Host Hotels Earnings: Q4 Margins Better Than Anticipated but 2025 Margin Guidance Below Expectations

Host Hotels & Resorts reported fourth-quarter results that were better than anticipated, but 2025 guidance came in below expectations. Taken together, we do not anticipate a material change to our $23 fair value estimate for the no-moat company. Same-store occupancy was relatively flat, down 20 basis points year over year to 67.1%. Meanwhile, average room rates were up 3.3% in the fourth quarter, leading to Host reporting revenue per available room growth of 3.0% that was better than our estimate of 1.5% revPAR growth. Similarly, same-store revenue growth was 3.4% while operating expenses were up 2.9%. Therefore, same-store hotel EBITDA margins improved 40 basis points as same-store hotel EBITDA increased 4.6% in the quarter, which was significantly better than our estimate of a 1.4% decline. As a result, Host reported adjusted funds from operations of $0.44 per share in the fourth quarter, 4 cents better than our $0.40 estimate and in line with the $0.44 figure the company reported in the fourth quarter of 2023.