Host Hotels & Resorts, Inc. Q3 FY2025 earnings call

• Strong Q3 performance: Outperformed expectations, with adjusted EBITDAre and FFO per share results. - Business mix: Resort RevPAR growth exceeded expectations despite renovations and macro uncertainty; transient revenue grew 2% with strong resort performance; group revenue down 2% due to government room nights and renovation disruption. - Don CeSar: Completed final reconstruction phase, saw better-than-expected transient pickup and group bookings, EBITDA expectations raised. - Capital allocation: Sold Washington Marriott Metro Center at 12.7x trailing 12-month EBITDA; Hyatt Transformational Capital program ~65% complete; reached second agreement with Marriott for transformational renovations at 4 properties. - Portfolio reinvestment: Progress on Hyatt and Marriott renovation programs; value-enhancing development projects ongoing. - Corporate responsibility: Released 2025 corporate responsibility report aligned with 2030 goals.

In the third quarter, Host Hotels & Resorts delivered adjusted EBITDAre of $319 million, a decrease of 3.3% over last year. Adjusted FFO per share was $0.35, down 2.8% compared to Q3 2024. Year-to-date, adjusted EBITDAre was up 2.2% and adjusted FFO per share was up 60 basis points. Comparable hotel total RevPAR improved by 80 basis points. Resort properties saw RevPAR growth driven by leisure transient demand pickup. Transient revenue grew 2%, with strong performance in Maui, San Francisco, etc. Group revenue was down 2% in Q3 due to reduced government room nights. The Don CeSar completed reconstruction, and EBITDA expectations for the resort were raised to $6 million from $3 million.

• Increased comparable hotel RevPAR guidance to approximately 3% and total RevPAR to ~3.4%. - Raised adjusted EBITDAre guidance to $1.730 billion, a $25 million improvement. - Guidance includes $24 million business interruption proceeds, $6 million from Don CeSar, $14 million from Alila Ventana Big Sur, and accounts for condo development EBITDA contributions.

• Macroeconomic uncertainty impacting business. - Jewish holiday shifts affecting group revenue. - Renovation disruption impacting group business. - Government shutdown potential negatively impacting RevPAR. - Labor contract negotiations and wage growth affecting margins.

Q: Can we expect more asset trading based on current market seen and how thinking about valuation for public market capture?

A: James Risoleo noted they are opportunistic with capital allocation, sold Washington Marriott at strong metrics, market transaction flow tepid but they have balance sheet to be opportunistic.

Q: How picking hotels/markets for CapEx and if not buying back stock due to better CapEx returns?

A: James Risoleo said they screen assets, focus on transformational renovations, collaborate with operators, and believe investing in assets gives better returns than stock buybacks currently.

Q: Early thoughts on Maui recovery impact on 2026 earnings and group pace?

A: Sourav Ghosh said Maui group revenue pace up 13% for 2026, has 67,000 group room nights booked, hopeful for positive EBITDA incremental beyond 2025 guide.

Q: Group booking pace near-term softness and broad-based impact?

A: Sourav Ghosh said near-term group softness related to Jewish holiday shift, Q4 group pace strong up over 7%, banquet and catering revenue per group room night up showing groups still spend.

Q: What driving out-of-room spend growth and visibility?

A: Sourav Ghosh said increased spend in spa, golf, resort fees, outlet repositioning driving growth, tougher comps expected next year but consumer still spending.

Q: Interest in asset acquisitions and portfolio enhancement?

A: James Risoleo said asset acquisitions low priority now as not seeing accretive opportunities, focus on investing in assets, paying dividend.

Q: Wages/benefits increases in 2026 and labor contracts?

A: Sourav Ghosh said 2025 wage growth ~6%, 2026 expected lower, New York labor contract due mid-next year, operators negotiate with unions.

Q: Gulf Coast storms tailwinds to 2026 growth?

A: James Risoleo said no major storms expected, Don CeSar, Ritz properties performing well, World Cup in 10 markets beneficial.

Q: EBITDA guidance bridge and November/December RevPAR?

A: Sourav Ghosh explained bridge of guidance, November/December slightly negative due to tougher comps but guide increased for quarter including those months.