Host Hotels lifts guidance after 8.8% RevPAR growth

Hotel demand did the heavy lifting for Host Hotels & Resorts, Inc. (NASDAQ:HST) in the third quarter, with comparable hotel RevPAR rising 8.8% year on year to US$219.50. The lodging REIT responded by lifting its full-year 2026 comparable RevPAR growth forecast to approximately 6.75%, above the previous 5% midpoint, while comparable Total RevPAR growth guidance increased to approximately 6%.

Hotel rates and occupancy drive upgraded guidance

The quarterly RevPAR increase reflected a 5.7% rise in average room rates and a 2.1 percentage-point improvement in occupancy. Total RevPAR, which also includes food and beverage and other hotel revenue, rose 7.3% to US$348.19. Host said demand was broad-based across leisure transient, group and business transient customers, with 11 of its 24 domestic markets recording double-digit Total RevPAR growth.

Property-level performance improved as well. Comparable hotel EBITDA, a non-GAAP measure, increased 11.4% to US$331 million, lifting the comparable hotel EBITDA margin by 90 basis points to 25.2%. Adjusted EBITDAre, another non-GAAP measure, rose 8.8% to US$347 million, while Adjusted FFO per diluted share increased 11.4% to US$0.39.

GAAP profit falls as asset-sale gains fade

The headline earnings picture was less tidy. GAAP net income fell 56.4% to US$71 million, or US$0.10 a diluted share, from US$163 million a year earlier. Host attributed the decline mainly to a smaller gain on asset sales, rather than weaker hotel operations; operating profit margin nevertheless improved to 9.0% from 7.6%. Year to date, GAAP net income was US$813 million, up 27.2%, helped by asset-sale gains recorded earlier in the year.

US$374 million acquisition expands the portfolio

Host also completed two acquisitions after the quarter ended: the 195-room 1 Hotel Brooklyn Bridge for US$202 million and the 308-room Renaissance Dallas at Plano Legacy West Hotel for US$172 million. The purchases establish Host in a new Brooklyn submarket and the Dallas/Fort Worth market, respectively. Management expects the properties to contribute approximately US$3 million of net income and US$6 million of EBITDA to 2026 results, with both entering comparable hotel results from the fourth quarter.

The balance-sheet move was more defensive and arguably just as important. Host amended its US$2.5 billion credit facility, extending the revolver maturity to January 2031 and the two US$500 million term loans to January 2031 and January 2032. The amendment also expanded the accordion feature to US$1.25 billion and reduced pricing by 12.5 basis points on revolver draws, 15 basis points on term loans and 5 basis points on the facility fee. After the acquisitions and a US$137 million dividend payment, the company estimated cash and cash equivalents of US$991 million. Its full-year guidance assumes US$550 million to US$600 million of capital expenditure, including renovation and replacement work.