Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

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.

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, level comparable In certain results. today’s as such we call, information, on hotel FFO, discuss will financial adjusted EBITDAre

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

would on today’s call over to Jim. me Vice and Ghosh, turn Risoleo, President to Executive Chief I Executive President and With Officer. like are and Financial Sourav call the Officer; Chief Jim that, With

Jim Risoleo

the for RevPAR and percentage you, We outperformance, off first the Jaime, points. Thank with end by of of quarter to improvement quarter delivering exceeding XX% quarter kicked our RevPAR X thanks meaningful us morning. guidance XXXX to of of XXXX, first first the a top this joining everyone compared

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

XXXX in driven continued Our hotels. $XXX hotel of segment our XX% above business particularly at in first strength, by downtown rate XX% million EBITDA was quarter above both comparable occupancy and and XXXX, the increases the group

and exceeded the comparable margin meaningfully for First of of XXXX EBITDA hotel XXXX consecutive was quarter quarter. XX.X% fourth ahead

to the our growth RevPAR, the expected guidance X% midpoint, RevPAR quarter. And EBITDAre fourth X% the growth adjusted at allowed Our XXXX. full RevPAR tighten to to XXXX. we to This onset and and strong our achieved year have improved marks X.X% above substantially our since XXXX guidance with our outlook full the for from performance the us the full is margins EBITDA XX.X%, the midpoint year, coupled in RevPAR of first doubling pandemic quarter, year X% of ahead that of quarter consecutive last year nearly range raise

of over raised EBITDA focus Our allocation expense relative by we above improvement. our X is X% a to the first made $XX midpoint, adjusted capital our $XXX at over unwavering million, margin control years It and that outperformance our million result worth decisions on which is is consensus. noting last guidance outperformance the the quarter and of significantly

the above at our X% of our XXXX is XXXX. midpoint year EBITDA Lastly, range, forecasted to full be

guidance hotel quarter X% We are growth to RevPAR providing also second of comparable X%.

a minutes. Sourav will in few discuss assumptions our guidance updated

purchaser the When million $XX Collection multiple, million the On trailing $XX foregone not the quarter, capital Phoenix, of loan a allocation to XX.Xx XX-month $XX the Arizona, Camby additional with we sold calculating available ratio. during estimated first the a to XXX-key provided we Autograph we included up EBITDA In $XXX for front, an exceed the million XX% Hotel property a EBITDA. million in to near-term or for sale, CapEx. connection approximately with improvement plan loan-to-cost

our common quarter quarter, for shares X.X bringing million. repurchase per price repurchases through share average $XX.XX million the an During the of repurchased share program, $XX also total our at we to

the an at of have stock price million $XX.XX X we repurchase per $XX Over past repurchased average of share. quarters,

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

of We year. in clear of uncertainty of continue economy in optimistic the to the be half underlying second state despite the the today the travel about visibility lack and

last signs earnings seeing improved and call. since for of We year our any our rest are not outlook the of slowdown the has a

levels XXXX plateaued moderation above well we second the saw remain first and rates the the in half year of in quarter. Leisure last

which was with in first were quarter, XX% resorts the fourth XXXX the our at rates transient context, line quarter. in For above

X.X% time and picked same XXXX. the as rooms than front, group total top is of XXXX ahead rooms markets same XXXX of XXX,XXX the window more over most for group XXXX. booking is for extending we quarter now The the booked in group the first up in our group time pace quarter, first the group On revenue in

transient to holding quarter business in fourth demand evolve, rates XXXX, with to XX% up to compared first the steady is While quarter. continuing demand the were

up Transient to quarter the comparable the while hotel comparable Comparable XX% quarter first hotel a XXXX RevPAR over XXXX. quarter rate expenses easier first XX% higher. of increased were comparisons hotels. managers operating XX% of XXXX, as quarter XX% primarily the Turning XXXX improvement improvement to first first revenues push approximately the for and Revenue our revenue quarter by which XXXX to results, in X% a of hotel a over and only above up first result was $XXX, Omicron, and downtown growth due first the our XXXX. was quarter driven over respectively, were was over of and over X.X% XX% XXXX over allowed occupancy

XXXX. properties to resort with Our transient rate X% continue growth over outperform

led Disney had Residence, $X,XXX, the we at over the Four Resort Orlando Hole and Resort Walt resorts transient World Jackson $X,XXX with quarter, by nearly rates first $X,XXX. Seasons Resort at at the In X in above Four Seasons

since a of the phase comparable restoration reopening park As both is excluded and has our the expected in Ritz-Carlton, reminder, Hyatt hotel its Naples from the complete Point Ian. complex. from results final with been Coconut impacts water due mid-June and Coconut Hyatt November, are Hurricane of opened to to Point

remains Naples Ritz-Carlton closed. The

we property efforts, equipment replacing with flood and are the equipment, However, end dry measures efficient the critical which of more improving will by resiliency machinery. elevating major proofing the nearing of reconstruction enhance our

in July. We have including the resort, targeted reopening tower the XX-key new expansion

transformational the Ritz-Carlton We are excited the showcase Naples. repositioning of to

As of have of damage. costs. of received proceeds $XXX million recovery received The the insurance approximately million all to of for insurance have proceeds as classified date potential covered property $XX expected been today, we

were to million As full of guidance. which a year included additional not reminder, is in these $XX this two properties contribute EBITDA expected year, an our

nights room over room nights the XX% same third million $X.X sold. growth to quarter room Turning time This books rate XXXX, to X over group. group actual the consecutive quarter revenue AV group X% up with was is exceeded and XXXX of driven in quarter the the increased XX% full Definite revenue XXXX as of elevated on represents Which the for first group XXXX fourth XX% million nights, group first XXXX, comparable quarter. Total XXXX. ahead spend. for the in continued driven group banquet by year from approximately of by of

increase on time fourth the For basis full the is the a rate quarter. to since XX last Group year XXXX, over up X% same point books year,

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

that the elevated quarter the the in XXXX. books, above at – the for bookings, the have We we same large base continue particularly quarter XX% very to remain encouraged on group by you be consider when time our

minutes. details touch additional will outlook Sourav operational on our in a updated few XXXX and

to we underwritten and and to are our comfortably ahead our well acquired acquisitions underwriting contribute XXXX meaningfully recent period. from of within our the expectations. Based range ahead in on EBITDA X Our and stabilization to forecast, outperformance ‘XX full hotels of XXXX continue our targeted year is XXx XX of

EBITDA have the hotel owned we by TRevPAR XXXX key assets foregone our Comparing the our assets XXx $XXX disposed of XXXX, of expenditures. billion back XXx Looking of and per transaction million XXXX, since multiple, RevPAR portfolio all a have activity results by and by X%, our billion increased XX%. on capital of of including the $X we acquired multiple a assets estimated to current at for EBITDA at XX% EBITDA $X.X

Washington XX first Transformational portfolio of on renovations completed Marriott in Moving the XX May. Marriott out Capital and completed the to Marquis completed underway, the to program, reinvestment, Diego quarter, the Center, of San we Program during number we Marriott at the bringing Metro The expect comprehensive be property is it in in to and assets. final Marina, properties that

during quarter. comprehensive Georgetown, Washington, the D.C. our completed the also of We Westin renovation

The Oak the to $XX our addition World building our resort announce Resort at Seasons in development We fee-simple detached development and and we a villas. to parcel on will X-acre contract renovations, additional XX-unit develop at these to completed In Orlando, for condominiums to acquired. adjacent Disney Orlando condominium to a condominium plans feature an the million Resort. Four X sell Walt excited at purchase was XX are parcel signed X-acre the time development a mid-rise Golden

project. for development teens We return to are ROI cash-on-cash high targeting a mid- this

of scheduled fourth Construction of in and is XXXX in commence tentatively the of expected fourth complete to quarter with the sales XXXX in quarter to the XXXX. begin first half

Beach, expansion, which Canyon luxury for guestroom expenditure investment XXXX Ritz-Carlton full hurricane range ROI of Orlando $XXX million at The $XXX lobby delayed and condominium the Hurricane World renovation construction Phoenician by of a million Naples $XXX capital to transformation, Fairmont Villa year, renovation to million Walt redevelopment, the and completing for development which Kea guidance and million Suites of our work. the a projects the transformational restoration Four tower Resort Disney Seasons remains and million For $XXX the at expansion, approximately $XXX Ian. projects was repositioning Lani, include reflects

In closing, year. first we the of positioned the macroeconomic current environment. with outlook We rest is pleased the believe outperform our for quarter performance Host to and are in our very strong well improved

best-in-class sheet. We have balance a

We business are diversified across and geographies mix.

portfolio. model our growth improved of portfolio taken the together dramatically the redefined We reinvestments EBITDA have we our through and have operating have profile in which transformed transactions,

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

Sourav Ghosh

balance everyone. quarter good on you, updated sheet dividend. XXXX I on operations, Jim’s first go morning, will our and Building detail our our and Thank into Jim, comments, guidance and

XXXX driven revenue was the by to and X occupancy points up business of with growth Starting transient over leisure overall strength quarter XX% continued first mix, rates. in of

year. of the forward over growth holidays revenue drove increases. when the revenue Martin the Our weekends. XX last break spring hotels. Day, all more both pace properties you was occupancy low digits up also second the fueled King year, strong, quarter, the strong looking first our July. and demand saw downtown is room Juneteenth spring comparisons for overall particularly rate hotels consider in which last leisure impressive Holiday over demand at and resort portfolio Day is breaks" year quite RevPAR increased as significant Quickly elevated Memorial Jr. downtown quarter "mother in last single points Downtown fourth of from President’s hotels of growth Downtown led performance for of X%, Luther to gaining than

Resorts to in first increase saw compared XXXX. the approximately quarter overall X% of RevPAR an

markets Caribbean As Florida to performance to travel and impacted expected, lower markets resorts. the hesitancy repeat travel return let our at of consumer to downtown tourism

Miami, that it notable significant as Coast XXXX over Jacksonville the However, are significantly Gulf was and not Florida XX%. an impact still average And by RevPAR the levels expected. we of is outpacing as

rate. compared in represents to portfolio’s last by and approximately continue XX% same year, business XX% in down demand improvement achieved growth only first the travel for business month XX% which quarter and the fourth the was our properties also recovery, over entirely is Hawaii XXX noting sequential XXXX, a transient down over at businesses X% resorts today Our basis point driven the Downtown accounted Business small transient to of approximately revenue It representing March. quarter. of XXXX. RevPAR to XX% to medium-sized worth was drive the demand in of XXXX of revenue business time that the transient XX% to

levels. group. York. revenue with X% Miami, booked growth. of were the drove the in by This New the Near in of quarter. the rate half consecutive fourth has Phoenix, in XXXX, third for surpassed San booking first up marks the room rooms for group driven the San the XX% of a XX% a booked growth. D.C. The short-term of X% room by or XXXX quarter group the Corporate for quarter revenue that rate quarter, revenue XXXX. to quarter quarter, third trend quarter Turning Francisco, growth above and XX% rooms in revenues and above was room continued to Washington, quarter group room were XXXX XXX,XXX driven pickup compared Group Diego the nights

Group in recovered down rate driven Association the growth. X% quarter revenue to compared has just first by XXXX, X% nearly

or educational, fraternal margin gears military, X% Wrapping above was XX% to groups, revenue rate SMERF on driven social, with growth. Shifting performance. XXXX, up group by religious and

be quarter of XXXX. to quarter basis better basis quarter and to than first Compared comparable at had better of points able than can the AV revenues XXX XXXX, margin attrition operating rate the for last quarter’s and redefine XX.X% we which other expansion expansion primarily banquet encouraged all and growth, XXXX. XXX fourth compared improvement and was to improvements had model, in and were the All efforts Margin to is we maintain quarter. except margin XXXX that margin the to departments are as hotel cancellation Our points XXXX EBITDA revenue compared came departments, first to margin XXXX. below growth our in first attributed

range to our tightened XXXX comparable hotel RevPAR raised and to XX.X%. Turning to our X.X% updated We full significantly guidance. growth year

activity Our and the strong better booking improved quarter, outperformance the year. in outlook is in half the continued quarter of the group second driven into first by second visibility

business the slowdown may not business other is it to of relates levels. is decrease demand we as not in that if a business it to see As XXXX worth recovery, recovered transient noting our still transient in demand a parts occurs fully

the Group macroeconomic macroeconomic and slowdown varying continue Given depend on segment. a degree ability guidance will international continued the contemplates environment, our of uncertainty, to inbound the improvement second and the in half of business transient resort range rated maintain high our for the year, in improvement broader particularly of group, Further markets to continued business travel. the a

guidance. of the RevPAR to expect context, year-over-year be hotel comparable year digits second the our single midpoint in would In this changes low half we percentage up of the at

to anticipate comparable with a RevPAR ahead full adjusted comparable of EBITDA hotel points EBITDAre and XX XXXX growth compared margin basis As of the of we X% midpoint hotel Jim mentioned, of XX.X% guidance, our billion. and $X.XXX XXXX, of year at

We follow XXXX supplemental on to results Page our financial our provided expect quarterly information. operational trends of roughly seasonal XX as

impacts an hotel both Ian. of contribution year-end $XX As full up comparable Point our EBITDAre million is performance from of a are reminder, excluded Hyatt from expected $XX contribution the Coconut hotels Naples, $XX and expected from The year our Ritz-Carlton, Coconut at Point. which these Hyatt to of from guidance as the result from million million a guidance as adjusted better includes two Hurricane XXXX results due our

expected two proceeds the new from expected Naples, guidance. $XX including additional million these be was in at from also that hotels, included is we have Hurricane XXXX. tower contribution any an estimated in It Ian business Ritz-Carlton, note pre-hurricane the The to to interruption our important not XXXX

of removed our In sale million EBITDAre approximately The $X full with adjusted Camby year of from the addition, range. we associated guidance

low comparable closer noted to our guidance and and XXXX, higher XXX our fees. lower at year-over-year, basis quarter, basis down the and to cancelation last throughout end we end discussed attrition XXX to EBITDA points and high we to hotels, the staffing expenses As down margins insurance expect due hotel at stable be at utility levels points of points to expect that Despite this be basis the the at to important our occupancy XX is high efforts relative low margins to the portfolio we and years basis of It our XXXX up note evolve XX points transform in end. and end lagging the operating of reflects XXXX at guidance pressures, model. to to up X inflationary hotel

that in As consider X% forecasted it the period. when X.X% only CAGR is the versus the we have past, CPI hotel discussed particularly impressive expense same forecasted over total XXXX is core our from of CAGR XXXX you to

our Turning position. to balance and sheet liquidity

of $XXX leverage, the available of of X.X% and million we in subject Wrapping by quarterly per to a our April, quarterly cash paid dividend a expect able approval dividends macroeconomic though our $X.X dividend to full maturity X of have net is April average average includes availability weighted X.Xx future and have potential we significant and maturities we Directors we consideration All no reserves at maintain which share. rate years of a are of We $X.XX at into up, sustainable until credit taking XXXX. to company’s ended Our total weighted liquidity, level, billion the quarter interest billion factors. Board $X.X be at fourth FF&E facility.

performance, positioned we balance current our are believe our particularly the will portfolio, outlook continue outperforming, To strategic relative our team In scenario, of to the year pleased our macroeconomic the conclude, optimistic. we be are any cautiously sheet to and remainder to recent continue for and very and with environment. in is our well operational XXXX we

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

Operator

from first Instructions] [Operator Capital coming line Aryeh at Your question BMO live. is is for your Markets. Klein Aryeh, today

Aryeh Klein

Hi, thanks and morning. good

about Sorry that.

giving the increase the you Just surprise half prior in upside second maybe to of to the that’s outlook the year? outlook the relative what’s been biggest the particularly the confidence to

Jim Risoleo

business I all to but segments firing three not of cylinders. isolated that on segments, all our are any Aryeh, three segments, think one Yes, the all fact it’s really

slowdown We in X% $X,XXX transient and mentioned, six had as the haven’t or seen leisure business, Sourav in we’re in greater. resorts we had revenues the QX segment, leisure any in growth segment of up RevPAR that of our

apparent and of us to it’s and to it’s travel traveling to piece going next notwithstanding out to So be Caribbean, the migration And that it’s comfortable to has that’s and experiences consumer to well-heeled Which to was hotels. from internationally occurred people experiences. we sticky. natural that the continues places back more very anticipated experiential want the The They going leisure to there got leads other business. shift want to fact that experiences. the real the and and downtown as our resorts a of other the me Europe goods

seen have hotels business transient not And but a business. really only material downtown return Our way. leisure business in

way feel way really is the unfolding recovery the for and things the pacing consumer. about we leisure the are good So

is Group point X.X% the X.X% up is fourth in increase revenue year, rate basis the group now really cylinders. XX books on and that’s same the since up Total same pace a quarter. to time time firing XXXX is last to XXXX. nearly on all for the Group

quarter for Sourav as amount seeing, the of bookings in mentioned, still We’re significant quarter. a occurring the

I think last compared XX% to quarter was it XXXX.

room We’re in was quarter, actual in That’s definite to up nights XXXX somewhere on XX%, I now. were about the X.X think XX% of last it relative range. we books million where that

as business pickup saw to continues well. transient a and evolve So we significant

by We’re businesses. the and recovery BT in small medium-sized seeing led

as corporate. driven increased being rate well special As by

let really more are firing color on BT. add segments it’s So all And the all I’ll little on I a think Sourav of cylinders.

Sourav Ghosh

gives us booking you think the nights. half, really when I group half, activity we the picked for is second room specifically, the confidence at up XXX,XXX look second what Aryeh, Hey,

‘XX Just the of perspective, to than put ‘XX. up what in picked second we that into of more QX half XX% that’s for

from XXX,XXX it apart room in nights, see year. activity just was the QX, the not about meaningful for that’s real So up we for the QX. half ‘XX group only the pickup, of quarter really XX% also second encouraging quarter for to above but picked

Aryeh Klein

Thanks.

Jim Risoleo

we is fourth QX QX. a with growth we I we in RevPAR call, thing were at looking flat quarter add thought scenario where anticipating as last that our connection were would The for about

X%. you to given RevPAR of X% have we Now growth

Aryeh Klein

for Thanks could on give could and additional you ask decision, cost development whether on the you that there, just condo are And little to Orlando you similar color. if if and potentially pursue? could that types of the be not there I a what just total maybe that opportunities context expect or

Jim Risoleo

thought Four development a branded venture, project the Seasons was something this anticipate are and stand-alone adjacent very, to to that sell-out building going ROI our generate which on going a as branding very Resort be the to have mid- behind The whenever Yes. to condo of is units, an to returns attractive development Seasons they cash-on-cash you’re the selling high Four in teens we is nature. and

uplift golf are taken the of the ancillary at have it consideration the we that spend, hotel to having Additionally, been believe beverage going we to hotel these spend, units that to real all sustainable spend, and driven, which into property. the terms spa adjacent be food revenues what are from and is is received additional XX going in

XX respect to projects ways be or million you somewhere ongoing are ROI in area million. of not we we on And other constantly And is $XXX we to have cost going $XXX the Host. additional have pipeline opportunities, total with as remind built Westin past, capital on working that whether the an know, To Kierland in So to we’ve We a the of some shareholder on in built lot AC Phoenix. value deploying in Wailea Maui. you at to that the enhance villas ROI of Kierland we the Andaz projects. through done the parking Resort ones in at

expansion the doing Phoenix Phoenician. the Suites at Canyon of the of We’re the

have have we’re with and the messaging, to very we’re going thoughtful, been confident message our projects other we but and do we’re in have these forward pipeline, projects I that entitlements with to not always the them. we think, we we move that until confident So respect

Aryeh Klein

Thank you.

Operator

Your next at today question Anthony from coming is Powell for Barclays.

Anthony Powell

good guess, I Hi, book. Question loan about, growing morning. you’re bridge a

later generally, up I talk to extending these in you year. have you have you just those are started And this the how much Have loans two expiring forward? think about borrowers capital loans? going willing tied loans with to

Jim Risoleo

Anthony, the that the The – with that are both share in think, on of back. are documents, fully in going I expect loans compliance both year. be pay of they be payments in the borrowers repaid Well, half Both the us a to second current. Sheratons to are the the position loan we to anticipate of loans

Phoenician respect acquired respect unique we of Camby, Season wanted the $XXX property we our asset in asset. own to the asset And that We or opportunity the exchange decision area Westin million, So to resorts the to and wasn’t make from because think at the two could a exchange There low the into I it into that And the Phoenix the decision like-kind market. sell for Jackson we Phoenix those reverse the loans. supply a basis the Kierland by Hole long-term, sense to a we certain we that in to investing We Four go Camby as wanted we Four by needed that CapEx advantage area. With made that the Season repaid getting that take the is with a some new no to a property own we’ve made in proceeds it coming got, into very made had of have an amount on the to XXXX. terrific with concerns needed the exposure that given the and Jackson had Hole metropolitan was situation. in designating reverse like-kind best hotel.

provide that the of was that financing. So drove reasons solid to us one

make comment. – just I’ll I’ll a broader

number doing a now. of right – is all, this of us reasons. really it’s don’t any terrific the see for in we’re position Number we I broad don’t First portfolio on a – scale. one, And

have decisions assets to $X over the Given the called X we forward, that years, we’ve the portfolio. sold want didn’t have for assets of the and made we last XXXX the we plus but allocation own long-term from of really billion out capital that dumped,

So than bridge many I to I XX% XX% today. any if more more value. the bridge sold, doing assets we greater to loan think loans that us don’t loans, have see not But

So a of we’ve go connection if the gotten nice a slug living on with in to what south, were is do something equity hotels. And we for sale.

I we us So had take to a bother at all back. property if wouldn’t

Anthony Powell

Thank you for the detail

Operator

Your next question for today is coming from Smedes Rose at Citi.

Smedes Rose

I a terms wanted kind you you group to more seeing thanks. of XXX maybe Diego, little about Francisco talk from coming kind just San bit? what of kind on relatively bookings seeing you’re of marquee Hi, in ask you’re as just it a demand? kind side little recently of of that, a groups? maybe seeing the smaller larger bit composition could Or that what and are you return of Is then in could mainly just and renovated San of touch some you on York. New And properties the of with Fortune the in

Sourav Ghosh

Hi, Smedes.

first quarter. remarks, XXXX. revenue groups. more the smaller Association in XX% of the in XX% driven down revenue so was front, and it thing which about meaningfully is this driven group was X% Corporate to only by rate my by now On I back X% to group and being corporate is in up talked certainly came One group terms prepared

say, in citywides. gap I on revenue really pickup group is right corporate – the now, meaningful a So would

citywide about room nights were where back for XX% XXXX. XXXX, of in are, We on

really a QX, last long we but as picking So meaningful the way been to but of thing multiple there same what QX, happen up, big overall, pickup. quarters, the well group into not are seeing citywide in the second year and which activity only and is go saw comeback terms we association, corporate has is we in really continuing half. still saw as in But

Smedes Rose

that impact Four then enough hotel? far guests? thanks. your condo it Seasons, Okay, disruption won’t your to it any expect away And the Or on just development, you would quickly is the

Jim Risoleo

anticipating Not disruption, any Smedes.

Smedes Rose

you, Thank guys.

Operator

for question at coming next from David Your today is Katz Jefferies.

David Katz

on look morning, group everyone. wanted my in any the trepidation groups citywides, we good to know color terms gotten around to some question. Thanks or which, expectation just commentary of just the to business meaning, to of the they corporate is Is Hi, follow and into have commentary, yet? it? I respect strength. that? for taking with not I How Sourav, that or repeated booking some you makeup Is there is any large there to there should

Sourav Ghosh

if of citywide David, nights you have And from? our overall XX% where put think our for about sort to to come we big just citywide. portfolio, come group perspective that Host of XX% about room for into the really from

how of back closed in expanded this talking last We of selling on would certainly have But of during convention a a general, cities, come done citywides we’ve were pandemic in up are you completely those and very expecting staff in space, a of hotels the terms the groups just and gearing we of you if across city-wides. the about be our centers less a have meeting the to the sort really year, dependent think with meaningful were groups ability self-contained. that last and board, ramp-up actually are market bringing in-house time, house where in more we specific. a which were good job about that now sales way. And in-house is lot lot It ones is the there very, to actually

Chicago. into we seeing citywide pre-pandemic cities actually As like group being to pickup other future are look levels. like relative like where citywide driven you bookings, years Antonio, are you San Boston, places by meaningfully But a pretty at San that’s well are when Francisco, good like which know, and have

a so time. to with staff selling getting ramp is it expect all So, those coming the But of but back, do we sales up cities. just up matter entire geared it’s and that further

David Katz

I see.

debate. sort it because If take with that can given if as San us, Can what’s of follow-on I just reasonably strong what results should And going sense in you can respect than the already how of and matter other the have and follow-up I just to on the is a you for to city My a it we that differentiated talk there. way. is areas? there done you seen about sort So, well upside. Francisco, have by further we are of is you guidance you have

Jim Risoleo

share thoughts, San can little it balance will quarter thinking in get Fran about a broader of I we more first into the Sure. happened are in Sourav detail how and what then on for and the the year. our

about off. not its San clearly Francisco challenges. has the So, question writing There it. we is will are you, no city I tell

think we that there. as have well. feel the the the very committed dealing about problems I fixing perspective, we perception that in and assets then From we our city good is a own with Mayor to actual

their you Given and connection recently visited in NAREIT. with the call our Marriott Marquis on have many location Moscone, of

what to to So, set it it asset and Main well any extremely you Convention It’s in through Main in bring It’s that go is asset an And in-house is been shape. book type up after know repositioned group. business for going renovated great that Moscone and is it is. of fully is in and Center. the

on the So, hotel and Union that we Grand property. have terrific then have Square Hyatt another we

the that as then the assets in. about the hotel Fisherman’s which think property. asset are generally we group citywide We the is like we like in Wharf, third is market assets that to condition leisure they have. the and Marriott as material a we So, own opposed and We

let really results, market take we be in that And into get good some in and first share moment. Sourav as will a and business a to position returns. So, pull have seen we with the to you fill are I

like, market intelligence office how the of and center tech to to concerns that we absolutely is is world be relative concern the in rest country. think and the market But what is San really and Now, XXXX the of return it’s have the performing don’t because with as in that lagging the center returns. artificial of about layoffs it world I to to have the happened don’t tech about Francisco and you the going the want do we of

let market. Sourav on some you I our that, in the will with hotels give how performed So specifics

Sourav Ghosh

so or occupancy we were Francisco For at XX% about market, the $XXX. San around

to expectations Francisco that return that the pickup in rest across strength about up bit. the down actually Francisco While driven And the big a that it X.X% are group, or of overall we exceed is really the particular, a looking is increase Overall, our by in quarter. RevPAR was for to picked Francisco, of relative ‘XX JPMorgan but we so. by did this with contracted quarter forecast. San a seeing when actually that Group. the which San but the there. just have we San out been We compared banquet rooms We the our of were of in almost the and minimums, did the up citywides beverage did Food frankly, And to due help well. see in quite XX% quarter few a the was a there booked board, of lot we of piece in are are year, for were actually lot do really XX.X%,

XX another then is citywides XXXX, I XX. number And the about think total for citywides XXXX. confirmed for of

certainly say long-term pickup. and There I is – of trend. there cautious it’s would be certainly is of not it in somewhat short-term green some necessarily is while And lot a positive shoots a Francisco. and San So,

David Katz

Really done. Good it. Thanks. quarter. appreciate Well

Operator

Baird. Michael Bellisario question with Your from is next coming

Michael Bellisario

of Thanks. Good of do forecast P&L, mentioned cost and challenges you previously? the on hiring for have side that any then Thanks. you you here see seeing morning. remainder or any expense the tracking of Probably have wages where the for benefits the are updated the And year? easing you Sourav the pressures

Sourav Ghosh

Yes.

of terms the wage the year-over-year for the year. and at expect year, for Don’t is to change in outlook that increase X%-ish. Our benefit still

well that. are We on tracking

we job into primarily where it of to career, and pushing has a not and we we fully as seeing of say terms and portfolio hire really retaining still given good our much talent lucky do are which are are made are which good. hospitality to cook. only they would managed for our staffed markets, right really a talent is we across are pretty quality talent brand-managed apart from to I but really just not difficult predisposed line I any volumes hotels. staff-up, But hotels, easier feel the overall get it Marriott certain now, challenges. In that, acquiring managed are where business staffing, staff-up, and a in mean Hyatt major hotels,

Michael Bellisario

you. Thank

Operator

is question James. from next coming at Your Crow Raymond Bill

Bill Crow

you BT a relative Hey. Good and occupancy morning it look or that more ‘XX? Sourav specifically, When take we everybody. is on is want gap? to Where Jim, How big seen. rates higher at travel question. you or maybe look you is out how this of have the demand that at depending to

Sourav Ghosh

remarks, in sort are anywhere perspective, only my pick is We to ahead. I from at so had overall BT XXXX. which it volume the said to on is you is obviously still down revenue a from prepared now a really Certain market, – up, depending down XX%. market XX% look markets dependent. X% meaningful But rate March, gap Bill, if of That our Yes.

New down almost between York, say, to XX% in close meaningfully XX% in I XXXX. general were back somewhere volume. for in is terms we ahead would of down example, to But where

Bill Crow

expect that you can Thank year, you you next it given or Is headlines And all stuff for maybe we layoffs, cost is this about. tech travel, overall gap year that even that XXXX? be and the that. that the do something that, then that think or read do other macro of narrowed further

Sourav Ghosh

going from how and to difficult a sequential macroeconomic ramp One tell uncertainty the occur just improvement. of we of prepared thing lot larger positive seeing of to keep business are is, a It’s that demand trend and month-to-month in other medium-sized But little is to we overall. given getting the talked transient we in a as our mind, sort companies. are about versus remarks small

business And classify to that retail, difficult some in as transient. exactly which of comes through is

one until classified being gap more still through plateauing there up improvement being to to could by probably is but of opposed in made business. retail So, directly But more some the expect occur, argue certainty. as general, we some or macroeconomic selling is

Bill Crow

I quick a one. Great. if Jim, ask could just you

also be can shareholder I enough of You wondering to appealing acquisitions you repurchases? the prospects that agree, for you am in but lieu I ownership business, the the are returns if business. in which are share hotel noted in use capital

Jim Risoleo

Yes. investment evaluating potential we opportunities. actively Bill, are

$X.X portfolio, course ‘XX what’s from that the the ‘XX happened as capital to billion our the the of all well occurred including allocation eight we leading Host as the several all down that’s the that gating think the ‘XX of distinguish last has X.Xx I years, put balance were that our leverage, his now in the and outperformance the quarter that completed after have. over well we that to really activity sheet back decisions in fortress as forward, over acquisitions today. is is as that particular, that Finishing leading factor

XXXX, XX% I a table in I on our margins and the of hotel – and to per XX% to and put through we So, guidance EBITDA the up XX% the on focus entire able and is just want with transformation flow set unyielding and for RevPAR in our quarter comparable why to first were key basis deliver X% raise TRevPAR and XX% up expenses reason and beat up portfolio un-blenching RevPAR substantial our to big the a and year. XX% a

want fairly company. sellers today. bid-ask growth seeing the that to are what So, elevate what we spread the out profile and we look will sellers, will acquisitions Right what between is EBITDA we prepared a wide of are pay for continue to there now,

when of on. economy conclusions say sides, change, reasons right, rate mean cost respect Now on of to everyone capital. interest it perform we our of clearer mode, a a can looking it the for the or that’s we some it right the different going half else If bullish and talking about know draw if don’t with to does change is going which how back cutting assets have to picture the in an can the macro on into non-distressed Street I and can happen get seems our that underwriting a to as for point But we be of change I now. see going banking I I change can am forward. cuts different year. view more two Fed and number of as on, get both about they not. And can are

get change value. hand, other maybe the the going then some if expectations regarding On sellers’ tough, to of are things

what’s keeping the we So, transaction very are happening on close tabs in market.

to going that this are ‘XX. later loans and CMBS We tracking of the are maturing ‘XX also be into all year and

that place our capital. be assets. deploy can it’s clearly that not Host that perspective. from sheet to a So, we great will mutually the is balance exclusive buy is We thing one about prepared But

We will to our invest continue in portfolio.

generate to ROI We $X.XX do dividend a the projects will continue returns, share. shareholder to at

what is. the available we dividend repurchases do be as will share quarter’s the We to Board next about talking have And capital well. to our

to So, all. we threading ability kind do it’s a needle, have of the it but

Bill Crow

next Jim. Very week. seeing you Look good. Thanks to forward

Jim Risoleo

Likewise.

Operator

Your coming next Chris question from Bank. Woronka for today is at Deutsche

Chris Woronka

Thanks so Good morning. guys. far. the details all Hey for

of to of group – Thanks. the of So, It business you answer What Where kind really increases ‘XX I recapturing mean you out pushing if the to starting post-COVID. ‘XX? on want is increases baseball got my think some of on group for business do rate? long innings think of use that to like question to in, be has? a or group the in seems benefit analogy stuff now will are do kind are terms you rate. you of say, from how you tail are maybe rate people booked we agreeing

Sourav Ghosh

Yes.

of rate, around quarter. already we of were a of and in end managers in you year-over-year, our by And were quarter, end certainly the the to improved with of if XXXX much at is make fourth at conversations, for We our are inflation a XX rate environment that group we continue sure otherwise. first X% to frankly, we terms those where high higher easier basis have look just the sort the And working priority. than points

as we out we times really more challenging been feel expand. we those into seeing and keep their that have future, we becoming starts possible, rates, on pushing availability pretty lead So, as the wherever go and confident

that the future, and those real rates further. specific yield leads once booked into getting to even drive So, to up management date start able be

perspective, a ‘XX, trend seeing and rate strength not ‘XX continuously really but only into a all-in-all, So, from are and beyond. rate good we

Chris Woronka

Okay. Thanks Sourav.

Operator

Your is next today Stanley. Stephen at question from Morgan Grambling coming for

Stephen Grambling

characterize tech would of question. tech the the Hi. of some how some is But coming your This brand a you of opportunity midst longer investments, from your from large what overhaul on Thanks. perhaps partners partners? a that brand term in you the how And or general out, intelligence in? thoughts bring could how on but are not to fit are approach only you your what bring then zooming business, partners what also your artificial with

Jim Risoleo

with father Sourav this Stephen him I our that as like much relationship as the Watson, to answer answer it. to the would going let of IBM Given am was I question,

Sourav Ghosh

Jim. Thanks

to as out with terms technology, had whether not I mean In piloting improvement friction. our also I sort new just but to at technology, customer of drive is overall productivity going refer and of technology looking new those trying satisfaction like our and concept sort to And is forefront of managers to provide we going a are desk of brand – been you of and doing optionality desk have does the to we are you to what think with partners the having the front when period, drive access about the have of that what really always only of proof expenses, what at sort reduced transaction it’s be conversations your really future, of of are front flexibility to room, needs to there guests the it’s give being if to through approach through a – a else is you whether your or phone kiosk you able card to hostess getting host then and to a can there, physical or nothing check it’s whether if in. key

kind only operating the really drive conversations So, is satisfaction. technology how of but not change do leverage you long-term of have customer had the having we model are efficiencies, those improved we sort are that and

that IBM and that as markets Research there was rank a to – And make into As this in model identify them, artificial really really with develop us back help mentioned partnership there, for proprietary briefly it was or relates outperform it will to Jim we us we – underperform IBM it capital XXXX. internal so say do would intelligence, dispositions acquisitions, can IBM entered what frankly, Watson accurate predictor third-party relative predict our including other while assets. terms of existing every analytics. in it I out much And capital predicting investing whether certainly predictive our was to or in couldn’t RevPAR pandemic, even decisions, better most there allocation that’s and this is the will Watson,

utilize we decisions. it, are natural IBM’s good that processing language to So, a capital a churned with as make we as computing those use and system partnership the But really help certainly it rankings. really allocation it’s of points come been data to through tool on up forefront is multiple us that well

Stephen Grambling

Helpful. you. Thank

Operator

Our final question Evercore coming today ISI. from is for at Duane Pfennigwerth

Duane Pfennigwerth

have questions Most Thanks. of been asked. Hey. my

do and guidance Just insurance if apologize or said on have you BI, year? any reimbursement be I you this, interruption, include business what your there. But this that not does anticipate to

Sourav Ghosh

Frankly, because with that it’s something difficult our insurers. to we upon it tell now is agree right

year BI, it a in from obviously exactly know down this and how let through get would moment do we So, our all will and we much our we have flow is perspective it timing why you EBITDA. And and we not frankly will to the difficult. put But amount that’s the guidance. in perspective, it’s collect forecast, not

Duane Pfennigwerth

Okay. Thanks.

Jim Risoleo

Sure.

Operator

and have turn the call to question-and-answer for the remarks. I will now Jim end over session, We of closing reached the

Jim Risoleo

I today on for first call. to quarter thank would like us joining our everyone

talk up guidance is We year. are discuss of opportunity the the and the for and us, the we about setting to our really you way with results balance the year appreciated for excited about

again. can be to many you As and seeing Investor Thanks Florida. will Day join of hosting Orlando, in forward XXrd you XXnd we us, a We and reminder, an hope on May there. we look

Operator

disconnect at may today’s your your this concludes This conference you time. for Thank participation. and you lines

Host Hotels & Resorts (HST) 4 May 232023 Q1 Earnings call transcript