With Host Hotels & Resorts’ portfolio focused on higher-end hotels, the ongoing bifurcation of travel demand has allowed the company to raise its full-year outlook.
During the hotel real estate investment trust’s third-quarter earnings call, Host President and CEO James Risoleo said the company's hotel portfolio outperformed expectations again. The strong year-to-date performance and improved expectations for the fourth quarter have allowed Host to increase its comparable hotel revenue per available room and total RevPAR guidance estimates to approximately 3% and 3.4%, respectively.
Since laying out its initial full-year 2025 guidance in February, Host has increased its RevPAR expectations by 150 basis points and its adjusted earnings before interest, taxes, depreciation and amortization expectations by $110 million, he said.
“The bifurcation of the consumer is likely to lead to continued outperformance for upper-upscale and luxury hotels, and we believe Host will be a beneficiary, given our higher-end properties, our size and scale, our diversified business and geographic mix, and our continued reinvestment in our portfolio,” Risoleo said.
Host expects low single-digit RevPAR growth in the fourth quarter, an improvement over its prior guidance driven in part by strong estimated RevPAR growth of 5.5% in October, said Sourav Ghosh, executive vice president and chief financial officer. The outlook assumes continued recovery in Maui, no improvement in the U.S. international hotel demand imbalance and steady demand trends in the fourth quarter.
The outlook also takes into account the limited impact Host has felt from the government shutdown in October, primarily in Washington, D.C., and San Diego, Ghosh said.
“If the government shutdown continues to the end of the year, full-year RevPAR growth could be negatively impacted,” he added.
Performance update
Comparable hotel TRevPAR improved by 80 basis points compared to the third quarter of 2024, and comparable hotel RevPAR improved by 20 basis points, due to better than expected short-term transient demand pickup and higher rates across Host's portfolio, Risoleo said. Comparable hotel EBITDA margin for the quarter fell by 50 basis points year over year to 23.9% due to increases in wages and benefits.
RevPAR growth in the third quarter exceeded expectations at Host’s resort properties, driven by short-term leisure transient demand pickup and rate growth despite transformational renovations, the Jewish holiday shift and lingering impacts from macroeconomic uncertainty, he said.
Transient revenue grew by 2%, driven by double-digit growth at resorts, he said. Host's hotel portfolio saw particularly strong performance in Maui, San Francisco, New York and Miami. In Maui, leisure transient demand continued to recover, and Host’s hotels there saw 20% RevPAR growth and 19% TRevPAR growth, driven by “substantial increases” in occupancy and strong out of room spending on food and beverage and spa services.
“Looking forward, total group revenue pace in Maui is up 13% for 2026, reflecting continued momentum behind the recovery,” Risoleo said.
Business transient revenue was down 2% in the third quarter due to the continued reduction in government room nights, he said. Group room revenue was down about 5% year over year driven primarily by planned renovation disruption, the Jewish holiday calendar shift and reduced short-term group pickup.
Definite group room nights on the books increased to 4 million for 2025, he said. Full-year 2025 total group revenue pace is up 1.2% compared to the same period in 2024.
Portfolio management
Host completed the final phase of the reconstruction of The Don CeSar following damage from Hurricane Helene and Hurricane Milton in 2024, Risoleo said.
In August, Host sold the Washington Marriott at Metro Center for $177 million. The REIT provided $114 million of seller financing at a 6.5% interest rate to facilitate a 1031 exchange for the buyer, Risoleo said. Since 2018, Host has sold about $5.2 billion in hotels and has spent $4.9 billion on hotel acquisitions for the same period.
The Hyatt Transformational Capital Program is about 65% complete and tracking on time and under budget, Risoleo said. Renovations at the Hyatt Regency Capitol Hill are complete, and renovations for the Hyatt Regency Austin are substantially complete. Work is underway at several of Host's other Hyatt-branded properties.
Host is beginning a second transformation program from its Marriott International-branded properties, Risoleo said. The four properties included are the Ritz-Carlton Marina Del Rey; the Ritz-Carlon Naples, Tiburon; the Westin Kierland Resort & Spa; and the New Orleans Marriott.
“We believe these reinvestments will position the hotels to outperform competitors in their respective markets, while enhancing long-term performance,” he said.
Marriott has agreed to provide $22 million in operating profit guarantees to cover the anticipated disruption associated with the investment projects, which is expected to be between $300 million and $350 million over the next four years, he said. Host is targeting stabilized annual cash-on-cash returns in the mid-teens through a combination of RevPAR index share gains and enhanced owner priority returns.
“Similar to the first Marriott transformational capital program, we are targeting average RevPAR index share games of 3 to 5 points,” he said.
By the numbers
Host reported total revenue of $1.33 billion during the third quarter, up from nearly $1.32 billion in the year before, according to its earnings release. It reported net income of $163 million, up from $84 million in 2024.
The REIT reported comparable hotel earnings before interest, taxes, depreciation and amortization was $309 million, a 1.3% year-over-year decrease with a 50 basis point decrease in comparable hotel EBITDA margin to 23.9%. Adjusted EBITDA for real estate was $319 million, a decrease of 3.3%.
Comparable hotel total RevPAR was $335.42, a 0.8% year-over-year increase. Comparable hotel RevPAR was $208.07, a 0.2% year-over-year increase.
As of Sept. 30, Host had $13 billion in total assets with a portfolio of 79 hotels and resorts. Its debt balance was $5.1 billion with a weighted average maturity of 5.2 years, a weighted average interest rate of 4.9% and a balanced maturity schedule. Its total liquidity was about $2.2 billion, including furniture, fixtures and equipment reserves of $205 million and $1.5 billion under the revolver portion of its credit facility.
Moody’s upgraded Host’s credit rating to Baa2 with a stable outlook citing its operating performance and maintenance of a conservative financial profile along with its high-quality portfolio.
As of press time, Host's stock was trading at $17.04 per share, down 2.8% year to date. The NASDAQ Composite was up 19.8% for the same period.