Introduction & Market Context
Host Hotels & Resorts (NASDAQ:HST), the only S&P 500 lodging REIT, delivered strong first-quarter 2025 results that exceeded market expectations, as revealed in its May 2025 investor presentation. The company reported an earnings per share of $0.35, surpassing the forecasted $0.27, while revenue reached $1.59 billion against an anticipated $1.55 billion. Following the announcement, Host Hotels’ stock rose by 2.62% to close at $14.49.
The company’s presentation highlighted its unique position in the lodging REIT sector, with a $10.0 billion equity market cap and $14.9 billion enterprise value as of March 31, 2025. Host maintains a diverse portfolio of 81 hotels with 43,400 rooms, with no single market accounting for more than 11% of its 2024 Comparable Hotel EBITDA.
As shown in the following comprehensive fact sheet, Host Hotels maintains a well-diversified portfolio across top markets and brands:
Quarterly Performance Highlights
Host Hotels reported impressive Q1 2025 results, with Comparable Hotel Total (EPA:TTEF) RevPAR increasing 5.8% compared to Q1 2024. Adjusted EBITDAre reached $514 million, 5.1% above the same period last year, while Comparable Hotel EBITDA margin expanded to 31.8%, 30 basis points higher than Q1 2024.
The company’s strong performance was driven by robust rate growth, particularly in the group and transient segments. Group room RevPAR increased 7% over Q1 2024, with corporate group RevPAR surging 18%. Transient revenue grew 6%, bolstered by the leisure recovery in Maui and strong rate growth across the portfolio.
The following slide summarizes the key highlights from Q1 2025:
Host’s performance significantly outpaces its peers in the lodging REIT sector. The company has demonstrated superior bottom-line growth compared to other full-service lodging REITs, with 2024 vs. 2019 Adjusted EBITDARE growth of 8% compared to an average decline of 17% for peers. Similarly, NAREIT FFO per share grew 16% over the same period, while peers experienced an average 30% decline.
This outperformance is illustrated in the following comparison:
Strategic Initiatives
Host Hotels’ strategic capital allocation has been a key driver of its outperformance. Since 2022, the company has returned $1.8 billion to stockholders through dividends and repurchased $415 million in shares at an average price of $16.16. Simultaneously, Host has invested $1.7 billion in portfolio re-investment projects between 2019 and 2024.
The company has executed an accretive capital recycling strategy, acquiring properties at 13.3x EBITDA while disposing of assets at 17.5x EBITDA since 2021. This approach has enhanced portfolio quality and earnings potential.
As shown in the following slide, Host’s capital allocation strategy balances shareholder returns with strategic investments:
A cornerstone of Host’s strategy is its comprehensive renovation programs. The Marriott Transformational Capital Program (MTCP) has delivered impressive results, with an average RevPAR index share gain of 8.9 points for 19 stabilized properties, significantly exceeding the target of 3-5 points. The company has also launched a similar Hyatt Transformational Capital Program (HTCP) targeting six properties.
The following scorecard demonstrates the success of these renovation programs:
Case studies presented in the investor deck highlight the effectiveness of these renovations. For example, The Westin Georgetown in Washington D.C. achieved a RevPAR index share gain of 12.5 points following extensive renovations completed in March 2023. The property’s RevPAR increased 24% compared to 2019, driven by rate improvements, while group room revenue surged 55%.
Forward-Looking Statements
Despite the strong Q1 performance, Host Hotels’ 2025 outlook indicates some challenges ahead. The company projects Comparable Hotel Total RevPAR growth of 0.7% to 2.7% for the full year, with RevPAR growth of 0.5% to 2.5%. However, Comparable Hotel EBITDA margins are expected to decline by approximately 130 basis points compared to 2024.
The following slide details the company’s operational outlook for 2025:
The anticipated margin compression is primarily attributed to wage and benefits pressures, which are expected to impact margins by 110 basis points. During the earnings call, management noted that wage and benefits expenses are projected to increase by over 6% in 2025.
The following breakdown illustrates the expected margin headwinds:
Despite these challenges, Host Hotels sees significant potential for future EBITDA growth. The company identified up to $340 million in potential incremental future stabilized EBITDA from various sources, including occupancy expansion, net acquisitions, and ROI capital expenditures.
Financial Position
Host Hotels maintains a strong balance sheet, which provides flexibility in a volatile environment. As of March 31, 2025, the company had a net leverage ratio of 2.8x and total available liquidity of $2.2 billion, including approximately $264 million of FF&E reserves and $1.5 billion available under its credit facility revolver.
The company is the only lodging REIT with an investment grade rating (Moody’s:Baa3 positive, S&P: BBB- Stable, Fitch: BBB Stable), and 99% of its consolidated portfolio is unencumbered by debt. This financial strength positions Host to weather potential economic uncertainties and capitalize on growth opportunities.
During the earnings call, CEO Jim Rizzolio emphasized the company’s financial position, stating, "We are in a unique position given the balance sheet and the fact that we’re sitting here today only 2.8 times leverage and we have $2.2 billion of liquidity."
Host Hotels’ stock is currently trading at $14.85, within its 52-week range of $12.22 to $19.36. Analysts maintain a generally positive outlook on the company, with price targets ranging from $14 to $21.50, suggesting potential upside from current levels.
As Host navigates the challenges of 2025, including wage pressures and potential macroeconomic uncertainties, its strong balance sheet, diverse portfolio, and successful renovation programs position it well to continue outperforming its peers in the lodging REIT sector.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.