Host Hotels & Resorts Has $2.9B to Spend on Acquisitions In Battered Urban Markets

Host Hotels & Resorts has nearly $3B in cash to spend on a bet that tourism is returning to some cities that were beaten down by the pandemic.

The real estate investment trust that specializes in luxury-stay properties said it has about $2.9B in liquidity to invest in properties in cities like San Francisco, where Host’s San Francisco Marriott Marquis just posted its best January revenue ever, executives said on a fourth-quarter earnings call Thursday. 

Based in Bethesda, Maryland, Host is targeting properties in growth markets that suffered turbulence amid the pandemic. It expects to begin buying as soon as some larger properties go on sale, CEO Jim Risoleo told analysts.

“We'll also continue to start looking at urban markets today because we've seen some good solid performance out of the urban market,” Risoleo said on the call. “So I think recovery is on the way. We feel good about the macro picture.”

Big corporate bookings have helped the firm recover as well. 

Host’s group revenue pace is up 10% over the same time last year, driven by rate room nights and banquets, Chief Financial Officer Sourav Ghosh said during the call.

“We continue to be encouraged by the ongoing strength of group business as evidenced by strong pace, lengthening booking windows and double digit citywide room night pace in key markets such as New Orleans, San Diego, Seattle and D.C.” he added.

The REIT reported net income of $752M for 2023, up $109M from 2022, according to an earnings statement.

The firm’s growth rate was battered last year after the fires in Maui, which killed hundreds and destroyed or damaged three Host properties on the island.

However, Host's portfolio closed out 2023 by hitting a revenue per available room rate of $211.71, up 8.1% from 2022. Host's RevPAR is expected to grow between 2.5% and 5.5% in the year ahead, according to the earnings statement.