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Host Hotels & Resorts Inc HST

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Morningstar’s Analysis

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Host Hotels' Fourth-Quarter Decline in Hotel Operations in Line With Our Expectations

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

While Host Hotels & Resorts' bottom line remained negative in the fourth quarter, the company's operating results were in line with our expectations, which leads us to reaffirm our $15.50 fair value estimate for the no-moat company. Occupancy for the total portfolio was just 19.4% in the fourth quarter, down significantly from the 76.2% level in the fourth quarter of 2019 but up modestly from the 17.1% figure host reported in the third quarter of 2020, which we view as a significant positive given that the fourth quarter typically sees an occupancy drop and the fourth quarter saw a higher coronavirus case count across the country than any prior quarter. While average daily rates fell 20.4% year over year, that is smaller than the decline seen in either of the second or third quarters. As a result, revenue per available room fell 79.7% year over year, which is slightly better than the declines seen in the second and third quarters of 2020. Fortunately, Host was also able to reduce operating expenses by 65.4%, leading to a hotel EBITDA loss of $62 million that was in line with our estimates and far better than the $294 million combined hotel EBITDA loss Host experienced across the prior two quarters.

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Company Profile

Business Description

Host Hotels & Resorts owns over 80 predominantly urban and resort upper upscale and luxury hotel properties representing over 47,000 rooms, mainly in the United States. Host recently sold off the company's interests in a joint venture owning a portfolio of hotels throughout Europe and also sold other joint ventures that owned properties in Asia and the United States. The majority of Host’s portfolio operates under the Marriott and Starwood brands.

4747 Bethesda Avenue, Suite 1300
Bethesda, MD, 20814
T +1 240 744-1000
Sector Real Estate
Industry REIT - Hotel & Motel
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 163