Host earnings impacted by Florida hurricanes, Maui fire

BETHESDA, Maryland – REIT giant Host Hotels & Resorts delivered comparable hotel Total RevPAR growth of 3.1% over the third quarter of 2023, driven by improvements in food and beverage revenues from group business.

Comparable hotel RevPAR increased 0.8% for the quarter as a result of continued strong group demand and improving trends in Maui.

Host reported third quarter earnings per share of $0.12, down $.04, primarily due to a $25 million decrease in gains on insurance settlements. Revenue for the quarter came in at $1.32 billion versus the consensus estimate of $1.29 billion.

Many of the company’s hotels in Florida were affected by Hurricanes Helene and Milton.  Four properties in Florida were temporarily closed due to evacuation mandates and/or loss of commercial power; three of which have reopened. The Don CeSar remains closed and sustained the most significant damage during the storms. The company currently expects a phased reopening of The Don CeSar beginning in late first quarter of 2025. Enhanced resiliency investments implemented during the reconstruction of The Ritz-Carlton, Naples following Hurricane Ian in 2022 were successful in minimizing damage to the resort during the two storms.

We believe our investment grade balance sheet continues to put us in a position to execute on multiple fronts, leaving Host well positioned for growth in the future.

James Risoleo

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Despite the impact of the hurricanes in Florida, Host President and CEO James Risoleo said the company is maintaining its previous full year comparable hotel guidance at the midpoint, which assumes a continued recovery in Maui and steady demand trends in the fourth quarter, despite the impacts of Hurricanes Helene and Milton.

Operating profit margin and comparable hotel EBITDA margins in 2024 are expected to decline compared to 2023, impacted by the Maui wildfires and continued growth in wages, real estate taxes and insurance.

The impact from Maui operations is expected to be an approximate decline of 150 basis points in RevPAR and 110 basis points in Total RevPAR. When combined with the expected pre-wildfire Maui contribution, the total impact is estimated to be 220 basis points and 180 basis points, respectively. Net of the benefit of the business interruption gains relating to the wildfires received earlier this year, the year-over-year impact from Maui on net income and Adjusted EBITDAre for full year is expected to be a decline of $25 million, and on margins is expected to be a decline of approximately 20 basis points.

The company's full year forecast comparable hotel set now includes the operations of The Ritz-Carlton O'ahu, Turtle Bay and 1 Hotel Central Park properties that were acquired in July 2024, and excludes The Don CeSar, which closed on September 25. The estimated impact to net income and Adjusted EBITDAre from the loss of business due to the hurricanes for 2024 is approximately $15 million.

Anticipate full-year Total RevPAR growth is approximately 1.2% and RevPAR approximately flat to 2023.

Expect operating profit margin is expected to be approximately 15.2% and comparable hotel EBITDA margin is set at approximately 29%.

Expect net income for 2024 is approximately $687 million and Adjusted EBITDAre is forecast at approximately $1.63 billion.

During the quarter, Host repurchased $57 million of common stock, bringing its total repurchases for the year to $107 million at an average price of $16.99, and completed the issuance of $700 million of Series L senior notes at 5.5%.

“We believe our investment grade balance sheet continues to put us in a position to execute on multiple fronts, leaving Host well positioned for growth in the future,” Risoleo added.

Net income of $84 million for the third quarter was down 25.7%.

Adjusted EBITDAre of $324 million was down 10.2% and Adjusted FFO per diluted share was $0.36.

Third quarter 2023 results benefited from business interruption insurance proceeds of $54 million, while none were recognized in the third quarter of 2024.