Host Hotels & Resorts Provides Update on Third Quarter 2020 Business Trends
September 15 2020 - 4:30PM
Host Hotels & Resorts, Inc. (NYSE: HST) (the “Company”),
the nation’s largest lodging real estate investment trust (“REIT”),
today provided an update on its hotel operations, including its
preliminary top-line results for July and August 2020.1
Update on Third Quarter 2020 Business
Trends
The following presents the monthly hotel
operating results for the full portfolio and for the hotels without
suspended operations during the periods presented:
|
Total Portfolio |
|
|
Open Hotels2 |
|
|
|
July |
|
Aug |
|
|
|
July |
|
Aug |
|
Number of hotels |
|
|
|
80 |
|
|
|
80 |
|
|
|
|
|
57 |
|
|
|
66 |
|
Number of rooms |
|
|
|
46,670 |
|
|
|
46,674 |
|
|
|
|
|
32,478 |
|
|
|
38,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Occupancy
Percentage |
|
|
|
12.9 |
% |
|
|
18.9 |
% |
|
|
|
|
17.9 |
% |
|
|
22.0 |
% |
Average Room Rate |
|
|
$ |
177.76 |
|
|
$ |
162.50 |
|
|
|
|
$ |
178.56 |
|
|
$ |
163.41 |
|
RevPAR |
|
|
$ |
22.94 |
|
|
$ |
30.67 |
|
|
|
|
$ |
32.02 |
|
|
$ |
35.88 |
|
RevPAR Year over Year Percent
Change |
|
|
|
(87.9 |
%) |
|
|
(82.6 |
%) |
|
|
|
|
(82.5 |
%) |
|
|
(78.5 |
%) |
Total RevPAR |
|
|
$ |
35.29 |
|
|
$ |
46.81 |
|
|
|
|
$ |
48.61 |
|
|
$ |
54.71 |
|
Total RevPAR Year over Year
Percent Change |
|
|
|
(87.5 |
%) |
|
|
(82.1 |
%) |
|
|
|
|
(82.0 |
%) |
|
|
(78.0 |
%) |
Total Revenue (in
millions) |
|
|
$ |
52 |
|
|
$ |
69 |
|
|
|
|
|
|
|
|
|
|
|
Highlights:
- Reopened a total of 19 hotels in July and August and is
currently operating with 70 of its 80 consolidated hotels open, or
88% of total room count, with no plans to open additional hotels in
September
- Improved RevPAR by 10.4% in July and 33.7% in August, on a
month-over-month basis, primarily due to average occupancy gains
driven by an increase in leisure demand
- Improved total portfolio average occupancy by 220 basis points
to 12.9% in July and by 600 basis points to 18.9% in August, on a
month-over-month basis
- Expects to incur $60 to $70 million of severance expenses in
the second half of the year due to its hotel operators executing
permanent property-level staff reductions
- Expects to accrue approximately $22 to $24 million of fourth
quarter furlough related healthcare benefits in the third
quarter
- Issued $750 million of 3.5% Senior notes due 2030 and purchased
81% of $450 million principal amount of 4.750% Series C
senior notes due 2023, thereby extending the Company’s weighted
average debt maturity, maintaining its weighted average interest
rate and further augmenting its cash position by $335 million
- Expects to end 2020 with approximately $2.2 billion of total
available liquidity, assuming a continuation of second quarter
operational performance for the second half of the year
James F. Risoleo, President and Chief Executive
Officer, said, “We remain focused on using the current environment
as an opportunity to redefine our operating model in a way that
strengthens our business and positions Host for the long term. We
are working with our operators to drive occupancy and increase
revenues, reduce costs without impacting the guest experience, and
generate higher levels of profitability at lower levels of
occupancy. We are confident the steps we are taking will drive
value for Host and our stakeholders through the recovery and
beyond.”
Bank of America Merrill Lynch 2020 Global Real Estate
Virtual Conference
Host will participate at the Bank of America Merrill Lynch
Global Real Estate 2020 Virtual Conference on Wednesday, September
16, 2020.
Updated Investor Presentation
For additional information on business performance, including
preliminary July and August top-line results, please refer to the
September 2020 investor presentation located in the investor
section of the Company’s website (www.hosthotels.com).
________________________________
1 July and August 2020 numbers are preliminary, unaudited and
are inherently uncertain and subject to change as the Company
completes its financial statements for the quarter.
2 Represents the hotels that were accepting
reservations during the entirety of the month. Excludes the 23, and
14 hotels with suspended operations in the months of July and
August, respectively.
Note: This press release contains
forward-looking statements within the meaning of federal securities
regulations. These forward-looking statements are identified by
their use of terms and phrases such as “anticipate,” “believe,”
“could,” “estimate,” “expect,” “intend,” “may,” “should,” “plan,”
“predict,” “project,” “will,” “continue” and other similar terms
and phrases, including references to assumptions and forecasts of
future results. Forward-looking statements are not guarantees of
future performance and involve known and unknown risks,
uncertainties and other factors which may cause the actual results
to differ materially from those anticipated at the time the
forward-looking statements are made. These risks include, but are
not limited to: the duration and scope of the COVID-19 pandemic and
its short and longer-term impact on the demand for travel,
transient and group business, and levels of consumer confidence;
actions governments, businesses and individuals take in response to
the pandemic, including limiting or banning travel; the impact of
the pandemic and actions taken in response to the pandemic on
global and regional economies, travel, and economic activity,
including the duration and magnitude of its impact on unemployment
rates, business investment and consumer discretionary spending; the
pace of recovery when the COVID-19 pandemic subsides; general
economic uncertainty in U.S. markets where we own hotels
and a worsening of economic conditions or low levels of economic
growth in these markets; the effects of steps we and our hotel
managers take to reduce operating costs in response to the COVID-19
pandemic; our ability to close this Offering and apply the proceeds
as currently intended; our ability to use or allocate the net
proceeds from this Offering to eligible green projects that will
satisfy, or continue to satisfy, investor criteria and expectations
regarding environmental impact and sustainability performance;
other changes (apart from the COVID-19 pandemic) in national and
local economic and business conditions and other factors such as
natural disasters and weather that will affect occupancy rates at
our hotels and the demand for hotel products and services; the
impact of geopolitical developments outside the U.S. on
lodging demand; volatility in global financial and credit markets;
operating risks associated with the hotel business; risks and
limitations in our operating flexibility associated with the level
of our indebtedness and our ability to meet covenants in our debt
agreements; risks associated with our relationships with property
managers and joint venture partners; our ability to maintain our
properties in a first-class manner, including meeting capital
expenditure requirements; the effects of hotel renovations on our
hotel occupancy and financial results; our ability to compete
effectively in areas such as access, location, quality of
accommodations and room rate structures; risks associated with our
ability to complete acquisitions and dispositions and develop new
properties and the risks that acquisitions and new developments may
not perform in accordance with our expectations; our ability to
continue to satisfy complex rules in order for us to remain a real
estate investment trust for federal income tax purposes; risks
associated with our ability to effectuate our dividend policy,
including factors such as operating results and the economic
outlook influencing our board’s decision whether to pay further
dividends at levels previously disclosed or to use available cash
to make special dividends; and other risks and uncertainties
associated with our business described in the Company’s annual
report on Form 10-K, quarterly reports on Form 10-Q and current
reports on Form 8-K filed with the SEC. Although the Company
believes the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, it can give no
assurance that the expectations will be attained or that any
deviation will not be material. All information in this release is
as of the date of this release and the Company undertakes no
obligation to update any forward-looking statement to conform the
statement to actual results or changes in the Company’s
expectations.
SOURAV GHOSH Chief Financial Officer (240)
744-5267 |
TEJAL ENGMAN Investor Relations (240) 744-5116
ir@hosthotels.com |
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