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Host Hotels & Resorts Inc HST

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Morningstar’s Analysis

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Host Reports Significant Recovery of RevPAR Along With Further Acquisitions and Dispositions in Q3

Kevin Brown, CFA Equity Analyst

Analyst Note

| Kevin Brown, CFA |

Third-quarter results were in line with our expectations for Host Hotels & Resorts, leading us to reaffirm our $17 fair value estimate for the no-moat company. Portfolio occupancy was 55.6% in the quarter, far better than the 17.4% level reported in the third quarter of 2020 but still well below the 80.4% level in the third quarter of 2019. Average daily rate improved 27.4% year over year and is now relatively back in line with 2019 rates, just 0.6% below the average rate charged in the third quarter of 2019. As a result, revenue per available room is up 308% year over year, relatively in line with our estimate of 327% growth, but is still 33.7% below revPAR in the third quarter of 2019. EBITDA margins have mostly recovered, with the third quarter's 23.0% level not far from the third quarter of 2019's 25.3% level, producing hotel EBITDA of $196 million in the quarter. Host reported funds from operations of $0.20 in the third quarter that was in line with our estimate of $0.19, significantly better than the $0.11 FFO loss in the third quarter of 2020 but still below the $0.35 figure reported in the third quarter of 2019.

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Company Profile

Business Description

Host Hotels & Resorts owns 82 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.

Contact
4747 Bethesda Avenue, Suite 1300
Bethesda, MD, 20814
T +1 240 744-1000
Sector Real Estate
Industry REIT - Hotel & Motel
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 163

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