Host Hotels Earnings: Slightly Better Than Anticipated, but 2024 Guidance Disappoints

No-moat Host Hotels & Resorts reported fourth-quarter results that were in line with our expectations, giving us confidence in our $24 fair value estimate. Occupancy increased 80 basis points year over year to 67.2% but is still below the 75.6% seen in the fourth quarter of 2019. Average daily rate was up 0.4% year over year and is now 17.5% higher than the fourth quarter of 2019. As a result, revenue per available room grew 1.5% in the fourth quarter, slightly better than our estimate of 0.6%, and is now 4.4% higher than 2019. However, hotel operating expenses were up 3.4% in the quarter, leading to hotel EBITDA margin falling 180 basis points to 28.1% and hotel EBITDA falling 5.3% year over year, though that is better than our estimate of an 8.3% decline. Host reported adjusted funds from operations of $0.44 per share in the fourth quarter, slightly better than our $0.40 estimate.