Host Hotels & Resorts Q2 2025 Earnings Report

Host Hotels & Resorts EPS Results

• Actual EPS: $0.58
• Consensus EPS: $0.51
• Beat/Miss: Beat by +$0.07
• One Year Ago EPS: $0.57

Host Hotels & Resorts Revenue Results

• Actual Revenue: $1.59 billion
• Expected Revenue: $1.51 billion
• Beat/Miss: Beat by +$79.51 million
• YoY Revenue Growth: +8.20%

Host Hotels & Resorts Announcement Details

• Quarter: Q2 2025
• Date: 7/30/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 11:00AM ET

Host Hotels & Resorts (NASDAQ:HST) is a real estate investment trust, which engages in the management of luxury and upper-upscale hotels. It operates through the following geographical segments: United States, Brazil, and Canada. The company was founded in 1927 and is headquartered in Bethesda, MD.

Host Hotels & Resorts Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Host delivered adjusted EBITDAre of $496 million (up 3.1%) and adjusted FFO per share of $0.58 (up 1.8%) in Q2 2025, including $9 million of business interruption proceeds.
• Neutral Sentiment: Comparable hotel total RevPAR improved 4.2% year-over-year driven by transient demand, ADR growth and ancillary spend, while comparable hotel EBITDA margin declined 120 basis points due to lower last-year business interruption proceeds.
• Positive Sentiment: Maui resorts saw a 19% RevPAR increase in Q2, contributing 100 basis points to portfolio RevPAR growth and showing strong leisure transient recovery in F&B, golf and spa.
• Negative Sentiment: Group room revenue decreased 5% year-over-year in Q2 due to an Easter calendar shift, renovation disruptions and mix shifts, though definite group room nights on the books rose to 3.8 million.
• Positive Sentiment: Management raised full-year 2025 guidance with comparable hotel RevPAR growth of 1.5–2.5% and an adjusted EBITDAre midpoint of $1.705 billion, up $60 million from prior expectations.

Presentation

[Operator]

Good morning, and welcome to the Host Hotels and Resorts Second Quarter twenty twenty five Earnings Conference Call.

[Operator]

Today's conference is being recorded. At this time, I would like to turn the call over to Jamie Marcus, Senior Vice President of Investor Relations. Please go ahead.

[Jaime Marcus, SVP, Investor Relations at Host Hotels & Resorts]

Thank you and good morning everyone. Before we begin, please note that many of the comments made today are considered to be forward looking statements under federal securities laws.

[Jaime Marcus, SVP, Investor Relations at Host Hotels & Resorts]

As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward looking statements. In addition, on today's call, we will discuss certain non GAAP financial information such as FFO, adjusted EBITDAre and comparable hotel level results. You can find this information together with reconciliations to the most directly comparable GAAP information in yesterday's earnings press release, in our eight ks filed with the SEC and in the supplemental financial information on our website at hosthotels.com. With me on today's call are Jim Rizzolio, President and Chief Executive Officer and Sarov Ghosh, Executive Vice President and Chief Financial Officer. With that, I would like to turn the call over to Jim.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Thank you, Jamie, and thanks to everyone for joining us this morning. We are proud to have achieved another strong quarter of operating and financial results, leading to outperformance in the 2025. In the second quarter, we delivered adjusted EBITDAre of $496,000,000 an increase of 3.1% over last year and adjusted FFO per share of $0.58 an increase of 1.8% over last year. Second quarter adjusted EBITDAre and adjusted FFO per share benefited from $9,000,000 of business interruption proceeds related to Hurricanes Helene and Milton, while the second quarter of twenty twenty four benefited from $30,000,000 of business interruption proceeds related to Hurricane Ian and the Maui wildfires. Comparable hotel total RevPAR improved 4.2% compared to the 2024 and comparable hotel RevPAR improved 3% driven by stronger transient demand, higher ADR and more ancillary spend.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Comparable hotel EBITDA margin declined by 120 basis points year over year to 31% driven by a 120 basis point impact from business interruption proceeds that were received last year for the Maui wildfires. The operational results discussed today refer to our 78 hotel comparable portfolio in 2025, which excludes the Alila Ventana Big Sur, the Don Cesar and the Weston Cincinnati, which we sold in June. Turning to business mix, RevPAR growth in the second quarter was better than expected, driven by leisure transient demand and rate growth despite a continuation of the international demand imbalance. We saw particularly strong performance in Maui, Miami, Orlando, Atlanta, New York, the Florida Gulf Coast and San Francisco. Transient revenue grew by 7% driven by both the Easter calendar shift and the ongoing recovery in Mali, the latter of which accounted for approximately 40% of the transient revenue growth in the quarter.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Digging into Maui, the leisure transient demand recovery continued driving Maui's strong results for the second quarter. Maui's 19% RevPAR growth provided a 100 basis point benefit to portfolio RevPAR growth in the quarter. Total RevPAR at our three Maui resorts was also up 19% driven by robust growth in F and B outlets as well as golf and spa revenue, a clear indication that the recovery in Maui is well underway. Turning to business transient, revenue was relatively flat in the second quarter as demand decreases were nearly offset by rate. As expected, group room revenue decreased 5% year over year driven primarily by the Easter calendar shift, planned renovation disruption from the Hyatt transformational capital program, business mix shifting from group to transient in Maui and reduced group pickup.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Our properties actualized 1,100,000 group room nights in the second quarter and our definite group room nights on the books increased to 3,800,000 for 2025. Total group revenue pace is up 1.6% to the same time last year. Ancillary spending by guests at our properties remain strong as illustrated by our 4% total RevPAR growth in the second quarter. F and B revenue was up 4% driven by outlet revenues. Banquet revenue grew by 1% as contribution per group room night outpaced absolute group room night declines.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

We also saw particularly strong growth in other revenue, which was up 13% including golf and spa. Turning to the Don Cesar. During the second quarter, we completed the North Pool And Pool Bar. In early July, we completed the marketplace and lower level retail spaces. In the third quarter, we expect to complete the final phase of reconstruction, including the lower level kitchen and two F and B outlets.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Since the reopening, we are seeing better than expected near term transient pickup, higher F and B capture and average checks and increased group bookings, which allowed us to raise our full year expectations for the resort to $3,000,000 from negative $1,000,000 We collected $9,000,000 of business interruption proceeds for Hurricane Saline and Milton in the second quarter, bringing the total business interruption proceeds collected to $19,000,000 for the first half of the year. We also collected an additional $5,000,000 of business interruption proceeds in July related to those two hurricanes, which are included in our updated guidance. While we expect to collect additional business interruption proceeds, the timing and amounts of additional payments are subject to stabilization of the asset and ongoing discussions with our insurance carriers. Turning to capital allocation. In June, we sold the four fifty six key leasehold interest in the Western Cincinnati for $60,000,000 or 14.3 times trailing twelve month EBITDA.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

When calculating the EBITDA multiple, we included $54,000,000 of estimated disrupted capital expenditures over the next five years. Since 2018, we have disposed of approximately $5,100,000,000 of hotels at a blended 17.2 times EBITDA multiple, including estimated foregone capital expenditures of 1,000,000,000 which compares favorably to our $4,900,000,000 of acquisitions over the same period at a blended 13.6 times EBITDA multiple. In addition to dispositions, we repurchased 6,700,000.0 shares of common stock during the second quarter at an average price of $15.56 per share for a total of $105,000,000 bringing our total repurchases to $2.00 $5,000,000 year to date at an average price of $15.68 per share. Since 2022, we have repurchased five twenty million dollars of stock at an average repurchase price of $16.03 per share and we have $480,000,000 of remaining capacity under our share repurchase program. Turning to portfolio reinvestment.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

As of the second quarter, the Hyatt transformational capital program is approximately 50 complete and is tracking on time and under budget. We completed the guest rooms renovations at the Grand Hyatt Washington DC and paused the remaining public space renovations to accommodate group business on the books while we complete the comprehensive renovations at Hyatt Regency Capital Hill. We also started comprehensive renovations at the Manchester Grand Hyatt San Diego, the final property in the Hyatt transformational capital program, which we expect to complete in early twenty twenty seven. We continue to make progress on value enhancing development projects including the Don Cesar Ballroom expansion and the Phoenician Canyon Villa Suites, both of which we expect to complete in the 2025. We also made progress on the condo development at the Four Seasons Resort Orlando at Walt Disney World Resort.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

We expect to complete the mid rise condominium building and begin closing on sales in the fourth quarter of this year. We now have deposits and purchase agreements for 20 of the 40 units, including eight of the nine villas. In 2025, our capital expenditure guidance range is $590,000,000 to $660,000,000 which includes between 70,000,000 and $80,000,000 for property damage reconstruction, majority of which we expect to be covered by insurance. Our CapEx guidance also reflects approximately $270,000,000 to $3.00 $5,000,000 of investment for redevelopment, repositioning and ROI projects. As part of our climate risk and resiliency program, we purchased flood barriers for nine high risk properties with measures being put in place for the twenty twenty five hurricane season.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

We also developed a resiliency ROI method and expanded the program to new hotels with a focus on emergency power and wildfire risk. Within the Hyatt transformational capital program, we expect to complete renovations at the Hyatt Regency Austin and the Hyatt Regency Capitol Hill in the second half of this year. As a reminder, we expect to benefit from approximately $27,000,000 of operating profit guarantees related to the Hyatt transformational capital program in 2025, which we expect will offset the majority of the EBITDA disruption at those properties. In addition to our capital expenditure investment, we expect to spend 75,000,000 to $85,000,000 on the condo development at the Four Seasons Resort Orlando at Walt Disney World Resort this year. Looking back at prior transformational renovations, we completed investments in 24 properties between 2018 and 2023, which are continuing to provide meaningful tailwinds for our portfolio.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Of the 20 hotels that have stabilized post renovation operations to date, the average RevPAR index share gain is over 8.7 points, which is well in excess of our targeted gain of three to five points. Turning to our outlook for 2025. Despite the heightened macroeconomic uncertainty, we continue to outperform our expectations in the second quarter. As a result of our strong performance in the first half of the year, we are increasing our comparable hotel RevPAR and total RevPAR guidance ranges. As Saurabh will discuss in more detail, the low end of our guidance range contemplates softer demand in the second half of the year, while the high end assumes a more stable macroeconomic environment.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Similar to last quarter, we are also providing an approximate rule of thumb for the current environment based on how our portfolio is positioned today. For every 100 basis point change in RevPAR, we would expect to see a 32,000,000 to $37,000,000 change in adjusted EBITDAre, which is consistent with the range we provided last quarter. As we have said many times before, Host is well positioned to weather any environment because of our fortress investment grade balance sheet, a leverage ratio of 2.8 times, our size and scale, our diversified business and geographic mix and our continued reinvestment in our portfolio. We will continue to use our competitive advantages to create value for our shareholders and position Host to outperform over the long term. With that, I will now turn the call over to Saurabh.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Thank you, Jim, and good morning, everyone. Building on Jim's comments, I will go into detail on our second quarter operations, updated 2025 guidance and our balance sheet. Starting with total revenue trends, comparable hotel total RevPAR growth outpaced RevPAR growth as both group and transient guests maintained elevated levels of out of room spend. Comparable hotel food and beverage revenue grew 4% in the quarter driven by outlets. Outlet revenue grew 9% driven by transient room night growth in Maui as well as recently repositioned outlets including The View at the New York Marriott Marquis, Aviv at the One Hotel South Beach and outlets at the Singer Oceanfront Resort.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Properties in Orlando, Nashville and Naples also contributed to outlet growth. Banquet revenue grew 1% as increases in banquet and catering contribution per group room night outpaced decreases in group room night volume. Banquet and catering contribution was up 7% in the quarter, signaling the continued health of group spending. Growth was driven by our large group hotels in San Diego, San Francisco, New York, Orlando and Naples. Other revenue grew 13% in the second quarter as Golf and Spa revenues continue to grow.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

This is further indication that the high end consumer is prioritizing spending on premium experiences. Shifting to business mix, overall transient revenue was up 7% compared to the 2024, driven by higher rates and the continued growth of transient room nights at our resorts led by Maui. During the second quarter, our resorts saw modest transient rate growth year over year alongside 21% transient room night growth, which benefited from the Easter calendar shift and the recovery in Maui. Excluding Maui, transient revenue at our resorts was up in the mid teens driven by our resorts in Orlando, Oahu and Miami. Looking at recent holidays, revenue for Memorial Day weekend was up over 2% driven by our resorts in Maui, Miami, Orlando and Naples.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Revenue for July 4 was down 1% for the comparable portfolio. Our resorts were up 6%, but storms over the holiday weekend heavily impacted the short term pickup at many of our properties. Business transient revenue was relatively flat to the 2024 as 6% rate growth nearly offset business transient room night declines. It is worth noting that corporate negotiated room night volumes were down slightly, which is in line with recent quarters. As a reminder, we expect business transient revenue to remain flat for the remainder of this year as a result of the uncertain macroeconomic environment.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Turning to group, as expected, revenue was down 5% year over year, driven by planned renovation disruption from the higher transformational capital program and business mix shifting from group to transient in Maui. Group room revenue also faced headwinds from the Easter calendar shift and reduced group pickup. Despite these headwinds, our properties in San Francisco achieved group revenue growth of more than 30% driven by meaningful citywide recovery. Aritz Falls and Resorts in Naples, Florida also benefited by strategically adding high quality groups in the quarter. For full year 2025, we have over 3,800,000 definite group room nights on the books, representing a 6% increase since the first quarter.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

As Jim mentioned, total group revenue pace is up 1.6% over the same time last year. As we discussed last quarter, we have seen softer short term group pickup, particularly for the third quarter due to macroeconomic uncertainty. That said, rate continued to grow across the portfolio for bookings made in the second quarter for the rest of 2025. We also continue to see double digit citywide booking pace in many of our key markets, including San Francisco, San Antonio and New Orleans. Shifting gears to margins, comparable hotel EBITDA margin of 31 was 120 basis points below the 2024, which includes a 120 basis point impact from business interruption proceeds we received for the Maui wildfires last year.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Outside of the BI proceeds impact, margin performance in the second quarter was the result of strong revenue growth as well as higher HTCP guarantee amounts, which offset headwinds from elevated wage rate growth. We continue to expect negative year over year margin comparisons for the remainder of the year, primarily driven by elevated wages and benefits. On the insurance front, our June 1 property renewal came in meaningfully better than expected at down 4% compared to last year, which equates to a $14,000,000 expense reduction compared to our prior guidance. This savings has been reflected in our updated guidance. Turning to our outlook for 2025.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

As Jim mentioned, we are increasing our comparable hotel RevPAR and total RevPAR guidance ranges as a result of our outperformance in the first half of the year. As a reminder, we have assumed a gradual improvement at our Maui properties this year and no improvement in the international demand imbalance. At the low end of our guidance, we have assumed softer demand in the second half of the year and at the high end, we have assumed improvements in the overall macroeconomic environment driven by clarity on trade and other policies. Our full year 2025 guidance contemplates comparable hotel RevPAR growth of between 1.52.5% over 2024. We expect comparable hotel EBITDA margins to be down 90 basis points year over year at the low end of our guidance to down 60 basis points at the high end, a 60 basis points improvement over our prior guidance at the midpoint.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Consistent with our prior guidance, we expect negative year over year RevPAR in the third quarter, driven by softer short term group volume and slightly positive RevPAR growth in the fourth quarter. The midpoint assumes comparable hotel RevPAR growth of 2% compared to 2024 and the comparable hotel EBITDA margin of 28.6%, which is 70 basis points below 2024. As we think about bridging our 2024 results to 2025, we estimate 100 basis point impact to full year comparable hotel EBITDA margin from wage and benefit rate increases and a 40 basis point impact from lower business interruption proceeds in the comparable portfolio, which are partially offset by an estimated 70 basis point benefit from operational improvements. For the full year, we continue to expect overall wage and benefit expenses to increase 6%, which comprises approximately 50% of our total hotel operating expenses. Our twenty twenty five full year adjusted EBITDAre midpoint is $1,705,000,000 This represents a $60,000,000 or 3.6% improvement over our prior guidance midpoint driven by outperformance in the first half of the year.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

This includes $19,000,000 of business interruption proceeds that were received in the first half of the year for Hurricanes Helene and Milton and an additional $5,000,000 of business interruption proceeds that were received in July. Our twenty twenty five full year adjusted EBITDAre midpoint also includes $25,000,000 of estimated EBITDA from the 4 Seasons condo development, which we expect to recognize concurrent with condo sale closings in the fourth quarter. Lastly, our midpoint includes an estimated $3,000,000 contribution at the Don Cesar, an improvement of $4,000,000 since the last quarter and an estimated $13,000,000 contribution from the operations at Alila Ventana Big Sur, both of which are excluded from our comparable hotel set in 2025. Turning to our strong balance sheet and liquidity position, in May, we redeemed the $500,000,000 Series E notes, which matured in June, with proceeds from the recent $500,000,000 5.7% Series M notes issuance. Our weighted average maturity is now five point four years at a weighted average interest rate of 4.9%.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

We currently have $2,300,000,000 in total available liquidity, which includes $279,000,000 of FSNE reserves and $1,500,000,000 available under the revolver portion of the credit facility. Our quarter end leverage ratio was 2.8 times. In July, we paid a quarterly cash dividend of $0.2 per share. As always, future dividends are subject to approval by the company's Board of Directors. We will continue to be strategic in managing our balance sheet and liquidity position as we move through the rest of the year.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Wrapping up, we believe our strong investment grade balance sheet as well as our size, scale and diversification uniquely position Host to execute in the current environment while capitalizing on opportunities for growth in the future. With that, we would be happy to take your questions. To ensure we have time to address as many questions as possible, please limit yourself to one question.

[Operator]

Your first question comes from the line of Duane Pfennigwerth with Evercore ISI. Please go ahead.

[Duane Pfennigwerth, Senior Managing Director - Equities at Evercore]

Of room nights on the books up 6% sequentially versus the last quarter and your 3Q group commentary. I assume this means you're seeing groups further out for 2026 and beyond continue to book. But maybe you could just talk a little bit about the group dynamics that you're seeing second half and then longer term.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Hey, Duane, it's Jim. Can you state the question over? We didn't catch the first part of it. I think you were on mute. So if you wouldn't mind restating it, we'd appreciate it.

[Duane Pfennigwerth, Senior Managing Director - Equities at Evercore]

Sorry about that. Yes, just help us match up the commentary of room nights on the books up six percent versus last quarter versus the 3Q commentary that you're making. I assume that means you're seeing group bookings further out into 'twenty six and beyond.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Duane. It's Saurav. So yes, just to put it into perspective, when we started off the year, we had an expectation of achieving about 4,300,000 group room nights. And you may recall, last quarter, we took our forecast for overall group room nights down by about 100,000 group room nights. So we were at about 4.2.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Based on what we are seeing in terms of softening sort of short term group pickup, we looked at the second half, particularly the third quarter and took out about another 75,000 to 77,000 group room nights. So we are 3,800,000 group room nights, which we have on the books, and now our expectation for the full year is approximately 4,100,000 group room nights. That said, when you look out into the future, as you were saying, our 26 to 28, we had messaged last time that that group pace was in the higher single digits. That actually improved slightly from the last quarter. So yes, we see groups continuing to book out into the future.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

It's more the short term pickup, particularly in the third quarter that we have taken some risk off the table. Just to put some numbers around sort of what we picked up in the second quarter for the remainder of the year, we picked up 215,000 group room nights for the remainder of the year. And about 20%, call it, was for q two, and 80% of that was for the rest of the year. And if if you look at or compare to 2024, that was about 311,000 group room nights. So definitely somewhat softening in terms of the third quarter.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

But as we look out particularly into the future, it's strong. And the only other thing I'd add is the group rate that we booked into the second half is extremely strong as well. So that continues to really show up.

[Duane Pfennigwerth, Senior Managing Director - Equities at Evercore]

Thank you.

[Operator]

Your next question comes from the line of Chris Woronka with Deutsche Bank.

[Chris Woronka, Research Analyst at Deutsche Bank]

Jim or Suram, I was hoping you could dive in a little bit further on on Hawaii. And, you know, I think I think more widely, we've been getting messages, you know, through through the various news sources about what's going on there. Can you can you maybe shed a little bit light of light on on what you're seeing within your your portfolio and and, you know, how confident you feel about that for the the back half of the year and maybe any early on '26? Thanks.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Yeah. Chris, I'll I'll start and Suraj can feel free to jump in if he has additional color he wants to add. But we are of the opinion that Maui's recovery is firmly underway. We had 19% RevPAR growth in the quarter for our Maui resorts. That was matched by 19% out of room spend as well, really driven by outlet growth.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

The recovery is being fueled by leisure transient and it's a somewhat of a new phenomenon for Maui because the booking window is very short term. We had said that we anticipated Maui to contribute $100,000,000 of EBITDA this year for the portfolio. We are now assuming that the Maui resorts will contribute $110,000,000 So we're seeing very positive momentum. There's no question about it going forward. I think this is fueled in large part by a marketing campaign that a group of hotel owners banded together to undertake marketing individual properties combined with the state of Hawaii led by the governor who endorsed and sponsored a I don't think about a $6,300,000 marketing campaign as well.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

So when people see what is happening on the island and you were there in February, you know that it's open for business. Wailea is a great place to be. The West Side where the Hyatt Regency is a great place to visit as well. It's I think probably the best group hotel on the island. And that's what we have to see happen to really get back to where we were pre fire levels. We have to start seeing the incentive groups come back to Hawaii and we're getting good traction with meeting planners. They're taking trips called FAM trips, FAM familiarization trips, they can just go see what is happening on the island. There's a long lead time for incentive group bookings to occur. It's at least six months and it can be a year or longer in some instances. So we expect to see the group pace pick up as we get into 2026 and 2027 and beyond.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

But Maui is definitely open for business and we're really pleased with what we're seeing. The other thing that has to happen, Chris, is we have to see additional airlift made available. It's a bit of a chicken and an egg situation where the airlines are not going to want to bring additional capacity back online until they have a good feeling about their ability to fill those seats and vice versa. We don't want our customers who want to come to Hawaii and not be able to find a seat on an airplane. So compared to where we were pre wildfire in terms of airline capacity in the Maui, we're down about 20%.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

We're hopeful that that's going to change over time. The recovery is well underway. In addition to the outlet revenue, we saw a meaningful pickup in spa revenue and golf revenue as well. So people are definitely coming in their spending.

[Chris Woronka, Research Analyst at Deutsche Bank]

Okay. Thanks, Jim.

[Operator]

Your next question comes from the line of David Katz with Jefferies. Please go ahead.

[David Katz, Managing Director at Jefferies]

I just had to get myself unmuted. Thanks for taking my question. I wanted to ask about more about Hawaii and in particular, as you know, Jim, the Turtle Bay sort of caught my caught my fancy. Can can you just give us an update on how you're doing with that? What's, you know, what's been sort of the best surprise?

[David Katz, Managing Director at Jefferies]

Maybe if there's any negative surprises, you know, with it. And, you know, I I I just wanna be clear about how we're comping that hotel in the RevPAR. Right? It it that was sort of out for two q, I believe. Right?

[David Katz, Managing Director at Jefferies]

And is that sort of done by 3Q and in there? Those are my sort of two questions. Thanks.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Know, Turtle Bay, the hotel pro form a hotel operations, David, are exceeding our pro form a expectations. So it's been well received into the Ritz Carlton system. Bonvoy is driving a lot of business to the property. It I wouldn't say that there are any negative surprises with respect to hotel ops at all. The property is performing well.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

We've had a change of plans with respect to our repositioning and renovation of the Fazio Golf Course. You may recall from your visit that there are two golf courses on property, the Fazio and the Palmer. We have leased the Palmer Course to the developer that is developing some residential units adjacent to the resort itself, Arte development. And we own continue to own the Fazio Course. For a number of reasons, we've made the decision that we're not going to reposition and upgrade the Fazio Course at this point in time.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

But we're going to spend the time really preparing the site for potential future development while we have the opportunity to do that. So if you're seeing a shortfall in operating performance for the resort in total, it's as a result of The Gulf, it's not as a result of the hotel. And I'll let Saurabh address your other question regarding comp, non comp.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Yeah. It is actually in our comparable results. We did not own the hotel. However, we do have, the actual numbers and performance from that hotel. So it is in our comparable numbers.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

You just have to look at the comp, comp tables.

[David Katz, Managing Director at Jefferies]

Got it. Okay. So it's in 2Q

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

To and Page 10, I believe.

[David Katz, Managing Director at Jefferies]

Okay. Perfect. Thank you.

[Operator]

Your next question comes from Smedes Rose with Citigroup. Please go ahead.

[Smedes Rose, Director at Citigroup]

Hi. Thank you. I wanted to ask a little more about wages and benefits. You mentioned that they're tracking up 6% for this year. Can you maybe, Saurabh, just give some thoughts on it'd be interesting to what are the components of that, like labor versus benefits, to employees and kind of how you're thinking about might pace into next year?

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Sure. When you think about sort of overall, it really is obviously market dependent. It is being driven by where there was CBA negotiations finalized and that's driving a big piece of the increase for this year just given the front loading impact. For next year, all I can tell you that it is going to be overall lower than where it is this year. That's the expectation.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

But it's too early to tell, frankly, because we haven't seen budgets from our managers yet, and we will not see that until later. So can't really comment on an exact number, but the expectation is the growth should be slightly lower than this year. What that is, I can't comment right now.

[Smedes Rose, Director at Citigroup]

Okay. Thank you.

[Operator]

Your next question comes from Ari Klein with BMO Capital Markets. Please go ahead.

[Ari Klein, Director - Equity Research at BMO Capital Markets]

Thanks and good morning. Can you talk a little bit about the cadence for RevPAR growth in the second half of the year? Specifically, what might drive Q4 growth relative to the third quarter? And then just a clarification on the insurance savings. Is the $14,000,000 an annualized number or just what you expect to save this year?

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Ari, the $14,000,000 is just what we expect to save for this year. So that's what we have effectively. You would take out, reduce from our prior guidance of, which we had at 1,645,000,000.000 It's a savings of $14,000,000 from that number, so just this year. And, to your first question in terms of why we have confidence in the fourth quarter growth and what's driving that, right at the beginning of the year, we had pretty solid pace for the fourth quarter. A couple of things happening in the third and fourth quarter that you have to remember.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

One is Rosh Hashanah was in October, that's falling in September. So that's helping the fourth quarter and it's detrimental to the third quarter. Second, our big Hyatt our Grand Hyatt Manchester and San Diego is under renovation. That's impacting group pace as well. The other big thing for the fourth quarter that's helping, you might recall that when there was elections, a week before and a week after elections, nobody was really booking.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

So that's actually uplifting your q four pace numbers as as well. So the expectation of fourth quarter is is better as a result of that. So those are sort of the three components.

[Ari Klein, Director - Equity Research at BMO Capital Markets]

Thanks.

[Operator]

Your next question comes from the line of Robin Farley with UBS. Please go ahead.

[Robin Farley, Managing Director - Leisure Analyst at UBS Group]

Great. Thanks. Can you talk a little bit about the transaction environment?

[Robin Farley, Managing Director - Leisure Analyst at UBS Group]

Just you sold an asset just sort of broadly what the environment is like for that and also any opportunities to buy? And then I do have one quick follow-up. Thanks.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Sure, Robin. Let me start by saying that the debt capital markets are wide open. CMBS market is wide open. It's very active at this point in time. We've seen a notable pickup in transaction activity over the last ninety days or so.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

It's certainly not I wouldn't characterize it as robust. It's certainly not at levels that it has been in the past. There is still a fairly significant bid ask spread between buyers and sellers. However, in certain instances, we have seen that bid ask spread narrow and transactions get done. So we'll see what happens as we get a bit more certainty on the macro picture over the remainder of this year and into 2026.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

I think that it's still somewhat difficult to underwrite a potential acquisition aggressively given the macro uncertainty right now and that may be holding some people back at this point in time. But our belief is that a number of assets have not been invested in since COVID days. So we're talking five years now. And the properties are in dire need of capital of CapEx. And those something is going to have to happen with those assets going forward.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

So I mean, we were in the really fortunate position, as you know, that we had the balance sheet that allowed us to invest in our assets. And over the last six years, we have invested $1,700,000,000 in ROI CapEx in our properties, completed 24 transformational renovations. Of those 24 properties, 20 have stabilized operations and we picked up close to nine points in yield index. And that is that's one of the reasons why we continue to outperform. It's really our capital allocation decisions that had been made from 2017 forward.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

So to answer the second part of your question, are we interested in buying hotels? I'll never say never, but I will tell you as we sit here today, it's not at the top of our list. We think that the better use of our capital certainly in the second quarter in the first half of this year has been investing in our assets so that we can continue to drive the types of returns that we're seeing, paying a sustainable dividend subject to the approval of our Board of Directors and buying back shares. We bought back $2.00 $5,000,000 worth of stock in the first half of the year. And we think the stock is a screaming bargain today given where it's valued relative to the quality of our portfolio and our fortress balance sheet.

[Robin Farley, Managing Director - Leisure Analyst at UBS Group]

Right. Super helpful. Thank you. Just one quick clarification following up and maybe one for Saurav. With the guidance change, you're getting a little more cautious on that sort of close in Q3 group bookings.

[Robin Farley, Managing Director - Leisure Analyst at UBS Group]

And I know that's relative to what you said three months ago. Some have sort of pointed to things picking up a little bit in July. Are you seeing at least in the very near term, something maybe a little bit better than the sort of delta you're talking about versus April?

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Because it's such short term business, I think that's kind of why we have taken some of the risk out of Q3. Is July trending well? Not in a position to give a number for July, but yes, has been certainly trending well relative to our expectations. So could it get better? There is certainly a possibility, but it's it's really tough because these groups are sometimes weekly booking one week out or even a couple of days out.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

So we want to make sure we are appropriately cautious as we were doing our forecast.

[Robin Farley, Managing Director - Leisure Analyst at UBS Group]

Okay, great. Thank you very much.

[Operator]

Our next question comes from the line of Dan Politzer with JPMorgan. Please go ahead.

[Daniel Politzer, Executive Director, Equity Research - Gaming and Lodging at JP Morgan]

Hey, good morning everyone. Thanks for taking my question. I just wanted to follow-up on the group commentary. Is there any more detail in terms of like lead volumes corporate versus association? And then are you seeing actual changes in terms of the spending patterns from these groups in terms of some of that ancillary or F and B?

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Yes. So it's very similar to what we had talked about on the first quarter in terms of where we are seeing some of the weakness in groups. It certainly is a little more on the association side, particularly as it relates to associations that either rely on government funding or somehow tied to government funding. In terms of the folks that are actually showing up to the hotels, they're spending well. So if you look at our second quarter results, group volume was down, but our banquet and catering revenue was actually up.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

And we look at the banquet and catering revenue on a per group overnight basis, that was up 7%. So overall, groups, when they're coming to the hotels, are actually spending and spending well and continue to spend. So that trend really hasn't changed. And it certainly it has the same momentum as it did, which we saw in the first quarter. And we have that same expectation going into the groups that are going to be coming in, in the third and fourth quarter as well.

[Daniel Politzer, Executive Director, Equity Research - Gaming and Lodging at JP Morgan]

Got it. Thanks so much.

[Operator]

Your next question comes from the line of Daniel Hogan with Baird. Please go ahead.

[Daniel Hogan, Equity Research Associate at Robert W. Baird & Co]

Hi, good morning.

[Daniel Hogan, Equity Research Associate at Robert W. Baird & Co]

Just quickly on the Cincinnati sale. Looking at the rest of the portfolio, how many more assets are in need of that amount of CapEx or would be potential non core sale candidates? And how are both you and potential buyers thinking about those that amount of CapEx needs differently? And is that able to then get a deal across the line?

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Cincinnati, I would say probably ranked at the bottom of our portfolio Dan from a CapEx perspective. It's in a tough market, a very low RevPAR asset. It's subject to a ground lease. What we sold was a leasehold interest. And we really hadn't invested in that property since 02/2009.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

So I don't know of any other hotel in our portfolio that is in that dire need of CapEx. So we like what we own. Obviously, if you look at the makeup of our portfolio, our top 40 assets account for over 80% of our EBITDA. We have 78 comparable hotels plus the Elite of Antana and the Dawn in non comp. But that should give you a sense of the magnitude of EBITDA that something like a Western Cincinnati contributes to the overall earnings of Post.

[Daniel Hogan, Equity Research Associate at Robert W. Baird & Co]

All right. Thank you.

[Operator]

Our next question comes from the line of Chris Darling with Green Street. Please go ahead.

[Chris Darling, Senior Analyst at Green Street Advisors, LLC]

Hi. Thanks for taking the question. Jim, can you comment on the relative strength across sort of the high end luxury hotel segment relative to what's really been a more sluggish demand backdrop for seemingly most of the rest of the industry? To be candid with you, I'm kind of surprised the dynamic has lasted as long as it has and I wonder what your perspective is on whether it persists, and also how your perspective may or may not inform your portfolio positioning going forward?

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Chris, we began the journey to reposition this portfolio in twenty seventeen, twenty eighteen. We sold and our performance today has to do as much with what we sold as with what we bought. We disposed of $5,100,000,000 assets with a purchase price roughly of $5,100,000,000 that needed significant CapEx of roughly $1,000,000,000 at a 17.2 times EBITDA multiple. And over the same timeframe, we acquired $4,900,000,000 of assets at 13.6 times EBITDA. And there was a keen focus on luxury.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

And the focus on luxury is really informed by our opinion that the long term RevPAR CAGRs of luxury properties, luxury resorts in particular outperform other segmented hotels in the industry. And I think that has really proved itself out as we see no resistance really to rate at our resort portfolio today. And we see a continued increase in out of room spend by customers on a per occupied room basis at the outlets, at spa, at golf, etcetera. So the affluent consumer is clearly in a very good position. They want to continue to prioritize experiences and they're willing to spend money to do that. If you look at the performance of the various segments over the second quarter, luxury was followed by upper upscale, which is where the rest of our portfolio is. We outperformed the industry across the board.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

And that has to do with the investments that we made in our assets that I spoke to earlier. And then as you move further down the chain scale where our consumers The U. S. Consumers are stressed and you look at the economy segment, you see negative RevPAR growth. So I mean the amount of wealth that in our opinion, the amount of wealth that's been created in this country through housing and through the stock market is substantial.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

And we like the way the portfolio is positioned for the long term. Obviously, if something were to go awry and people didn't feel as good about their balance sheets going forward that would impact the business. But we're certainly not seeing that at this point in time.

[Chris Darling, Senior Analyst at Green Street Advisors, LLC]

All right. Helpful commentary. Thank you.

[Operator]

Your next question comes from the line of Gregory Miller with Truist Securities. Please go ahead.

[Gregory Miller, Equity Analyst at Truist Securities]

Thank you very much and good morning. Could you provide some detail on how summer leisure demand from international inbound is performing relative to your expectations a few months ago? Are there certain markets or property types performing better or worse?

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Sure. So when you look at what happened with international outbound inbound, first quarter, we had talked about our, I would say, hope that that would somewhat moderate and it would effectively be a wash. We were expecting lower inbound travel, but we were also expecting lower outbound travel. In a way, that's kind of what happened, not to a very large degree, but net net, it was effectively a wash. You may recall that in the fourth quarter when it peaked in 2024, outbound relative to 2019 was at 125% and inbound was at 94%.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

That progressed in q one twenty twenty five. Outbound became 124. So came down a little bit. In q two, it went down to a 122%. And, actually, in June, it came down a little bit further to 120%.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

In the in the same token, your inbound also, reduced. So while outbound did go down, the inbound cadence was '24. It was 94%, and this is all relative to 19 levels. Q1, 25, 80 '9, and then Q2, 86. So when you think about the actual change in inbound relative to change in outbound, it net net sort of washed out.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

So overall, as we look at international demand, I mean, least specifically for our portfolio, it has been relatively strong overall. I mean, there's certain markets really driving that. I mean, New York's driving that. While Seattle did see Canadian visitors significantly decline, our Western overall actually did well. A lot of these markets where, we've seen declining Canadian travels, it has been made up by other European markets.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

So thus far, it hasn't had a, a meaningful impact one way or the other. And kind of what we expected, no real change in the international inbound, outbound imbalance, that's sort of, coming to fruition thus far.

[Gregory Miller, Equity Analyst at Truist Securities]

Thanks for the helpful.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

Greg, just a data point on New York. I mean, the portfolio is positioned where over 90% of our revenues come from domestic U. S. Travel. So there is roughly 8.5%, 9% that does come from international visitors to The U.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

S. But I just want to follow-up on what Saurabh said. He referenced New York as one of those markets. Just for point of reference, so you have a sense of how our assets are performing. The New York Marriott Marquis underwent a transformational renovation beginning in 2019.

[James Risoleo, President, CEO & Director at Host Hotels & Resorts]

So as base year 2018, using 2018 as the base year, this year our RevPAR is going to be up 16%. Our EBITDA at the Marriott Marquis is going to be up 46% over 2019. So 2018, I'm sorry, we did $66,000,000 in EBITDA in 2018. We're on budget to do $96,000,000 this year and that's on top of a 16% RevPAR increase. So the health of our New York assets is very good and very strong.

[Gregory Miller, Equity Analyst at Truist Securities]

Thank you, Jim. Appreciate it.

[Operator]

Our final question comes from the line of Jack Armstrong with Wells Fargo. Please go ahead.

[Jack Armstrong, Equity Research Associate at Wells Fargo]

Hey, good morning. Thanks for taking the question. Just returning to Maui again here briefly. We've heard from you and some of your peers that some of the strength you've been having there is related to promotional activity. You've seen an uptick in transient demand.

[Jack Armstrong, Equity Research Associate at Wells Fargo]

But what's the plan for rolling off that promotional activity and then kind of replacing that demand with group? You know, is that a late twenty five event or 2026? And is there a chance you kind of get a stuck in in between those two?

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

Yeah. Just to be clear, it's it's not like a a group is not being pushed at these properties. So we have as Jim mentioned earlier, we are engaging with meeting planners. We are having fam trips. So that is progressing.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

And what's important to know, we are very encouraged by how twenty twenty six is is pacing. And at some point, we'll provide very specific numbers on on on Maui group pay for 2026. But overall, when you look at sort of Maui and this is YLA as well as the Hyatt Regency Kannapali, they're effectively pacing very, very close at this point to where there were not only pre fire, but pre pandemic levels. So we are very encouraged by that. Remember, the lead times with these incentive groups is nine to twelve months.

[Sourav Ghosh, Executive VP & CFO at Host Hotels & Resorts]

So while it is going to take some time to pick up, we fully expect to have a much better group year in, 2026. And just to put into perspective, so you have what the peak was for Maui. Like, in 2019, we did about a 100,000 group room nights or so in Maui. And this year, our expectation is, call it, around 81,000, and we certainly expect to improve on that into next year.

[Jack Armstrong, Equity Research Associate at Wells Fargo]

Great. Thank you.

Participants

Executives

• Jaime Marcus, SVP, Investor Relations
• James Risoleo, President, CEO & Director
• Sourav Ghosh, Executive VP & CFO

Analysts

• Duane Pfennigwerth, Senior Managing Director - Equities at Evercore
• Chris Woronka, Research Analyst at Deutsche Bank
• David Katz, Managing Director at Jefferies
• Smedes Rose, Director at Citigroup
• Ari Klein, Director - Equity Research at BMO Capital Markets
• Robin Farley, Managing Director - Leisure Analyst at UBS Group
• Daniel Politzer, Executive Director, Equity Research - Gaming and Lodging at JP Morgan
• Daniel Hogan, Equity Research Associate at Robert W. Baird & Co
• Chris Darling, Senior Analyst at Green Street Advisors, LLC
• Gregory Miller, Equity Analyst at Truist Securities
• Jack Armstrong, Equity Research Associate at Wells Fargo