Host Hotels & Resorts, Inc.

Stock market summary: DJIA up 429 points, Nasdaq up 156, S&P 500 up 53. Increased demand for connecting rooms and suites in hotels due to multigenerational family and group travel. Acquisitions and expansions: Fairmont Hot Springs Resort acquired for $40 million, Rimrock Resort Hotel acquired for $170 million with renovations planned, and Bluegreen Vacations expanding accommodations across various properties.

US hotels surpass pre-pandemic revenue levels in Q1 2023, with a 13% increase compared to 2019, driven by higher room rates. Despite concerns of a recession and liquidity crisis, US hotels continue to perform well, with leisure travel showing strength and business travel gradually returning. Significant hotel developments and renovations are underway in various US cities, including new acquisitions, expansions, and upgrades to enhance guest experiences.

Soho House reported mostly in-line estimates. Adjusted EBITDA was in line despite revenue being slightly lower than expectations. Morgan Stanley upped their target price on Hyatt to $142 from $139 while maintaining their Overweight rating. Marriott International announced a 30% increase in their quarterly dividend, to $0.52 a share.

InterContinental Hotels Group announced Keith Barr has informed the Board of his decision to step down from his role as Group Chief Executive Officer and from the IHG Board. Playa Hotels & Resorts reported a 1Q beat and repurchased 5 million shares for $42.6 million in 1Q as well as another 2.1 million shares for $20 million in April. During Q1 2023, RevPAR grew 13% compared to 2019 , fueled by higher ADR and growth in business and group demand as well as strong leisure travel, according to JLL’s latest U.S. Hotel Investment Trends report.

The earnings calendar accelerated in both the REIT and C-Corp section in the past 24 hours. Hyatt received the most attention with a clean beat but then some concerns creeping in. Host Hotels had a lousy two days to issue a great report with a clean and positive beat and raise. Summit Hotels came in just under consensus even with a strong top-line performance as higher hotel-level expenses hurt results.

CBRE released its US Hotels State of the Union March 2023 Edition . Key takeaways include February marked nine consecutive months of easing inflation. Baird said that with industry wide March RevPAR being better than expected, it de-risked 1Q23 earnings a bit, and the trade is likely higher into the earnings prints. Jefferies said they continue to believe Host Hotels is best-positioned among peers to generate growth and expanding cash flows irrespective of macro challenges and has yet to receive valuation credit.

Wells Fargo has cut price targets on lodging stocks under coverage due to concerns over regional banks and their impact on the hotel industry. The bank only downgraded two names - Park Hotels and Xenia Hotels - but reduced price targets on many others, including Hilton, Marriott, and Hyatt. STR's global "bubble chart" update shows growing momentum in the Asia Pacific region and more than half of markets globally with better than 20% growth in RevPAR versus 2019. Israel, Switzerland, Singapore, the Dominican Republic, and New Zealand led in RevPAR on an actual basis. HEI Hotels & Resorts has taken over management of the Marriott Jacksonville Downtown Hotel in Jacksonville, Florida, which will undergo a comprehensive renovation in the planning stages with completion anticipated in the first quarter of 2024.

Hilton announces plans to double its hotel portfolio in Puerto Rico by 2027, with the addition of seven new properties. The expansion will create around 2,100 new jobs and contribute to the island's economic recovery following the devastation caused by Hurricane Maria in 2017. Hilton's investment in Puerto Rico's tourism industry is a sign of the company's confidence in the island's potential as a destination for both leisure and business travelers.

Truist said they have seen no noticeable changes to overall corporate booking and pricing trends in the first 10 days following the collapse of Silicon Valley Bank . On March 20, Membership Collective Group commenced trading on the NYSE under its new name and ticker, Soho House & Co Inc. / SHCO. In a joint venture, NewcrestImage and Hospitality Capital Partners have acquired 16 hotels with a total of 2,155 rooms for $137.3 million from Service Properties Trust .

Despite the jitters and dire predictions we have been hearing for getting close to a year, lodging demand remains consistent with any concern of deterioration stemming from headline economic risk not yet manifesting in fundamentals. Baird reported on something we touched on recently, insider buying at lodging companies . A majority of the U.S. corporate travel buyers expect their company’s business travel to ramp up and return to pre-pandemic levels by the end of 2023