Host Hotels & Resorts Q2 2026 Earnings Call: Complete Transcript

Host Hotels & Resorts (NASDAQ: HST ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

6%. Comparable hotel RevPAR grew by 7%, fueled by luxury resort demand and major events such as the World Cup, which contributed significantly to RevPAR growth. The company completed the sale of the Sheraton Parsippany and paid a special dividend, showcasing its commitment to strategic capital allocation and shareholder returns. Strategic renovations under the Hyatt and Marriott Transformational Capital Programs are on track, with several projects nearing completion and expected to boost future EBITDA.

25% for the full year, driven by sustained leisure demand and stable business transient demand. Maui properties are expected to contribute approximately $120 million of EBITDA in 2026, with strong demand recovery in the market. 2 times. Full Transcript OPERATOR Welcome to the Host Hotels & Resorts second quarter 2026 earnings conference call.

Today's conference is being recorded. At this time I would like to turn the call over to Jamie Marcus, Senior Vice President of Investor Relations. Jaime Marcus, Senior Vice President, Investor Relations Thank you and good morning, everyone. Before we begin, today's call will include forward-looking statements within the meaning of federal securities laws as described in our filings with the SEC.

These statements are subject to risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements. On today's call we will also discuss certain non-GAAP financial information such as FFO, adjusted EBITDA RE and comparable hotel-level results. com. The operational results discussed today refer to our 74-hotel comparable hotel portfolio in 2026, which excludes the Don CeSar and Sheraton Parsippany, which we sold in June.

With me on today's call are Jim Risoleo, President and Chief Executive Officer, and Sourav Ghosh, Executive Vice President and Chief Financial Officer. With that I would like to turn the call over to Jim. Jim Risoleo, President and Chief Executive Officer Thank you, Jaime, and thanks to everyone for joining us this morning. We delivered a strong second quarter, building on the momentum of the first quarter and again exceeding our expectations.

6% over last year. 9% driven by rate growth and higher food and beverage revenue. 9% driven by rate growth alongside lower fixed expenses. RevPAR growth in the second quarter came in significantly better than our expectations with broad-based strength across markets and business mix.

Growth was driven by sustained luxury resort demand, elevated rates associated with the World Cup and strong group performance. Looking at World Cup performance, we estimate that the event contributed approximately 160 basis points of RevPAR growth in the second quarter. For June alone, RevPAR in our World Cup markets grew 15% compared to 12% in non-World Cup markets. For the full year, we expect the World Cup to contribute approximately 70 basis points of gross RevPAR growth, a 10 basis point increase over our initial expectation.

Turning to business mix, transient revenue was up 7%, marking the strongest growth in the past seven quarters driven by higher rates as demand remained relatively stable. Rate growth was supported by major events, citywide compression and continued leisure strength at our luxury resorts. Growth was led by Maui, New York and San Francisco, with improvements in key business transient markets also providing a tailwind to performance. Briefly touching on Maui, RevPAR grew 14% and total RevPAR grew 11% reflecting strong demand growth.

In fact, occupancy grew more than 8 percentage points in the quarter. As the market's recovery continues, we continue to expect our Maui properties to contribute approximately $120 million of EBITDA in 2026. Business transient revenue grew 4% driven by strong rate growth, and we were encouraged to see an increase in business transient room nights in several key markets from a variety of industries. Group room revenue for the quarter was up 7% year over year, driven fairly evenly by room night and rate growth.

1 million room nights in the second quarter. 8 million, with total group revenue pace up more than 5% to the same time last year. Turning to ancillary spending, food and beverage revenue grew 6% and other revenue was approximately flat as growth in on-property spending was offset by a decrease in attrition and cancellation revenue compared to last year's tough comparisons. The broad-based growth across food and beverage departments, golf and spa demonstrates the continued strength of the affluent consumer as well as the benefits of the strategic investments we have made at many of our properties over the last several years.

Turning to capital allocation, in June we completed the sale of the Sheraton Parsippany for approximately $12 million. This disposition reflects our strategy of selling lower-growth assets with near-term elevated capital expenditure requirements. 72 per share. The special dividend represented the distribution of the approximately $500 million taxable gain from the sale of the two Four Seasons resorts in the first quarter of this year.

This is a great example of our commitment to disciplined and opportunistic capital allocation. By returning capital to shareholders through regular, quarterly and special dividends, we are enhancing long-term value for our investors. Turning to portfolio reinvestment, during the second quarter we continued the execution of the Hyatt Transformational Capital Program, which is nearly 90% complete and on track for completion by the end of 2026. C.

The Manchester Grand Hyatt San Diego, the final asset in the program, was phased to mitigate business interruption and is expected to be substantially complete by the end of this year. We also made progress on the second Marriott Transformational Capital Program, which is approximately 37% complete and is tracking on time and under budget. Guest room renovations at the New Orleans Marriott are nearing completion. Renovations at The Ritz-Carlton, Naples, Tiburón and The Westin Carlsbad are in progress, and The Ritz-Carlton, Marina del Rey is scheduled to start renovations later this month.

In the second quarter, we received $5 million of operating guarantees related to our transformational capital programs. As a reminder, we expect to benefit from approximately $19 million of operating profit guarantees in 2026 related to our two transformational capital programs, which we expect will offset most of the EBITDA disruption at those properties. Looking at other ROI projects, we completed the final phase of the Four Seasons branded condo development at the Walt Disney World Resort during the second quarter, on time and within budget. To date we have closed on 28 of the 40 units, including 20 of 31 mid-rise units and 8 of 9 villas.

As a result of the expected timing of the remaining closings, we now anticipate 2026 EBITDA of $16 to $20 million compared to our prior expectation of $20 to $25 million, with the difference expected to be recognized in 2027. For 2026, our capital expenditure guidance range is approximately $550 to $630 million. This includes approximately $250 to $285 million of reinvestment focused on redevelopment, repositioning and ROI projects, as well as $25 to $30 million of property damage reconstruction associated with the Kona Low rainstorm in Hawaii.

We also anticipate remediation costs of approximately $2 million, and we expect insurance coverage to substantially cover the losses in excess of our deductible. In addition to our capital expenditure investment, we spent approximately $17 million to close out the condo development at the Four Seasons Orlando. Our continued reinvestment across the portfolio remains a key differentiator and is an important driver of Host's sustained outperformance. 1 billion into comprehensive renovations across 34 hotels, which are expected to contribute approximately 60% of our hotel EBITDA in 2026.

We have stabilized post-renovation performance at 21 of these properties, where we have seen an average stabilized RevPAR index share gain of nearly 9 points. These results underscore how our disciplined capital allocation strategy over the past several years is translating into meaningful value creation for our shareholders. Earlier this week we released our 2026 Corporate Responsibility Report, which outlines our CR strategy and performance, highlighting continued progress across environmental stewardship, social impact and governance in support of our long-term responsible investment strategy and 2050 net-positive vision.

We are proud to again be recognized for our corporate responsibility leadership, including NAREIT's 2026 Leader in the Light Award for Operations for large-cap REITs, inclusion in the 2026 Dow Jones Best in Class World and North American Indices, revalidation of our emissions reduction target by the Science Based Targets Initiative, and an Advanced Net Zero Assessment rating from Moody's. com. Turning to our full-year outlook, we continue to expect strong leisure demand, modest improvements to short-term group booking trends and stable business transient demand. 25% over 2025.

It is important to note that our RevPAR and total RevPAR growth guidance ranges are now in line. This reflects the outsized rate growth we achieved in the first half of the year and our expectation that rate growth will normalize in the second half of the year. Looking ahead, we are optimistic about the travel environment, which is supported by resilient demand trends and a continued preference among high-end consumers for experiential travel. Industry fundamentals in the second quarter reflected strong RevPAR growth driven by sustained rate strength, while new supply across our markets and chain scales remains near historic lows.

Against this favorable backdrop, Host's investment-grade balance sheet gives us the flexibility to continue reinvesting in our portfolio, pursue opportunistic acquisitions and dispositions, and return capital to shareholders in the form of dividends and share repurchases. As our results over the past several years have shown, Host's competitive advantages uniquely position the company to continue capturing additional upside in the current environment and over the long term. With that, I will now turn the call over to Sourav. Sourav Ghosh, Executive Vice President & Chief Financial Officer Thank you, Jim, and good morning, everyone.

Building on Jim's comments, I will go into detail on our second quarter operations, our financial results, our updated 2026 guidance, and our balance sheet, starting with total revenue trends. RevPAR growth outpaced total RevPAR as outsized rates driven by special events boosted rooms growth beyond ancillary revenue growth. Comparable hotel food and beverage revenue for the quarter grew 6%, led by widespread improvements in banquet and catering revenues. Banquet and catering revenue increased 7%, driven by increases in both group room night volume and contribution per group room night.

, where a 45% increase in banquet and catering revenue reflected a 20% increase in banquet and catering contribution per group room night from our newly renovated Hyatt properties. Outlet revenue increased 4%, driven by growth across resorts, the ongoing ramp of The View at the New York Marriott Marquis, and our newly renovated Hyatt properties. Maui led outlet growth in the quarter with a 14% increase, driven by substantial occupancy increases at the Andaz Maui and Hyatt Regency Maui. Other revenues were flat in the quarter as a decrease in attrition and cancellation revenue from last year's tough comparisons offset strength in golf and spa growth.

Spa revenue was up 4%, driven by increased capture at our resorts; notably, spa capture at The Ritz-Carlton, Naples; The Ritz-Carlton, Amelia Island; Andaz Maui; and Hyatt Regency Coconut Point was up double digits compared to last year. Golf revenue grew 9%, driven by our courses in Maui and Naples, further underscoring Maui's robust recovery. Golf revenue in the second quarter was 9% ahead of pre-fire levels. These increases reflect continued demand from premium leisure travelers, as guests prioritize spending on wellness and experiential offerings.

Shifting to rooms revenues, overall transient revenue was up 7% compared to the second quarter of 2025, driven by special events, citywide compression, and continued leisure strength at our resorts. Resort RevPAR grew 9% in the quarter, with Maui accounting for nearly 40% of the growth. Other standout resorts include 1 Hotel South Beach, which benefited from the F1 Grand Prix, and our Florida Gulf resorts, which benefited from an extended spring break. These results continue to underscore the strength of high-end demand.

As Jim mentioned, the World Cup contributed approximately 160 basis points to RevPAR growth in the second quarter. Overall, RevPAR growth in our World Cup markets outperformed our other markets for the month of June. We also saw strength in non-World Cup markets, which benefited from travelers avoiding congestion and pricing in host cities. This trend underscores one of the many advantages of our geographically diverse portfolio.

Looking at recent holidays, revenue growth for Easter and Memorial Day was driven by resorts, with Easter room revenue up 11% and Memorial Day weekend room revenue up nearly 5%. Transient revenue was up 27% for July 4th, with broad-based growth across our markets and property types, driven by America 250 celebrations and multiple World Cup matches. Looking ahead to upcoming holidays, transient revenue pace for Labor Day weekend, Thanksgiving, and the festive period are all up double digits with strength across property types and markets. Business transient revenue increased 4% compared to the second quarter of 2025, driven by rate growth.

, Chicago, and San Diego. In fact, the New York Marriott Marquis had 14% business transient room night growth in the quarter, driven by demand from tech, consulting, and finance companies. Turning to group, revenue was up 7% year over year. Growth was driven fairly evenly by rate and room nights, which was supported by renovated properties and strong event-related demand.

Corporate groups were the primary driver of revenue growth, accounting for approximately two-thirds of the increase, while associations and other groups also grew in the low- to mid-single digits. 8 million definite group room nights on the books, representing an 8% increase since the first quarter. As Jim mentioned, total group revenue pace is up more than 5% over the same time last year. For the second half of the year, we are seeing meaningful total group revenue pace in the Florida Gulf Coast, Miami, Boston, New York, and Maui, and group booking pace remains strongest for the fourth quarter.

9% was 60 basis points above the second quarter of 2025, driven by outsized rate growth alongside lower total fixed costs. We continue to expect year-over-year margin comparisons to moderate in the second half of the year, primarily due to lower expected rate growth in the second half. 5 million expense reduction in 2026 compared to our prior guidance. Those savings are now incorporated in our updated guidance.