Financial Data and Key Metrics Changes - In Q3 2025, adjusted EBITDAre was $319 million, a decrease of 3.3% year-over-year, while adjusted FFO per share was $0.35, down 2.8% compared to Q3 2024 [4][5] - Year-to-date, adjusted EBITDAre and adjusted FFO per share increased by 2.2% and 60 basis points, respectively, compared to 2024 [4] - Comparable hotel total RevPAR improved by 80 basis points compared to Q3 2024, driven by better-than-expected transient demand and higher rates [5][6] Business Line Data and Key Metrics Changes - Comparable hotel EBITDA margin declined by 50 basis points year-over-year to 23.9%, primarily due to increased wages and benefits [5][24] - Transient revenue grew by 2%, with double-digit growth at resort properties, particularly in Maui, San Francisco, New York, and Miami [6][21] - Group room revenue decreased approximately 5% year-over-year, attributed to renovation disruptions and the Jewish holiday calendar shift [7][22] Market Data and Key Metrics Changes - Maui experienced a 20% RevPAR growth, driven by increased occupancy and strong out-of-room spending [6][7] - Total group revenue pace in Maui is up 13% for 2026, indicating continued recovery momentum [7] - San Francisco's total group revenue pace for 2026 is up over 20%, with group rate pacing up 10% [56] Company Strategy and Development Direction - The company is focusing on capital allocation decisions that enhance long-term shareholder value, including transformational renovations and strategic asset sales [10][11] - A second agreement with Marriott for transformational renovations at four properties is expected to enhance long-term performance [11] - The company aims to leverage its investment-grade balance sheet and diversified portfolio to outperform in the current environment [16][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued recovery of leisure travel and the affluent consumer's prioritization of premium experiences [58] - The company raised its full-year 2025 guidance for comparable hotel RevPAR and total RevPAR to approximately 3% and 3.4%, respectively, reflecting strong performance [15][24] - Management noted that the bifurcation of the consumer market is likely to benefit upper-upscale and luxury hotels [16] Other Important Information - The company collected $5 million in business interruption proceeds for Hurricanes Helene and Milton, totaling $24 million for the year [9] - Capital expenditure guidance for 2025 is set at $605-$640 million, including significant investments for redevelopment and repositioning projects [13][26] - The company has a strong liquidity position with $2.2 billion available, facilitating strategic capital allocation decisions [27] Q&A Session Summary Question: Can we expect more asset trading in the market based on current performance? - Management indicated they will be opportunistic with capital allocation regarding dispositions and acquisitions, highlighting successful asset sales this year [33][34] Question: How are you selecting hotels and markets for investment? - The company screens assets to determine capital allocation, focusing on transformational renovations that reposition properties for better performance [42][44] Question: What are the expectations for group booking pace in 2026? - Group revenue pace for 2026 is up 5%, with strong performance expected in key markets like San Francisco and Maui [49][56] Question: How is the company managing wage and benefits increases? - Wage rate growth is expected to be lower in 2026, with New York being the only major market with upcoming labor contract negotiations [82] Question: What are the tailwinds for growth potential in 2026? - The absence of major storms on the Gulf Coast and strong performance from properties like The Don CeSar are expected to contribute positively to growth [88][90]

Financial Data and Key Metrics Changes - Adjusted EBITDAre for Q3 2025 was $319 million, a decrease of 3.3% year-over-year, while adjusted FFO per share was $0.35, down 2.8% compared to Q3 2024 [4] - Year-to-date, adjusted EBITDAre and adjusted FFO per share were up 2.2% and 60 basis points, respectively, compared to 2024 [4] - Comparable hotel total RevPAR improved by 80 basis points compared to Q3 2024, driven by better-than-expected transient demand and higher rates [5] Business Line Data and Key Metrics Changes - Comparable hotel EBITDA margin for Q3 declined by 50 basis points year-over-year to 23.9%, primarily due to increased expenses in wages and benefits [5][23] - Transient revenue grew by 2%, with double-digit growth at resort properties, particularly in Maui, San Francisco, New York, and Miami [5][20] - F&B revenue was flat, with outlet revenue growth offset by declines in banquet and catering revenue [18] Market Data and Key Metrics Changes - Maui experienced a 20% RevPAR growth driven by increased occupancy and strong out-of-room spending [6] - Business transient revenue was down 2% in Q3, primarily due to a reduction in government room nights [21] - Total group revenue pace for 2026 is up 13% for Maui, indicating continued recovery momentum [6][41] Company Strategy and Development Direction - The company is focusing on capital allocation decisions that enhance long-term shareholder value, including transformational renovations and strategic asset sales [30][32] - A second agreement with Marriott for transformational renovations at four properties is expected to enhance long-term performance [11] - The company anticipates continued outperformance in upper-upscale and luxury hotels due to its diversified portfolio and ongoing reinvestment [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of leisure travel and the affluent consumer's prioritization of premium experiences [47] - The company raised its full-year 2025 guidance for comparable hotel RevPAR and total RevPAR to approximately 3% and 3.4%, respectively, reflecting strong performance [16][24] - Management noted that the bifurcation of the consumer market is likely to benefit the company due to its higher-end properties [17] Other Important Information - The company collected $5 million in business interruption proceeds for Hurricanes Helene and Milton, totaling $24 million for the year [9] - Capital expenditure guidance for 2025 is set at $605-$640 million, including significant investments for redevelopment and repositioning projects [13] - The company has a strong balance sheet with $2.2 billion in total available liquidity and a leverage ratio of 2.8 times [26] Q&A Session Summary Question: Can we expect more asset trading in the market based on current observations? - Management indicated they will be opportunistic with capital allocation regarding dispositions and acquisitions, highlighting successful asset sales this year [30] Question: How are you selecting hotels and markets for investment? - The company screens assets to determine where to invest capital, focusing on transformational renovations that provide clear returns [35] Question: What is the outlook for group bookings in 2026? - Group revenue pace for 2026 is up 5%, with strong performance expected in key markets like San Francisco and Washington, D.C. [46] Question: What is driving the growth in out-of-room spending? - Increased spending on amenities such as spa and golf, along with successful repositioning of outlets, is driving growth in out-of-room spending [50] Question: What are the expectations for wage and benefits increases in 2026? - Wage rate growth is expected to be lower in 2026, with New York being the only major market with upcoming labor contract negotiations [57]

Core Viewpoint - Host Hotels & Resorts, Inc. (HST) is the largest lodging REIT, valued at $11.3 billion, and is set to announce its fiscal third-quarter earnings for 2025 on November 5, 2025 [1] Financial Performance - Analysts expect HST to report a Funds From Operations (FFO) of $0.33 per share for Q3 2025, which is an 8.3% decrease from $0.36 per share in the same quarter last year [2] - For the full year, HST is projected to report an FFO per share of $2.01, reflecting a 2% increase from $1.97 in fiscal 2024, but a decline of 2.5% year over year to $1.96 per share is anticipated in fiscal 2026 [3] Stock Performance - HST stock has underperformed the S&P 500 Index, which gained 15.1% over the past 52 weeks, with HST shares down 5.6% during the same period [4] - The stock also underperformed the Real Estate Select Sector SPDR Fund, which saw a 3.4% decline [4] Challenges - HST faces challenges from rising costs, economic uncertainty, inflation, and a slower-than-expected recovery in business and group travel demand, which may limit near-term growth and stock price gains [5] Recent Results - In Q2, HST reported an adjusted FFO per share of $0.58, exceeding Wall Street's expectation of $0.51, with revenue of $1.6 billion, surpassing the forecast of $1.5 billion [6] Analyst Ratings - The consensus opinion on HST stock is moderately bullish, with a "Moderate Buy" rating overall; out of 18 analysts, eight recommend a "Strong Buy," one a "Moderate Buy," and nine a "Hold" [7] - HST's average analyst price target is $18.58, indicating a potential upside of 11.6% from current levels [7]