Host Hotels & Resorts, Inc.

Good morning, and welcome to the Host Hotels and Resorts First Quarter 2026 Earnings Conference Call. 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. Jamie, please go ahead.

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 on federal securities laws. 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 EBITDA RE, and comparable hotel-level results. You can find this information together with reconciliations to the most directly comparable gap information in yesterday's earnings press release, in our 8K filed with the SEC, and in the supplemental financial information on our website at hosthotels.com. The operational results discussed today refer to our 74 hotel comparable hotel portfolio in 2026, which excludes the Don Cesar and Sheridan Parsippany. With me on today's call are Jim Rizzolio, President and Chief Executive Officer, and Saurav Ghosh, Executive Vice President and Chief Finance Officer. With that, I would like to turn the call over to Jim.

Thank you, Jamie, and thanks to everyone for joining us this morning. Our first quarter results exceeded our expectations, representing a strong start to 2026. We delivered adjusted EBITDA RE of $543 million, an increase of 5.6% over last year, and adjusted FFO per share of 67 cents, an increase of 4.7% over last year. First quarter adjusted EBITDA RE and adjusted FFO per share benefited from $7 million of business interruption proceeds related to hurricanes Helene and Milton, compared to $10 million in the first quarter of 2025. Comparable hotel total REVPAR improved 4.6% compared to the first quarter of 2025, and comparable hotel REVPAR improved 4.4%, driven by rate growth and continued strength and out-of-room spending. Comparable hotel EBITDA margin improved by 70 basis points year over year, to 32.7% driven by revenue growth. Rep heart growth in the first quarter was meaningfully better than expected. Strong rate growth was enabled by resilient demand despite estimated weather impacts of approximately 120 basis points in tough comparisons to last year. We saw particularly strong performance at our resorts in Florida and Phoenix as well as in San Francisco which benefited from the Super Bowl and the ongoing market recovery. Notably, San Francisco achieved 26% rep part growth and more than 70% EBITDA growth in the quarter, reflecting continued momentum in the market's recovery. Turning to business mix, transient revenue grew by 5.5%, driven by rate growth, particularly at our resorts. First quarter transient results benefited from Easter in early April, which compressed spring break demand in March, contributing to 9% transient revenue growth at our resorts. Feedback from our properties indicates that ongoing geopolitical uncertainty supported travelers favoring U.S. luxury destinations over international destinations. As a result, resort properties delivered particularly strong performance in the first quarter. Briefly touching on Maui, REPPAR grew 1.5% and total REPPAR grew 1.6% as growth was impacted by the Kona low rainstorm in March. Prior to the storm, overall demand at our Maori resorts was tracking ahead of our expectations for the first quarter. It is important to note that the impacts from the storm were contained and are not ongoing. We have also seen strong rebookings since the storm, and as a result, we continue to expect Maui to contribute approximately $120 million of EBITDA in 2026. Business transient revenue grew 4%, driven by strong rate growth. as we saw a continued mix shift from government to corporate negotiated customers in the first quarter. Group room revenue for the quarter was up 2.4% year over year, driven by improvements in both demand and rate. Our property sold 1.1 million group room nights in the first quarter, and definite group room nights on the books for 2026 now stand at 3.5 million. with total group revenue pace up nearly 4% to the same time last year. Turning to ancillary spend, F&B revenue grew 5% and other revenue grew 6%, with broad-based strength across departments, demonstrating the continued strength of the affluent consumer, as well as the benefits of the strategic investments we have made in many of our properties over the last several years. Turning to capital allocation, we repurchased 4 million shares of common stock at an average price of $18.97 per share for a total of $75 million in the first quarter. Since 2017, we have repurchased 73.2 million shares at an average price of $16.76 per share. bringing our total share repurchases to approximately $1.2 billion. Yesterday, the Board of Directors authorized a quarterly common dividend of 20 cents per share and a special dividend of 72 cents per share. The dividend will be paid on July 15th to stockholders of record on June 30th. The special dividend represents the distribution of the approximate $500 million taxable gain from the sale of the two Four Seasons resorts in the first quarter of this year. Creating value for our stockholders remains our top priority. By returning capital through a regular quarterly cash dividend, special dividends like the one we will pay out this quarter and our share repurchase program We are advancing our objective of delivering long-term value for our investors. Turning to portfolio reinvestment, during the first quarter, we completed the comprehensive renovation at the Hyatt Regency Reston. As of the end of the first quarter, the Hyatt Transformational Capital Program is more than 80% complete, and it's tracking on time and under budget. Transformational renovations are now complete at four of the six hotels in the program, including the Grand Hyatt Atlanta Buckhead, the Hyatt Regency Capitol Hill, the Hyatt Regency Austin, and the Hyatt Regency Reston. We are nearing completion on the Grand Hyatt Washington DC, which is expected to be finished later this month. The Manchester Grand Hyatt San Diego, the final asset in the program, has been phased to mitigate business interruption and is expected to be substantially complete by the end of this year. Additionally, the second Marriott Transformational Capital Program is well underway. Guest room renovations at the New Orleans Marriott are in progress and are scheduled to be completed in the third quarter. And renovations at the Ritz-Carlton Naples Tiburon and the Westing Cureland are scheduled to start later this month. The four asset program is already more than 25% complete, and it is also tracking on time and under budget. In the first quarter, we received $3 million of operating guarantees related to our transformational capital programs. As a reminder, We expect to benefit from approximately $19 million of operating profit guarantees in 2026 related to our two transformational capital programs, which we expect will offset most of the EBITDA disruption at these properties. Looking at other ROI projects, we are nearing completion of the condo development at the Four Seasons Orlando. To date, we have closed on the sale of 20 of 31 units within the mid-rise building and we have deposits and purchase agreements in place for eight of the nine villas, bringing total sales and deposits to 28 of 40 units. Overall, the project is on budget and expected to sell out by the end of this year. For 2026, Our capital expenditure guidance range is $545 to $655 million. This includes approximately $250 to $300 million of investment focused on redevelopment, repositioning, and ROI projects, and $20 to $30 million of property damage reconstruction associated with the Konolo Rainstorm in Hawaii. We also anticipate remediation costs of approximately $5 million. While we are still evaluating the total impacts of the storm, we expect our insurance coverage to cover the losses in excess of our deductible. In addition to our capital expenditure investment, we expect to spend $15 million to complete the condo development at the Four Seasons Orlando in 2026. Our continued reinvestment across our portfolio is a true differentiator for Host. In fact, once the second Marriott Transformational Capital Program is complete, we will have invested $2.1 billion in comprehensive renovations at 34 hotels in our portfolio, which are expected to contribute approximately 60% of our total hotel EBITDA in 2026. We have now stabilized post renovation data on 21 hotels and the average rep part index share gain is nearly nine points. As evidenced by our results, our capital allocation decisions over the past few years are driving value creation for our shareholders. We also reinforce our position as a global leader in corporate responsibility in the first quarter. Last week, Host was proud to be included in the Dow Jones Best in Class Index World for the seventh consecutive year and North America for the ninth consecutive year, ranking number three globally in our sector. In fact, Host was one of only two North American companies on the World Index and number one in our sector among seven companies on the North America Index. Turning to our outlook for 2026, We continue to expect strong leisure demand bolstered by special events, modest improvements to short-term group booking trends, and stable business transient demand. As a result, we are raising our 2026 comparable hotel rep part guidance range to 3% to 4.5% over 2025, and our comparable hotel total rep part growth guidance range to 3.5% to 5% over last year. Looking ahead to the remainder of the year, we are optimistic about the travel environment. High-end consumers continue to prioritize experiences, and supply across our markets and chain scales remains at historically low levels. Against this backdrop, our Fortress balance sheet gives us the flexibility to continuously reinvest in our portfolio while also returning capital to shareholders through a sustainable quarterly dividend periodic special dividends, and share repurchases. As our results over the past few years have shown, our competitive advantages uniquely position hosts to continue to capture additional upside in the current environment and for many years to come. With that, I will now turn the call over to Saurav.