace some San which what's larger from of of markets San really Orlando, Diego, XX% D.C., in would for markets, say, terms are San And are trending we have well. our effectively So I like what Francisco. over group on Antonio

San about at over the have we when to and above threshold Antonio, we're levels from are Philadelphia, on XX% which we would are it that Atlanta, of Orleans. New of threshold citywide markets. sort say and I relates are those And certainly Chicago whatever are at looking that Seattle book that of XXXX, XX% ones Boston, for citywide So are sort are data, the the Francisco San below and San Diego, and that markets XXXX

Operator

next is from with coming Bank. question Deutsche Our Woronka Chris

Chris Woronka

a occupancy but a a there's rate. may still peak talk it's maybe but that not lot of of mix recover having little come question, of or levels, the bit Jim, occupancy hypothetical obviously, and with corporate. a with getting the to expensive at about a bit But of back lot to group that effect prior

that question it any operators intentionally things would business the essentially it? but more So about forward arc be, that that, that are one the lower that of business I way opaque a as know you structurally the your go keep metric you decent for some Is price-sensitive we higher we don't solve to and out think like to of is rate. reasonable business, have and think

Jim Risoleo

increases EBITDA XX% say the revenue in easy rate markets to from think don't I'd occupancy certain worth increases, believe it for at occupancy XX% Chris, a -- We rate, the that's money. strategy. hotels. more dollar relative that every get little that to to you is right flow-through certain differently. management occupancy for about rate XX% is It's which We in given buy

rates. see to to to levels to rate we're continue increase continue going hold occupancy We at but evolve, high continue and

rate and XXXX business for for group by as in particular, pretty that encouraged, positive books, locked looking as with sequentially I quarter-over-quarter transient the think growth able as the we're well. in we've in definites well to that's been up achieve us on rate

up So the same points revenue XXXX. year total for only and very down to is group time XX% us. at to last basis pace That's XX the XXXX encouraging

of the favor that employ that's we to are rate a And in buy occupancy. to as general statement we intend forward. strategy going So cutting

Operator

question is next Duane coming from Pfennigwerth with ISI. Evercore Our

Duane Pfennigwerth

to open you time on surprised the back year, QX as on contrast rate time since surprise maybe could bookings last Naples forward since for But you, the XQ biggest has last biggest of stand example, go fill commentary, has year-over-year? today And may I has look rates been position we fall. impact. like? be you If just in what the and into view margin back world or change while this time? on the a those in you improvement of year lingering Obviously, versus some your the that structural where Maybe then follow-up, has forward visibility changed XQ what the have your

Sourav Ghosh

Sure.

your half with question first. start I'll So the of second

the terms feel year, of good mentioned, of QX about rates, group the into what In the have rate and is And the our rates very we as X%. we on rest Jim up books.

rates We single to up digits. the in expect high business transient be

In that terms And sort saw remarks short-term in the that pickup quarter in booking. fourth seems quarter goes meaningful expecting. for demand, my We it very the actual still of is of pickup the to the of are to we short-term that quarter, continue.

the first are thing quarter. second So the significant amount in a meaningful the while the for we quarter of same still we do in quarter books, pickup have first a amount the of on expecting group and

visibility more incremental, the a fourth I maybe slightly from it's standpoint, incremental relative So to quarter. wouldn't say

to a the frankly, million relative occupancy of point to changes, really balance of operating And the $XXX we Those be said our savings, model coming have to $XXX savings expense out bulk savings. achieved back. have want relates what is it driven we As of million by to I XXXX. it is those going do to

would points occupancy XX I occupancy as XX still, bps are with perspective. margin to gain. Jim point off that roughly to And would every an We gain, equate of XXXX of from say mentioned, of XX

when meaningful is it. about you think pretty So that

really I at sort points million levels, to the $XXX expenses down but to to million get to occupancy XXX we X%. XXXX, basis the to relative of F&B of specifically actually XXX midpoint revenues our one down to look like compare $XXX from highlight are would looking So you're expenses, is of 'XX to back XXXX our when if at and And anywhere 'XX, X.X%, you that to things for margin you improvement. are our

it was So in huge shows and has food piece operating a model made that beverage of big changes a and difference. all the it

be we'll relative for expense marketing less the and 'XX midpoint, down XXXX, to Sales to than X%. again,

performance So we'll guidance, higher course, the when actually I sort down 'XX, be end the really story. midpoint. of at the it margin you're tells of at said, the And only like And of XXXX. slightly comparing above we'd again, to the be

Operator

Our next BMO. Ari Klein with from question is coming

Ari Klein

question. little the on anticipate is up challenges bit of couple expenses following last the cut Maybe over we've macro to labor years. you What's a the of some had more given that difficult wherewithal than margin the the if

Sourav Ghosh

was on I mute. Sorry, Apologies.

can sort would I the have we you're the there that what to any half. a COVID assuming now happen department. I'm going down, payoff need to And a reality second if So by department really a we slow is slowdown pullback and in think there a if of talking as through have about if what is playbook is is,

we any we there feel slowdown, to we whether confident if actually of department. make operations that is efficiencies very if modifying that's single changes And would hours have that are a So the that in or driving in situation?

So we are for that. going to be well prepared

Ari Klein

dispositions Got priority and you're you admittedly it. acquisitions, thinking more And us the underwriting macro? how your on update about then and sheet. balance just on and uncertain Can

Jim Risoleo

Sure.

happens people the of the position. we year. here over in balance are we today, And have, sit regardless As course we a sheet positioned well strong of be what given that very the

invest As this in to from year, CapEx continue to going our portfolio. you see we're our guidance

distinguishing Just REITs. sets of really other XXXX from us the in a our a assets, course lodging of point $X.X billion XXXX, which that invested apart is we factor reference over through

projects Canyon to transformation to at and as a complete will and repositioning the expansion positioned and Lani in completion Kea going Naples. continue our Fairmont the forward, such Suites tower a outperform well the ROI pursue We're Phoenician of Ritz-Carlton as the at new we

our deploy assets. mid unlevered continue capital returns. Those to for to opportunities look in to cash-on-cash underwrite will low we to cash-on-cash generally returns, So

to we place good that's free a So think very capital.

there now On the yet. right bid-ask acquisition middle number spread evaluating. in front, would that say the are the to of come properties we just a I hasn't market the that are

because transaction we're position to a only anticipating the a that out XX are could Four out for near-term we which puts of cash. not XX So in days. that there anticipating, was I meaningful near-term, Jackson can change. the do Hole talking really for Seasons a XX-day process point when the just not our the strong us I'll any us acquiring roughly player next really that about I'm say assets

how we maturities XXXX, might XXXX. sit the at loan the tracking look evolve and a year for As CMBS back all

a in pandemic. because if place the when We have you think put in environment to their And asset the presents they been XXXX. fact invest owners markets the distress asset, able than the financing the evolves that and given in that significant a the investing haven't is sell need to likely are certain could they're to that was us invested they I just itself, and debt current rate the position environment going different will year markets where interest of to where see XXXX their relative over course we CapEx see as to are across assuming current

Operator

question next Our UBS. with is from coming Robin Farley

Robin Farley

by to markets kind in your like I about single I'm high that did about resort And you up I that acquisition you sort you pace of means most ask than than pace, I digits. the last more When just years. different then, comment ask last if And XX guess were or it's of about intrigued I But a being investing revenue your going question rate, group rather was already. revenue wondering in of sounds plans. in your just kind two markets actually you about what think talking bps if it down mean? clarification. And of XXXX, might that could answered

anticipating are around nights down group relative of -- rate number of high So single-digit that a 'XX? being you to sort

what you're group terms as nights and room well. In transient Thanks. other into curious of recovery of full think when might in guidance make in you nights factoring terms a just words,

Jim Risoleo

I'll your take question the Robin. investment related the market. to of part Sure,

not think you that to that capital done we can six how the as think really deploying we EBITDA and forward. growth last value we've going everything I look has can create asset I about markets, we be think years whether do the other or company. And growth EBITDA or underlying it's so, profile open-minded and the of say to going when of been transaction with what we we're have elevate and been the at dependent over

employ differently, we it, a red So the subject market evaluate country underwriting when think has line that there's a don't in a criteria of I that I through hotel. the all to said we particular

touch base Sourav, the group? on want do you to

Sourav Ghosh

nights. It's yes, you're side, right. group the the on Robin, effectively room on Sure. group

We up room the only high XXXX. for are at again, in the amount now like midpoint, levels half. course, around below we digits pick But to XX% year single sort the of that I group pacing right 'XX. half in the second the effectively about night room nights of the expectation remember, year for The that said, get assumes to we would our of relative group of

Operator

Instructions]. [Operator

SMBC. Our next coming from Kornreich question Jay with is

Jay Kornreich

As provides the $XX shortfall throughout impacted if on that it as EBITDA assets the an outlook XXXX, And upside I you anything the your Hurricane looks possible any upside else excludes guess surprised or eye the mentioned curious, range. like provided we hotels. if that recession back coming contribution believe have guidance a million those the opportunity see I'm downside. Ian to I to XXXX you besides you there's the online from get

Jim Risoleo

Well, Jay, by really in important Hurricane that affected in it's EBITDA to highlight were XXXX. I generate anticipated assets the to $XX million Ian think

million have midpoint. the in to We $XX guidance our

hurricane a disruption. gap there's purely $XX is related that So to million

proceeds We any have interruption not assumed hitting our business guidance.

business that XXXX, interruption if over we of So forward. to were the going upside proceeds is get course

the is want suite just property year. million the made is be one for XX The count very out year about that that XXXX. that think of we to do year tower full going and in EBITDA the So But a of will XXXX $XX asset number occur and new It's to amount we're likely transformed. of later significant into rooms be of is The open. other impact will point XXXX. performance to completely enhancements. this that because Ritz-Carlton [indiscernible] We've excited a added increased the I

XXXX. of Ian has a So amount from significant us disruption one cost Hurricane for year

Jay Kornreich

that Or the a estimate? during as Maybe up be conservative that clarify looked $XX at hotels in year? as the expect that even expect just could million XXXX, you Thanks. both to is that open you what

Jim Risoleo

at this what think we I in point time. it's expect

Operator

next Point. van Our is with from Dijkum coming question Compass Floris

Floris van Dijkum

business that you've look strong yet. are RevPAR insurance, very expectations pretty If here. million pace little A quarter. Naples. include of I mixed interruption ahead, last in XX%, call strong insurance that group missing message which, results were from Obviously, got your we presumably, again, of up, the it, you're first have you bit If call to EBITDA a it, $XX to XX%, quarter XX% going get to the

maybe is based flat down, of context provide sort Can your or on growth consensus. and rate, down. EBITDA margins EBITDA your going your where higher occupancy in any a on basis You're at and is historical you portfolio looking your trending longer-term are your

Sourav Ghosh

I to up occupancy are the Actually, to asking seen about expect it, stands right? historically? down, way where you've from to if think said, margins I go sort you 'XX, performance occupancy of as Floris, actually Sorry, today. and go would of occupancy If we go relative improve margin we as think up, see have the

at the I we assumptions of upside year. now. half the into this have think, with are second The time right data is, reality our available where visibility have the think that Therefore, is. that's we don't the I reasonable

top-end up the 'XX. the at the actually, to of are look guidance, relative margins you when And

what looking business on and points So we And have non-residential XX-basis for you for sort growth at it year. the half really in in for to fixed see year of where investment, the up pickup year then, investment kind shape things of you're the second group. a the only depends remember,

at it's So It's available our predict have guidance very range second point half. for is what expect, based can we data the today. on difficult the to this we best

Jim Risoleo

of we quarter we thing was not of a where comparison seeing margins reasons. a not add were the wasn't And that very lot over sustainable. at XXXX. services that the We I is, had levels. lounges Floris. XXXX, optimal is clear performance to Yes, and for proper full were were second not were were for closed, and one customers. it The sustainable the number course would third call, hotels feel the offered We Restaurants being were staffing club of for closed, we margin

X.X% basis seen we have even down in CAGR, up a points only a only margin. And gone And basis XX points levels, reiterate, XX in to and X.X%. just we're have CPI inflation XXXX expenses our CAGR, in down

feel pointed is we as occupancy So XX every basis equate that of of points going very that XX well. we to actually Sourav to point improvement. out, we're to positioned get And margin

Operator

you it hand time, I any Risoleo closing Mr. At will to back this for comments to make. wish

Jim Risoleo

look our to Thank support you your us opportunity of quarter appreciate results thank with the weeks to to We joining the meeting you have a day. today. great and in with forward coming for discuss quarterly like would our for many months. I everyone much. very and we you Thank on you, fourth call continued and

Operator

This you. conclude does today's Thank conference.

and You wonderful have participation. we day. this may you disconnect your your at lines time And a for thank

Host Hotels & Resorts (HST) 16 Feb 232022 Q4 Earnings call transcript