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Mar 31, 2020
Host Hotels Q1 2020 Earnings Report
Host Hotels & Resorts experienced a significant decline in revenue and profitability due to the COVID-19 pandemic, but took swift actions to reduce expenses and strengthen its liquidity position.
Key Takeaways
Host Hotels & Resorts reported a decrease in revenues to $1.052 billion for Q1 2020, compared to $1.390 billion in Q1 2019. The company experienced a net loss of $3 million, a sharp contrast to the net income of $189 million in the same quarter last year, driven by the impact of the COVID-19 pandemic. To mitigate the impact, Host Hotels has suspended operations at 35 hotels, reduced portfolio-wide operating costs, and increased liquidity by accessing $1.5 billion under its credit facility.
Suspended operations at 35 hotels as of May 6, 2020, and operating the remaining 45 hotels at reduced capacity.
Reduced portfolio-wide hotel operating costs by approximately 70% to 75% in April, compared to initial forecasts.
Increased liquidity by accessing $1.5 billion under the revolver portion of Host’s credit facility in March 2020.
Rebooked almost 12% of 2020 group revenue that had been canceled as of May 4, with the majority rescheduled for the second half of the year.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Given the global economic uncertainty caused by COVID-19, the Company cannot provide full-year guidance for its operations and does not expect to see a material improvement until government restrictions have been lifted and travelers are comfortable traveling again.
Positive Outlook
- Implemented portfolio-wide cost reductions.
- Collaborated with operators to implement innovations and standards that will help address customers’ heightened safety and hygiene concerns.
- The Company's liquidity position and balance sheet position the Company to endure this crisis and capitalize on future opportunities to create long-term value.
- Prioritized major capital projects in those assets and markets that are expected to recover faster, such as leisure and drive-to destinations.
- Utilizing the low occupancy environment to accelerate certain projects and minimize future disruption.
Challenges Ahead
- Global economic uncertainty created by COVID-19.
- Uncertainty of the depth and duration of the pandemic.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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