Host Hotels & Resorts Inc (HST) Q4 2024 Earnings Call Highlights: Strong Revenue Growth ...

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Fri, Feb 21, 2025, 12:09 AM 4 min read

Adjusted EBITDAre (Full Year 2024): $1,656 billion, a 1.7% increase over 2023.
Adjusted FFO per Share (Full Year 2024): $1.97, a 2.6% increase year over year.
Comparable Hotel Total RevPAR Growth (Full Year 2024): 2.1%.
Comparable Hotel RevPAR Growth (Full Year 2024): 90 basis points compared to 2023.
Comparable Hotel EBITDA Margin (Full Year 2024): 29.2%, down 60 basis points versus 2023.
Adjusted EBITDAre (Q4 2024): $373 million.
Adjusted FFO per Share (Q4 2024): $0.44.
Comparable Hotel Total RevPAR Growth (Q4 2024): 3.3% compared to Q4 2023.
Comparable Hotel RevPAR Growth (Q4 2024): 3%.
Comparable Hotel EBITDA Margin (Q4 2024): 28.1%, improved by 30 basis points year over year.
Acquisitions (2024): $1.5 billion across four hotels.
Share Repurchases (2024): 6.3 million shares at an average price of $16.99 per share, totaling $107 million.
Total Dividends Declared (2024): $0.90 per share.
Capital Expenditures (2024): Nearly $550 million.
Comparable Hotel RevPAR Growth Guidance (2025): Between 50 basis points and 2.5% over 2024.
Comparable Hotel EBITDA Margin Guidance (2025): Down 210 to 150 basis points year-over-year.
Adjusted EBITDAre Guidance (2025): Midpoint of $1,620 million.
Available Liquidity (End of 2024): $2.3 billion.

Warning! GuruFocus has detected 3 Warning Sign with HST.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Host Hotels & Resorts Inc (NASDAQ:HST) delivered operational improvements in 2024, driven by rate growth and increased out-of-room spending.
The company acquired $1.5 billion of iconic real estate across four properties, expanding into new markets.
Host Hotels & Resorts Inc (NASDAQ:HST) returned significant capital to stockholders through dividends and share repurchases, totaling over $844 million in 2024.
The company maintained an investment-grade balance sheet with a leverage ratio of 2.7 times and $2.3 billion in total available liquidity.
Host Hotels & Resorts Inc (NASDAQ:HST) continued to be recognized for corporate responsibility, ranking 88th on Newsweek's list of America's Most Responsible Companies.

Negative Points

Comparable hotel EBITDA margin decreased by 60 basis points in 2024 due to increased wages, fixed expense pressures, and performance in Maui following wildfires.
Group room revenue declined by approximately 5% year over year in the fourth quarter due to tough comparisons in San Francisco and Maui.
The company faced a $15 million negative impact on adjusted EBITDAre in 2024 due to Hurricanes Helene and Milton.
Host Hotels & Resorts Inc (NASDAQ:HST) anticipates a 210 basis point decrease in comparable hotel EBITDA margins for 2025 at the low end of guidance.
Wage and benefit expenses are expected to increase over 6% in 2025, impacting overall hotel operating expenses.

Q & A Highlights

Q: What are the macroeconomic assumptions in your guidance, and where might you see potential upside? A: Sourav Ghosh, CFO, explained that the guidance is based on current GDP growth and nonresidential fixed investment data. Potential upside could come from strong group bookings, with a 4% year-over-year increase in group rates and a 5.6% increase in total group revenue pace. There is also room for growth in banquet and catering business and business transient volume if corporate travel increases.

Q: Can you provide a breakdown of Maui's EBITDA and expectations for 2025? A: Sourav Ghosh detailed that Maui's 2024 EBITDA, net of business interruption insurance, was about $97 million. After adjusting for nonrecurring items and wage increases, the 2025 EBITDA is expected to be between $80 million and $95 million, with improvements in operations contributing to this range.

Q: How did group and business transient (BT) segments perform in 2024, and what are the expectations for 2025? A: CEO James Risoleo noted that both segments performed well in 2024, with a 6% increase in BT revenues. There is optimism for 2025 as large corporations resume travel, and group business continues to show strength, particularly in out-of-room spending like banquets and catering.

Q: What is the company's stance on asset sales and the current transaction market? A: James Risoleo clarified that Host Hotels did not hire an adviser for asset sales, contrary to rumors. The company is comfortable with its current portfolio and will only sell assets if it benefits shareholders. The transaction market remains slow due to high treasury rates and a wide bid-ask spread.

Q: How is Host Hotels addressing labor availability and productivity challenges? A: James Risoleo stated that labor availability is not a concern due to strong partnerships with Marriott and Hyatt. Productivity enhancements include using AI to assist with customer bookings and leveraging tools like Marriott's Atlas for labor scheduling and talent retention.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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