Largest U.S. Hotel REIT Lowers Guidance In Anticipation Of 'Mild Slowdown'

Host Hotels & Resorts, the largest publicly traded hotel landlord, is girding itself for a slower-than-expected summer travel season.

The Bethesda, Maryland-based REIT now expects its total revenue per available room to grow by between 0.7% and 2.7% this year, down from its guidance of 1%-3% growth issued three months ago, it said in its first-quarter earnings report Thursday.

It attributed the lowered guidance to “moderating” volume in leads for group bookings.

Host, which owns more than 43,000 hotel rooms across 81 hotels, the vast majority of which are in the U.S., surpassed Wall Street expectations for revenue and earnings in the first quarter, and its stock price was up more than 3% as of Thursday afternoon.

“While we outperformed our expectations in the first quarter, we remain cautious, given the heightened macroeconomic uncertainty,” Host Hotels CEO James Risoleo said during a call with analysts Thursday morning. “The low end of our guidance range contemplates a mild slowdown, while the high end assumes a more stable macroeconomic environment.”

Host said its quarterly revenues jumped 8.4% year-over-year to $1.6B in the first quarter, led by strong hotel performance in Washington, D.C., Maui, New Orleans and New York City. Room revenues alone increased nearly 10% to $938M, and food and beverage revenues rose 6.3% to $503M, fueled in part by the opening of The View, a rotating restaurant and bar on the 47th and 48th floors of the Marriott Marquis in Manhattan's Times Square.

Host Chief Financial Officer Sourav Ghosh said spa revenues also increased, “leaving us encouraged that the affluent consumer is still prioritizing spending on premium experiences.”

Also during the first quarter, Host reopened The Don CeSar hotel in St. Pete Beach, Florida, after it took up to $110M in damage from Hurricanes Helene and Milton in 2024. The firm obtained $20M in insurance proceeds due to the damage, including $10M for business interruption.

Host also reported a recovery in revenues from its Maui hotels, which are still trying to bounce back from devastating 2023 wildfires on the Hawaiian island.

Risoleo repeatedly cautioned about economic uncertainty, especially clouding the outlook on acquisitions and sales, saying the entire hospitality industry is in “wait-and-see mode.”

“This is a policy, self-made policy issue that is creating all the uncertainty and that can change very quickly. That can change on a dime,” Risoleo said, adding that the industry hopes “the big R-word is a thing of the past and that we see a shift in policy.”

President Donald Trump's policies already appear to be having an impact on international travel. In March, international tourism to the U.S. fell 14% from a year earlier, according to the U.S. Travel Association, with a 14% drop in air travel from Canada, 17% from Western Europe and 10% from South America. 

The Travel Association said the U.S. could lose $21B in travel-related exports this year if the declines hold. Host executives said they are prepared for a downturn, but they haven't yet seen a slowdown in business.

“If things were to go south — and we’re not seeing that today, I want to emphasize that very, very clearly — we are very comfortable with the guidance that we’re maintaining for the balance of this year,” Risoleo said. “But if things were to go south, we would be in a position to very quickly implement our contingency planning and cut expenses as needed across the portfolio.”