Host Hotels Earnings: Low Growth in Quarter as 2023 Maui Wildfires Continue to Hurt Results

No-moat Host Hotels & Resorts reported mixed second-quarter results compared with our estimates, but we don’t anticipate any material changes to our $24 fair value estimate. Occupancy increased only 10 basis points year over year to 74.4%, while average room rates were flat, leading to revenue per available room growth of just 0.1% compared with our estimate of 3.0% growth. However, hotel operating expenses were up 0.7% in the quarter, well below our estimate of 5.5% growth. Therefore, while hotel EBITDA and EBITDA margins were flat in the quarter, that is better than our estimate of a 2.9% decline in hotel EBITDA and EBITDA margins falling to 30.7%. Host reported adjusted funds from operations of $0.57 per share in the quarter, which was better than our $0.55 estimate and the $0.53 reported in the second quarter of 2023.