Host Hotels and Resorts Eyes Steady 2026 Growth
Host Hotels and Resorts ((HST)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Host Hotels and Resorts struck an upbeat tone on its latest earnings call, leaning on solid RevPAR gains, improved EBITDA and FFO, and a standout year for its resorts, particularly in Maui. Management acknowledged margin pressure, wage inflation and some soft group pacing, but framed them as manageable headwinds against strong capital recycling, shareholder returns and a fortress balance sheet.
Full-Year Results Signal Steady Earnings Growth
Host reported adjusted EBITDAre of $1,757 million for the year, a 4.6% increase from 2024, underscoring resilient cash generation. Adjusted FFO per share rose 3.5% to $2.07, reflecting both higher operating income and the impact of share repurchases on per-share metrics.
RevPAR and Operations Benefit from Rate and Spend
Comparable hotel total RevPAR grew 4.2% and RevPAR 3.8% for the year, with Q4 gains of 5.4% and 4.6%, respectively. The company credited room-rate strength, healthy leisure transient demand and higher out-of-room spending as guests spent more on food, beverage and experiences.
Portfolio Outperforms High-End Lodging Peers
Host’s portfolio beat upper-tier industry RevPAR growth by roughly 200 basis points for the year, reinforcing its positioning in premium urban and resort markets. Management highlighted this outperformance as validation of its asset selection and reinvestment strategy relative to peers.
Maui and Resorts Drive a Powerful Recovery
Maui emerged as a key earnings engine, with quarterly RevPAR up 15% and total revenue per available room up 13%. The island delivered $111 million of EBITDA in 2025, and management expects about $120 million in 2026 as the recovery from wildfires and travel disruption continues.
Ancillary Revenue Engines Gain Momentum
Food and beverage performance was robust in Q4, with comparable F&B revenue up 6% and outlet revenue up 9%. Other revenue streams rose 10%, including a 14% jump in golf and 6% in spa, while banquet and catering revenue climbed 4% with higher profitability per group room night.
Capital Recycling Locks In High-Multiple Sales
The company continued to monetize trophy assets at rich valuations, selling Four Seasons Orlando and Jackson Hole for $1.1 billion at a 14.9x EBITDA multiple and an 11% unlevered IRR. Including $237 million from Westin Cincinnati and Washington Marriott, Host has sold about $6.4 billion of assets since 2018 at a 16.7x multiple versus $4.9 billion of acquisitions at 13.6x.
Shareholder Returns Remain Front and Center
Host returned nearly $860 million of capital to investors in 2025, including the repurchase of 13.1 million shares for $205 million at an average price of $15.68. Dividends were another pillar of returns, with a $0.20 quarterly payout plus a $0.15 special dividend bringing total 2025 dividends to $0.95 per share.
Balance Sheet Offers Flexibility and Safety
The REIT emphasized its conservative leverage, with a 2.6x leverage ratio and a weighted average debt maturity of 5.1 years at a 4.8% average rate. Host faces no debt maturities in 2026 and holds $2.4 billion of available liquidity, including $1.5 billion of undrawn credit capacity.
Reinvestment and Transformations Show Clear Payoff
Host invested about $644 million in 2025 on capital expenditures, resiliency projects and restoration work across its portfolio. Its Hyatt Transformational Capital Program is more than 75% complete, tracking on time and under budget, and completed projects are delivering an average RevPAR index share gain of 8.7 points versus a 3–5 point target.
Margins Hit by One-Offs and Comparisons
Comparable hotel EBITDA margin for the year slipped 40 basis points to 28.9%, largely because 2024 benefited from $21 million of Maui business interruption proceeds that did not repeat. In Q4, comparable hotel EBITDA margin declined 30 basis points to 28%, reflecting similar comparison effects and some cost pressure.
Dispositions Mask Underlying EBITDA Progress
The 2026 adjusted EBITDAre midpoint of $1,770 million embeds an $87 million decline from recently sold hotels. It also absorbs a $17 million net decline in business interruption proceeds and a $7 million drop in renovation guarantees, meaning underlying operational growth is being partially hidden by intentional portfolio pruning.
Group Demand Mixed Across Major Markets
Group revenue grew about 1% as higher rates offset lower group room nights, but some markets lagged due to renovations and weaker citywide calendars. San Diego, Chicago, Boston and Seattle remain behind in group pace, although management expects improved positioning as renovations complete and citywide activity normalizes.
Rising Labor Costs Put Pressure on Profitability
Wages and benefits, which account for roughly half of operating expenses, are projected to rise about 5% in 2026. While the company is pursuing productivity and efficiency initiatives, management acknowledged that higher labor costs will remain a key headwind to margin expansion.
Acquisition Pipeline Clouded by Market Uncertainty
Management described the acquisition environment as improved versus last year but still far from robust, limiting near-term external growth opportunities. If attractive, accretive deals do not materialize within the like-kind exchange window, a potential $500 million taxable gain may instead be returned to shareholders as a special dividend.
Seasonality and Tough Comps Weigh on Early 2026
Host expects the first quarter of 2026 to be the weakest of the year because of challenging comparisons, including events like last year’s presidential inauguration and wildfire-driven demand in Los Angeles. January comparable RevPAR was down 40 basis points year over year, though it still surpassed internal expectations, suggesting the drag is largely calendar-related.
Guidance Points to Modest Growth Despite Headwinds
For 2026, Host forecasts comparable hotel total RevPAR growth of 2.5%–4% and RevPAR growth of 2%–3.5%, with Q2 the strongest quarter helped by the World Cup and an earlier Easter. At the midpoint, management expects a flat comparable hotel EBITDA margin of 29.2% and adjusted EBITDAre of $1,770 million, up about 1% even after absorbing disposition-related and one-time revenue declines, while planning $525–$625 million of capital spending.
Host Hotels and Resorts’ earnings call painted a picture of a lodging REIT balancing strong operational momentum and disciplined capital allocation against labor inflation and tougher comparisons. With a healthy balance sheet, recovering resorts and clear commitment to shareholder returns, the company appears positioned for steady, if moderate, earnings growth as it navigates a nuanced 2026 demand backdrop.
