Host Hotels & Resorts Bargains in Travel Recovery

by Warren Seah

Host Hotels & Resorts Chief Executive Jim Risoleo is keeping a keen eye out for bargains and is prepared to make contrarian bets on travel recovery in big cities, including San Francisco.

Strong Liquidity Position to Drive Portfolio Investment and Acquisitions

At the end of 2023, the real estate investment trust boasted about $2.9 billion in liquidity. While the company plans to reinvest up to $675 million back into its portfolio this year, Risoleo expressed his interest in potential deals.

“I would anticipate that this year could be very active on the acquisition front,” Risoleo stated. “We’re excited to put money to work.”

Focus on Properties in Growing Markets and Urban Revitalization

Risoleo emphasized a preference for properties in growing markets with multiple demand generators across leisure, business, and group travel. Highlighting Nashville, Tenn., as an example, where Host already holds a 50% stake in the Hyatt Place hotel downtown, he also mentioned a close look at beaten-down urban markets.

“I believe that the major urban markets – not all of them – but certain major markets are going to come back,” he observed confidently. “There’s going to be a renaissance.”

San Francisco Shows Signs of Recovery and Strength

Expressing optimism about the long-term recovery of San Francisco, Risoleo noted that Host Hotels’ assets in the city performed well in the fourth quarter, particularly boosted by the Asia-Pacific Economic Cooperation meetings in November. This positive trend continued into the new year, with the San Francisco Marriott Marquis achieving its best month ever for revenue in January.

“What we saw happening in the fourth quarter is spilling over into the first quarter,” Risoleo commented.

Positive Fourth-Quarter Results and Strong Outlook for 2024

As the REIT reports fourth-quarter results, revenue exceeded analysts’ expectations, with funds from operations meeting forecasts provided by FactSet.

Looking ahead to 2024, Host Hotels is forecasting comparable-hotel revenue per available room (RevPAR) to grow by 2.5% to 5.5%. The company expects total revenue for the year to range between $5.59 billion and $5.74 billion, surpassing analysts’ projections of $5.48 billion.

Shares of Host Hotels rose over 1% to $20.47 in morning trading, reflecting a roughly 20% increase over the past year.

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