Host Hotels & Resorts Inc HST

Host Hotels Earnings: RevPAR Down Due to Maui Wildfire Impact but Nonroom Revenue Growth Solid

First-quarter results for no-moat Host Hotels & Resorts were mixed compared with our estimates, though we don’t see anything in the quarter that would materially change our $25 fair value estimate. Occupancy stayed flat at 68.4% in the quarter compared with the first quarter of 2023, while average room rates declined 1.3% year over year. As a result, revenue per available room fell 1.2%, which was below our expectations of 2.3% growth in the quarter. However, nonroom revenue did better as strong group business led to higher food and beverage spending. As a result, same-store revenue was up 1.7%, in line with our assumption for the quarter. Meanwhile, hotel operating expenses were up 4.0% in the quarter, which was lower than our estimate of 5.6% growth for expenses, leading to a hotel EBITDA decline of 2.9% that was better than our estimate of a 7.0% decline. Host reported adjusted funds from operations of $0.60 per share that beat our $0.50 estimate for the first quarter.