# Host Hotels & Resorts (HST) Financial Model

Free Excel 3-statement financial model and company analysis for Host Hotels & Resorts.

- Canonical: https://finamodel.com/companies/host-hotels-resorts
- Industry: Real Estate
- Downloadable model: Yes
- Excel download: https://finamodel.com/company-models/HST.xlsx

## Model Purpose

This model projects the financial performance, dividend coverage, and Net Asset Value (NAV) of Host Hotels & Resorts to determine whether an equity analyst should recommend buying the stock based on its Adjusted Funds From Operations (AFFO) yield and implied real estate valuation.

## Company Overview

- Host Hotels & Resorts (HST) is the largest lodging real estate investment trust (REIT) in the world, owning a portfolio of luxury and upper-upscale hotels. The company owns the physical real estate while partnering with premium brands (Marriott, Ritz-Carlton, Hyatt, Hilton) to manage the properties.
- **Business segments:** Room Revenues (~60-65%), Food & Beverage Revenues (~25-30%), and Other Revenues (~5-10%).
- **Key geographies:** Primarily the United States (71 properties) with a heavy presence in the Sunbelt and top 25 markets, plus 5 international properties, totalling approximately 41,700 rooms.
- **Business model type:** Asset-heavy lodging REIT. The company generates returns through property ownership, extensive capital recycling (buying/selling hotels), and ROI-driven renovations.
- **Competitive position:** S&P 500 constituent and the largest lodging REIT by market capitalisation, benefiting from immense scale and an investment-grade balance sheet.
- **Recent major events:** In early 2026, HST sold two Four Seasons properties (Orlando and Jackson Hole) for $1.1 billion. The company also completed a major Marriott Transformational Capital Program and recovered from the 2023/2024 Maui wildfire disruptions.

## Revenue Deep Dive



### Room Revenues

- **Segment name:** Room revenues
- **Revenue driver formula:** Total Available Room Nights x Occupancy % x Average Daily Rate (ADR)
- **Historical growth rate:** 3.8% Comparable RevPAR growth in 2025.
- **Key growth levers and headwinds:** Driven by transient leisure demand, corporate group bookings, and room rate pricing power. Headwinds include macroeconomic softening and extreme weather events (e.g., Maui wildfires).
- **Pricing dynamics:** Spot pricing that changes daily based on algorithmic revenue management systems run by the hotel operators.
- **Revenue recognition notes:** Recognised daily as rooms are occupied.
- **Seasonality:** Q1 and Q4 are typically stronger for corporate and group business, while Q1/Q2 are peak for Sunbelt and leisure resort properties.

### Food & Beverage (F&B) Revenues

- **Segment name:** Food and beverage revenues
- **Revenue driver formula:** Occupied Room Nights x F&B Spend per Occupied Room (heavily influenced by Group mix)
- **Historical growth rate:** 5-7% CAGR, outpacing room revenue recently due to strong banquet and catering demand.
- **Key growth levers and headwinds:** Group business volume is the primary driver. Inflation in menu pricing boosts top-line but pressures margins.
- **Pricing dynamics:** Contractual for large group banquets (booked months in advance); spot pricing for transient restaurant/bar spend.
- **Revenue recognition notes:** Recognised at the point of sale or when the banquet event occurs.
- **Seasonality:** Mirrors room occupancy, with spikes during heavy conference seasons (Spring/Autumn).

### Other Revenues

- **Segment name:** Other revenues
- **Revenue driver formula:** Occupied Room Nights x Ancillary Spend per Room
- **Historical growth rate:** 2-4% CAGR.
- **Key growth levers and headwinds:** Resort fees, parking, spa, and golf utilisation.
- **Pricing dynamics:** Largely fixed ancillary fees (e.g., daily resort fees) and spot pricing for services.
- **Revenue recognition notes:** Recognised as services are rendered.
- **Seasonality:** Highly correlated with leisure occupancy peaks.

## Cost Structure



### Variable Costs / COGS (Hotel Operating Expenses)

- **Line-by-line breakdown:** Rooms departmental expenses, F&B departmental expenses, Other departmental expenses.
- **Gross margin range:** Not reported as "gross margin". Instead, departmental margins are tracked. Rooms margin is typically 70-75%; F&B margin is much lower at 25-30%.
- **Key input costs and commodity exposures:** Hourly labour (housekeeping, banquet staff), food and beverage wholesale costs, linen and supplies.
- **How COGS scales with revenue:** Step-function. Minimum staffing is required regardless of occupancy, but variable labour and food costs scale directly with occupied rooms and F&B volume.

### Operating Expenses

- **Undistributed Hotel Expenses:** Includes Hotel administrative and general, Sales and marketing, Property operations and maintenance, and Utilities.
- **Corporate SG&A:** Corporate overhead, executive compensation, and legal fees. Typically 1.5-2.0% of total revenues.
- **Depreciation & Amortisation:** Massive expense for an asset-heavy REIT, typically running at 12-15% of total revenues.
- **Stock-Based Compensation:** Minimal relative to tech, usually embedded in Corporate SG&A.
- **Restructuring / one-time charges:** Frequent gains/losses on asset sales and occasional impairment charges on underperforming properties.

### Margin Profile

- **Comparable Hotel EBITDA Margin:** 28.0% - 29.5% (28.9% in 2025).
- **Operating Profit Margin:** 13.5% - 14.5% (heavily burdened by D&A).
- **Margin trend:** Slightly compressing (down 40 bps in 2025) due to wage inflation, rising property insurance, and real estate tax increases offsetting RevPAR gains.

## Balance Sheet Structure

- **Total assets:** Approximately $11.5 - $12.5 billion.
- **Key asset categories:** Investment in hotel properties (Land, Buildings, Furniture, Fixtures & Equipment) makes up >85% of total assets. Cash and cash equivalents ($768 million at year-end 2025).
- **Goodwill & intangibles:** Minimal; real estate is held at depreciated cost.
- **Working capital profile:**
  - **Days Sales Outstanding (DSO):** Very low (10-15 days) as most guests pay via credit card at checkout; group business pays deposits upfront.
  - **Days Inventory Outstanding (DIO):** Negligible (only F&B inventory).
  - **Days Payable Outstanding (DPO):** 30-45 days.
  - **Net working capital as % of revenue:** Structurally negative, providing a slight source of cash as the business grows.
- **PP&E:** Depreciated over 15-40 years for buildings and improvements, and 3-10 years for FF&E.
- **Right-of-use assets / operating leases:** Ground leases exist for certain properties but are a small fraction of the overall owned real estate base.

## Capital Expenditure & Investment

- **Capex as % of revenue:** 10-12% ($644 million in 2025 on $6.1 billion revenue).
- **Maintenance capex vs. growth capex:** Split into Renewal and Replacement ($287M in 2025) and ROI/Repositioning ($282M in 2025).
- **Major capex programmes underway:** Marriott Transformational Capital Program and ongoing comprehensive renovations.
- **Capitalised software:** Immaterial.
- **M&A pattern:** Active portfolio recycler. Sells mature or lower-tier assets (e.g., $1.1B Four Seasons sales in 2026) to fund acquisitions of higher-yield luxury resorts or share buybacks.
- **Typical acquisition multiple paid:** 12-15x EBITDA / 6-8% Cap Rates depending on the asset quality.

## Debt & Capital Structure

- **Total debt:** Approximately $4.0 - $4.5 billion.
- **Debt/EBITDA ratio:** 2.0x - 2.5x (very conservative for a REIT).
- **Credit rating:** Investment Grade (S&P: BBB-, Moody's: Baa2, Fitch: BBB).
- **Key debt instruments:** Unsecured senior notes (e.g., $1.3B issued in 2024) and a $1.5 billion revolving credit facility.
- **Maturity profile:** Well-laddered with recent refinancing pushing major maturities past 2028.
- **Interest rate profile:** Predominantly fixed-rate senior notes.
- **Covenants:** Standard REIT covenants (Total Debt to Total Assets < 65%, Secured Debt < 40%, Fixed Charge Coverage > 1.5x).
- **Share repurchase programme:** Active; repurchased $107 million in 2024, with $685 million remaining capacity.
- **Dividend policy:** Regular quarterly dividend ($0.20/share) plus special dividends (total $0.95/share declared in 2025). Payout ratio is typically 45-50% of AFFO.

## Cash Flow Characteristics

- **Operating cash flow conversion:** High; OCF is typically >1.0x Net Income due to massive non-cash depreciation add-backs.
- **Free cash flow margin:** 10-15% (OCF minus heavy FF&E capex).
- **Major non-cash items:** Real estate depreciation, stock-based compensation, and gains/losses on property sales.
- **Working capital cash flow impact:** Minimal year-over-year impact.
- **Capex intensity:** High. Hotels require constant FF&E refreshes (typically 4-5% of revenues reserved annually) to maintain brand standards.
- **Cash tax rate vs. GAAP effective tax rate:** Near 0% for the REIT entity. Small tax provisions exist for Taxable REIT Subsidiaries (TRS) which operate the F&B/ancillary businesses.

## Sheet Structure

1. **Assumptions:** Hardcoded drivers for macroeconomic inputs, RevPAR growth, margins, capex % of revenue, and capital return policies.
2. **Portfolio & Operating Stats:** Tracks Total Available Rooms, Occupancy %, ADR, RevPAR, and Total RevPAR. Includes adjustments for asset sales (e.g., removing the 569 rooms from the Q1 2026 Four Seasons sales).
3. **Income Statement:** Projects Room Revenues, F&B Revenues, Other Revenues. Deducts departmental expenses to reach Hotel EBITDA, then deducts corporate SG&A, interest, and D&A to reach Net Income.
4. **FFO & AFFO Reconciliation:** Bridges Net Income to NAREIT FFO (adding back real estate D&A, subtracting gains on sale) and then to Adjusted FFO (subtracting FF&E reserves, adding back non-cash items).
5. **Balance Sheet:** Projects Investment in Hotel Properties, Cash, Debt, and Equity.
6. **Cash Flow Statement:** Standard 3-statement build (OCF, CFI, CFF) linking Net Income to changes in Cash.
7. **Debt Schedule:** Tracks senior notes, revolver drawdowns, interest expense, and debt maturities.
8. **Capex & Real Estate Roll-forward:** Calculates maintenance capex (FF&E reserves), ROI capex, acquisitions, dispositions, and depreciation to roll forward the net PP&E balance.
9. **NAV Valuation:** Applies a blended capitalization rate to forward 12-month Hotel Net Operating Income (NOI), adds cash, and subtracts debt to calculate Net Asset Value per share.
10. **DCF Valuation:** Unlevered free cash flow build and WACC-based valuation for a secondary valuation perspective.

## Key Financial Relationships

1. `Available Room Nights = Total Rooms x Days in Period`
2. `Occupied Room Nights = Available Room Nights x Occupancy %`
3. `Room Revenue = Occupied Room Nights x Average Daily Rate (ADR)`
4. `RevPAR = Room Revenue / Available Room Nights`
5. `F&B Revenue = Occupied Room Nights x F&B Spend per Occupied Room`
6. `Total Revenues = Room Revenue + F&B Revenue + Other Revenue`
7. `Total RevPAR = Total Revenues / Available Room Nights`
8. `Rooms Departmental Profit = Room Revenue x (1 - Rooms Expense Margin)`
9. `Hotel EBITDA = Total Revenues - Rooms Expense - F&B Expense - Other Dept Expense - Undistributed Hotel Expenses`
10. `EBITDAre = Net Income + Interest Expense + Income Taxes + D&A + Impairments - Gains on Disposition of Real Estate`
11. `NAREIT FFO = Net Income + Real Estate D&A - Gains on Disposition of Real Estate`
12. `Adjusted FFO (AFFO) = NAREIT FFO - FF&E Replacement Reserves + Non-Cash Stock Comp`
13. `Net Asset Value (NAV) = (Forward 12M Hotel NOI / Cap Rate) + Cash & Equivalents - Total Debt`

## Cross-Sheet Dependencies

- **Portfolio & Operating Stats** is the foundational sheet. It feeds room counts and RevPAR into the **Income Statement** to generate revenues.
- The **Income Statement** calculates Net Income, which feeds the top of the **Cash Flow Statement** and the **FFO & AFFO Reconciliation**.
- The **Capex & Real Estate Roll-forward** uses revenue from the **Income Statement** to calculate the FF&E reserve (typically 4-5% of revenue), which then feeds into the **Balance Sheet** (PP&E), **Cash Flow Statement** (Investing Outflows), and **FFO & AFFO Reconciliation** (deduction for AFFO).
- The **Debt Schedule** calculates Interest Expense, which feeds back into the **Income Statement**. (Potential circularity here if revolver interest depends on cash flow deficits; recommend using beginning-of-period debt for interest calculations to break the circularity).
- The **NAV Valuation** relies on forward NOI from the **Income Statement** and current debt/cash balances from the **Balance Sheet**.

## Sign Convention

- **Revenues and Assets:** Positive.
- **Expenses and Liabilities:** Positive in their respective build-up schedules, but subtracted in aggregation formulas (e.g., `Revenue - Expenses = Profit`).
- **Cash Flow Statement:** Inflows are positive, outflows are negative.
- **Contra-accounts:** Accumulated depreciation is negative on the Balance Sheet.

## Things Most Likely to Go Wrong

- **Failing to adjust room counts for asset sales:** The model must reduce the total room count by ~569 rooms in Q1 2026 to account for the $1.1B Four Seasons dispositions, otherwise revenues will be overstated.
- **Confusing RevPAR with Total RevPAR:** RevPAR only covers room revenue. Total RevPAR includes F&B and ancillary spend. The model must explicitly separate these drivers.
- **Forgetting the FF&E Reserve in AFFO:** Unlike standard corporate free cash flow, REIT AFFO strictly requires the deduction of a maintenance capital expenditure reserve (usually 4-5% of total revenues). Omitting this artificially inflates AFFO.
- **Miscalculating EBITDAre:** The NAREIT definition of EBITDAre requires specific adjustments for real estate gains/losses. Using a standard corporate EBITDA formula will yield incorrect valuation multiples.
- **Ignoring TRS Tax Leakage:** While the REIT pays no corporate tax, the Taxable REIT Subsidiary (which runs the restaurants and bars) does. A small tax provision must be maintained.
- **Misaligning Occupancy and F&B Spend:** F&B revenue is driven by *occupied* rooms, not *available* rooms. Applying F&B growth to available rooms will break the unit economics.
- **Overestimating Margin Expansion:** Hotel operating costs (labour, insurance) are highly inflationary. Assuming margins expand linearly with RevPAR ignores the reality of wage pressures; margins should be modelled flat to slightly compressing.

## Validation Checks

- "Comparable Hotel EBITDA Margin should remain between 27.5% and 29.5%; flag if outside this band."
- "AFFO per share should be in the $2.00 - $2.15 range for 2026 based on management guidance."
- "Total RevPAR growth should align with management's 2.5% to 4.0% guidance for 2026."
- "FF&E Reserve must equal exactly 4.0% to 5.0% of Total Revenues."
- "Debt/EBITDA must remain below 3.0x to maintain investment-grade rating profile."
- "Balance sheet must balance: Total Assets = Total Liabilities + Equity in every period."
- "Dividend payout ratio should not exceed 100% of AFFO (target 45-60%)."
- "Implied Cap Rate from DCF should reconcile closely to the 7.5%-8.5% NAV Cap Rate assumption."

## Key Assumptions (Default Values)

| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Total Rooms (Start 2026) | 41,131 | Rooms | 41,700 year-end 2025 minus 569 rooms sold in Q1 2026 |
| Occupancy % | 67.0 | % | Aligns with 2025 actuals (66.9% in Q4 2025) |
| Average Daily Rate (ADR) | 345.00 | $ | Slight increase from Q4 2025 actuals ($339.44) |
| RevPAR Growth (2026) | 3.25 | % | Midpoint of 2026 guidance (2.5% - 4.0%) |
| F&B Spend per Occupied Room | 125.00 | $ | Derived from 2025 F&B revenues and occupancy |
| Rooms Expense Margin | 26.5 | % | Historical average |
| F&B Expense Margin | 72.0 | % | Historical average (F&B is lower margin than rooms) |
| Undistributed Hotel Expenses | 22.0 | % of Rev | Historical average for A&G, S&M, and utilities |
| Corporate SG&A | 1.8 | % of Rev | Based on 2025 actuals |
| FF&E Reserve Rate | 4.5 | % of Rev | Standard lodging REIT maintenance capex assumption |
| Effective Tax Rate | 1.5 | % | Minimal tax due to REIT structure (TRS taxes only) |
| Weighted Average Interest Rate | 4.5 | % | Based on recent senior notes pricing |
| Regular Dividend per Share | 0.80 | $ | $0.20 quarterly run-rate |
| Special Dividend per Share | 0.15 | $ | Estimated based on 2025 special dividend payout |
| Shares Outstanding | 687.5 | Millions | Actual diluted share count from recent filings |
| NAV Capitalisation Rate | 8.0 | % | Standard upper-upscale hotel cap rate environment |
| WACC | 9.5 | % | Reflects lodging industry cyclicality and current risk-free rates |

## Data Sources & Benchmarks

- **SEC EDGAR:** Host Hotels & Resorts (HST) 10-K and 10-Q filings.
- **Investor Relations:** HST Q4 2025 Supplemental Financial Information and Earnings Presentation (hosthotels.com).
- **Key Peers for Benchmarking:** Park Hotels & Resorts (PK), Sunstone Hotel Investors (SHO), Pebblebrook Hotel Trust (PEB), Ryman Hospitality Properties (RHP).
- **Industry Data Sources:** STR (Smith Travel Research) for RevPAR and ADR benchmarking across US markets; NAREIT for lodging REIT cap rates and FFO multiples.

## Sources

- Host Hotels & Resorts Investor Relations: https://www.hosthotels.com/investors
- SEC EDGAR Database: https://www.sec.gov/edgar/searchedgar/companysearch
- Q4 2025 Earnings Release and Supplemental Information (February 18, 2026)
- Zacks Equity Research: "Host Hotels' Q4 AFFO & Revenues Top Estimates" (February 19, 2026)
- Seeking Alpha: "Host Hotels & Resorts: A High-Quality Hotel REIT Still Worth Buying After Strong Results" (February 25, 2026)

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## Frequently asked questions

### What kind of company is Host Hotels & Resorts and what does it own?

Host Hotels & Resorts is the world's largest lodging real estate investment trust (REIT), owning a portfolio of luxury and upper-upscale hotels. The company owns the physical real estate and partners with premium brands like Marriott and Hyatt to manage its approximately 41,700 rooms.

### How does Host Hotels & Resorts generate its revenue?

Host Hotels & Resorts generates revenue primarily from Room Revenues, which account for 60-65% of its total. Food & Beverage Revenues contribute 25-30%, with Other Revenues making up the remaining 5-10%.

### What is Host Hotels & Resorts' approach to capital expenditures?

Host Hotels & Resorts is an active portfolio recycler, selling mature assets to fund acquisitions of higher-yield luxury resorts or share buybacks. The company's capital expenditures are typically 10-12% of revenue, split between renewal/replacement and ROI/repositioning projects.

### What is the working capital profile of Host Hotels & Resorts?

Host Hotels & Resorts has a structurally negative net working capital as a percentage of revenue, which provides a slight source of cash as the business grows. This is due to very low Days Sales Outstanding (10-15 days) and negligible Days Inventory Outstanding, while Days Payable Outstanding is 30-45 days.

### How is the financial performance of Host Hotels & Resorts evaluated in a financial model?

The financial model projects Host Hotels & Resorts' performance, dividend coverage, and Net Asset Value (NAV) to assess stock recommendations. This evaluation is based on its Adjusted Funds From Operations (AFFO) yield and implied real estate valuation.

### Can I download a financial model for Host Hotels & Resorts, and what is its forecast horizon?

Yes, a downloadable Excel model is available for Host Hotels & Resorts. This model provides financial projections with a forecast horizon from FY2026 through FY2030.

[Interactive forecast calculator](https://finamodel.com/companies/host-hotels-resorts/forecast)