Host Hotels raises 2025 EBITDAre guidance to $1.73B amid portfolio reinvestment and strong group revenue pace

Earnings Call Insights: Host Hotels & Resorts (HST) Q3 2025

MANAGEMENT VIEW

* CEO James Risoleo opened the call stating that "we continue to outperform our expectations in the third quarter, building on strong operating and financial results in the first half of 2025." He noted adjusted EBITDAre of $319 million, a decrease over last year, and adjusted FFO per share of $0.35, also down year-over-year, but emphasized that year-to-date figures were up.
* Risoleo highlighted that "comparable hotel total RevPAR improved by 80 basis points compared to the third quarter of 2024, and comparable hotel RevPAR improved by 20 basis points, due to better-than-expected short-term transient demand pickup and higher rates across our portfolio."
* He announced the completion of reconstruction at the Don CeSar and raised full year EBITDA expectations for the resort to $6 million from $3 million. The company also collected $5 million in business interruption proceeds for Hurricane Helene and Milton, bringing the total to $24 million for the year.
* Risoleo detailed the sale of the Washington Marriott Metro Center for $177 million and described expanded reinvestment programs, including a new agreement with Marriott for transformational renovations on four properties. "Marriott has agreed to provide $22 million in operating profit guarantees to cover the anticipated disruption associated with our investment, which is expected to be between $300 million and $350 million over the next 4 years."
* He signaled a raised 2025 adjusted EBITDAre guidance to $1.730 billion, stating, "since we laid out our initial full year 2025 guidance in February, we have increased our RevPAR expectations by 150 basis points and our adjusted EBITDA expectations by $110 million."
* CFO Sourav Ghosh stated, "comparable hotel total RevPAR growth continued to outpace RevPAR growth in the third quarter as both group and transient guests maintained elevated levels of out-of-room spend. Comparable hotel food and beverage revenue was flat in the quarter as growth in outlets offset declines in banquet and catering."

OUTLOOK

* Risoleo announced, "we are increasing our comparable hotel RevPAR and total RevPAR guidance estimates to approximately 3% and 3.4%, respectively. We are also increasing our adjusted EBITDAre guidance to $1.730 billion, representing a $25 million, or 1.5%, improvement."
* Ghosh described the outlook assumptions: "We expect low single-digit RevPAR growth in the fourth quarter, an improvement over our prior guidance, partially driven by strong estimated RevPAR growth of 5.5% in October." He cautioned that a continued government shutdown could negatively impact full year RevPAR growth, but the guidance assumes only limited impact from recent disruptions.
* Ghosh also noted that "the expected 2025 EBITDA contribution from the condo development has declined by $5 million as 8 of the 23 contracts signed thus far have been for the villas, which are expected to close in 2026."

FINANCIAL RESULTS

* Adjusted EBITDAre for the quarter was $319 million, and adjusted FFO per share was $0.35, both declining year-over-year, but year-to-date adjusted EBITDAre and FFO per share were up.
* Comparable hotel EBITDA margin for the quarter was 23.9%, down 50 basis points year-over-year. Total group revenue pace in Maui is up 13% for 2026.
* The company completed the sale of the Washington Marriott Metro Center for $177 million and provided $114 million in seller financing at a 6.5% interest rate.
* Capital expenditure guidance for 2025 is $605 million to $640 million, including $75 million to $80 million for property damage reconstruction, mostly expected to be covered by insurance.
* Total available liquidity at quarter-end was $2.2 billion, with a leverage ratio of 2.8x.

Q&A

* David Katz, Jefferies: Asked about further asset trades and valuation. Risoleo replied, "we will be opportunistic with our capital allocation when it comes to dispositions and acquisitions... We continue to test the market. We don't have to sell anything... We're sitting here with over $2 billion of liquidity today and a leverage ratio of 2.8x, a true differentiator."
* Michael Bellisario, Baird: Inquired about CapEx returns and allocation choices. Risoleo responded, "We obviously screen all of our assets to determine what assets we should be putting capital in... We'll continue to do this going forward. It's the clearest line of sight we have to strong cash-on-cash returns in this environment."
* Cooper Clark, Wells Fargo: Asked about Maui's recovery pace. Ghosh said, "Maui continues to recover really well. Our total group revenue pace for 2026 is a positive 13% versus same time last year... So we feel pretty confident that Maui is going to continue to recover."
* Chris Darling, Green Street: Sought elaboration on 2026 setup and low-hanging portfolio opportunities. Risoleo provided market-specific group revenue pace data, highlighting San Francisco, New York, Washington, D.C., and Nashville as strong performers for 2026.
* Aryeh Klein, BMO: Requested more color on softness in near-term group bookings. Ghosh: "There hasn't really been any sort of meaningful cancellation besides maybe a little bit what we have seen in D.C. tied with government business. But in general, I would say there is not a significant drop in terms of group pace by any means."
* Chris Woronka, Deutsche Bank: Queried out-of-room spend growth and sustainability. Ghosh: "There definitely is just increased spend... We -- just given the consumer that we are seeing, they continue to spend more."
* Robin Farley, UBS: Asked about group booking pace and acquisitions. Ghosh: "It is more room night driven. It's effectively almost all room night driven. Rate is a very slight improvement year-over-year."
* Bennett Rose, Citi: Asked about wage and benefits outlook. Ghosh: "For 2025, we are still expecting wage rate growth... at about 6%. Our expectation is that for next year, the wage rate growth is going to be lower."
* Duane Pfennigwerth, Evercore ISI: Asked about Gulf Coast growth if no storms occur. Risoleo: "The Don CeSar is performing extremely well... We're excited with how the Dawn is set up for 2026."
* Jay [indiscernible], Cantor Fitzgerald: Sought clarity on raised EBITDA guidance and Q4 setup. Ghosh provided a bridge of guidance changes and explained Q4 expectations, noting "the implied Q4 is around 1.5%."

SENTIMENT ANALYSIS

* Analysts’ tone was generally positive, focused on asset sales, CapEx allocation, group pace, and the sustainability of consumer spending, with probing on near-term group softness and CapEx returns.
* Management maintained a confident tone, emphasizing portfolio differentiation and the impact of capital allocation. Risoleo repeatedly highlighted the company’s "fortress balance sheet" and outperformance: "We have raised guidance, both RevPAR and EBITDA every quarter this year."
* Compared to the previous quarter, both analysts and management expressed greater confidence in forward growth, especially regarding Maui, group pace, and portfolio investments.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for comparable hotel RevPAR, total RevPAR, and adjusted EBITDAre was raised from the prior quarter, with the full-year adjusted EBITDAre guidance increasing to $1.730 billion from $1.705 billion.
* Capital expenditure guidance remained consistent, but a new Marriott transformational renovation agreement was announced in Q3.
* Analysts’ focus shifted from short-term group softness in Q2 to the sustainability of out-of-room spend and forward group pace in Q3. Management’s tone was more upbeat, supported by data on group booking momentum and reinvestment strategies.
* Key metrics such as group revenue pace in Maui and San Francisco improved sequentially, and portfolio asset sales continued to differentiate Host’s performance.

RISKS AND CONCERNS

* Management noted the risk of a prolonged government shutdown impacting full year RevPAR growth.
* Cost pressures persist, with Ghosh highlighting elevated wage and benefit growth.
* Some group business softness remains, particularly tied to government-related demand in D.C., but management reports no broad-based cancellations.
* Uncertainty around the timing and amount of additional business interruption proceeds remains due to ongoing insurance discussions.

FINAL TAKEAWAY

Management emphasized that Host Hotels & Resorts’ continued capital reinvestment, strategic asset sales, and a focus on high-performing markets have enabled the company to raise financial guidance again for 2025. The company sees strong group revenue pace heading into 2026, especially in Maui and San Francisco, and expects further benefits from transformational renovations and disciplined capital allocation. The balance sheet remains a key differentiator, providing flexibility for ongoing portfolio optimization and value creation for shareholders.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/hst/earnings/transcripts]

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