James F. Risoleo
President, Chief Executive Officer & Director at Host Hotels & Resorts
Thank you, Jaime, and thanks to everyone for joining us this morning.
In the first quarter, we delivered adjusted EBITDAre of $483 million and adjusted FFO per share of $0.60, which includes $10 million of business interruption proceeds from Hurricane Ian. Excluding the business interruption proceeds, our adjusted EBITDAre was 7% above the first quarter of 2023, and our adjusted FFO per share was 8% above last year. We delivered a year-over-year comparable hotel total RevPAR improvement of 50 basis points, underscoring the continued strength of out-of-room revenue while comparable hotel RevPAR declined 1.2%. First quarter RevPAR faced headwinds from tough year-over-year comparisons, particularly in Maui. The year-over-year decline in Maui RevPAR had an actual drag of 170 basis points on our first quarter portfolio RevPAR.
However, this understates the true impact of the wildfires as we would have expected Maui to contribute 140 basis points to portfolio RevPAR growth in the first quarter given the renovation disruption at Fairmont Kea Lani in 2023. As a result, the total estimated impact of the wildfires on first quarter RevPAR is 310 basis points. RevPAR was also impacted by unseasonable weather in Florida, Arizona and California unanticipated renovation delays at the Singer oceanfront resort. Despite these headwinds, our first quarter comparable hotel EBITDA margin of 31.2% and was 30 basis points above 2019. As a reminder, our first quarter operational results discussed today refer to our comparable hotel portfolio, which excludes The Ritz-Carlton, Naples in 2024.
In addition, while Alila Ventana Big Sur is included in our first quarter results, it is currently closed and it has been removed from our comparable hotel set for the remainder of the year after a portion of Highway 1 collapse in late March. At this time, we expect the resort to reopen towards the end of the second quarter. During the first quarter, our portfolio results continued to be impacted by the evolving nature of demand on Maui. Our risk management team has reached an agreement with our insurance carriers and we are now including between $18 million and $22 million of business interruption proceeds related to the Maui wildfires and our full year 2024 guidance.
Turning to business mix. It is worth noting that this quarter, we are referring to revenue growth for our business mix segment as revenue per available room as a result of the leap year. Group revenue per available room grew 4% in the first quarter, driven by room nights. Our properties booked over 500,000 group room nights in the year for the year bringing our definite group room nights on the books for 2024 to $3.6 million, with total group revenue pace up 7% compared to the same time last year. In the first quarter, business transient revenue per available room grew 5%, driven by both rate and room nights and leisure remained steady with transient rates at our comparable resorts up 52% compared to 2019, including our 3 Maui resorts. Briefly touching on out-of-room spend.
Food and beverage revenue per available room grew 2% in the first quarter compared to last year, driven by an all-time high banquet and catering contribution. Other revenue per available room grew 6%, driven by elevated attrition and cancellation fees. It is worth noting that nearly 40% of our total revenue in 2023 came from food and beverage and other revenue and our 2024 guidance assumes a similar proportion. Since 2017, non-room revenue has steadily grown as our portfolio has shifted towards more complex, higher-end properties, which benefit from substantial out-of-room spend from both guests and non guests.
In fact, there may be instances that the property teams at our hotels strategically forgo income rental room rate as they focus on the total revenue picture. The Ritz-Carlton, Naples is a clear example of the positive impact out-of-room spending. In the first quarter, the resort achieved RevPAR of $900, which is only half of its $1,700 total RevPAR. As a result of our meaningful expansion and transformational renovation, transient rates in the quarter were up 40% compared to 2019 driven by club level rooms and food and beverage revenue grew 38%, driven by outlets. In March, the resort posted its best revenue month ever, aided by Easter week's RevPAR, which was 45% above the competitive set. In addition, the resort was recently named to Travel and Leisure's It List, and we are proud to say that it truly is firing on all cylinders.
Turning to capital allocation. Yesterday, we announced the acquisition of the fee simple interest in a 2-hotel complex comprising the 215 room, 1 Hotel Nashville, in the 506 room Embassy Suites by Hilton Nashville Downtown were approximately $530 million in cash. The acquisition price represents a 12.6x EBITDA multiple or a cap rate of approximately 7.4% on 2024 estimated results. The properties are each expected to rank among our top 25 assets based on estimated full year 2024 results, with an expected combined RevPAR of $275, RevPAR of $435 and EBITDA per key of $58,550, further improving the quality of our portfolio.
The newly built LEED silver complex opened in 2022, and stands directly across from the 2.1 million square foot music city convention center adjacent to the Bridgestone Arena, which is home of the NHL Nashville Predators, and within a 10-minute drive of Nissan Stadium, the Country Music Hall of Fame Museum, Vanderbilt University, Tennessee State University and Centennial Park. It sits on 1.2 fee simple acres in Nashville, Spain Lower Broadway Entertainment District. The 2 hotel complex has a combined 721 oversized rooms that average approximately 500 square feet with a 75% suite mix. The properties offer 7 separate food and beverage outlets, including Harriet's Rooftop at the 1 Hotel, which provides guests with exclusive views of Music City skyline in an elevated night life setting.
Other amenities include a spa, 2 fitness centers, a yoga studio and 33,000 square feet of shared meeting space. From 2000 to 2023, the Nashville hotel market had a RevPAR CAGR of 7.7%, even while absorbing new supply. It is the number 2 ranked convention destination in the United States and the convention center has continued to set record attendance numbers by attracting larger events with promising definite bookings in future years. The new Nissan Stadium, home of the NFL Tennessee Titans, is also expected to generate increased demand as the stadium zone attracts more entertainment and sporting events with year-round activation.
In addition, Nashville has the fastest-growing airport in the United States with current passenger traffic 33% above 2019. The recent $1.5 billion airport expansion added 6 international gates and 8 satellite gates. And another $1.5 billion expansion is already underway, with expected completion in 2028. While supply growth is expected to continue in Nashville, most projects are in the planning stages and in the select service chain scale. We believe the 1 Hotel Nashville and the Embassy Suites by Hilton Nashville Downtown are highly differentiated from the future supply due to their central location and diversified product offerings, which provide distinct value propositions to customers and guests.
With multiple demand generators and no expected near-term capital expenditure requirements, we believe the combined properties will stabilize at approximately 10 to 12x EBITDA in the 2026 to 2028 time frame, driving additional value creation for our portfolio. Due to the timing of the acquisition, the 1 Hotel Nashville and the Embassy Suites by Hilton Nashville Downtown are not yet included in our comparable hotel guidance metrics, but will be included starting in the second quarter. The acquisition is expected to generate $29 million of adjusted EBITDA for our ownership period, which is included in our adjusted EBITDAre and FFO guidance for 2024.
Looking back on our transaction activity. We have acquired $4 billion of assets since 2018 at a 13.5x EBITDA multiple and disposed off $5 billion of assets at a 17x EBITDA multiple including $976 million of estimated foregone capital expenditures. This accretive capital recycling has allowed us to grow our adjusted EBITDAre and dividend in excess of full year 2019 levels as we continue on the path towards $2 billion of adjusted EBITDAre. As we have demonstrated, we believe Host is well positioned to continue capitalizing on value-enhancing acquisition opportunities. After adjusting for post-quarter transactions, we have $1.7 billion of total available liquidity and net leverage of 2.3x, and we will continue using our size, scale and relationships to uncover more acquisition opportunities.
Turning to portfolio reinvestment. Our 2024 capital expenditure guidance range remains $500 million to $605 million, which reflects approximately $225 million to $280 million of investment for redevelopment, repositioning and ROI projects. During the first quarter, we started the Hyatt Transformational Capital program renovations at the Grand Hyatt, Atlanta and the Grand Hyatt, Washington, which we expect to complete in the first half of 2025. We received $2 million of operating guarantees in the first quarter to offset business disruptions related to the Hyatt Transformational Capital program and we expect to benefit from an additional $7 million in 2024. More broadly, we have completed 24 transformational renovations since 2018, which we believe provide meaningful tailwinds for our portfolio. Of the 12 hotels that have stabilized post renovation operations to date, the average RevPAR index share gain is 8.5 points, which is well in excess of our targeted gain of 3 to 5 points.
Wrapping up, we believe Host is well positioned to continue to outperform. Our successful capital allocation strategy has allowed us to deliver 2023 adjusted EBITDAre and adjusted FFO per share above 2019 levels, outperforming the other full-service lodging REITs. We are encouraged by the supply picture for our markets and chain scales, which remains below historical levels. The improving international demand imbalance, the continued improvement in business transient demand and increased activity in the transactions market. We believe our EBITDA growth profile, our investment-grade balance sheet, our diversified portfolio and our continued portfolio reinvestment are key differentiators. As we have demonstrated, Host can and will continue to do it all.
With that, I will now turn the call over to Sourav to discuss additional operational detail and our revised 2024 outlook.