Host Hotels Q1 2020 Earnings Report
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.
Host Hotels
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Host Hotels Revenue by Segment
Host Hotels 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.
- Possibility of further hotel closures and erosion in operations.
- Near-term pace of group and transient business remains uncertain until the consumer feels comfortable travelling again.
- Company cannot provide full-year guidance for its operations.