Host Hotels & Resorts, Inc. HST reported fourth-quarter adjusted funds from operations (AFFO) per share of 44 cents, which was in line with the Zacks Consensus Estimate. Moreover, the figure remained unchanged from the prior-year quarter.

Results reflect higher revenues, driven by year-over-year occupancy growth. The lodging real estate investment trust also issued a better-than-anticipated 2024 outlook for AFFO per share.

Per James F. Risoleo, president and CEO of the company, “Our results during the quarter were driven by rate increases of 0.4% and continued occupancy improvements at our convention and downtown hotels.”

Host Hotels generated total revenues of $1.32 billion, beating the Zacks Consensus Estimate of $1.30 billion. The top line rose 4.8% on a year-over-year basis.

In 2023, HST reported AFFO per share of $1.92, up from the prior year’s $1.79. The reported figure was in line with the Zacks Consensus Estimate. Total revenues of $5.31 billion increased 8.2% year over year and beat the consensus mark of $5.29 billion.

Behind the Headlines

Host Hotels’ comparable hotel RevPAR was $202.92 in the reported quarter, climbing 1.5% from the year-ago quarter’s $199.97 and 4.4% from the fourth-quarter 2019 tally of $194.32. The rise was mainly backed by occupancy and rate growth in the quarter. We projected the same to be $205.15.

Comparable hotel EBITDA came in at $355 million, falling 5.3% from $375 million reported a year ago. The figure, however, surpassed the fourth-quarter 2019 tally of $337 million.

The average room rate of $301.84 in the fourth quarter increased from $300.71 reported in the year-ago quarter. The figure compared favorably with the $256.94 reported in fourth-quarter 2019.

The comparable average occupancy percentage in the quarter was 67.2%, up 70 basis points from the prior-year quarter. However, the figure was lower than the comparable average occupancy of 75.6% in fourth-quarter 2019.

The room nights for its transient business declined 2.5% year over year. The group business and contract businesses witnessed growth of 4.7% and 11.4%, respectively, from the prior-year period. Host Hotels’ transient, group and contract businesses accounted for roughly 61%, 35% and 4% of its 2023 room sales, respectively.

Balance Sheet Position

Host Hotels exited the fourth quarter with cash and cash equivalents of $1.14 billion, up from $916 million as of Sep 30, 2023.

HST’s liquidity totaled $2.9 billion, including FF&E escrow reserves of $217 million as of Dec 31, 2023. It had $1.5 billion available under the revolver portion of the credit facility as of the same date.