The paragraph is from a Host Hotels & Resorts earnings conference call. Jaime Marcus, Senior Vice President of Investor Relations, introduces the call, mentioning that it contains forward-looking statements and non-GAAP financial information. CEO Jim Risoleo reports a first-quarter adjusted EBITDAre of $514 million, up 5.1% from the previous year, and adjusted FFO per share of $0.64, up 4.9%. These figures were positively impacted by $10 million in business interruption proceeds from Hurricanes Helene and Milton, consistent with the amount recognized the previous year for Hurricane Ian.

In the first quarter of 2025, the 79-hotel comparable portfolio showed significant improvements, with total RevPAR increasing by 5.8% and comparable hotel RevPAR rising by 7%, largely due to strong room rate growth. EBITDA margin improved by 30 basis points to 31.8% as revenues outpaced expenses. Excluding certain hotels, RevPAR growth exceeded expectations, driven by room rate increases and strong performances in Washington, D.C., New York, New Orleans, Los Angeles, and Maui. In Maui, transient RevPAR grew significantly, with strong leisure demand compensating for declines in group bookings seen in 2024. This recovery, particularly in Maui's transient segment, contributed notably to the overall portfolio's RevPAR growth. Revenue from outlets, golf, and spa also boosted total RevPAR at the Green Maui Resort despite previous revenue from cancellations in 2024. Overall, the recovery in Maui is progressing well.

In the first quarter, business transient RevPAR increased by 2% due to rate growth and a shift from government to corporate customers. Group RevPAR rose by 7% year-over-year, driven by special events, Easter holiday shifts, and strong corporate bookings. The property sold 1.1 million group room nights, with 85% of the 2024 group nights already booked for 2025. Despite a challenging comparison in Maui, food and beverage RevPAR grew by 5%, and other revenues increased by 2%. The Don CeSar resort reopened in late March after a 6-month closure due to hurricanes, with enhanced resilience and amenities. Most staff returned, highlighting their dedication and loyalty.

Since reopening, the business has experienced higher-than-expected demand across various services and increased membership renewals. The estimated property damage and remediation costs for the Don CeSar are between $100 million and $110 million, with insurance deductibles at $20 million and $10 million collected in business interruption proceeds so far. The company repurchased $100 million in common stock in the first quarter, with a total of $415 million repurchased since 2022. The Board-authorized share repurchase program has $585 million remaining. Significant investments have been made in portfolio reinvestment, including completed renovations at several properties and ongoing developments, like the condo project at the Four Seasons Resort Orlando. The estimated capital expenditure for 2025 is between $580 million and $670 million, with insurance expected to cover most property damage reconstruction costs.

The company has allocated $270 million to $315 million for redevelopment, repositioning, and ROI projects, with plans to complete renovations at the Hyatt Regency Austin and Hyatt Regency Capitol Hill in the latter half of the year. They expect a $27 million operating profit from the Hyatt Transformational Capital Program to offset disruptions at these properties. Additional ROI projects include expansions at The Phoenician Canyon Suites and Don CeSar, set for completion in early 2025. They also plan to invest $75 million to $85 million in condo development at Four Seasons Resort Orlando. Previous renovations, 24 since 2018, have shown positive results, with 19 hotels achieving an average RevPAR index gain of over 8.9 points, surpassing their target. All 16 Marriott renovations have stabilized and contribute positively. Despite outpacing expectations in the first quarter, the company remains cautious about 2025 due to macroeconomic uncertainties and potential challenges in the lodging sector.

The paragraph discusses the current outlook and guidance for Host's hotel performance, focusing on RevPAR (Revenue Per Available Room) and overall revenue. Host is maintaining its RevPAR guidance but slightly reducing its total RevPAR expectations due to moderating trends in group bookings. The company's guidance considers past economic downturns as benchmarks for potential outcomes. For every 100 basis point change in RevPAR, Host anticipates a $32 million to $37 million change in adjusted EBITDAre. The company highlights its strong financial position, leveraging its investment-grade balance sheet and strategic advantages to navigate economic challenges. Sourav Ghosh will further detail first-quarter operations, updated 2025 guidance, and balance sheet strengths, noting RevPAR growth driven by special events. Despite tough comparisons, spending by group and transient guests is increasing.

In the quarter, hotel food and beverage revenue per available room (RevPAR) grew by 5%, driven by banquets and outlets. Specific properties like The Ritz-Carlton Resorts in Naples and others contributed to this growth. Banquet revenue increased due to more group room nights and higher contributions outside of Maui. Outlet revenue also rose by 5% due to normalized operations and new or repositioned venues. Other RevPAR climbed 2% despite tough comparisons from the previous year's high attrition and cancellation rates. Golf and spa revenues are on the rise, showing sustained consumer interest in premium experiences. Overall transient RevPAR increased by 6%, driven by leisure demand, particularly in Maui, and strong performances at various resorts. Washington, D.C. hotels experienced significant RevPAR growth during the inauguration, and President's Day weekend saw double-digit growth. However, transient revenue for Memorial Day weekend is slightly down as hotels prioritize group bookings.

The paragraph discusses the revenue and performance of hotels outside of convention centers, noting a significant increase in transient revenue driven by Maui, with a 30% rise for Maui alone and a 4% increase for the July 4 period. Business transient RevPAR rose 2% in Q1 2024 due to a 7% rate growth despite a 5% drop in volume, and it's expected to remain flat due to economic uncertainties. Group RevPAR increased by 7% year-over-year despite a negative impact from Maui. Group room nights declined due to not repeating last year's recovery in Maui, but there's a 12% rise in definite bookings for 2025. Total group revenue pace is up 3.3% from the previous year, with moderated lead volumes but stable rates. Citywide booking pace is strong in key markets. EBITDA margin increased slightly to 31.8% due to RevPAR growth outpacing expense growth, but margins are expected to decline due to wage, benefit, and fixed expense pressures and a reduction in total RevPAR forecast.

The outlook for 2025 includes maintaining a guidance range for comparable hotel RevPAR, with some reduction in total RevPAR due to decreased group lead volume. The forecast assumes gradual improvement at Maui properties and no change in international demand in Dallas. At the low end, the guidance factors in a mild slowdown due to macroeconomic challenges, while the high end assumes a stable environment with better trade policies and international demand. The full-year guidance anticipates RevPAR growth between 0.5% and 2.5% over 2024, with EBITDA margins decreasing by 100 to 160 basis points year-over-year. Quarterly RevPAR growth is expected to range from negative 2% to positive 1%, with the fourth quarter being the strongest. It is estimated that a 100 basis point change in RevPAR equates to a $32 to $37 million impact on adjusted EBITDAre. The midpoint assumes a 1.5% RevPAR growth and a 28% EBITDA margin, 130 basis points lower than in 2024.

The paragraph outlines the company's financial outlook and strategic management plans for 2025. It estimates a 110 basis point negative impact on comparable hotel EBITDA margin due to benefit rate increases, partially offset by operational improvements. Wage and benefit costs are expected to rise over 6%, making up 57% of total hotel operating expenses. The 2025 adjusted EBITDAre midpoint is projected at $1.645 billion, a 1.5% improvement from earlier guidance due to first quarter outperformance. Additional proceeds from a business interruption claim for the Don CeSar hotel are expected, but specifics are uncertain. The Four Seasons Condo development is projected to contribute $25 million to EBITDA, with sales closing in the fourth quarter. The forecast includes operating losses and gains from non-comparable hotel properties. The company maintains a strong balance sheet, with 5-year average debt maturity at a 4.7% interest rate, $2.2 billion in liquidity, and a 2.8x leverage ratio. They paid a $0.20 per share dividend in April, with future dividends depending on board approval. The focus remains on strategically managing the balance sheet and liquidity for 2025.

The paragraph features a Q&A session from a conference call, where Aryeh Klein from BMO asks about recent demand trends and potential market performance divergences, particularly concerning international travel. James Risoleo responds, noting that top U.S. markets are performing well despite onetime events impacting certain areas. He mentions the influence of Canadian inbound travel on Seattle and New York City, emphasizing that even without Seattle, their portfolio is strong, especially in New York due to innovations at the Marriott Marquis during COVID-19.

In the paragraph, the speaker discusses the strong performance of their group business, particularly highlighting the successful opening of The View Restaurant. They mention that their portfolio is not experiencing the negative impact from international inbound issues that others in the industry are facing. There's a distinction between top markets and luxury resorts versus secondary markets, with their portfolio well-positioned and seeing strong leisure demand. Sourav Ghosh adds that April's travel data shows an increase in the upper tier, with luxury performing well, driven by a strong Easter period. Duane Pfennigwerth then asks about the outlook for the remainder of the year, particularly in terms of RevPAR and profit growth, noting varying strengths across quarters for Maui.

The paragraph discusses the company's revised EBITDA projections for 2024, which have increased due to operational improvements. Initially, the EBITDA was restated to $72 million after deductions, but with expected improvements, the projection now stands at around $100 million. The increase is primarily attributed to the first quarter and anticipated continued improvements throughout the year. Additionally, during a Q&A session, Chris Woronka from Deutsche Bank asks James Risoleo about potential acquisition opportunities amid global uncertainties. Risoleo admits uncertainty about the future, acknowledging that he can't predict precise outcomes.

The speaker reflects on past market behavior during COVID and expresses optimism about economic recovery and future market opportunities. They note that anticipated asset sales did not occur and acknowledge current market uncertainty, particularly due to interest rates, which has led to a cautious transaction market. The speaker emphasizes a strategic, opportunistic approach to capital deployment, highlighting successful investments in Marriott assets that have significantly increased yield. Smart asset investment, stock buybacks, and maintaining dividend payments are outlined as key capital uses, positioning the company advantageously.

In the paragraph, the speaker discusses the company's strong financial position, noting its leverage and liquidity. David Katz from Jefferies questions whether the company plans to return more capital through stock repurchases or other one-time events in a stable operating environment with few large deals on the horizon. James Risoleo responds by stating that the company will continue considering stock repurchases and dividends, mentioning a recent blackout period that prevented share buybacks. He emphasizes keeping an eye on operations and long-term value creation, taking an opportunistic approach without committing to specific actions regarding share buybacks or asset acquisitions due to a lack of appealing opportunities. The conversation then shifts to Shaun Kelley from Bank of America Merrill Lynch, who wants to discuss the consumer environment.

The paragraph discusses trends in bookings and revenue for certain periods, highlighting that bookings for peak weekends like July 4th and Memorial Day are encouraging. Sourav Ghosh notes that the trend consistency remains steady across weekdays and weekends, with no significant changes observed across different assets and markets. The group booking pace is positive, with a year-over-year revenue increase of 3.3%, and the group rate has held at around 3.8%. Leisure bookings are strong, while business travel (BT) shows lower volume but higher rates. The discussion then shifts to Michael Bellisario's question about potential cost-cutting measures to manage margins, to which James Risoleo responds by stating that lessons from past downturns have been instructive, implying that they may guide cost-management decisions.

The paragraph discusses how contingency plans have been developed for each property, rather than on a portfolio-wide basis, due to the unique nature of each asset. The plans are ready to be implemented if necessary, although the current portfolio performance does not indicate such a need. The company is comfortable with its current guidance for the year, but is prepared to cut expenses quickly if circumstances worsen. In response to Chris Darling's question about the impact of tariffs on their CapEx budget and future capital projects, James Risoleo states that it is too early to determine the exact impact of tariff policies. They are maintaining their current CapEx guidance and have developed contingency plans for capital projects to mitigate potential risks from tariffs, particularly regarding guest room furniture and equipment, which are most vulnerable to tariff effects.

The paragraph discusses the current state of the hospitality company's High Transformational Capital Program and their completed projects, specifically mentioning the completion of the Grand Hyatt in Buckhead and upcoming completions of the Hyatt Regency Capitol Hill and Hyatt Regency Austin. When asked about the economic uncertainty's impact on business transient RevPAR and group bookings, Sourav Ghosh explains that the immediate challenge is with "in the year for the year" group bookings, where lead times are shrinking and there is a moderation in government and association groups. Despite this, the company has secured 470,000 group room nights for 2026 through 2028, showing strong future demand. The budgeting for 2026 capital expenditure is to be discussed later in the summer.

In the article's paragraph, it's mentioned that the business transient (BT) volume was down by about 5% year-over-year in Q1, primarily due to a decline in government-related BT room nights. Despite the decrease in volume, BT room rates increased by 6.5%, including a 4% rise in government rates. The company had previously anticipated a steady recovery in BT volume but now expects that the decline will persist throughout the year, with only moderate rate increases. In a subsequent discussion, Jack Armstrong from Wells Fargo inquires about the impact of administrative policies on supply and labor markets. James Risoleo responds that they have not faced labor supply issues due to their association with reputable employers like Marriott and Hyatt, allowing for a quick recovery after COVID. Additionally, he mentions that tariffs are not expected to affect hotel margins.

In the paragraph, James Risoleo addresses a question from Floris Van Dijkum regarding the transaction market, noting that some buyers are pulling out of deals due to uncertainty. He explains that the market is in a "wait-and-see" mode, influenced by recent disruptions in the CMBS market, which has now reopened. Risoleo anticipates that after policy clarity is achieved, the transaction market will likely become more active later in the year. He notes that the delays are more due to debt market conditions rather than equity issues, and that pricing still varies based on asset type, with luxury and upper upscale assets maintaining high prices.

The paragraph discusses the positive impact of limited new hotel supply in the luxury and upscale segments, suggesting it will help maintain pricing for transactions as there is no worry about new competition. Despite prevailing uncertainty driven by policy issues, hotel operations remain strong and financially stable. James Risoleo mentions that Host is in a strong financial position, not needing to sell assets unless desirable prices are offered. They are testing the market but have not listed any significant assets for sale, preferring a wait-and-see approach while acknowledging the difficulties faced by those investing new capital. The discussion is followed by a transition to another question from Smedes Rose with Citigroup.

In the conference call, Smedes Rose inquired about the performance of The Ritz-Carlton Turtle Bay in O'ahu relative to expectations, especially given market uncertainties. James Risoleo responded that the hotel is doing well, with RevPAR up 13% for the quarter. He mentioned a strategic decision regarding the property's two golf courses: delaying the transfer of the Palmer Course due to upcoming renovations by another party while expediting the renovation of the Fazio Course, which is owned by them. Risoleo expressed satisfaction with the hotel's performance in O'ahu and Maui and is excited about the ongoing improvements. The operator then concluded the call, and Risoleo thanked participants and looked forward to future interactions.

This summary was generated with AI and may contain some inaccuracies.