HOST HOTELS & RESORTS, INC. Q3 FY2024 earnings call

• Acknowledged the impact of Hurricanes Helene and Milton, with 4 properties temporarily closed, 3 reopening within 10 days, and The Don CeSar remaining closed. Resilience investments at Ritz-Carlton, Naples paid off during hurricanes.
• Third quarter results: adjusted EBITDAre $324M, adjusted FFO per share $0.36. Comparable hotel total RevPAR grew 3.1%, comparable hotel RevPAR up 80 basis points.
• Business mix: Group room night revenue up 1% (rate), business transient revenue grew 5%, transient room nights at comparable resorts up 4% (driven by Maui), leisure rates resilient.
• Capital allocation: Repurchased 3.5 million shares at an average price of $16.33 per share, acquired $1.5 billion of real estate with a blended 13.6 times EBITDA multiple.
• Portfolio reinvestment: Updated capital expenditure guidance range $485B to $580B, including redevelopment, renewal, and property damage reconstruction. 24 transformational renovations since 2018 with average RevPAR index share gain over seven points.

In the third quarter, Host Hotels & Resorts delivered adjusted EBITDAre of $324 million and adjusted FFO per share of $0.36. Comparable hotel total RevPAR grew 3.1% year-over-year, with comparable hotel RevPAR up 80 basis points. Group room night revenue was up 1% driven by rate, while group room nights were flat due to recovery in Maui. Business transient revenue grew 5% in the third quarter. Transient room nights sold at comparable resorts were up 4% in the third quarter, driven by Maui, and leisure rates remained resilient. Leisure transient rates at comparable resorts were up approximately 50% compared to 2019. Revenue contribution: Adjusted EBITDAre was $324 million, adjusted FFO per share was $0.36, with comparable hotel total RevPAR growth at 3.1%

• Maintained full year comparable hotel guidance growth midpoint, anticipating comparable hotel total RevPAR growth of approximately 1% and comparable hotel RevPAR flat compared to 2023.
• Maui wildfires estimated to impact full year comparable hotel total RevPAR by 180 basis points and RevPAR by 220 basis points.
• Revised 2024 full year adjusted EBITDAre guidance to $1.630 billion, a $15 million or approximately 1% decrease due to hurricanes in Florida, with $2 million in the third quarter and $13 million in the fourth quarter.

• Impact of Hurricanes Helene and Milton: 4 properties temporarily closed, 3 reopening within 10 days, The Don CeSar remaining closed with phased reopening expected towards end of Q1 2025.
• Maui wildfires: Impacted RevPAR and group revenue recovery, with group taking longer to recover compared to transient.

Q: Touch base on the transaction market, thinking about being a buyer or seller and market evolution A: Jim Risoleo said until recently buyers and sellers were on the sidelines, but with election past and better debt markets, likely see private equity back in next year. Host may test market with non-core assets.

Q: On underlying EBITDA, clean run rate and Maui recovery A: Sourav Ghosh said underlying EBITDA is still $1.750 billion, including taking out BI, adding acquisitions, and considering Maui recovery. Maui transient trends encouraging but group recovery will take longer Q: Clean run rate top and bottom line growth rates ex onetime items A: Sourav Ghosh said for 2024, if not for Maui drag, RevPAR growth would be ~3% and margin expansion expected. For 2025, group booking pace strong but Maui group recovery will take time Q: Maui EBITDA excluding BI proceeds and group outlook A: Sourav Ghosh said $97 million excluding BI proceeds. Group mix is asset-by-asset, but overall mix not shifting meaningfully, with strong citywide group booking paces for 2025 Q: Labor market and leisure transient A: Jim Risoleo said labor picture good with Marriott and Hyatt as employers of choice. Leisure transient ADR up 50% over 2019, affluent consumer still spending, expecting pendulum to swing back for international travel balance Q: Orlando condo development and densification opportunities A: Jim Risoleo said construction budget $150-170 million, sales starting late Nov, targeting mid-high teens cash-on-cash return. Exciting project at Ritz-Carlton O'ahu, Turtle Bay with residential development potential Q: Maui RevPAR headwind narrowing and group vs transient delta in Maui A: Sourav Ghosh said Maui RevPAR headwind revised to 220 basis points from 250, improved by transient pace. Maui group room nights still behind pre-wildfire, transient pace similar to prefire Q: Ritz-Carlton O'ahu performance post conversion A: Jim Risoleo said trending in line with pro forma expectations, transition going well, asset in good shape with no near-term CapEx needs Q: San Francisco group room night pacing and capital allocation A: Sourav Ghosh said San Francisco group room night pacing up 40%, capital allocation includes opportunistic stock buybacks, acquisitions if making sense, and continued portfolio investment Q: Leisure rates and $1.75 billion run rate including Maui recovery A: Sourav Ghosh said leisure rates formed new baseline, $1.75 billion run rate includes theoretical Maui recovery but not specifically for 2025