While an ongoing concern for the U.S. hotel industry at large continues, leisure demand from its Maui resorts helped drive strong performance at Host Hotels & Resorts’ properties during the second quarter.
During the real estate investment trust’s recent earnings call, Host President and CEO Jim Risoleo said the portfolio benefited from comparable hotel total revenue per available room growth of 4.2% compared to last year and 3% RevPAR growth of due to higher leisure transient demand, higher average daily rates and more ancillary spending.
Host's portfolio saw particularly strong performance in Maui, Miami, Orlando, Atlanta, New York, Florida’s Gulf Coast and San Francisco, he said.
Host's transient revenue grew by 7% due to the Easter calendar shift and the ongoing recovery in Maui from the 2023 wildfires, Risoleo said. Maui specifically accounted for 40% of the transient revenue growth in the quarter. The island saw 19% RevPAR growth, which gave a 100-basis-point boost to Host’s portfolio’s RevPAR growth for the quarter. TRevPAR at its three Maui resorts grew by 19%, driven by robust growth at its food and beverage outlets as well as golf and spa revenue.
Business transient revenue was relatively flat during the second quarter as rate growth nearly offset demand decreases, he said. Group room revenue decreased by 5% year over year mainly due to the Easter holiday shift, the planned renovation disruption from the company’s Hyatt Transformational Capital program, business mix shifting from group to transient in Maui and reduced group pickup.
Host’s properties actualized 1.1 million group room nights during the second quarter, and its definite group room nights on the books grew by 3.8 million for 2025, he said. Total group revenue pace is up 1.6% compared to the same time last year.
Ancillary spending by guests remains strong as illustrated by 4% TRevPAR growth in the second quarter, Risoleo said. Food and beverage revenue was up 4% driven by its outlet revenue, while banquet revenue grew by 1% as contribution per group room night outpaced absolute declines in group room nights.
Host has collected $9 million of business interruption proceeds for Hurricane Helene and Hurricane Milton during the second quarter, bringing the total amount of Host's insurance proceeds to $19 million for the first half of the year, he said. Host also collected another $5 million of business interruption proceeds in July.
Looking ahead
Despite the heightened macroeconomic uncertainty, Host continues to outperform expectations, Risoleo said. Because of its strong performance during the first half of the year, the company is increasing its outlook for comparable hotel RevPAR and total RevPAR.
“The low end of our guidance contemplates softer demand in the second half of the year while the high end assumes a more stable macroeconomic environment,” he said.
Host’s new full-year 2025 outlook for comparable hotel TRevPAR is $373 to $377, a 2% to 3% increase compared to 2024. Its comparable hotel RevPAR outlook is $224 to $226, a 1.5% to 2.5% increase. It projects net income of $601 million to $631 million in net income, a $70 million increase in its midpoint. Its adjusted earnings before interest, taxes, depreciation, amortization and real estate costs range is now $1.69 billion to $1.72 billion, a $60 million increase of the midpoint.
As it did last quarter, Host is projecting that every change in 100 basis points in RevPAR will result in a $32 million to $37 million change in adjusted EBITDAre, Risoleo said.
“As we have said many times before, Host is well-positioned to weather any environment because of our fortress investment grade balance sheet, a leverage ratio of 2.8 times, our size and scale, our diversified business and geographic mix, and our continued reinvestment in our portfolio,” he said.
Host has assumed a gradual improvement at its Maui properties this year and no improvement in the international demand imbalance, Executive Vice President and Chief Financial Officer Sourav Ghosh said. The company expects negative year-over-year RevPAR performance in the third quarter, driven by softer short-term group volume and slightly positive RevPAR performance in the fourth quarter.
Portfolio reinvestment
As of the second quarter, Host’s Hyatt Transformational Capital Program is 50% complete and is tracking on time and under budget, Risoleo said. Host has completed the guestrooms renovation at the Grand Hyatt Washington and has paused the public space renovations to accommodate group business on the books. In the meantime, it’s finishing the comprehensive renovations of the Hyatt Regency Washington on Capitol Hill. The Hyatt Regency Austin project should finish this year as well.
Host has started its comprehensive renovation of the Manchester Grand Hyatt San Diego, its final property in the capital program, Risoleo said. The project should finish in early 2026.
Host expects to benefit from about $27 million of operating profit guarantees related to the Hyatt capital program in 2025, which will offset the majority of the earnings before interest, taxes, depreciation and amortization disruption at these properties.
Outside of the program, the REIT is making progress on its value-enhancing projects, including The Don CeSar ballroom expansion and The Phoenician's Canyon Villa Suites, both of which should be completed in the fourth quarter of 2025, Risoleo said. It also expects to complete the mid-rise condominium building development at the Four Seasons Resort Orlando at Walt Disney World Resort and will begin closing on sales in the fourth quarter as well. It has deposits and purchase agreements for 20 of the 40 units, including eight of the nine villas.
During the second quarter, Host completed hurricane-related repair work on the north pool and pool bar at The Don CeSar property in St. Pete Beach, Florida, Risoleo said. In July, it finished the marketplace and lower-level retail spaces. During the third quarter, it expects to finish the final phase of reconstruction, including the lower-level kitchen and two food and beverage outlets.
Since reopening, The Don CeSar is seeing better than expected near-term transient pickup, higher food and beverage capture and increased group bookings, he said. That has allowed Host to raise full-year expectations for the resort to $3 million from a loss of $1 million.
Host’s capital expenditure outlook range for 2025 is $590 million to $660 million, which includes between $70 million and $80 million in property damage reconstruction, most of which should be covered by insurance, Risoleo said. The outlook also reflects about $270 million to $305 million of investment for redevelopment, repositioning and return on investment projects.
“As part of our climate risk and resiliency program, we purchased flood barriers for nine high-risk properties with measures being put in place for the 2025 hurricane season,” he said.
Looking back at past transformational renovations, Host has completed investments in 24 properties between 2018 and 2023 that continue to provide meaningful tailwinds, Risoleo said.
“Of the 20 hotels that have stabilized post-renovation operations to date, the average RevPAR index share gain is over 8.7 points, which is well in excess of our targeted gain of three to five points,” he said.
Host sold the 456-key leasehold interest in the Westin Cincinnati for $60 million, or 14.3 times trailing month EBITDA, Risoleo said. Since 2018, the REIT has sold approximately $5.1 billion of hotels at a blended 17.2 times EBITDA multiple, including estimated foregone capital expenditures of $1 billion. That’s compared to $4.9 billion of acquisitions over the same period of time with a blended 13.6 times EBITDA multiple.
By the numbers
Host reported $1.6 billion in revenue for the quarter, a 8.2% year-over-year increase, according to its earnings release. Comparable hotels revenue reached $1.55 billion, a 4.2% year-over-year increase. RevPAR grew by 3% to $239.64, and total RevPAR increased 4.2% to $400.91.
Net income reached $225 million, a 7% year-over-year decrease. Host also reported EBITDAre decreased by 2.2% to $491 million while adjusted EBITDAre rose 3.1% to $496 million.
Host’s portfolio is valued at a combined $13 billion. Its total available liquidity is roughly $2.3 billion, including furniture, fixtures and equipment escrow reserves of $279 million and $1.5 billion through the revolver portion of its credit facility.
As of quarter’s end, it had a debt balance of $5.1 billion with a weighted average maturity of 5.4 years and a weighted average interest rate of 4.9%.
During the second quarter, Host repurchased 6.7 million shares of common stock at an average price of $15.56 per share through its common share repurchase program for a total of $105 million. As of June 30, 2025, it had about $480 million remaining under its repurchase program.
As of press time, Host's stock was trading at $15.72 a share, down 8.6% year to date. The NASDAQ Composite is up 9.6% for the same period.