Host Hotels & Resorts, Inc. (HST) on Q1 2021 Results - Earnings Call Transcript
Operator: Good day, everyone, and welcome to the Host Hotels & Resorts First Quarter 2021 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Tejal Engman, Senior Vice President of Investor Relations. Please go ahead. Tejal Engman: 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. James Risoleo: Thank you, Tejal, and thanks, everyone, for joining us this morning. Since our earnings call in February, we have made excellent progress on operations and investments and achieve key milestones that we believe will accelerate our EBITDA recovery. To begin with, we significantly outperformed expectations for the first quarter, which recorded a GAAP net loss but delivered positive adjusted EBITDAre and hotel-level profitability for the first time since the onset of the pandemic. We grew first quarter total pro forma revenues by 50% sequentially. While holding hotel level operating expense growth to only 15% quarter-over-quarter as our operators successfully leveraged the existing resources to meet a stronger-than-expected demand surge in March. As a result, we delivered $21 million of positive hotel EBITDA for the quarter, a significant improvement from the negative $62 million recorded in the fourth quarter on a pro forma basis. In addition, we acquired the Hyatt Regency Austin, The Four Seasons Resort Orlando at Walt Disney World Resort and nearly 300 acres of irreplaceable land adjacent to our Hyatt Regency in Maui, strategically investing approximately $800 million of capital at prices that are meaningfully below 2019 levels. Following these transactions, we have a substantial $1.5 billion of total available liquidity, including $131 million of FF&E reserves. Operations continued to improve, with April RevPAR expected to exceed March as the vaccine driven margin recovery gains momentum. Finally, in addition to executing substantial strategic investments, we continue to focus on redefining our hotel operating model and positioning our renovated properties to gain market share, key long-term strategic objectives that we believe will position us to achieve best-in-class EBITDA growth through the lodging cycle. Sourav Ghosh: Thank you, Jim, and good morning, everyone. Building on Jim's comments, I'll provide more color on how we achieved breakeven in the first quarter and how we expect the revenue expense trends to evolve through the course of the year. We achieved positive hotel EBITDA and positive adjusted EBITDAre for the quarter due to 3 main drivers: a stronger-than-expected increase in demand throughout the quarter, particularly in March, our manager's ability to sequentially increase average room rates by 18% and continued expense control at the property level. As Jim covered the first 2 drivers in his remarks, I will focus on the third. First quarter hotel level operating costs rose by only 15% compared to the fourth quarter of 2020, despite an approximately 50% increase in total revenues over the same period. As demand suddenly surged in March, our operators didn't have the time to adjust staffing and other controllable costs from contingency levels implemented since the onset of the pandemic. As a result, March variable expenses declined by 70% on total revenue declines of only 62% compared to March 2019. Most of the resulting savings were due to cross utilizing hotel employees across various job functions. For the first quarter, variable expenses declined by 74% on total revenue declines of 70% compared to the first quarter of 2019. In future quarters, we expect staffing and other controllable costs to adjust to more normalized levels as demand continues to grow. Fixed expenses were 41% lower than the first quarter of 2019. This is a remarkable achievement considering that nearly 20% of the remaining fixed costs are below GOP and consists mainly of expenses such as property taxes and insurance, which don't change with business volumes. As part of our goal to redefine the operating model, both Hyatt and Marriott have restructured a number of above property shared service and allocated costs, which were historically completely fixed. Additionally, we have worked with the brands to achieve greater flexibility to opt-in to shared services on an as-needed basis, further reducing our fixed costs. Last quarter, we introduced the expense reduction ratio to measure the change in property level expenses against the change in total revenue over a comparable pro forma time period in 2019. The expense reduction ratio in the second through fourth quarters of 2020 was fairly stable at 0.8. That is, for every 10% decline in hotel revenue, hotel expenses declined 8%. In the first quarter, our expense reduction ratio came in at 0.84, much higher than the 0.65 to 0.7 that we expected on our last call for full year 2021. And the highest achieved at any point during the recovery. The outsized expense reduction ratio, combined with ADR being down only 9% to the first quarter of 2019, enabled our portfolio to achieve positive hotel level EBITDA at 26.6% occupancy, much better than our previously estimated breakeven range of 35% to 45% with ADRs down 15% to 30% compared to 2019. Positive hotel EBITDA for the quarter resulted in positive adjusted EBITDAre for the quarter for the first time since the onset of the pandemic. 30 hotels representing 30% of total rooms within our portfolio, achieved breakeven or positive hotel EBITDA for the full first quarter. 38 hotels representing 42% of rooms, achieved positive hotel EBITDA in March. March saw additional hotels achieved positive EBITDA in Atlanta, our Texas markets San Diego and L.A. as well as Philadelphia and Hawaii. In fact, all 4 of our Hawaii hotels achieved breakeven of positive hotel EBITDA in March. As I just mentioned in the first quarter, revenue came back quicker than expenses, which did grow commensurately, particularly in March. Going forward, our operators are expected to increase staffing and controllable spending more in line with higher levels of demand. In addition, other departmental and support expenses, such as sales and marketing as well as maintenance and other support costs will lead to ramp up relative to the first quarter, while remaining well below 2019 levels. Therefore, on a full year basis, we continue to expect the expense reduction ratio to be closer to 0.7. Shifting to our top line outlook. While we are not providing guidance at this time, I would like to share how we are thinking about our top line trajectory for the rest of the year. We expect RevPAR to continue increasing sequentially throughout the year, but we expect growth to be driven by occupancy in the second and third quarters. We think rates could sequentially decline as we move out of peak season in some of our higher-rated leisure markets. Seasonality in tandem with a normal demand shift toward lower-rated markets could also lead to lower rates in the second and third quarters as we have seen historically. Additionally, rates could come under pressure as suspended hotels reopen in urban markets. Moving to business mix. We think business transient will continue to make slow and steady progress during the year. With the anticipated return to office late in the third quarter, driving a ramp-up in business transient demand after Labor Day. While we have benefited from nontraditional group demand during the pandemic, we expect traditional groups, corporate and associations to begin ramping up meaningfully in the fourth quarter following the expected return to office after Labor Day. Finally, we believe leisure will continue driving total RevPAR at our properties particularly through the summer. We expect our urban hotels to increasingly benefit from leisure demand growth as restrictions in those markets continue to lift and key demand drivers we open. As it relates to cash burn for the quarter, our cash burn, excluding capital expenditures, which deducts corporate level expenses and interest payments decreased to $45 million or $138 million, including CapEx. These amounts are down meaningfully from the fourth quarter of 2020, driven by the strong first quarter operating performance. We maintained a strong liquidity position with $1.5 billion of cash, including $131 million of FF&E reserves after adjusting for the Four Seasons Disney Acquisition announced today. And we have no debt maturities until 2023. There is 1 accounting item I would like to bring to your attention. Neither we nor our operators expect any furlough accruals, employee retention credits or timing adjustments for these items moving forward as COBRA benefits provided in accordance with the American Rescue plan from April 1st to September 30, of 3 to the furlough associates of our operators and are fully reimbursable for our operators via a credit against their quarterly payroll tax liability. Therefore, there is ultimately no cost to the company for providing COBRA benefits and it will not have any P&L impact through the third quarter of this year. To conclude, we are very encouraged by the momentum of the lodging recovery, which has driven better-than-expected sequential revenue growth and resulted in positive first quarter hotel EBITDA and adjusted EBITDAre. We are seeing increased demand across all parts of our business, alongside strong rate integrity. We view an expected increase in expenses favorably, too, as that indicates business volumes are ramping back up to normal levels. Combining that with a strong balance sheet and a focus on our 3 strategic objectives: redefining the operating model, gaining market share at our renovated hotels and strategically allocating capital. We believe we are well positioned to deliver best-in-class EBITDA growth that we expect will continue to be further augmented by external growth opportunities throughout this lodging cycle. And with that, we will be happy to take any questions. To ensure we have time to address questions from as many of you as possible, please limit yourself to one question. Operator: . Our first question is coming from Bill Crow of Raymond James. William Crow: Jim, I hesitate to congratulate anybody given the state of the industry, but congratulations. It was much better-than-expected quarter. I wanted to ask you a question about acquisitions. It just -- it feels like 3 months ago, 4 months ago, the bid-ask spread on deals was fairly significant, and there wasn't a lot of movement. And it seems like that bid-ask spread has narrowed dramatically. And it's not the seller that's moving down. Is that the right way to think about what's going on with the transaction market? Is it -- the buyers have gotten much more aggressive, maybe much more confident in the outlook? James Risoleo: Yes, Bill, well, thank you for the congratulations. Even though we have a ways to go to get back to 2019 levels of RevPAR and EBITDA and exceed those levels. We really like the trajectory that we're on at this point in time. So I will take the congratulations in a tough environment. With respect to acquisitions, I think we all agreed that, let's call it a year ago, we believe that there was going to be a lot of distress in the marketplace. And I would point to our Hyatt Regency Austin acquisition as an asset that was under distress. The ownership, the borrower in that deal was staring down a UCC foreclosure action that was going to occur at the beginning of April, as you know, we bought the hotel in mid-March or thereabouts. And saved that borrower and paid off all of the debt associated with the hotel and acquired a really good asset at a significant discount to pre-COVID evaluations. I think that a couple of things are happening now. There is a lot of equity in the marketplace, chasing deals. Good deals are going to price at close to where they would have priced in 2019. There's no question about it. Solid resorts like the Four Seasons Disney, which are truly iconic and irreplaceable assets. Are going to be fully fairly priced. I am not seeing generally a lot of distress in the marketplace today, particularly for the better quality assets. And we are not really seeing a lot of distress across the system right now. So I do think that there is a lot of capital out there. I think as you compete more in auction processes, pricing is going to going to be aggressive. However, we're coming out of the worst downturn that we've ever experienced in the lodging industry and the pandemic induced recession in the United States as well, we're turning the corner, and we are firm believers that for the right assets at this stage of the cycle, it's the time to acquire. It's a time to continue to shape the quality of the portfolio that we have. We were fortunate that coming into 2020 on a number of different metrics, the company had never been in better shape. We talk a lot about the balance sheet and the firepower that, that's given us to deploy $800 million of capital today. What we don't talk about a lot, but I think it's really important that investors understand it is our RevPAR metrics as of January 1, 2020, and our EBITDA per key performance as well as the fact that over the last several years, over the last 5 years, we have consistently tightened up margins year-over-year. We had margin improvement going forward. So we are just delighted with where we are. And we hope that we're going to have the opportunity to acquire additional assets early in this cycle so that we can ride the economic wave. Operator: Our next question is coming from Robin Farley of UBS. Robin Farley: A question on a similar; topic, which is just looking at how asset values have been, as you said, a lot of capital out there. Does that change your expectation about whether you would use? I think you said you have $1.5 billion still remaining for acquisitions, whether you would actually be able to use that budget here in the next 12 months? And then just a little sort of side question. I'm curious with the Four Seasons Orlando, you talked about a lot of the acreage there. Is there opportunity to add anything there given it's special location, kind of the only thing not Disney owned, where you can kind of monetize that acreage? Or are there limits on what else you might be able to add to that acreage? James Risoleo: Sure, Robin. With respect to deploying the remaining capital that we have, the cash that's on the balance sheet obviously, we have some restrictions in connection with our bank waiver agreement today. We're looking forward to the time whenever we're going to come out of that the waiver amendment as operations improve, we're hoping that's going to be sooner rather than later. It's very difficult to hypothetically answer the question of whether or not we're going to be investing additional capital because it's really transaction specific, and we are evaluating a number of opportunities now, we've evaluated a number of opportunities over the course of this year that we've let out because we didn't think they were the right fit for host for 1 reason or another. So we have teams that are back on the road. I'm back on the road looking at assets. We have people on the road today as we speak, looking at assets, and we're hopeful that we're going to be able to get some additional capital smartly deployed. With respect to the Four Seasons Orlando, the resort sits on roughly 289 acres. And the short answer is that on the acreage that we have today, we do not see a current opportunity to redevelop any of that property. It includes it's -- if you haven't seen this property, I encourage you to look on the website or better yet, go visit it because it is really a fantastic, truly iconic and irreplaceable asset. It has an 18 hole golf course, it has 444 rooms, 55,000 square feet of meeting space, a 13,000 square foot spa, it has a 5-acre water park and tennis courts and 6 food and beverage outlets. So while the 289-acre sounds like a lot of acreage, it is being fully utilized today in a very, very efficient and a very useful manner. Operator: Our next question is coming from Neil Malkin of Capital One Securities. Neil Malkin: And great quarter. I'm slow clapping for you over here. My question is on the group side. I think that's sort of the big mystery here, the biggest unknown. I think everything else is well understood, and leisure is going to be fantastic for you guys. Just, Jim, if you could -- sorry, if you could put some color or maybe what you're underwriting for this year, in terms of group, I think in the first quarter, you were at about, I don't know, 20% or 25% of '19 levels for group. How do you see that shaping up maybe over the -- through '22? And more specifically, what are you underwriting for the fourth quarter of this year? You said things are coming back or you're more bullish on that quarter. I mean, can you kind of just benchmark or couch what you see as the performance relative to '19 in the fourth quarter and more specifically into '22 as well? James Risoleo: Sure. I'll start, and maybe I can pass Sourav chime in as well. For the second half of 2021 we have 1 million room nights on the books. And we have, at our Marriott managed properties, we booked 144,000 new room nights this year for 2Q for the second quarter through the fourth quarter of the year. Of those 144,000 new room nights, about 70% of those were for the second half of the year. So that 1 million room nights that we have on the books for the second half of 2021 equates to 50% of the room nights we had in 2019, same time in 2019. So the split between the bookings is really leaning fourth quarter a little bit, not a lot, call it, 54% in the fourth quarter. And the other thing I'd like to add is that we have a high degree of confidence that those groups are going to show up because our managers have just scrubbed all the bookings and to make certain that people aren't just hanging in there are going to cancel at some point in time. So it's not great, but it's good. The fact that 1 million room nights are still there and holding up is encouraging. As we look out to 2022, it is -- we have what about 2 million room nights on the books in 2022 Sourav, I think, something like that? And it is very dependent at this point in time on when restrictions are going to be lifted in key markets. To just put some back around it, some of the markets in Chicago, I think, just announced yesterday, when they're going to reopen. California is expecting to fully reopen on June 15, Boston, August 1, New York, July 1. And I think that as markets reopen, that's the first thing that has to happen. But more importantly, what has to happen for the business transient traveler to return. And the -- in groups to start booking into next year in a more meaningful way is we have to continue to get the pace of vaccines out there, get to herd immunity in the country and very importantly, get our children back-to-school. And I think that we're hopeful that, that's all going to happen comes to September. I don't know, Sourav, do you have anything you want to add on this point? Sourav Ghosh: The only thing I would add is in terms of booking activity. So our properties booked 440,000 room nights for the next 3 years. So that's '22 through '24 and to put that into perspective, that's 17% better than 2019 levels. So we're certainly encouraged by the booking activity that's taking place and hope that continues as we go into the second and third quarters for future years as well. Operator: Our next question is coming from Thomas Allen of Morgan Stanley. Thomas Allen: On the Four Seasons Orlando acquisition, having stayed there, I'll agree that a really special property. Just can you talk a little bit more about where you see opportunities? Like do you see the opportunity to make changes to that property to grow EBITDA longer term? And you bought it at a 4.7% 2019 cap rate or 16.8x EBITDA multiple. Do you have a view on where stabilized returns will be? James Risoleo: Sure, Thomas. We do have a view, obviously, in our underwriting. We put a lot of thought into it as we do in every acquisition. Let me start by saying that this is the type of hotel that we have a lot of experience with and that we have in the past, delivered a lot of value to our shareholders through our asset management and enterprise analytics capabilities. As we look at this property out of the box is profitable as we speak. And we're optimistic that the performance of the asset is going to exceed our underwriting expectations for 2021, for sure, the way it's going. There are a lot of things Sourav and I will kind of tag team this a little bit in a moment. But as we look at what's happening in Disney and in the country, we're very optimistic that we're going to see strong performance of this hotel going forward. We believe that this property is in a position to perform better from an EBITDA growth profile than the rest of our portfolio and to recover to 2019 levels of EBITDA and beyond sooner than the rest of our portfolio does. Additionally, and I'll let Sourav put some color on this, we feel that the asset has multiple asset management opportunities to advance margin and operational improvement. One other point I'd like to make is that October 1 this year is the 50th anniversary of Disney World of the Magic Kingdom and Disney is planning an 18-month celebration, starting October 1. So we expect that we're going to see incredible demand flowing to this hotel. One of the things that we looked at is the performance of ultra luxury assets. And if you look at ultra luxury assets over the last 20 years from 1990 to 2019. And those are defined as hotels with a RevPAR of $500 or greater. The CAGR was 6.2%. And if you look at the top 25 markets over that time frame, the CAGR was 3.2%. So we think that there is incredible demand out there for this. The resort is becoming a destination onto itself, not only a destination for people who want to stay at Disney, but a vacation destination given the amenities that are on property. I've heard from some people that they take their family to stay at the Four Seasons and the kids only want to go to Magic Kingdom. So all good stuff as we see it going forward. And I'll let Sourav talk a little bit about some of the things we're looking at. Sourav Ghosh: Yes. So we -- like with any acquisition, we have the best practice to pay book that we will share with the property and then work collaboratively with the management team to implement those best practices. For example, we have a best-in-class functional space management strategy to maximize revenue per available space. The meeting space that exists on property. We've obviously done a lot with our existing luxury resorts in Florida as well as across our portfolio. Additionally, given that this is a resort and it has a ton of ancillary income as well, it's going to be all about maximizing total RevPAR, which we have again successfully done in implementing it, whether it's the 1 South Beach one of our recent acquisitions or it's Naples in Florida as well. So a lot will be -- a lot of focus on total RevPAR and driving ancillary income. We will also work -- and the Four Seasons actually has a very experienced management team, work with them to identify any operating model opportunities as we have successfully again done across our luxury resorts and implement them as soon as possible. So we look forward to working with the team. The other piece is, obviously, we're evaluating multiple ROI opportunities, particularly as it relates to food and beverage. Which we are excited to move forward on as well. Operator: Our next question is coming from Smedes Rose of Citi. Smedes Rose: I just wanted to -- first, I just wanted to clarify something. Did you say you have 2 million group room nights on the books now for 2022? James Risoleo: Correct. Smedes. Yes. Smedes Rose: Okay. Is that running at about 1/3 of what you would have done in 2019? Or is it running at a higher pace? I'm just trying to get a sense of what potential upside be there. James Risoleo: Yes. Sourav Ghosh: Yes. Sure, Smedes. Relative to '19, when you think about it at this point in time, we would have about 60% on the books for the following year. We have approximately 45% on the books for 2022. Smedes Rose: Okay. Okay. And then I just wanted to ask you, you mentioned the $100 million to $150 million in cost savings. And you've talked a lot about just being more efficient at the property level in order to achieve some of those savings. But has there been any more thought, I guess, coming out of the brands around the way that housekeeping will be execute going forward? And is that another potential opportunity for significant savings? Or would you not expect to see any kind of meaningful changes in that cost item? Sourav Ghosh: It is certainly an ongoing dialogue, and it is going to be on a case-by-case basis, as you can imagine, at resort properties, it's going to be somewhat different than with urban hotels. And also business mix is also very dependent. So it's something that we are constantly -- we are having conversations with our managers to see how that brand standard will evolve as we get into more stabilized operations. So it's a continuing dialogue, and it definitely is going to be on a market-by-market basis. But there certainly is opportunity to modify housekeeping relative to what it was pre-pandemic. Operator: Our next question is coming from Lukas Hartwich of Green Street. Lukas Hartwich: Can you talk a little bit more about the long-term optionality with the 300 acres acquired in Maui? James Risoleo: Sure, Lukas. Again, $95,000 an acre currently being utilized for 2 golf courses, and a couple of restaurants on that site. It's immediately adjacent to the Hyatt Regency Maui, an asset that we have just completely repositioned. It was a -- one of the assets that was under a multiyear repositioning program and when COVID hit, we were able to go back to our general contractor and renegotiate the contract is to give you context and accelerate the renovation and repositioning of that asset. So it was completed in November of last year as opposed to a year later, plus or minus. We see opportunities going forward, subject to zoning and doing a additional development in Maui takes time. There's a long process, but that we have experience with that, given what we were able to do at the Andaz with the addition of our Villa units. And there are opportunities on that land to add rooms to the existing hotel to build another hotel to build a select serve hotel. As we think about it, and use the petition as the Blue -- Play bulk and Blueprint, where we took 27 holes of golf and shrunk it to 18 holes those are things that we're going to think about going forward in Maui. Operator: Our next question is coming from Chris Woronka of Deutsche Bank. Chris Woronka: I think back in the prepared comments, you mentioned that as part of the long-term EBITDA improvement plan, you're looking at $21 million to $35 million coming from 3 to 5 points of index growth at some of your recently renovated Marriott Hotels. Can you kind of give us a sense as for -- is that 3 to 5 points of index growth relative to 2019 or pre renovation? And just where do you think that lift comes from? Is it from other Marriott properties in the market? Or is it from other brands? Just any additional details that you can give us on that would be terrific. James Risoleo: Yes. It is 3 to 5 points of yield index growth relative to where the asset was performing pre renovation. And the assets that we're talking about are not only the 16 Marriott transformational capital program assets but other assets where we invested ROI money such as the doses are and what we're going to be doing at the Ritz and Naples and other hotels across the portfolio. Where does it come from? It's tough to say, Chris. We think that in the middle of the pandemic, the 1 asset that we can point to that has really captured a lot of incremental market share is the Coronado Island, Resort & Spa in San Diego. I think the yield index gain for well over 9 points at that hotel. So it's going to be case by case, and I don't want to promise anything, but as we are putting money in our hotels and renovating our properties and repositioning them, we're going to have a distinct advantage as business gets back to normal. And I personally believe that we should be able to achieved more than 3 to 5 points of yield index growth because we're going to be competing with hotels that haven't been renovated that are going to have to be renovated going forward. And there's going to be incremental disruption associated with those renovations. When they do occur, and it's going to have to happen or we're just going to be competing with a tired property. So we are very fortunate to have had the ability to continue to invest in our assets over the course of 2020, and we're doing the same thing this year going forward. Operator: Our next question is coming from Aryeh Klein of BMO Capital Markets. Aryeh Klein: ADR resorts have been incredibly strong through pandemic. Do you view this as the new normal and a run rate maybe moving forward? I guess when you look ahead over next year or two, can this be sustainable and that we build-off of this year? James Risoleo: Yes. I don't know that it's going to be sustainable, Aryeh. I think that this year, was a unique point in time with businesses closed and people working from home and people being in a position where they can work from anywhere as children get back into schools and as offices open, I think we're going to see a return of business transient traveler and return of group business, and we are just very fortunate that our resort portfolio and our assets in the Sunbelt have carried us through in a material way. We never thought that we would be profitable in the first quarter. We had 30 hotels that were profitable for the entire quarter. And I don't know that we talked about this before, but we had 38 hotels 42% of our rooms that were profitable for the month of March. So do we think that we're going to continue to see this outsized performance? I think for a -- for the near term, the answer is yes. And when I say near term, we're talking about another year or so because there's so much pent-up demand out there is so much money in savings. There is $6 trillion that individuals have in their bank accounts today, they want to spend it. For sure, they want experiences. They're happy to get on the airplane and go. One of the other interesting data points that we look at is air capacity. And surprisingly, for Maui, our 3 resorts, I gave you some numbers on how they're trending for June and July, which I don't think anybody would have believed that sitting here a year ago, that we'd be seeing 80% to 90% occupancy at an ADR up 28% and our 3 resorts on Maui. It's the only market in the country the only air mark in the country being Maui, that has more capacity right now than it did in 2019. Air capacity from Maui is up 4%. So for the near term, I think you're going to see incredible pent-up demand, replenished travel, we are seeing it. That's going to continue. But is it sustainable over the next 3 to 5 years? It's hard to say, but I doubt it. At that point in time, we are really going to be able to compress rates as we have group business and business transient business back in the hotels. Operator: We're showing time for one last question. Our last question will be coming from Anthony Powell of Barclays. Anthony Powell: You talked a lot about the strength in ultra luxury properties over the past several years that cycle. So that shift -- that signal a shift for you to focus more on those properties and buying more of those over the cycle? Or would you prefer or even try to do more deals like the Austin property, which is more of a discounted group convention hotel in a kind of a growing market? James Risoleo: Anthony, I think that we are very open-minded to investing in both types of assets. We're comfortable with a hotel like Austin that puts the profile of assets that we own today that we know how to effectively asset manage as I've talked earlier on this call, we're very comfortable with an asset like the Four Seasons Orlando. And it really comes down to what I said in my prepared remarks. Regarding improving the EBITDA growth profile of the company. So that's where you're going to see us putting capital into assets where we feel that we can improve the overall EBITDA growth profile. As I mentioned on our fourth quarter call, we're prepared to look beyond the top 25 markets. We did that with Austin. We're continuing to do that today. The demographic trends are changing in this nation. And a lot of people and a lot of businesses are relocating to cities in Sunbelt states, and we're going to follow the demand. So I think you can expect to see us invest in a Marriott array of properties so long as they're all going to approve the overall growth profile of host. Operator: Thank you. Ladies and gentlemen, this concludes the question-and-answer session. At this time, I'd like to turn the floor back over to Mr. Risoleo for closing comments. James Risoleo: Well, everyone, thank you for joining us on the call today. We really appreciate the opportunity to discuss our first quarter results with you. I look forward to talking with many of you over the coming weeks and at NAREIT in June. And at REIT World in person at the Wind hotel in November. Just ask -- I'm going to ask you to just do a couple of things. If you haven't gotten vaccinated, please get vaccinated. Enjoy your summer travels and go out and visit some of our hotels. Lastly, be well and stay healthy. Thank you very much. Operator: Ladies and gentlemen, thank you for your interest in Host Hotels & Resorts. You may disconnect your lines at this time, and have a wonderful day.HST Ratings Summary
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Host Hotels & Resorts Initiated With Perform Rating at Oppenheimer
Oppenheimer analysts initiated coverage on Host Hotels & Resorts, Inc. (NASDAQ:HST) with perform rating and a $21 price target, noting they like the company's strong balance sheet and multiple strategies to elevate the growth trajectory of the portfolio.
However, the analysts believe the ownership of full-service hotels could leave the company exposed to wage pressures and challenges relating to hiring employees.
The analysts also think the company’s strong portfolio performance should slow in the future. Recent gains have been driven by outsized ADR growth at several resort hotels, something that should reverse in the future. The analysts believe this normalization process could weigh on sentiment toward the stock.
Host Hotels & Resorts Initiated With Perform Rating at Oppenheimer
Oppenheimer analysts initiated coverage on Host Hotels & Resorts, Inc. (NASDAQ:HST) with perform rating and a $21 price target, noting they like the company's strong balance sheet and multiple strategies to elevate the growth trajectory of the portfolio.
However, the analysts believe the ownership of full-service hotels could leave the company exposed to wage pressures and challenges relating to hiring employees.
The analysts also think the company’s strong portfolio performance should slow in the future. Recent gains have been driven by outsized ADR growth at several resort hotels, something that should reverse in the future. The analysts believe this normalization process could weigh on sentiment toward the stock.
