The combination of an improved year-end outlook and better-than-expected performance in the second quarter has led Host Hotels & Resorts to raise its revenue per available room outlook.
During the hotel real estate investment trust's second-quarter earnings call, Jim Risoleo, chairman, president and CEO of Host, said the company now expects both its comparable hotel RevPAR growth and comparable hotel total RevPAR growth to both range between 4.75% to 5.25%. That's an increase of 75 basis points and 125 basis points, respectively, from their midpoints in the company's previous full-year outlook.
"This reflects the outsized rate growth we achieved in the first half of the year, and our expectation that rate growth will normalize in the second half of the year," he said.
Revenue per available room growth in the second quarter topped Host's expectations, with broad-based strength across both markets and business mix, Risoleo said. Sustained luxury resort demand, strong group performance and elevated rates associated with World Cup matches drove growth for the portfolio.
“We estimate that the event contributed approximately 160 basis points of RevPAR growth in the second quarter,” he said. “For June alone, RevPAR in our World Cup markets grew 15% compared to 12% in non-World Cup markets.”
Host’s team expects the World Cup will contribute approximately 70 basis points of gross RevPAR growth for the full year, a 10-basis-point increase over expectations, he said.
Transient guest revenue grew 7% during the quarter, marking the strongest growth out of the last seven quarters, Risoleo said. Those higher rates were the result of relatively stable demand thanks to major events, citywide compression and continued leisure strength at luxury resorts.
Among Host’s markets, Maui, New York and San Francisco led that growth with improvements in key business transient markets also adding some performance tailwinds, he said. Maui in particular saw RevPAR grow 14% and total RevPAR grow 11%, reflecting strong demand growth as occupancy grew more than 8 percentage points in the quarter.
Group room revenue grew 7% during the quarter, the result of fairly even room-night and rate growth, he said. Host’s portfolio sold 1.1 million group room nights during the quarter, and its definite group room nights on the books for 2026 now stand at 3.8 million. Total group revenue pace is up more than 5% compared to the same time last year.
Food-and-beverage revenue grew 6% during the quarter while other ancillary revenue remained flat, Risoleo said. The growth in on-property spending was offset by a decrease in attrition and cancellation revenue compared to last year’s tough comparisons.
“The broad-based growth across food and beverage departments, golf and spa demonstrates the continued strength of the affluent consumer, as well as the benefits of the strategic investments we have made at many of our properties over the last several years,” he said.
Portfolio update
In June, Host closed on its sale of the Sheraton Parsippany for approximately $12 million, Risoleo said. The deal was in line with its strategy of selling off lower-growth properties with near-term elevated capital expenditure requirements.
During the second quarter, Host made further progress in its Hyatt Transformational Capital Program, and it is now nearly 90% complete, he said. The program should finish by the end of the year. The program has renovated five hotels so far: the Grand Hyatt Atlanta in Buckhead; the Hyatt Regency Capitol Hill; the Hyatt Regency Austin; the Hyatt Regency Ruston; and the Grand Hyatt Washington.
The Manchester Grand Hyatt San Diego, the final Hyatt hotel in the program, has a phased renovation to mitigate business interruption, and it should be substantially complete by the end of this year, he said.
Host has moved forward with its second Marriott Transformational Capital Program, which is about 37% complete, Risoleo said. It’s tracking on time and under budget. Guestroom renovations at the New Orleans Marriott are nearly done. Renovations at the Ritz-Carlton Naples, Tiburon, and Westin Kierland Resort & Spa are in progress, and the Ritz-Carlton Marina del Rey is scheduled to start renovations later this month.
During the second quarter, Host received $5 million in operating guarantees related to its transformational capital programs, he said. The REIT expects to benefit from about $19 million in operating profit guarantees in 2026 from the two programs, which should offset most of the earnings before interest, taxes, depreciation and amortization disruption.
Host finished the final phase of its Four Seasons Orlando condo development at the Walt Disney World Resort during the quarter, Risoleo said. So far, the company has closed on 28 of the 40 units, including 20 of the 31 midrise units and eight of the nine villas.
For 2026, Host has provided a capital expenditure guidance range of about $550 million to $630 million, he said. That includes about $250 million to $285 million in reinvestment focused on redevelopment, repositioning and return-on-investment projects, as well as $25 million to $30 million for property damage reconstruction associated with the Kona rainstorm in Hawaii.
In addition, Host has spent about $17 million to close out the condo development at the Four Seasons Orlando resort, he said.
“Our continued reinvestment across the portfolio remains a key differentiator and is an important driver of Host’s sustained outperformance,” Risoleo said.
Once Host completes its Marriott program in 2029, it will have reinvested approximately $2.1 billion into comprehensive renovations across 34 hotels, he said. That should contribute about 60% of its hotel EBITDA in 2026.
“We have stabilized post-renovation performance at 21 of these properties, where we have seen an average stabilized RevPAR index share gain of nearly 9 points,” he said.
By the numbers
For the second quarter, Host reported net income of $241 million, a 7.1% year-over-year increase, according to the company’s earnings release. Total revenue for the quarter amounted to $1.64 billion, an increase from $1.58 billion the year before.
Comparable hotel RevPAR was $251.53, a 7% increase, and comparable hotel total RevPAR was $417.58, a 5.9% increase.
Earnings before interest, taxes, depreciation, amortization for real estate was $519 million, a 5.7% year-over-year increase. Adjusted EBITDAre totaled $525 million, a 5.8% increase.
As of June 30, Host reported its total assets were valued at $13.3 billion. The REIT had a debt balance of $5.1 billion with a weighted average maturity of 4.7 years and a weighted average interest rate of 4.8%. It has no maturities in 2026. It has total available liquidity of about $3.6 billion, which includes furniture, fixtures and equipment escrow reserves of $156 million and $1.5 billion through the revolver portion of its credit facility.
As of press time, Host’s stock was trading at $23.53, up 29.6% year to date. The NASDAQ Composite was up 14.5% for the same period.