Host Hotels Earnings: Revenue and EBITDA Growth Exceed Expectations, Leading to 2023 Guidance Raise

First-quarter results for no-moat Host Hotels & Resorts were better than we anticipated, giving us confidence in our $23 fair value estimate. Occupancy improved to 68.4%, which is up from 54.4% in the first quarter of 2022, but it is still below the 76.3% level reported in the first quarter of 2019. Average daily rate improved 4.2% year over year and is up 19.8% compared with the first quarter of 2019. As a result, revenue per available room was up 31.1% in the first quarter, slightly ahead of our 28.6% estimate. Hotel EBITDA margins improved to 32.6% from 30.3% a year ago, leading to hotel EBITDA growth of 44.1%, well ahead of our estimate. Host reported adjusted funds from operations in the first quarter of $0.55 per share, 14 cents better than our $0.41 estimate and 16 cents higher than the $0.39 figure reported in the first quarter of 2022.