Host Hotels raised its 2025 RevPAR guidance to 2.5-4.5% growth on stronger group bookings. Corporate demand is accelerating in key markets like San Francisco and Orlando.
Host Hotels & Resorts lifted its full-year guidance Tuesday, a move the company tied to stronger-than-expected group bookings and steady leisure travel demand through the second quarter.
The real estate investment trust now expects comparable RevPAR growth of 2.5% to 4.5% for 2025, up from an earlier forecast of 1% to 3%. The midpoint shift implies roughly $50 million in incremental room revenue across its portfolio of 74 mostly luxury and upper-upscale properties.
Group demand drove the revision. Transient leisure bookings, while still positive, have normalized closer to 2019 levels. Host's portfolio leans heavily on convention hotels in major U.S. cities and resort properties in Hawaii, Florida and California – segments where group business typically commands higher average daily rates and longer forward booking windows.
"Group business has outperformed our initial expectations across the portfolio," CEO James F. Risoleo told analysts on the Tuesday call. "We see that momentum continuing through the third quarter based on current on-the-books pace."
Risoleo cited corporate meeting activity and association conferences as particularly strong, with group revenue booked for the remainder of the year up 7% compared with the same period last year.
How the forecast landed
The new RevPAR range compares with consensus expectations of roughly 2.8% growth at the time of the company's first-quarter earnings report in April. The upside was driven mostly by demand volume at properties like the Marriott Marquis in Washington, D.C., the Hilton San Diego Bayfront, and the Hyatt Regency Orlando, the company said.
Host also raised its forecast for total hotel EBITDA margins by roughly 50 basis points, to a range of 41.5% of hotel revenue. The margin improvement reflects operating leverage on the incremental group revenue, which carries lower variable costs than leisure transient stays.
Full-year adjusted EBITDA guidance was lifted to a range of $1.695 billion to $1.755 billion, up from $1.65 billion to $1.725 billion. The new midpoint of $1.725 billion sits about $40 million above the prior consensus.
What changed on group vs. leisure
The revision marks a shift from 2024, when leisure demand outpaced group. Group revenue surpassed pre-pandemic levels for the first time in the 2024 second half, but the recovery had been uneven. This year, corporate demand has stepped up, particularly from technology and financial-services companies holding larger meetings.
Host's portfolio carries exposure to the San Francisco and Silicon Valley markets through properties such as the Westin St. Francis and the Hilton San Francisco Union Square. Those markets had lagged the broader recovery as tech companies scaled back travel. The company said group bookings in those two hotels are now accelerating.
"We have been investing in the experience, and the customer is responding," Risoleo said. He pointed to completed renovations at the Westin St. Francis and the JW Marriott San Francisco Union Square as catalysts for stronger business.
Leisure demand continues to support portfolio occupancy but is running closer to seasonal norms. Host reported that transient occupancy in the second quarter was roughly flat year over year, while group occupancy rose 3 percentage points.
Room for more upside
Host maintained its capital spending plan of $450 million to $550 million for 2025, with roughly half allocated to renovations and repositioning projects. The guidance lift did not require additional investment, Risoleo noted – the revenue gains came from existing capacity.
Forward booking data through mid-July showed group revenue on the books for the fourth quarter up 4% year over year, the company said. That pace could support further upward revisions if leisure demand holds above the company's baseline assumptions through Labor Day.
Host shares rose 1.8% in regular trading Tuesday and added another 0.5% after hours. The stock trades at roughly 12.5x consensus forward EBITDA, a discount to hotel REIT peers that trade closer to 14x, in part reflecting the portfolio's heavier group mix versus more leisure-exposed competitors. HST stock page
Who benefits from the group shift
The group-leaning demand profile creates a different set of winners and risks. Marriott International and Hilton, which operate most of Host's properties under management agreements, benefit from higher room revenue without the capital outlay. For those hotel operators, the group trend adds to a favorable fee-growth narrative.
For Host specifically, the guidance raise comes as the company refinances roughly $1.2 billion in debt maturing through 2026. Higher EBITDA supports more favorable borrowing terms. The company said it expects to term out a $500 million floating-rate loan into fixed-rate notes before year-end.
Host also declared a quarterly dividend of $0.20 per share, payable Aug. 14 to shareholders of record on July 31. The payout remains unchanged from the prior quarter and represents roughly 55% of the company's projected free cash flow at the midpoint of the new guidance.
A note on the consumer
The travel-demand backdrop more broadly remains constructive but not immune to macro pressure. Airlines have warned about discounting in the domestic market, and some hotel owners have flagged a slowdown in the lowest-tier economy segments. Host's luxury and upper-upscale positioning, the company said, has so far insulated it from that pattern.
"The consumer we serve continues to prioritize experiences," Risoleo said. "We don't see signs of a pullback at our price points."
Host's next quarterly update, covering third-quarter results, is expected in early November.
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