Host Hotels & Resorts (NASDAQ: HST) reported Q1 EPS of $0.38, $0.08 better than the analyst estimate of $0.30. Revenue for the quarter came in at $1.47 billion versus the consensus estimate of $1.42 billion.

GUIDANCE:

Host Hotels & Resorts sees FY2024 revenue of $5.65-5.753 billion, versus the consensus of $5.592 billion.

The 2024 guidance range continues to contemplate steady demand in travel and low supply growth. In addition, the range incorporates continued improvement in group business, a gradual recovery in business transient demand, softer short term leisure transient demand, and the evolution of demand on Maui as the island recovers from the recent wildfires. Growth in the first half of 2024 is expected to be flat to low single-digits, while the second half of the year is expected to have stronger year-over-year improvements due to better group booking pace, less renovation disruption compared to the second half of 2023 and diminishing impacts from the wildfire event in Maui, which occurred in early August of 2023.

Operating profit margin in 2024 is expected to increase slightly compared to 2023, while comparable hotel EBITDA margins are expected to decline compared to 2023, due to the impacts from the Maui wildfires and continued growth in wages, real estate taxes and insurance. At the midpoint of guidance, the impact from the Maui wildfires is expected to be an approximate decline of 130 basis points in RevPAR, 90 basis points in Total RevPAR and 20 basis points in margins. At the midpoint, in comparison to 2019, operating profit margin is expected to increase 110 basis points and comparable hotel EBITDA margins are expected to increase 10 basis points, as portfolio-wide cost reductions continue to curb inflation and benefiting from business interruption gains.

The guidance range for net income and Adjusted EBITDAre includes an additional $28 million of gains from business interruption proceeds compared to prior forecast comprised of $8 million related to Hurricane Ian and based on an estimated range of $18 million to $22 million related to the Maui wildfires, which is expected to be received during the remainder of 2024. The guidance also includes an estimated $17 million and $29 million of net income and Adjusted EBITDAre, respectively, which is expected from the recent acquisition of the 1 Hotel Nashville and Embassy Suites by Hilton Nashville Downtown. Due to the timing of the acquisition, the results for these two hotels will be included in the comparable hotel guidance starting in the second quarter. Additionally, following the collapse of a portion of Highway 1 in California in March 2024, Alila Ventana Big Sur temporarily closed on March 30, 2024 and will be removed from the forecast comparable hotel set for full year 2024.

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