Roundup of REIT earnings from 4Q and full-year 2023

Fourth quarter and full-year 2023 earnings season is nearly complete. Here, we summarize many of the REITs reporting along analyst's insights.

Ashford Hospitality Trust
The Dallas-based REIT doesn’t release its earnings until Wednesday but previously announced its preliminary expectations for net losses through the fourth quarter ($30.3-$32.3 million) and the full year ($192.7-$194.7 million). It also recently provided an update on its plan to pay off strategic financing with a final maturity date of January 2026. Last month, Ashford said it plans to raise the capital through asset sales, mortgage debt refinancing and non-traded preferred capital raises, and it listed 12 hotels at various stages of being available for sale. Two weeks ago, it announced the sale of the Residence Inn by Marriott Salt Lake City Cottonwood in Salt Lake City, Utah, to an undisclosed buyer for $19.2 million. It now says it has two other properties under purchase and sale agreements and three additional assets under letters of intent. Those six assets total more than $220 million.

Apple Hospitality REIT
The Richmond, Virginia-based REIT reported strong operating performance, with comparable hotels RevPAR up 2% for 4Q23 and 7% year-over-year (both numbers were up approximately 8% over the same periods in 2019), while comparable hotels ADR was up 3% and 5%, respectively, over the same period. It said its adjusted hotel EBITDA of approximately $104 million for Q4 and $500 million for 2023 were down 2% and 5%, respectively, YOY. Apple, which has been much more active in the acquisition space than its counterparts, said it acquired six hotels and a free-standing parking garage over the year for approximately $290 million.

Chatham Lodging Trust
The West Palm Beach, Florida-based said its RevPAR increased 2.5% in Q4 year-over-year, while ADR was up 0.5% and occupancy was up 2% over the same period. The REIT said it experienced RevPAR growth of 6.1% in 2023, reduced its net debt by $26 million, and lowered its leverage ratio from 27% to 25%, marking the lowest level in a decade.

Host Hotels & Resorts
The Bethesda, Maryland-based REIT, the largest in the U.S., said its comparable hotel RevPAR was up 8.1% for the full year, which was driven by an increase in both occupancy and rate and comparable hotel EBITDA of $1.56 billion for 2023, a 2.4% increase year-over-year. Its GAAP net income was $752 million for 2023, a 17% increase YOY. Host President and CEO Jim Risoleo said the company would like to make more acquisitions in 2024, but currently there aren’t a lot of assets available at the right price that would interest the REIT. The company also said the Maui wildfires and the resulting impact on its properties, golf courses, and JV timeshare impacted its net income by approximately $15 million in Q4. Analysts at R.W. Baird said it has a positive view of Host’s earnings, “particularly the 2024 outlook that reflects solid top-line growth (likely better than investors were expecting) and adjusted EBITDA guidance that is ahead of consensus (ex-BI and inclusive of the incremental Maui impact).”

Park Hotels & Resorts
The Tysons, Virginia-based REIT reported a 437% increase in its fourth quarter net income, year-over-year and a 38.7% decrease for the full year. Comparable RevPAR grew by 4.1% in Q4 and 8.7% for the full year. Adjusted EBITDA also increased by 8.7% in 2023. The company invested nearly $300 million in capital improvements in 2023 and has another $190-200 million planned for later in 2024. Its outlook for 2024 includes a RevPAR increase of 3.5-5.5%, net income of $146-186 million and operating margin income from 14.9-16.1%

Pebblebrook Hotel Trust
The Bethesda, Maryland-based REIT said it benefited from a significant resurgence in urban demand in 2023 and is cautiously optimistic about prospects in 2024. “While overall industry demand has been softening in the lower to middle segments, likely as a result of the Federal Reserve’s initiatives to diminish inflation, the ongoing recovery in our urban markets, and in the upper upscale segment, which includes most of our hotels and resorts, remains favorable,” CEO Jon Bortz said. Pebblebrook said its same-property total RevPAR increased 5.9% year-over-year, while its same-property hotel EBITDA was $350.9 million, down 2.6% YOY. The REIT sold seven properties in 2023 for approximately $331 million of gross proceeds, addressed all material 2024 debut maturities and completed $152.3 million in capital expenditures. Analysts at R.W. Baird said they saw positives in the report. “We see no surprises with Pebblebrook’s better-than-expected 4Q23 earnings given the company’s recent operating update; urban markets continue to recover, and Pebblebrook is making slow but steady progress with asset sales and balance sheet deleveraging. Positively, capex spending will be down substantially in 2024, near-term debt maturities have been addressed/extended, and recent renovations and repositioning projects should lead to more predictable earnings/growth.”

RLJ Lodging Trust
The Bethesda, Maryland REIT reported portfolio comparable RevPAR of $133.84 for Q4 (up 5.2% year-over-year) and $141.24 for the full year (up 9% YOY). ADR growth was 4.5% and occupancy growth was 4.2% for 2023. It also said it acquired the fee interest in the 304-key Wyndham Boston Beacon Hill for $125. Analyst R.W. Baird said the REIT’s Q4 results came in as expected. “We see no surprises with RLJ’s 4Q23 earnings as urban markets continued to drive the portfolio’s top-line recovery. Full-year 2024 guidance is being driven by a solid RevPAR outlook (4% at the midpoint), but expense growth of 5%-6% is causing the hotel EBITDA and adjusted EBITDA ranges to bracket expectations… No change in our positive view, which is based on expectations for top-line outperformance (i.e., a continued recovery in urban markets and upside from recent conversion projects) and a strong balance sheet and free cash flow profile.”

Ryman Hospitality Properties
Overall, the Nashville-based company said it generated net income of $170 million for Q4 and $453.7 million for the full year. It also reported an all-time quarterly revenue of $633.1 million (up 11.3%) and yearly revenue of $2.2 billion (up 19.5%), both records for the REIT. Its hospitality segment revenue had similar trends, with Q4 revenue up 12.5% and full-year revenue up 19.2%. Its same-store hospitality portfolio had a record total RevPAR of $525, a 3.8% increase in Q4 and a record ADR of nearly $260. Truist analysts said Ryman is its favorite story in its hotel REIT coverage. “4Q23, no surprises were given pre-reporting for investor day. Headline 4Q23 adjusted EBITDAre was $187.5M vs. our projection of $186.1M and consensus of $187M.” For 2024, Ryman is projecting its same-store total RevPAR to grow 3.8% compared to -0.6% for 2023. Its property level results were mixed, with its Gaylord Texan Resort & Convention Center (RevPAR up 4.8% YOY and Total RevPAR up 13.9%) and AC Hotel National Harbor (RevPAR up 1.7% YOY and Total RevPAR up 12%) being the leaders.\

Sunstone Hotel Investors
The Aliso Viejo, California REIT saw RevPAR grow 5.6% year-over-year, including a 15.6% improvement across its urban and convention hotels. Net income more than doubled at $206.7 million in 2023 YOY, although the company said much of that increase was from selling its Boston Park Plaza property. CEO Bryan Giglia said it has a specific type of asset it wants to use with the proceeds of its $370 million sale of the property in Boston. “We are targeting a group-centric hotel that has an attractive going-in yield, that has limited near-term capital needs, but with longer-term, value-add opportunities. While this sounds like an ambitious wish list, we are confident that we can execute in the near term,” he said. The REIT said it expected RevPAR growth between 2.5-5.5% in 2023 and adjusted EBITDAre between $230-255 million.