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HST Host Hotels & Resorts

Filed: 5 Aug 21, 3:22pm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

Commission File Number: 001-14625 (Host Hotels & Resorts, Inc.)

0-25087 (Host Hotels & Resorts, L.P.)

 

HOST HOTELS & RESORTS, INC.

HOST HOTELS & RESORTS, L.P.

(Exact name of registrant as specified in its charter)

 

 

Maryland (Host Hotels & Resorts, Inc.)

Delaware (Host Hotels & Resorts, L.P.)

(State or Other Jurisdiction of

Incorporation or Organization)

 

53-0085950

52-2095412

(I.R.S. Employer

Identification No.)

 

 

 

4747 Bethesda Ave, Suite 1300

Bethesda, Maryland

(Address of Principal Executive Offices)

 

20814

(Zip Code)

(240) 744-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 

 

Title of each class

 

Trading Symbol

 

Name of Each Exchange on Which Registered

Host Hotels & Resorts, Inc.

 

Common Stock, $.01 par value

 

HST

 

The Nasdaq Stock Market LLC

Host Hotels & Resorts, L.P.

 

None

 

None

 

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Host Hotels & Resorts, Inc.

 

Yes  

  

    

 

No  

  

Host Hotels & Resorts, L.P.

 

Yes  

  

    

 

No  

  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Host Hotels & Resorts, Inc.

 

Yes  

  

    

 

No  

  

Host Hotels & Resorts, L.P.

 

Yes  

  

    

 

No  

  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Host Hotels & Resorts, Inc.

 

Large accelerated filer    

Accelerated filer    

Non-accelerated filer    

Smaller reporting company    

Emerging growth company    

 

 

 

Host Hotels & Resorts, L.P.

 

Large accelerated filer    

Accelerated filer    

Non-accelerated filer    

Smaller reporting company    

Emerging growth company    

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Host Hotels & Resorts, Inc.

 

Yes  

  

    

 

No  

  

Host Hotels & Resorts, L.P.

 

Yes  

  

    

 

No  

  

As of August 2, 2021, there were 713,973,483 shares of Host Hotels & Resorts, Inc.’s common stock, $.01 par value per share, outstanding.

 

 

 


 

 

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q of Host Hotels & Resorts, Inc. and Host Hotels & Resorts, L.P. Unless stated otherwise or the context requires otherwise, references to “Host Inc.” mean Host Hotels & Resorts, Inc., a Maryland corporation, and references to “Host L.P.” mean Host Hotels & Resorts, L.P., a Delaware limited partnership, and its consolidated subsidiaries, in cases where it is important to distinguish between Host Inc. and Host L.P. We use the terms “we,” “our” or “the company” to refer to Host Inc. and Host L.P. together, unless the context indicates otherwise.

Host Inc. operates as a self-managed and self-administered real estate investment trust (“REIT”). Host Inc. owns properties and conducts operations through Host L.P., of which Host Inc. is the sole general partner and of which it holds approximately 99% of the partnership interests (“OP units”). The remaining OP units are owned by various unaffiliated limited partners. As the sole general partner of Host L.P., Host Inc. has the exclusive and complete responsibility for Host L.P.’s day-to-day management and control. Management operates Host Inc. and Host L.P. as one enterprise. The management of Host Inc. consists of the same persons who direct the management of Host L.P. As general partner with control of Host L.P., Host Inc. consolidates Host L.P. for financial reporting purposes, and Host Inc. does not have significant assets other than its investment in Host L.P. Therefore, the assets and liabilities of Host Inc. and Host L.P. are substantially the same on their respective condensed consolidated financial statements and the disclosures of Host Inc. and Host L.P. also are substantially similar. For these reasons, we believe that the combination into a single report of the quarterly reports on Form 10-Q of Host Inc. and Host L.P. results in benefits to management and investors.

The substantive difference between Host Inc.’s and Host L.P.’s filings is the fact that Host Inc. is a REIT with public stock, while Host L.P. is a partnership with no publicly traded equity. In the condensed consolidated financial statements, this difference primarily is reflected in the equity (or partners’ capital for Host L.P.) section of the consolidated balance sheets and in the consolidated statements of equity (or partners’ capital for Host L.P.). Apart from the different equity treatment, the condensed consolidated financial statements of Host Inc. and Host L.P. are nearly identical.

This combined Form 10-Q for Host Inc. and Host L.P. includes, for each entity, separate interim financial statements (but combined footnotes), separate reports on disclosure controls and procedures and internal control over financial reporting and separate CEO/CFO certifications. In addition, with respect to any other financial and non-financial disclosure items required by Form 10-Q, any material differences between Host Inc. and Host L.P. are discussed separately herein. For a more detailed discussion of the substantive differences between Host Inc. and Host L.P. and why we believe the combined filing results in benefits to investors, see the discussion in the combined Annual Report on Form 10-K for the year ended December 31, 2020 under the heading “Explanatory Note.”

 

 

 

i


 

 

HOST HOTELS & RESORTS, INC. AND HOST HOTELS & RESORTS, L.P.

INDEX

PART I. FINANCIAL INFORMATION

 

 

  

 

Page No.

Item 1.

  

Financial Statements for Host Hotels & Resorts, Inc.:

 

 

 

 

 

 

  

Condensed Consolidated Balance Sheets -

June 30, 2021 (unaudited) and December 31, 2020

1

 

 

 

 

 

  

Condensed Consolidated Statements of Operations (unaudited) -

Quarter and Year-to-date ended June 30, 2021 and 2020

2

 

 

 

 

 

  

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) -

Quarter and Year-to-date ended June 30, 2021 and 2020

3

 

 

 

 

 

  

Condensed Consolidated Statements of Cash Flows (unaudited) -

Year-to-date ended June 30, 2021 and 2020

4

 

 

 

 

 

  

Financial Statements for Host Hotels & Resorts, L.P.:

 

 

 

 

 

 

  

Condensed Consolidated Balance Sheets -

June 30, 2021 (unaudited) and December 31, 2020

6

 

 

 

 

 

  

Condensed Consolidated Statements of Operations (unaudited) -

Quarter and Year-to-date ended June 30, 2021 and 2020

7

 

 

 

 

 

  

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) -

Quarter and Year-to-date ended June 30, 2021 and 2020

8

 

 

 

 

 

  

Condensed Consolidated Statements of Cash Flows (unaudited) -

Year-to-date ended June 30, 2021 and 2020

9

 

 

 

 

 

  

Notes to Condensed Consolidated Financial Statements (unaudited)

11

 

 

 

 

Item 2.

  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

 

 

 

 

Item 3.

  

Quantitative and Qualitative Disclosures about Market Risk

45

 

 

 

 

Item 4.

  

Controls and Procedures

46

 

 

 

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

 

Item 2.

  

Unregistered Sales of Equity Securities and Use of Proceeds

47

 

 

 

 

Item 6.

  

Exhibits

48

 

 

 

ii


 

 

HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2021 and December 31, 2020

(in millions, except share and per share amounts)

 

 

 

June 30, 2021

 

 

December 31, 2020

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

Property and equipment, net

 

$

10,071

 

 

$

9,416

 

Right-of-use assets

 

 

594

 

 

 

597

 

Due from managers

 

 

55

 

 

 

22

 

Advances to and investments in affiliates

 

 

58

 

 

 

21

 

Furniture, fixtures and equipment replacement fund

 

 

139

 

 

 

139

 

Other

 

 

442

 

 

 

360

 

Cash and cash equivalents

 

 

1,450

 

 

 

2,335

 

Total assets

 

$

12,809

 

 

$

12,890

 

 

 

 

 

 

 

 

 

 

LIABILITIES, NON-CONTROLLING INTERESTS AND EQUITY

 

Debt

 

 

 

 

 

 

 

 

Senior notes

 

$

3,067

 

 

$

3,065

 

Credit facility, including the term loans of $996 and $997, respectively

 

 

2,470

 

 

 

2,471

 

Other debt

 

 

5

 

 

 

5

 

Total debt

 

 

5,542

 

 

 

5,541

 

Lease liabilities

 

 

607

 

 

 

610

 

Accounts payable and accrued expenses

 

 

80

 

 

 

71

 

Due to managers

 

 

50

 

 

 

64

 

Other

 

 

168

 

 

 

170

 

Total liabilities

 

 

6,447

 

 

 

6,456

 

 

 

 

 

 

 

 

 

 

Redeemable non-controlling interests - Host Hotels & Resorts, L.P.

 

 

125

 

 

 

108

 

 

 

 

 

 

 

 

 

 

Host Hotels & Resorts, Inc. stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, par value $.01, 1,050 million shares authorized,

     713.9 million shares and 705.4 million shares issued and

     outstanding, respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

7,688

 

 

 

7,568

 

Accumulated other comprehensive loss

 

 

(71

)

 

 

(74

)

Deficit

 

 

(1,392

)

 

 

(1,180

)

Total equity of Host Hotels & Resorts, Inc. stockholders

 

 

6,232

 

 

 

6,321

 

Non-redeemable non-controlling interests—other consolidated partnerships

 

 

5

 

 

 

5

 

Total equity

 

 

6,237

 

 

 

6,326

 

Total liabilities, non-controlling interests and equity

 

$

12,809

 

 

$

12,890

 

See notes to condensed consolidated financial statements.

 

 

 

1


 

 

HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter and Year-to-date ended June 30, 2021 and 2020

(unaudited, in millions, except per share amounts)

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

423

 

 

$

61

 

 

$

680

 

 

$

687

 

Food and beverage

 

 

137

 

 

 

11

 

 

 

214

 

 

 

341

 

Other

 

 

89

 

 

 

31

 

 

 

154

 

 

 

127

 

Total revenues

 

 

649

 

 

 

103

 

 

 

1,048

 

 

 

1,155

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

 

109

 

 

 

43

 

 

 

174

 

 

 

230

 

Food and beverage

 

 

105

 

 

 

39

 

 

 

167

 

 

 

284

 

Other departmental and support expenses

 

 

209

 

 

 

113

 

 

 

369

 

 

 

432

 

Management fees

 

 

21

 

 

 

(2

)

 

 

32

 

 

 

28

 

Other property-level expenses

 

 

79

 

 

 

70

 

 

 

157

 

 

 

163

 

Depreciation and amortization

 

 

169

 

 

 

168

 

 

 

334

 

 

 

332

 

Corporate and other expenses

 

 

25

 

 

 

25

 

 

 

49

 

 

 

50

 

Total operating costs and expenses

 

 

717

 

 

 

456

 

 

 

1,282

 

 

 

1,519

 

OPERATING LOSS

 

 

(68

)

 

 

(353

)

 

 

(234

)

 

 

(364

)

Interest income

 

 

 

 

 

1

 

 

 

1

 

 

 

7

 

Interest expense

 

 

(43

)

 

 

(40

)

 

 

(85

)

 

 

(77

)

Other gains

 

 

3

 

 

 

15

 

 

 

2

 

 

 

13

 

Equity in earnings (losses) of affiliates

 

 

25

 

 

 

(25

)

 

 

34

 

 

 

(21

)

LOSS BEFORE INCOME TAXES

 

 

(83

)

 

 

(402

)

 

 

(282

)

 

 

(442

)

Benefit for income taxes

 

 

22

 

 

 

46

 

 

 

68

 

 

 

83

 

NET LOSS

 

 

(61

)

 

 

(356

)

 

 

(214

)

 

 

(359

)

Less: Net loss attributable to non-controlling interests

 

 

1

 

 

 

4

 

 

 

2

 

 

 

4

 

NET LOSS ATTRIBUTABLE TO HOST HOTELS &

     RESORTS, INC.

 

$

(60

)

 

$

(352

)

 

$

(212

)

 

$

(355

)

Basic loss per common share

 

$

(.09

)

 

$

(.50

)

 

$

(.30

)

 

$

(.50

)

Diluted loss per common share

 

$

(.09

)

 

$

(.50

)

 

$

(.30

)

 

$

(.50

)

See notes to condensed consolidated financial statements.

 

 

2


 

 

 

HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Quarter and Year-to-date ended June 30, 2021 and 2020

(unaudited, in millions)

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

NET LOSS

 

$

(61

)

 

$

(356

)

 

$

(214

)

 

$

(359

)

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation and other comprehensive income

     of unconsolidated affiliates

 

 

6

 

 

 

 

 

 

4

 

 

 

(19

)

Change in fair value of derivative instruments

 

 

0

 

 

 

(2

)

 

 

(1

)

 

 

1

 

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

 

 

6

 

 

 

(2

)

 

 

3

 

 

 

(18

)

COMPREHENSIVE LOSS

 

 

(55

)

 

 

(358

)

 

 

(211

)

 

 

(377

)

Less: Comprehensive loss attributable to non-controlling interests

 

 

1

 

 

 

4

 

 

 

2

 

 

 

4

 

COMPREHENSIVE LOSS ATTRIBUTABLE TO HOST HOTELS & RESORTS, INC.

 

$

(54

)

 

$

(354

)

 

$

(209

)

 

$

(373

)

See notes to condensed consolidated financial statements.

 

 

 

3


 

 

HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Year-to-date ended June 30, 2021 and 2020

(unaudited, in millions)

 

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

 

$

(214

)

 

$

(359

)

Adjustments to reconcile net loss to net cash provided by (used in) operations:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

334

 

 

 

332

 

Amortization of finance costs, discounts and premiums, net

 

 

5

 

 

 

3

 

Loss on extinguishment of debt

 

 

 

 

 

1

 

Stock compensation expense

 

 

9

 

 

 

7

 

Other gains

 

 

(2

)

 

 

(13

)

Equity in (earnings) losses of affiliates

 

 

(34

)

 

 

21

 

Change in due from/to managers

 

 

(71

)

 

 

53

 

Distributions from investments in affiliates

 

 

4

 

 

 

 

Changes in other assets

 

 

(64

)

 

 

(51

)

Changes in other liabilities

 

 

(7

)

 

 

(9

)

Net cash used in operating activities

 

 

(40

)

 

 

(15

)

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from sales of assets, net

 

 

6

 

 

 

11

 

Proceeds from loan receivable

 

 

9

 

 

 

28

 

Advances to and investments in affiliates

 

 

(8

)

 

 

(3

)

Acquisitions

 

 

(801

)

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

Renewals and replacements

 

 

(63

)

 

 

(94

)

Return on investment

 

 

(117

)

 

 

(206

)

Net cash used in investing activities

 

 

(974

)

 

 

(264

)

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Financing costs

 

 

(3

)

 

 

(5

)

Draws on credit facility

 

 

 

 

 

1,500

 

Repayment of credit facility

 

 

 

 

 

(750

)

Issuance of common stock

 

 

138

 

 

 

 

Common stock repurchase

 

 

 

 

 

(147

)

Dividends on common stock

 

 

 

 

 

(320

)

Distributions and payments to non-controlling interests

 

 

 

 

 

(3

)

Other financing activities

 

 

(8

)

 

 

(7

)

Net cash provided by financing activities

 

 

127

 

 

 

268

 

Effects of exchange rate changes on cash held

 

 

2

 

 

 

(6

)

NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(885

)

 

 

(17

)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING

     OF PERIOD

 

 

2,476

 

 

 

1,750

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

 

$

1,591

 

 

$

1,733

 

 

See notes to condensed consolidated financial statements.

 

 

4


 

 

HOST HOTELS & RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

Year-to-date ended June 30, 2021 and 2020

(unaudited)

Supplemental disclosure of cash flow information (in millions):

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet to the amount shown in the statements of cash flows:

  

 

June 30, 2021

 

 

 

 

June 30, 2020

 

Cash and cash equivalents

 

$

1,450

 

 

 

 

$

1,578

 

Restricted cash (included in other assets)

 

 

2

 

 

 

 

 

1

 

Cash included in furniture, fixtures and equipment replacement fund

 

 

139

 

 

 

 

 

154

 

Total cash and cash equivalents and restricted cash shown in the statements of cash flows

 

$

1,591

 

 

 

 

$

1,733

 

 The following table presents cash paid for the following: 

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

Total interest paid

 

$

83

 

 

$

73

 

Income taxes paid

 

$

 

 

$

 

Supplemental schedule of noncash investing and financing activities:

In 2021, non-cash consideration for the acquisition of the Four Seasons Resort Orlando at Walt Disney World® Resort included the assumption of hotel-level liabilities of approximately $24 million, consisting primarily of advance deposits received from guests for future stays that were retained by the seller.

In connection with the sale of a parcel of land adjacent to The Phoenician hotel in 2020, we received as consideration a note receivable for $9 million. The proceeds received in 2020 from the sale are net of this note receivable. The note receivable was collected in January 2021.

See notes to condensed consolidated financial statements.

 

 

 

5


 

 

HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2021 and December 31, 2020

(in millions)

 

 

 

June 30, 2021

 

 

December 31, 2020

 

 

 

(unaudited)

 

 

 

 

 

ASSETS

 

Property and equipment, net

 

$

10,071

 

 

$

9,416

 

Right-of-use assets

 

 

594

 

 

 

597

 

Due from managers

 

 

55

 

 

 

22

 

Advances to and investments in affiliates

 

 

58

 

 

 

21

 

Furniture, fixtures and equipment replacement fund

 

 

139

 

 

 

139

 

Other

 

 

442

 

 

 

360

 

Cash and cash equivalents

 

 

1,450

 

 

 

2,335

 

Total assets

 

$

12,809

 

 

$

12,890

 

 

 

 

 

 

 

 

 

 

LIABILITIES, LIMITED PARTNERSHIP INTERESTS OF THIRD PARTIES AND CAPITAL

 

Debt

 

 

 

 

 

 

 

 

Senior notes

 

$

3,067

 

 

$

3,065

 

Credit facility, including the term loans of $996 and $997, respectively

 

 

2,470

 

 

 

2,471

 

Other debt

 

 

5

 

 

 

5

 

Total debt

 

 

5,542

 

 

 

5,541

 

Lease liabilities

 

 

607

 

 

 

610

 

Accounts payable and accrued expenses

 

 

80

 

 

 

71

 

Due to managers

 

 

50

 

 

 

64

 

Other

 

 

168

 

 

 

170

 

Total liabilities

 

 

6,447

 

 

 

6,456

 

 

 

 

 

 

 

 

 

 

Limited partnership interests of third parties

 

 

125

 

 

 

108

 

 

 

 

 

 

 

 

 

 

Host Hotels & Resorts, L.P. capital:

 

 

 

 

 

 

 

 

General partner

 

 

1

 

 

 

1

 

Limited partner

 

 

6,302

 

 

 

6,394

 

Accumulated other comprehensive loss

 

 

(71

)

 

 

(74

)

Total Host Hotels & Resorts, L.P. capital

 

 

6,232

 

 

 

6,321

 

Non-controlling interests—consolidated partnerships

 

 

5

 

 

 

5

 

Total capital

 

 

6,237

 

 

 

6,326

 

Total liabilities, limited partnership interests of third parties and

     capital

 

$

12,809

 

 

$

12,890

 

See notes to condensed consolidated financial statements.

 

 

 

6


 

 

HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Quarter and Year-to-date ended June 30, 2021 and 2020

(unaudited, in millions, except per unit amounts)

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

423

 

 

$

61

 

 

$

680

 

 

$

687

 

Food and beverage

 

 

137

 

 

 

11

 

 

 

214

 

 

 

341

 

Other

 

 

89

 

 

 

31

 

 

 

154

 

 

 

127

 

Total revenues

 

 

649

 

 

 

103

 

 

 

1,048

 

 

 

1,155

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

 

109

 

 

 

43

 

 

 

174

 

 

 

230

 

Food and beverage

 

 

105

 

 

 

39

 

 

 

167

 

 

 

284

 

Other departmental and support expenses

 

 

209

 

 

 

113

 

 

 

369

 

 

 

432

 

Management fees

 

 

21

 

 

 

(2

)

 

 

32

 

 

 

28

 

Other property-level expenses

 

 

79

 

 

 

70

 

 

 

157

 

 

 

163

 

Depreciation and amortization

 

 

169

 

 

 

168

 

 

 

334

 

 

 

332

 

Corporate and other expenses

 

 

25

 

 

 

25

 

 

 

49

 

 

 

50

 

Total operating costs and expenses

 

 

717

 

 

 

456

 

 

 

1,282

 

 

 

1,519

 

OPERATING LOSS

 

 

(68

)

 

 

(353

)

 

 

(234

)

 

 

(364

)

Interest income

 

 

 

 

 

1

 

 

 

1

 

 

 

7

 

Interest expense

 

 

(43

)

 

 

(40

)

 

 

(85

)

 

 

(77

)

Other gains

 

 

3

 

 

 

15

 

 

 

2

 

 

 

13

 

Equity in earnings (losses) of affiliates

 

 

25

 

 

 

(25

)

 

 

34

 

 

 

(21

)

LOSS BEFORE INCOME TAXES

 

 

(83

)

 

 

(402

)

 

 

(282

)

 

 

(442

)

Benefit for income taxes

 

 

22

 

 

 

46

 

 

 

68

 

 

 

83

 

NET LOSS

 

 

(61

)

 

 

(356

)

 

 

(214

)

 

 

(359

)

Less: Net loss attributable to non-controlling interests

 

 

 

 

 

1

 

 

 

 

 

 

1

 

NET LOSS ATTRIBUTABLE TO HOST HOTELS &

     RESORTS, L.P.

 

$

(61

)

 

$

(355

)

 

$

(214

)

 

$

(358

)

Basic loss per common unit

 

$

(.09

)

 

$

(.51

)

 

$

(.31

)

 

$

(.51

)

Diluted loss per common unit

 

$

(.09

)

 

$

(.51

)

 

$

(.31

)

 

$

(.51

)

See notes to condensed consolidated financial statements.

7


 

HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Quarter and Year-to-date ended June 30, 2021 and 2020

(unaudited, in millions)

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

NET LOSS

 

$

(61

)

 

$

(356

)

 

$

(214

)

 

$

(359

)

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation and other comprehensive income

     of unconsolidated affiliates

 

 

6

 

 

 

 

 

 

4

 

 

 

(19

)

Change in fair value of derivative instruments

 

 

0

 

 

 

(2

)

 

 

(1

)

 

 

1

 

OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

 

 

6

 

 

 

(2

)

 

 

3

 

 

 

(18

)

COMPREHENSIVE LOSS

 

 

(55

)

 

 

(358

)

 

 

(211

)

 

 

(377

)

Less: Comprehensive loss attributable to non-controlling interests

 

 

 

 

 

1

 

 

 

 

 

 

1

 

COMPREHENSIVE LOSS ATTRIBUTABLE TO HOST HOTELS & RESORTS, L.P.

 

$

(55

)

 

$

(357

)

 

$

(211

)

 

$

(376

)

See notes to condensed consolidated financial statements.

8


 

HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Year-to-date ended June 30, 2021 and 2020

(unaudited, in millions)

 

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net loss

 

$

(214

)

 

$

(359

)

Adjustments to reconcile net loss to net cash provided by (used in) operations:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

334

 

 

 

332

 

Amortization of finance costs, discounts and premiums, net

 

 

5

 

 

 

3

 

Loss on extinguishment of debt

 

 

 

 

 

1

 

Stock compensation expense

 

 

9

 

 

 

7

 

Other gains

 

 

(2

)

 

 

(13

)

Equity in (earnings) losses of affiliates

 

 

(34

)

 

 

21

 

Change in due from/to managers

 

 

(71

)

 

 

53

 

Distributions from investments in affiliates

 

 

4

 

 

 

 

Changes in other assets

 

 

(64

)

 

 

(51

)

Changes in other liabilities

 

 

(7

)

 

 

(9

)

Net cash used in operating activities

 

 

(40

)

 

 

(15

)

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from sales of assets, net

 

 

6

 

 

 

11

 

Proceeds from loan receivable

 

 

9

 

 

 

28

 

Advances to and investments in affiliates

 

 

(8

)

 

 

(3

)

Acquisitions

 

 

(801

)

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

Renewals and replacements

 

 

(63

)

 

 

(94

)

Return on investment

 

 

(117

)

 

 

(206

)

Net cash used in investing activities

 

 

(974

)

 

 

(264

)

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Financing costs

 

 

(3

)

 

 

(5

)

Draws on credit facility

 

 

 

 

 

1,500

 

Repayment of credit facility

 

 

 

 

 

(750

)

Issuance of common OP units

 

 

138

 

 

 

 

Repurchase of common OP units

 

 

 

 

 

(147

)

Distributions on common OP units

 

 

 

 

 

(323

)

Other financing activities

 

 

(8

)

 

 

(7

)

Net cash provided by financing activities

 

 

127

 

 

 

268

 

Effects of exchange rate changes on cash held

 

 

2

 

 

 

(6

)

NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(885

)

 

 

(17

)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING

     OF PERIOD

 

 

2,476

 

 

 

1,750

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

 

$

1,591

 

 

$

1,733

 

 

See notes to condensed consolidated financial statements.

 

 

9


 

 

HOST HOTELS & RESORTS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

Year-to-date ended June 30, 2021 and 2020

(unaudited)

Supplemental disclosure of cash flow information (in millions):

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet to the amount shown in the statements of cash flows: 

 

 

June 30, 2021

 

 

 

 

June 30, 2020

 

Cash and cash equivalents

 

$

1,450

 

 

 

 

$

1,578

 

Restricted cash (included in other assets)

 

 

2

 

 

 

 

 

1

 

Cash included in furniture, fixtures and equipment replacement fund

 

 

139

 

 

 

 

 

154

 

Total cash and cash equivalents and restricted cash shown in the statements of cash flows

 

$

1,591

 

 

 

 

$

1,733

 

The following table presents cash paid for the following:

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

Total interest paid

 

$

83

 

 

$

73

 

Income taxes paid

 

$

 

 

$

 

Supplemental schedule of noncash investing and financing activities:

In 2021, non-cash consideration for the acquisition of the Four Seasons Resort Orlando at Walt Disney World® Resort included the assumption of hotel-level liabilities of approximately $24 million, consisting primarily of advance deposits received from guests for future stays that were retained by the seller.

In connection with the sale of a parcel of land adjacent to The Phoenician hotel in 2020, we received as consideration a note receivable for $9 million. The proceeds received in 2020 from the sale are net of this note receivable. The note receivable was collected in January 2021.

See notes to condensed consolidated financial statements.

 

 

 

10


 

 

HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

1.

Organization

Description of Business

Host Hotels & Resorts, Inc. operates as a self-managed and self-administered real estate investment trust (“REIT”), with its operations conducted solely through Host Hotels & Resorts, L.P. and its subsidiaries. Host Hotels & Resorts, L.P., a Delaware limited partnership, operates through an umbrella partnership structure, with Host Hotels & Resorts, Inc., a Maryland corporation, as its sole general partner. In the notes to these unaudited condensed consolidated financial statements, we use the terms “we” or “our” to refer to Host Hotels & Resorts, Inc. and Host Hotels & Resorts, L.P. together, unless the context indicates otherwise. We also use the term “Host Inc.” specifically to refer to Host Hotels & Resorts, Inc. and the term “Host L.P.” specifically to refer to Host Hotels & Resorts, L.P. in cases where it is important to distinguish between Host Inc. and Host L.P. As of June 30, 2021, Host Inc. holds approximately 99% of Host L.P.’s partnership interests.

Liquidity and Management’s Plans

The COVID-19 pandemic has had a significant adverse impact on U.S. and global economic activity and has contributed to significant volatility in financial markets beginning in the first quarter of 2020. While many of the restrictive measures put in place in jurisdictions where we own hotels have been lifted, certain restrictions remain, including limitations on the size of gatherings and/or on the types of business that may continue to operate. As a result, the COVID-19 pandemic continues to negatively impact the U.S. lodging industry generally and our company specifically.

At the start of the pandemic, we suspended operations at 35 hotels. As of June 30, 2021, operations remain suspended at 1 hotel, which reopened subsequent to quarter end. While the U.S. economic recovery has accelerated during the quarter, the pandemic continues to have a material negative impact on our financial results and cash flows. In 2020, we drew down $1.5 billion on the revolver portion of our credit facility as a precautionary measure in order to increase our cash position and preserve financial flexibility. We are continuing to take further measures to preserve our liquidity, including operating expense reductions and the suspension of dividends and common stock repurchases. We also have reached agreements with our hotel managers to temporarily suspend furniture, fixture and equipment (“FF&E”) replacement fund contributions for our hotels and to defer certain hotel initiatives and brand standards.

Consolidated Portfolio

As of June 30, 2021, our consolidated portfolio, primarily consisting of luxury and upper upscale hotels, is located in the following countries:

 

 

Hotels

 

United States

 

77

 

Brazil

 

3

 

Canada

 

2

 

Total

 

82

 

 

 

 

2.

Summary of Significant Accounting Policies

We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10–K for the year ended December 31, 2020.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

11


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of June 30, 2021, and the results of our operations and cash flows for the quarters ended June 30, 2021 and 2020, respectively. Interim results are not necessarily indicative of full year performance because of the effect of seasonal variations as well as the impact from the COVID-19 pandemic.

Three of the partnerships in which we own an interest are considered variable interest entities (VIEs) as the general partner maintains control over the decisions that most significantly impact such partnerships. These VIEs include the operating partnership, Host L.P., which is consolidated by Host Inc., of which Host Inc. is the sole general partner and holds approximately 99% of its partnership interests; the consolidated partnership that owns the Houston Airport Marriott at George Bush Intercontinental; and the unconsolidated partnership that owns the Philadelphia Marriott Downtown. Host Inc.’s sole significant asset is its investment in Host L.P. and, consequently, substantially all of Host Inc.’s assets and liabilities consists of the assets and liabilities of Host L.P. All of Host Inc.���s debt is an obligation of Host L.P. and may be repaid only with assets of Host L.P.

Reclassifications

Certain prior year financial statement amounts have been reclassified to conform with the current year presentation.

 

 

 

3.

Earnings (Loss) Per Common Share (Unit)

Basic earnings (loss) per common share (unit) is computed by dividing net income (loss) attributable to common stockholders (unitholders) by the weighted average number of shares of Host Inc. common stock or Host L.P. common units outstanding. Diluted earnings (loss) per common share (unit) is computed by dividing net income (loss) attributable to common stockholders (unitholders), as adjusted for potentially dilutive securities, by the weighted average number of shares of Host Inc. common stock or Host L.P. common units outstanding plus other potentially dilutive securities. Dilutive securities may include shares granted under comprehensive stock plans or the Host L.P. common units distributed to Host Inc. to support such shares granted, and other non-controlling interests that have the option to convert their limited partner interests to Host L.P. common units. No effect is shown for any securities that are anti-dilutive. We have 7.2 million Host L.P. common units, which are convertible into 7.4 million Host Inc. common shares, that are not included in Host Inc.’s calculation of earnings (loss) per share as their effect is not dilutive. The calculation of Host Inc. basic and diluted earnings (loss) per common share is shown below (in millions, except per share amounts):

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(61

)

 

$

(356

)

 

$

(214

)

 

$

(359

)

Less: Net loss attributable to non-controlling interests

 

 

1

 

 

 

4

 

 

 

2

 

 

 

4

 

Net loss attributable to Host Inc.

 

$

(60

)

 

$

(352

)

 

$

(212

)

 

$

(355

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

707.6

 

 

 

705.1

 

 

 

706.6

 

 

 

706.7

 

Diluted weighted average shares outstanding

 

 

707.6

 

 

 

705.1

 

 

 

706.6

 

 

 

706.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per common share

 

$

(.09

)

 

$

(.50

)

 

$

(.30

)

 

$

(.50

)

Diluted loss per common share

 

$

(.09

)

 

$

(.50

)

 

$

(.30

)

 

$

(.50

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

 

The calculation of Host L.P. basic and diluted earnings (loss) per unit is shown below (in millions, except per unit amounts):

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(61

)

 

$

(356

)

 

$

(214

)

 

$

(359

)

Less: Net loss attributable to non-controlling

     interests

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Net loss attributable to Host L.P.

 

$

(61

)

 

$

(355

)

 

$

(214

)

 

$

(358

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average units outstanding

 

 

699.9

 

 

 

697.7

 

 

 

699.0

 

 

 

699.3

 

Diluted weighted average units outstanding

 

 

699.9

 

 

 

697.7

 

 

 

699.0

 

 

 

699.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss per common unit

 

$

(.09

)

 

$

(.51

)

 

$

(.31

)

 

$

(.51

)

Diluted loss per common unit

 

$

(.09

)

 

$

(.51

)

 

$

(.31

)

 

$

(.51

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.

Revenue

Substantially all our operating results represent revenues and expenses generated by hotel-level operations. Payments are due from customers when services are provided to them. Due to the short-term nature of our contracts and the almost concurrent receipt of payment, we have no material unearned revenue at quarter end. We collect sales, use, occupancy and similar taxes from our customers, which we present on a net basis (excluded from revenues) on our statements of operations.

13


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

Disaggregation of Revenues. While we do not consider the following presentation of revenues by location to consist of reportable segments, we have disaggregated hotel revenues by market location. Our revenues also are presented by country in Note 10 – Geographic Information.

By Location. The following table presents hotel revenues for each of the geographic locations in our consolidated hotel portfolio (in millions):

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

Location

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Florida Gulf Coast

 

$

85

 

 

$

18

 

 

$

166

 

 

$

127

 

Maui/Oahu

 

 

98

 

 

 

1

 

 

 

142

 

 

 

94

 

Phoenix

 

 

63

 

 

 

8

 

 

 

117

 

 

 

91

 

Miami

 

 

56

 

 

 

5

 

 

 

112

 

 

 

65

 

San Diego

 

 

41

 

 

 

5

 

 

 

55

 

 

 

92

 

Orlando

 

 

36

 

 

 

3

 

 

 

45

 

 

 

56

 

Washington, D.C. (Central Business District)

 

 

20

 

 

 

3

 

 

 

43

 

 

 

57

 

Jacksonville

 

 

29

 

 

 

9

 

 

 

43

 

 

 

28

 

Los Angeles/Orange County

 

 

29

 

 

 

7

 

 

 

39

 

 

 

59

 

San Francisco/San Jose

 

 

25

 

 

 

6

 

 

 

36

 

 

 

112

 

New York

 

 

25

 

 

 

16

 

 

 

36

 

 

 

93

 

Houston

 

 

19

 

 

 

4

 

 

 

32

 

 

 

29

 

Atlanta

 

 

18

 

 

 

3

 

 

 

29

 

 

 

33

 

San Antonio/Austin

 

 

18

 

 

 

1

 

 

 

26

 

 

 

18

 

Northern Virginia

 

 

12

 

 

 

1

 

 

 

19

 

 

 

22

 

Philadelphia

 

 

11

 

 

 

1

 

 

 

16

 

 

 

14

 

Chicago

 

 

9

 

 

 

2

 

 

 

13

 

 

 

18

 

Boston

 

 

10

 

 

 

1

 

 

 

13

 

 

 

36

 

New Orleans

 

 

10

 

 

 

 

 

 

13

 

 

 

24

 

Denver

 

 

9

 

 

 

2

 

 

 

12

 

 

 

17

 

Seattle

 

 

5

 

 

 

 

 

 

7

 

 

 

18

 

Other

 

 

18

 

 

 

5

 

 

 

29

 

 

 

36

 

Domestic

 

 

646

 

 

 

101

 

 

 

1,043

 

 

 

1,139

 

International

 

 

3

 

 

 

2

 

 

 

5

 

 

 

16

 

Total

 

$

649

 

 

$

103

 

 

$

1,048

 

 

$

1,155

 

 

 

5.

Property and Equipment

Property and equipment consists of the following (in millions):

 

  

 

June 30, 2021

 

 

December 31, 2020

 

Land and land improvements

 

$

2,179

 

 

$

2,033

 

Buildings and leasehold improvements

 

 

14,400

 

 

 

13,609

 

Furniture and equipment

 

 

2,523

 

 

 

2,471

 

Construction in progress

 

 

169

 

 

 

166

 

 

 

 

19,271

 

 

 

18,279

 

Less accumulated depreciation and amortization

 

 

(9,200

)

 

 

(8,863

)

 

 

$

10,071

 

 

$

9,416

 

 

n

6.

Debt

Senior Notes. As of June 30, 2021, we are below the EBITDA-to-interest coverage ratio covenant requirement of our senior notes indenture necessary to incur additional debt, and, therefore, while not an event of default, we will be unable to incur additional debt while we remain below the required covenant level.  

14


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

Credit Facility. As of June 30, 2021, we have $12 million of available capacity under the revolver portion of our credit facility. Due to the failure to satisfy the senior notes indenture covenant requirement noted above, we currently are restricted from incurring additional debt.

 

 

7.

Equity of Host Inc. and Capital of Host L.P.

 

Equity of Host Inc.

The components of the Equity of Host Inc. are as follows (in millions):

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Retained Earnings / (Deficit)

 

 

Non-redeemable, non-controlling interests

 

 

Total equity

 

 

Redeemable, non-controlling interests

 

Balance, December 31, 2020

 

$

7

 

 

$

7,568

 

 

$

(74

)

 

$

(1,180

)

 

$

5

 

 

$

6,326

 

 

$

108

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(212

)

 

 

 

 

 

(212

)

 

 

(2

)

Issuance of common stock for

     comprehensive stock plans,

     net

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

Common stock issuances

 

 

 

 

 

138

 

 

 

 

 

 

 

 

 

 

 

 

138

 

 

 

 

Changes in ownership and other

 

 

 

 

 

(20

)

 

 

 

 

 

 

 

 

 

 

 

(20

)

 

 

19

 

Other comprehensive income

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

3

 

 

 

 

Balance, June 30, 2021

 

$

7

 

 

$

7,688

 

 

$

(71

)

 

$

(1,392

)

 

$

5

 

 

$

6,237

 

 

$

125

 

 

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Retained Earnings / (Deficit)

 

 

Non-redeemable, non-controlling interests

 

 

Total equity

 

 

Redeemable, non-controlling interests

 

Balance, March 31, 2021

 

$

7

 

 

$

7,547

 

 

$

(77

)

 

$

(1,332

)

 

$

5

 

 

$

6,150

 

 

$

124

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(60

)

 

 

 

 

 

(60

)

 

 

(1

)

Issuance of common stock for

     comprehensive stock plans,

     net

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

 

Common stock issuances

 

 

 

 

 

138

 

 

 

 

 

 

 

 

 

 

 

 

138

 

 

 

 

Changes in ownership and other

 

 

 

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

2

 

Other comprehensive income

 

 

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

6

 

 

 

 

Balance, June 30, 2021

 

$

7

 

 

$

7,688

 

 

$

(71

)

 

$

(1,392

)

 

$

5

 

 

$

6,237

 

 

$

125

 

15


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

 

 

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Retained Earnings / (Deficit)

 

 

Non-redeemable, non-controlling interests

 

 

Total equity

 

 

Redeemable, non-controlling interests

 

Balance, December 31, 2019

 

$

7

 

 

$

7,675

 

 

$

(56

)

 

$

(307

)

 

$

6

 

 

$

7,325

 

 

$

142

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(355

)

 

 

(1

)

 

 

(356

)

 

 

(3

)

Issuance of common stock for

     comprehensive stock plans,

     net

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

Repurchase of common stock

 

 

 

 

 

(147

)

 

 

 

 

 

 

 

 

 

 

 

(147

)

 

 

 

Dividends declared on common

     stock

 

 

 

 

 

 

 

 

 

 

 

(141

)

 

 

 

 

 

(141

)

 

 

 

Distributions to non-controlling

     interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

Changes in ownership and other

 

 

 

 

 

57

 

 

 

 

 

 

1

 

 

 

 

 

 

58

 

 

 

(56

)

Other comprehensive loss

 

 

 

 

 

 

 

 

(18

)

 

 

 

 

 

 

 

 

(18

)

 

 

 

Balance, June 30, 2020

 

$

7

 

 

$

7,586

 

 

$

(74

)

 

$

(802

)

 

$

5

 

 

$

6,722

 

 

$

81

 

 

 

 

Common Stock

 

 

Additional Paid-in Capital

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Retained Earnings / (Deficit)

 

 

Non-redeemable, non-controlling interests

 

 

Total equity

 

 

Redeemable, non-controlling interests

 

Balance, March 31, 2020

 

$

7

 

 

$

7,580

 

 

$

(72

)

 

$

(451

)

 

$

6

 

 

$

7,070

 

 

$

84

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(352

)

 

 

(1

)

 

 

(353

)

 

 

(3

)

Issuance of common stock for

     comprehensive stock plans,

     net

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

 

Changes in ownership and other

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

1

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

 

 

 

(2

)

 

 

 

Balance, June 30, 2020

 

$

7

 

 

$

7,586

 

 

$

(74

)

 

$

(802

)

 

$

5

 

 

$

6,722

 

 

$

81

 

Capital of Host L.P.

As of June 30, 2021, Host Inc. is the owner of approximately 99% of Host L.P.’s common OP units. The remaining common OP units are owned by unaffiliated limited partners. Each common OP unit may be redeemed for cash or, at the election of Host Inc., Host Inc. common stock, based on the conversion ratio of 1.021494 shares of Host Inc. common stock for each common OP unit. Under the credit facility, all redemptions must be made with Host Inc. common stock until Host L.P.’s leverage ratio (as calculated under the credit facility) is below 7.25x.

In exchange for any shares issued by Host Inc., Host L.P. will issue common OP units to Host Inc. based on the applicable conversion ratio. Additionally, funds used by Host Inc. to pay dividends on its common stock are provided by distributions from Host L.P.

16


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

The components of the Capital of Host L.P. are as follows (in millions):

 

 

 

General Partner

 

 

Limited Partner

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Non-controlling interests

 

 

Total capital

 

 

Limited partnership interests of third parties

 

Balance, December 31, 2020

 

$

1

 

 

$

6,394

 

 

$

(74

)

 

$

5

 

 

$

6,326

 

 

$

108

 

Net loss

 

 

 

 

 

(212

)

 

 

 

 

 

 

 

 

(212

)

 

 

(2

)

Issuance of common OP units to

     Host Inc. for comprehensive

     stock plans, net

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

 

 

 

Common OP unit issuances

 

 

 

 

 

138

 

 

 

 

 

 

 

 

 

138

 

 

 

 

Changes in ownership and other

 

 

 

 

 

(20

)

 

 

 

 

 

 

 

 

(20

)

 

 

19

 

Other comprehensive income

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

 

 

 

Balance, June 30, 2021

 

$

1

 

 

$

6,302

 

 

$

(71

)

 

$

5

 

 

$

6,237

 

 

$

125

 

 

 

 

General Partner

 

 

Limited Partner

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Non-controlling interests

 

 

Total capital

 

 

Limited partnership interests of third parties

 

Balance, March 31, 2021

 

$

1

 

 

$

6,221

 

 

$

(77

)

 

$

5

 

 

$

6,150

 

 

$

124

 

Net loss

 

 

 

 

 

(60

)

 

 

 

 

 

 

 

 

(60

)

 

 

(1

)

Issuance of common OP units to

     Host Inc. for comprehensive

     stock plans, net

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

6

 

 

 

 

Common OP unit issuances

 

 

 

 

 

138

 

 

 

 

 

 

 

 

 

138

 

 

 

 

Changes in ownership and other

 

 

 

 

 

(3

)

 

 

 

 

 

 

 

 

(3

)

 

 

2

 

Other comprehensive income

 

 

 

 

 

 

 

 

6

 

 

 

 

 

 

6

 

 

 

 

Balance, June 30, 2021

 

$

1

 

 

$

6,302

 

 

$

(71

)

 

$

5

 

 

$

6,237

 

 

$

125

 

 

 

 

General Partner

 

 

Limited Partner

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Non-controlling interests

 

 

Total capital

 

 

Limited partnership interests of third parties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019

 

$

1

 

 

$

7,374

 

 

$

(56

)

 

$

6

 

 

$

7,325

 

 

$

142

 

Net loss

 

 

 

 

 

(355

)

 

 

 

 

 

(1

)

 

 

(356

)

 

 

(3

)

Issuance of common OP units to

     Host Inc. for comprehensive

     stock plans, net

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

 

Repurchase of common OP units

 

 

 

 

 

(147

)

 

 

 

 

 

 

 

 

(147

)

 

 

 

Distributions declared on common

     OP units

 

 

 

 

 

(141

)

 

 

 

 

 

 

 

 

(141

)

 

 

(2

)

Changes in ownership and other

 

 

 

 

 

58

 

 

 

 

 

 

 

 

 

58

 

 

 

(56

)

Other comprehensive loss

 

 

 

 

 

 

 

 

(18

)

 

 

 

 

 

(18

)

 

 

 

Balance, June 30, 2020

 

$

1

 

 

$

6,790

 

 

$

(74

)

 

$

5

 

 

$

6,722

 

 

$

81

 

17


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

 

 

 

 

General Partner

 

 

Limited Partner

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Non-controlling interests

 

 

Total capital

 

 

Limited partnership interests of third parties

 

Balance, March 31, 2020

 

$

1

 

 

$

7,135

 

 

$

(72

)

 

$

6

 

 

$

7,070

 

 

$

84

 

Net loss

 

 

 

 

 

(352

)

 

 

 

 

 

(1

)

 

 

(353

)

 

 

(3

)

Issuance of common OP units to

     Host Inc. for comprehensive

     stock plans, net

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

6

 

 

 

 

Changes in ownership and other

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

(2

)

 

 

 

Balance, June 30, 2020

 

$

1

 

 

$

6,790

 

 

$

(74

)

 

$

5

 

 

$

6,722

 

 

$

81

 

 

Share Repurchases

As of June 30, 2021, we have $371 million available for repurchase under our common share repurchase program. In accordance with the restrictions in our amended credit facility, there were 0 share repurchases during 2021.

Issuance of Common Stock

On May 6, 2021, we entered into a distribution agreement with  J. P. Morgan Securities LLC, BofA Securities, Inc., BTIG, LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., Truist Securities, Inc. and Wells Fargo Securities, LLC, as sales agents, pursuant to which we may issue and sell, from time to time, shares having an aggregate offering price of up to $600 million. The sales will be made in “at the market” offerings under the SEC rules. We may sell shares of Host Inc. common stock under this program from time to time based on market conditions, although we are not under an obligation to sell any shares. During the second quarter, we issued approximately 7.8 million shares under the program at an average price of $17.99 per share, for net proceeds of approximately $138 million. In connection with the common stock issuance by Host Inc., Host L.P. issued 7.6 million common OP units. At June 30, 2021, there was $460 million of remaining capacity under the agreement.

Dividends/Distributions

As part of our response to the COVID-19 pandemic and in order to preserve cash and future financial flexibility, we have suspended our regular quarterly common cash dividends. Additionally, based on the terms of the credit facility amendments, we are restricted from paying a quarterly common cash dividend in excess of $0.01 per share during the covenant relief period, unless a higher amount is required to allow Host Inc. to maintain its REIT status or to avoid the payment of corporate income or excise taxes, until after the covenant waiver period expires. The amendment currently expires following the second quarter of 2022, although we are permitted to terminate the covenant relief period at any time, subject to demonstrating satisfaction of the financial maintenance covenants that otherwise would apply for the quarter ending June 30, 2022.

 

8.

Acquisitions

During the quarter, we purchased the 444-room Four Seasons Resort Orlando at Walt Disney World® Resort for a total purchase price of $610 million and the Royal Ka’anapali and Ka’anapali Kai golf courses, adjacent to our Hyatt Regency Maui hotel, for $28 million.

Subsequent to quarter end, we purchased the 200-room Baker’s Cay Resort Key Largo, Curio Collection for a total purchase price of $200 million and an unbranded 223-room luxury hotel in Houston with suspended operations, formerly operated as the Hotel Alessandra, for $65 million.

 

 

18


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

 

9.

Fair Value Measurements

We did not elect the fair value measurement option for any of our financial liabilities. The fair value of our credit facility is determined based on expected future payments discounted at a risk-adjusted rate. Our senior notes are valued based on quoted market prices. The fair values of financial instruments not included in this table are estimated to be equal to their carrying amounts.

The fair value of certain financial liabilities is shown below (in millions):  

 

 

 

June 30, 2021

 

 

December 31, 2020

 

 

 

Carrying

Amount

 

 

Fair Value

 

 

Carrying

Amount

 

 

Fair Value

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior notes (Level 1)

 

$

3,067

 

 

$

3,300

 

 

$

3,065

 

 

$

3,284

 

Credit facility (Level 2)

 

 

2,470

 

 

 

2,483

 

 

 

2,471

 

 

 

2,483

 

 

 

E

 

10.

Geographic Information

We consider each of our hotels to be an operating segment, as we allocate resources and assess operating performance based on individual hotels. All of our hotels meet the aggregation criteria for segment reporting and our other real estate investment activities (primarily our retail spaces and office buildings) are immaterial. As such, we report 1 segment: hotel ownership. Our consolidated foreign operations consist of hotels in 2 countries as of June 30, 2021. There were no intersegment sales during the periods presented.

The following table presents total revenues and property and equipment, net, for each of the geographical areas in which we operate (in millions):

 

 

 

Total Revenues

 

 

Property and Equipment, net

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

June 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

United States

 

$

646

 

 

$

101

 

 

$

1,043

 

 

$

1,139

 

 

$

9,988

 

 

$

9,331

 

Brazil

 

 

1

 

 

 

1

 

 

 

2

 

 

 

5

 

 

 

35

 

 

 

34

 

Canada

 

 

2

 

 

 

1

 

 

 

3

 

 

 

11

 

 

 

48

 

 

 

51

 

Total

 

$

649

 

 

$

103

 

 

$

1,048

 

 

$

1,155

 

 

$

10,071

 

 

$

9,416

 

 

 

 

11.

Non-controlling Interests

Host Inc.’s treatment of the non-controlling interests of Host L.P.: Host Inc. adjusts the amount of the non-controlling interests of Host L.P. each period so that the amount presented equals the greater of their carrying amount based on accumulated historical cost or their redemption value. The historical cost is based on the proportional relationship between the historical cost of equity held by our common stockholders relative to that of the common unitholders of Host L.P. The redemption value is based on the amount of cash or Host Inc. common stock, at our option, that would be paid to the non-controlling interests of Host L.P. if it were terminated. Therefore, the redemption value of the common OP units is equivalent to the number of common shares that would be issued upon conversion of the common OP units held by third parties valued at the market price of Host Inc. common stock at the balance sheet date. One common OP unit may be exchanged for 1.021494 shares of Host Inc. common stock. Redeemable non-controlling interests of Host L.P. are classified in the mezzanine section of our balance sheets as they do not meet the requirements for equity classification because the redemption feature requires the delivery of registered shares. During the Covenant Relief Period, all redemptions must be made with Host Inc. common stock.

19


HOST HOTELS & RESORTS, INC., HOST HOTELS & RESORTS, L.P., AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

 

The table below details the historical cost and redemption values for the non-controlling interests:

 

 

 

June 30, 2021

 

 

December 31, 2020

 

Common OP units outstanding (millions)

 

 

7.2

 

 

 

7.2

 

Market price per Host Inc. common share

 

$

17.09

 

 

$

14.63

 

Shares issuable upon conversion of one common OP unit

 

 

1.021494

 

 

 

1.021494

 

Redemption value (millions)

 

$

125

 

 

$

108

 

Historical cost (millions)

 

 

65

 

 

 

67

 

Book value (millions) (1)

 

 

125

 

 

 

108

 

___________

 

 

 

 

 

 

 

 

 

(1)

The book value recorded is equal to the greater of redemption value or historical cost.

Other Consolidated Partnerships. We consolidate 2 majority-owned partnerships that have third-party, non-controlling ownership interests. The third-party limited partner interests are included in non-redeemable non-controlling interests — other consolidated partnerships on the balance sheets and totaled $5 million as of both June 30, 2021 and December 31, 2020.

 

12.

Legal Proceedings

We are involved in various legal proceedings in the ordinary course of business regarding the operation of our hotels and company matters. To the extent not covered by insurance, these legal proceedings generally fall into the following broad categories: disputes involving hotel-level contracts, employment litigation, compliance with laws such as the Americans with Disabilities Act, tax disputes and other general matters. Under our management agreements, our operators have broad latitude to resolve individual hotel-level claims for amounts generally less than $150,000. However, for matters exceeding such threshold, our operators may not settle claims without our consent.

Based on our analysis of legal proceedings with which we are involved or of which we currently are aware and our experience in resolving similar claims in the past, we have recorded immaterial accruals as of June 30, 2021 related to such claims. We have estimated that, in the aggregate, our losses related to these proceedings will not be material. We are not aware of any matters with a reasonably possible unfavorable outcome for which disclosure of a loss contingency is required. No assurances can be given as to the outcome of any pending legal proceedings.

 

 

 

20


 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this report. Host Inc. operates as a self-managed and self-administered REIT. Host Inc. is the sole general partner of Host L.P. and holds approximately 99% of its partnership interests. Host L.P. is a limited partnership operating through an umbrella partnership structure. The remaining common OP units are owned by various unaffiliated limited partners.

Forward-Looking Statements

In this quarterly report on Form 10-Q, we make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by their use of terms and phrases such as “anticipate,” “believe,” “could,” “expect,” “may,” “intend,” “predict,” “project,” “plan,” “will,” “estimate” and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are based on management’s current expectations and assumptions and are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results to differ materially from those anticipated at the time the forward-looking statements are made.

The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

 

the duration and scope of the COVID-19 pandemic and its short and longer-term impact on the demand for travel, transient and group business, and levels of consumer confidence; actions governments, businesses and individuals take in response to the pandemic, including limiting or banning travel; the ability of our hotel managers to operate hotels in a way that facilitate social distancing, implement enhanced cleaning protocols and other COVID-19 pandemic mitigation practices; the impact of the pandemic and actions taken in response to the pandemic on global and regional economies, travel, and economic activity, including the duration and magnitude of its impact on unemployment rates, business investment and consumer discretionary spending; the pace of recovery as the COVID-19 pandemic subsides; general economic uncertainty in U.S. markets where we own hotels and the potential for low levels of economic growth in these markets; and the effects on hotel operations of steps that our hotel managers take to reduce operating costs in response to the COVID-19 pandemic;

 

the effect on lodging demand of (i) changes in national and local economic and business conditions, including concerns about the pace of U.S. economic growth, global economic prospects, consumer confidence and the value of the U.S. dollar, and (ii) factors that may shape public perception of travel to a particular location, such as natural disasters, weather, changes in the international political climate, and the occurrence or potential occurrence of terrorist attacks, all of which will affect occupancy rates at our hotels and the demand for hotel products and services;

 

the impact of geopolitical developments outside the United States, such as the pace of economic growth in Europe, the effects of the United Kingdom’s withdrawal from the European Union, escalating trade tensions between the United States and its trading partners such as China, or conflicts in the Middle East, all of which could affect the relative volatility of global credit markets generally, global travel and lodging demand within the United States;

 

risks that U.S. immigration policies, border closings related to the COVID-19 pandemic and travel bans will suppress international travel to the United States generally;

 

volatility in global financial and credit markets, in particular because of the COVID-19 pandemic, and the impact of budget deficits and potential U.S. governmental action to address such deficits through reductions in spending and similar austerity measures, which could materially adversely affect U.S. and global economic conditions, business activity, credit availability, borrowing costs, and lodging demand;

 

operating risks associated with the hotel business, including the effect of labor stoppages or strikes, increasing operating or labor costs or changes in workplace rules that affect labor costs and risks relating to the response to the COVID-19 pandemic, such as increased costs relating to severance and furloughed hotel employees as a result of measures taken by our hotel managers in response to the COVID-19 pandemic and risks associated with our managers’ ability to successfully increase staffing levels to meet expected increases in lodging demand due to the challenging labor environment;

 

the effect of rating agency downgrades of our debt securities on the cost and availability of new debt financings;

 

the reduction in our operating flexibility and the limitation on our ability to incur debt, pay dividends and make distributions resulting from restrictive covenants in our debt agreements, including the waivers we obtained under our credit facility as a result of not meeting the original covenant thresholds that otherwise would have been required and other risks associated with the amount of our indebtedness or related to restrictive covenants in our debt agreements, including the risk that a default could occur as a result of the decline in operations due to the COVID-19 pandemic;

21


 

 

our ability to maintain our hotels in a first-class manner, including meeting capital expenditures requirements, and the effect of renovations, including temporary closures, on our hotel occupancy and financial results;

 

the ability of our hotels to compete effectively against other lodging businesses in the highly competitive markets in which we operate in terms of access, location, quality of accommodations and room rate structures;

 

our ability to acquire or develop additional hotels and the risk that potential acquisitions or developments may not perform in accordance with our expectations;

 

the ability to complete hotel renovations on schedule and under budget and the potential for increased costs and construction delays due to government restrictions on non-essential activities and shortages of supplies as a result of supply chain disruptions due to the COVID-19 pandemic;  

 

relationships with property managers and joint venture partners and our ability to realize the expected benefits of our joint ventures and other strategic relationships;

 

risks associated with a single manager, Marriott International, managing a significant portion of our hotels;

 

changes in the desirability of the geographic regions of the hotels in our portfolio or in the travel patterns of hotel customers;

 

the ability of third-party internet and other travel intermediaries to attract and retain customers;

 

our ability to recover fully under our existing insurance policies for terrorist acts and our ability to maintain adequate or full replacement cost “all-risk” property insurance policies on our hotels on commercially reasonable terms;

 

the effect of a data breach or significant disruption of hotel operator information technology networks as a result of cyber attacks;

 

the effects of tax legislative action and other changes in laws and regulations, or the interpretation thereof, including the need for compliance with new environmental and safety requirements;

 

the ability of Host Inc. and each of the REITs acquired, established or to be established by Host Inc. to continue to satisfy complex rules in order to qualify as REITs for federal income tax purposes and Host Inc.’s and Host L.P.’s ability and the ability of our subsidiaries, and similar entities to be acquired or established by us, to operate effectively within the limitations imposed by these rules; and

 

risks associated with our ability to execute our dividend policy, including factors such as the need to preserve cash and financial flexibility in response to the COVID-19 pandemic, investment activity, operating results and the economic outlook, any or all of which may influence the decision of our board of directors as to whether to pay future dividends at levels previously disclosed or to use available cash to pay special dividends.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions, including those risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2020 and in other filings with the Securities and Exchange Commission (“SEC”). Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material.

Operating Results and Outlook

COVID-19 Response

The COVID-19 pandemic has significantly adversely impacted U.S. and global economic activity and has contributed to significant volatility in financial markets beginning in the first quarter of 2020. While many of the restrictive measures put in place in jurisdictions where we own hotels have been lifted, certain restrictions remain, including limitations on the size of gatherings and/or on the types of business that may continue to operate. As a result, the pandemic continues to negatively impact the U.S. lodging industry generally and our company specifically. The ongoing effects of the pandemic on our operations and future bookings have had, and will continue to have, a material negative impact on our financial results and cash flows, and such negative impact may continue well after remaining restrictive measures imposed by federal, state, local and other governmental authorities have been lifted.

We have not filed for any relief under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) or the American Rescue Plan Act; however, several of our operators, including Hyatt and Marriott, have filed for the Employee Retention Credit (“ERC”) to partially offset the costs of their furloughed hotel employees under Title II of the CARES Act, as discussed below. Benefits received by our operators from the ERC related to their employees working at our hotels ultimately benefit us as we bear the

22


 

expense for the wages and benefits of all persons working at our hotels. Benefit costs for furloughed employees did not have a significant impact on the second quarter results, as they were eligible to be reimbursed through the American Rescue Plan Act, the reimbursement of which our managers have applied. We expect that these benefit costs will also not have a significant impact on our third quarter results.

In response to the pandemic, we and our managers, as applicable, have accomplished the following:

 

As of August 2, 2021, reopened all of the 35 hotels that had suspended operations at the start of the COVID-19 pandemic;

 

Average monthly occupancy (which includes the results of hotels with suspended operations) has increased during the quarter from 38.6% in April to 48.5% in June, as the increased vaccination rate in the U.S. has continued to lead to improving leisure demand;

 

Working with our hotel managers, we implemented portfolio-wide cost reductions. These initiatives have resulted in a reduction of pro forma hotel operating costs across the portfolio by approximately 46% in the second quarter of 2021, compared to 2019. We expect that certain initiatives, including modernized brand standards, streamlined operating departments and accelerated adoption of cost-saving technologies, may lead to long-term expense reductions. However, we expect hotel operating costs to increase more in line with total revenues over time as hotels continue to transition from their contingency level operational plans to increased staffing levels and controllable spending. The transition to increased staffing levels has lagged revenue increases due to the challenging labor environment across the industry. Additionally, reintroduction of marketing, maintenance and other support costs are expected to increase other departmental and support expenses as the recovery is expected to continue to gain momentum;

 

Suspended contributions to certain of our hotels’ FF&E escrow accounts;

 

Further amended the credit agreement governing our $1.5 billion revolving credit facility and two $500 million term loans. Under the amendments, the quarterly-tested financial covenants were waived beginning July 1, 2020 until the required financial statement reporting date for the second quarter of 2022, with certain financial covenants modified through the third quarter of 2023;

 

Accessed the full $1.5 billion under the revolver portion of the credit facility in 2020 as a precautionary measure in order to increase our cash position and preserve financial flexibility in light of continued uncertainty in the global markets; 

 

Suspended regular quarterly common cash dividends and stock repurchases until further notice. All future dividends are subject to approval by the Board of Directors; and

 

Reduced corporate expenses in 2020 by approximately 17%, compared to 2019, through reduced travel, compensation and other overhead.

The impact of the COVID-19 pandemic on the company remains fluid, as does our corporate and property-level response, together with the response of our hotel operators. While vaccination rates have increased during the first half of the year, there remains a great deal of uncertainty surrounding the trends and duration of the COVID-19 pandemic, and we are monitoring developments on an ongoing basis. We, and our hotel managers, may take additional actions in response to future developments.  

23


 

Operating Results

The following table reflects certain line items from our statements of operations and significant operating statistics (in millions, except per share and hotel statistics):

  

Historical Income Statement Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended June 30,

 

 

 

 

 

 

Year-to-date ended June 30,

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

Total revenues

 

$

649

 

 

$

103

 

 

 

530.1

%

 

$

1,048

 

 

$

1,155

 

 

 

(9.3

)%

Net loss

 

 

(61

)

 

 

(356

)

 

 

82.9

%

 

 

(214

)

 

 

(359

)

 

 

40.4

%

Operating loss

 

 

(68

)

 

 

(353

)

 

 

80.7

%

 

 

(234

)

 

 

(364

)

 

 

35.7

%

Operating loss margin under GAAP

 

 

(10.5

)%

 

 

(342.7

)%

 

 

33,220

bps

 

 

(22.3

)%

 

 

(31.5

)%

 

 

920

bps

EBITDAre (1)

 

$

111

 

 

$

(190

)

 

N/M

 

 

$

116

 

 

$

(26

)

 

N/M

 

Adjusted EBITDAre (1)

 

 

110

 

 

 

(189

)

 

N/M

 

 

 

113

 

 

 

(25

)

 

N/M

 

Diluted loss per common share

 

 

(0.09

)

 

 

(0.50

)

 

 

82.0

%

 

 

(0.30

)

 

 

(0.50

)

 

 

40.0

%

NAREIT FFO per diluted share (1)

 

 

0.12

 

 

 

(0.26

)

 

N/M

 

 

 

0.13

 

 

 

(0.03

)

 

N/M

 

Adjusted FFO per diluted share (1)

 

 

0.12

 

 

 

(0.26

)

 

N/M

 

 

 

0.13

 

 

 

(0.03

)

 

N/M

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Owned Hotel Data (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended June 30,

 

 

 

 

 

 

Year-to-date ended June 30,

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

All owned hotel revenues (pro forma) (1)

 

$

659

 

 

$

104

 

 

 

533.7

%

 

$

1,088

 

 

$

1,196

 

 

 

(9.0

)%

All owned hotel EBITDA (pro forma) (1)

 

 

126

 

 

 

(172

)

 

N/M

 

 

 

151

 

 

 

18

 

 

 

738.9

%

All owned hotel EBITDA margin (pro forma) (1)

 

 

19.1

%

 

 

(165.4

)%

 

N/M

 

 

 

13.9

%

 

 

1.5

%

 

 

1,240

bps

Change in all owned hotel Total RevPAR - Constant US$

 

 

540.7

%

 

 

 

 

 

 

 

 

 

 

(8.8

)%

 

 

 

 

 

 

 

 

Change in all owned hotel RevPAR - Constant US$

 

 

607.0

%

 

 

 

 

 

 

 

 

 

 

(0.3

)%

 

 

 

 

 

 

 

 

Change in all owned hotel RevPAR - Nominal US$

 

 

607.5

%

 

 

 

 

 

 

 

 

 

 

(0.4

)%

 

 

 

 

 

 

 

 

Change in domestic RevPAR

 

 

612.6

%

 

 

 

 

 

 

 

 

 

 

0.7

%

 

 

 

 

 

 

 

 

Change in international RevPAR - Constant US$

 

 

141.2

%

 

 

 

 

 

 

 

 

 

 

(68.1

)%

 

 

 

 

 

 

 

 

___________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

EBITDAre, Adjusted EBITDAre, NAREIT FFO per diluted share and Adjusted FFO per diluted share and all owned hotel operating results (including hotel revenues and hotel EBITDA and margins) are non-GAAP financial measures within the meaning of the rules of the SEC. See “Non-GAAP Financial Measures” for more information on these measures, including why we believe these supplemental measures are useful, reconciliations to the most directly comparable GAAP measure, and the limitations on the use of these supplemental measures.

(2)

Due to the COVID-19 pandemic and its effects on operations, we are temporarily presenting hotel operating results on an All Owned Hotel pro forma basis. Thus, operating results are presented for all consolidated hotels owned as of June 30, 2021 and do not include the results of operations for hotels sold through the reporting date. Additionally, operating results for acquisitions as of June 30, 2021 are reflected for full calendar years, which include results for periods prior to our ownership.

N/M = Not meaningful.

Operations

While still below pre-pandemic levels, total revenues increased $546 million, or 530.1%, for the second quarter as compared to the second quarter of 2020 due to strong leisure demand at our resort hotels. For the year-to-date, total revenues decreased $107 million, or 9.3%, as positive results in January and February of 2020 offset the improvement in revenues during the second quarter of 2021. All owned hotel RevPAR and Total RevPAR on a constant US$ basis for the quarter increased 607.0% and 540.7%, respectively, due to increases in occupancy and food and beverage revenues. For the year-to-date, all owned hotel RevPAR and Total RevPAR on a constant US$ basis decreased 0.3% and 8.8%, respectively.

During the quarter, all owned hotel Total RevPAR in our Jacksonville, Maui, and Florida Gulf Coast markets totaled $730, $544 and $506, respectively, due to strong leisure demand. Our hotels in New York and San Francisco/San Jose, our two largest markets by room count, experienced all owned hotel Total RevPAR of just $64 and $59, respectively, as operations at these hotels begin to ramp

24


 

up following the lifting of many of the restrictions previously in place in these markets. All owned hotel Total RevPAR was lowest for our Boston properties, at $39, as operations at the Sheraton Boston remained suspended through the end of the second quarter.

Operating trends continue to be positive in the second quarter of 2021, as vaccine distribution has continued and many jurisdictions have lifted COVID-19 restrictions, with RevPAR increasing from $93.49 in April to $111.25 in June. In particular, properties in Florida, Arizona and Hawaii continue to drive the portfolio, with RevPAR levels that are approaching or exceeding 2019 levels. At the same time, hotel-level operating costs are increasing at lower rates, as hiring did not keep pace with the improvement in operations at these resort destinations. The lag in hiring is due to the challenging labor environment across the industry, coupled with the strong pace of sequential growth in occupancy, which has not provided our managers sufficient time to adjust staffing levels commensurate with the increase in demand. We anticipate that hotel-level operating costs over time will increase at a higher rate, as our hotel managers adjust back to more normalized levels of operations.

Although operations remain below pre-pandemic levels, as a result of continued operational improvements at our hotels since the COVID-19 pandemic began in mid-March 2020, second quarter and year-to-date 2021 results improved when compared to 2020 as follows:

 

net loss decreased $295 million for the quarter and $145 million year-to-date;

 

diluted loss per share for the quarter decreased $0.41 for the quarter and $0.20 year-to-date;

 

Adjusted EBITDAre increased $299 million for the quarter and $138 million year-to-date; and

 

Adjusted FFO per diluted share increased $0.38 for the quarter and $0.16 year-to-date.

Outlook

While the COVID-19 pandemic has severely impacted macroeconomic and industry expectations for 2021, year-over-year growth in real GDP and business investment has seen a strong rebound from 2020, supported by recent stimulus, low interest rates, vaccine distribution, and the lifting of many government-imposed restrictions across the U.S. While forecasts for 2021 remain uncertain, Blue Chip Economic Indicators consensus currently estimates an increase in real GDP of 6.6% for the year, while business investment is anticipated to increase 8.4%. Though analysts believe the unemployment rate peaked in 2020, it is anticipated to remain elevated in 2021, with an expected average of 5.6% for the year. The range of potential outcomes on the economy and the lodging industry specifically remain exceptionally wide, reflecting the unprecedented nature of the pandemic, varying analyst assumptions surrounding new virus variants and the continued impact of vaccine deployments.

While there have been some permanent closures of existing hotel rooms, hotel supply growth is anticipated to remain below the long-term historical average in 2021, as social distancing measures and supply chain challenges have resulted in project delays across the U.S. However, the pandemic has had an outsized impact on our industry demand. As a result, RevPAR recovery to pre-pandemic levels is anticipated to lag that of the broader U.S. economy, despite lower supply growth. Luxury and upper upscale hotels in top U.S. markets, where a majority of our hotels are located, have been most heavily affected by the pandemic, due in part to the sharp decline in air travel, particularly from international arrivals, and the slower recovery of corporate and group demand. While we have seen improving trends, especially in sunbelt markets, we anticipate that these factors will persist through the remainder 2021.

As a result of the significant uncertainties related to the impact of new virus variants, the pace of vaccination and broader macroeconomic trends in 2021, we anticipate that the industry outlook will continue to be weighed down by the slow return of corporate and group travel, as businesses are expected to remain cautious. While investor optimism has grown in the first half of 2021, as analysts focus on strong leisure demand, existing corporate policies are likely to continue to constrain nonessential business transient and group travel in the near term. Therefore, the timing and trajectory of the recovery is difficult to forecast due to a wide range of customer responses to vaccines and the virus, seasonal shifts in the mix of business and leisure demand, as well as a condensed booking window for hotel rooms. Therefore, while we currently anticipate sequential RevPAR growth through the remainder of the year, we cannot provide a full year forecast for RevPAR at this time. We believe that the continued recovery within the lodging industry is highly dependent on the strength of the economy, consumer confidence and the return of corporate and group travel. Accordingly, we believe that the impact of the recovery on specific markets and industries will be uneven.

As noted above, the current outlook for the lodging industry remains highly uncertain. There can be no assurances as to the extent and timing for a recovery in lodging demand for any number of reasons, including, but not limited to, slower than anticipated return of group and business travel.

25


 

Strategic Initiatives

Balance Sheet and Financing Transactions. As of June 30, 2021, we had $1.5 billion of cash and cash equivalents. During the second quarter, we issued approximately 7.8 million shares of Host Inc. common stock under our “at-the-market” offering program at an average price of $17.99 per share, for net proceeds of approximately $138 million.

Acquisitions. During the second quarter, we purchased the 444-room Four Seasons Resort Orlando at Walt Disney World® Resort for a total purchase price of $610 million and the Royal Ka’anapali and Ka’anapali Kai golf courses, adjacent to our Hyatt Regency Maui hotel, for $28 million.

Subsequent to quarter end, we purchased the 200-room Baker’s Cay Resort Key Largo, Curio Collection for a total purchase price of $200 million and a 223-room luxury downtown hotel in Houston, formerly operated as the Hotel Alessandra, for $65 million. We have engaged HEI to manage the luxury downtown Houston hotel and expect to re-open the property later this year under a new name and brand.

Capital Projects. We are utilizing the low occupancy environment to accelerate certain projects and minimize future disruption.

During the first half of 2021, we spent approximately $117 million on ROI capital projects and $63 million on renewal and replacement projects. For full year 2021, we expect total capital expenditures of $400 million to $475 million. This total amount consists of ROI projects of approximately $275 million to $325 million and renewal and replacement expenditures of $125 million to $150 million. ROI projects include approximately $110 million to $140 million for the Marriott transformational capital program discussed below.

During the second quarter, we completed the development of a new waterpark at The Ritz-Carlton Golf Resort, Naples and 19 two-bedroom luxury villas at the Andaz Maui at Wailea Resort. The 19 two-bedroom luxury villas achieved occupancy of 73% in June 2021, its first full month of operations, at an average rate of $1,626.

We have made substantial progress on the Marriott transformational capital program, which began in 2018 and is expected to be substantially complete by 2022, and includes 16 of our hotels. We believe this program will position these hotels to be more competitive in their respective markets and will enhance long-term performance through increases in RevPAR and market yield index. We agreed to invest amounts in excess of the FF&E reserves required under our management agreements and, in exchange, Marriott has provided additional priority returns on the agreed upon investments and operating profit guarantees of up to $83 million, before reductions for incentive management fees, to offset expected business disruption. Approximately 75% of the total estimated costs of the program have been spent as of June 30, 2021, and we expect to complete approximately 85% of the program by the end of the year. Of the 16 hotels included in the program, we have completed projects at the Coronado Island Marriott Resort & Spa, New York Marriott Downtown, San Francisco Marriott Marquis, and Santa Clara Marriott in 2019 and projects at the Minneapolis Marriott City Center, San Antonio Marriott Rivercenter and JW Marriott Atlanta Buckhead in 2020. In 2021, we completed the project at The Ritz-Carlton Amelia Island and we expect to substantially complete projects at three additional hotels: New York Marriott Marquis, Houston Medical Center Marriott and Orlando World Center Marriott.

 

26


 

 

Results of Operations

The following table reflects certain line items from our statements of operations (in millions, except percentages):  

 

 

Quarter ended June 30,

 

 

 

 

 

 

Year-to-date ended June 30,

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

Total revenues

 

$

649

 

 

$

103

 

 

 

530.1

%

 

$

1,048

 

 

$

1,155

 

 

 

(9.3

)%

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property-level costs (1)

 

 

692

 

 

 

431

 

 

 

60.6

 

 

 

1,233

 

 

 

1,469

 

 

 

(16.1

)

Corporate and other expenses

 

 

25

 

 

 

25

 

 

 

 

 

 

49

 

 

 

50

 

 

 

(2.0

)

Operating loss

 

 

(68

)

 

 

(353

)

 

 

80.7

 

 

 

(234

)

 

 

(364

)

 

 

35.7

 

Interest expense

 

��

43

 

 

 

40

 

 

 

7.5

 

 

 

85

 

 

 

77

 

 

 

10.4

 

Other gains

 

 

3

 

 

 

15

 

 

 

(80.0

)

 

 

2

 

 

 

13

 

 

 

(84.6

)

Benefit for income taxes

 

 

22

 

 

 

46

 

 

 

(52.2

)

 

 

68

 

 

 

83

 

 

 

(18.1

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Host Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling interests

 

 

(1

)

 

 

(4

)

 

 

75.0

 

 

 

(2

)

 

 

(4

)

 

 

50.0

 

Net loss attributable to Host Inc.

 

 

(60

)

 

 

(352

)

 

 

83.0

 

 

 

(212

)

 

 

(355

)

 

 

40.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Host L.P.:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to non-controlling

     interests

 

 

 

 

 

(1

)

 

N/M

 

 

 

 

 

 

(1

)

 

N/M

 

Net loss attributable to Host L.P.

 

 

(61

)

 

 

(355

)

 

 

82.8

 

 

 

(214

)

 

 

(358

)

 

 

40.2

 

___________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Amount represents total operating costs and expenses from our unaudited condensed consolidated statements of operations, less corporate and other expenses.

N/M=Not meaningful.

Statement of Operations Results and Trends

The COVID-19 pandemic began to significantly impact hotel operations beginning in mid-March of 2020. However, RevPAR has increased sequentially each month during 2021, from $43.57 in January to $111.25 in June. There can be no assurances that the month-over-month increases in RevPAR will continue.

Hotel Sales Overview

The following table presents total revenues in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):

 

 

 

Quarter ended June 30,

 

 

 

 

 

 

Year-to-date ended June 30,

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

423

 

 

$

61

 

 

 

593.4

%

 

$

680

 

 

$

687

 

 

 

(1.0

)%

Food and beverage

 

 

137

 

 

 

11

 

 

 

1,145.5

 

 

 

214

 

 

 

341

 

 

 

(37.2

)

Other

 

 

89

 

 

 

31

 

 

 

187.1

 

 

 

154

 

 

 

127

 

 

 

21.3

 

Total revenues

 

$

649

 

 

$

103

 

 

 

530.1

 

 

$

1,048

 

 

$

1,155

 

 

 

(9.3

)

 

While still below pre-pandemic levels, operations have improved in the second quarter of 2021 compared to 2020. Year-to-date 2021 operations are still below the same period in 2020, as January and February of 2020 had positive operations, and declines began in the middle of March of 2020. This has impacted operations as follows:

Rooms. Total rooms revenues increased $362 million for the quarter, and decreased $7 million, or 1.0%, year-to-date.

Food and beverage. Total food and beverage (“F&B”) revenues increased $126 million for the quarter, and decreased $127 million, or 37.2%, year-to-date. F&B revenue growth has been driven by ancillary spend at our outlets.

27


 

Other revenues. Total other revenues increased $58 million for the quarter and increased $27 million, or 21.3%, year-to-date, as strong ancillary revenues offset a decrease in attrition and cancellation fees.

Property-level Operating Expenses

The following table presents property-level operating expenses in accordance with GAAP and includes all consolidated hotels (in millions, except percentages):

 

 

 

Quarter ended June 30,

 

 

 

 

 

 

Year-to-date ended June 30,

 

 

 

 

 

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rooms

 

$

109

 

 

$

43

 

 

 

153.5

%

 

$

174

 

 

$

230

 

 

 

(24.3

)%

Food and beverage

 

 

105

 

 

 

39

 

 

 

169.2

 

 

 

167

 

 

 

284

 

 

 

(41.2

)

Other departmental and

     support expenses

 

 

209

 

 

 

113

 

 

 

85.0

 

 

 

369

 

 

 

432

 

 

 

(14.6

)

Management fees

 

 

21

 

 

 

(2

)

 

N/M

 

 

 

32

 

 

 

28

 

 

 

14.3

 

Other property-level

     expenses

 

 

79

 

 

 

70

 

 

 

12.9

 

 

 

157

 

 

 

163

 

 

 

(3.7

)

Depreciation and

     amortization

 

 

169

 

 

 

168

 

 

 

0.6

 

 

 

334

 

 

 

332

 

 

 

0.6

 

Total property-level

     operating expenses

 

$

692

 

 

$

431

 

 

 

60.6

 

 

$

1,233

 

 

$

1,469

 

 

 

(16.1

)

 

Our operating costs and expenses, which have both fixed and variable components, are affected by several factors. Rooms expenses are affected mainly by occupancy, which drives costs related to items such as housekeeping, reservation systems, room supplies, laundry services and front desk costs. Food and beverage expenses correlate closely with food and beverage revenues and are affected by occupancy and the mix of business between banquet, audio-visual and outlet sales. However, the most significant expense for the rooms, food and beverage, and other departmental and support expenses is wages and employee benefits, which comprise approximately 54% of these expenses. Due to a significant decline in operations and implementation of portfolio-wide cost reductions in response to the COVID-19 pandemic, including significant reductions to wages and benefits, portfolio-wide hotel operating costs in the second quarter and year-to-date 2021, excluding severance, were nearly 46% and 52% lower, respectively, compared to the same periods in 2019. In addition, included in these amounts for the quarter and year-to-date 2021 is a reduction of approximately $3 million and $10 million, respectively, related to the ERC recorded by our managers, the benefit of which was passed on to us.

Additionally, the ramp up in staffing at several properties during 2021 continues to lag the increase in demand due to the challenging labor market across the industry, which could result in upward pressure on wages and benefits going forward. However, the expiration of supplemental unemployment benefits may temper possible increases. As a result of the lag in hiring, portfolio-wide operating expenses were only 32% higher compared to the first quarter of 2021, despite an approximately 54% increase in total revenues quarter over quarter. Other property-level expenses consist of property taxes, the amounts and structure of which are highly dependent on local jurisdiction taxing authorities, and property and general liability insurance, all of which do not necessarily increase or decrease based on similar changes in revenues at our hotels.

The change in expenses for the second quarter compared to 2020 for rooms, food and beverage, other departmental and support, and management fees predominantly are due to the beginning recovery from the impact of the COVID-19 pandemic. While our operators were able to maintain a reduced level of expenses compared to pre-pandemic levels, an increase in occupancy and hotel operations led to increases in expenses for the second quarter of 2021 compared to 2020. For the year-to-date period, pre-pandemic results in January and February of 2020, with higher occupancy, led to a decrease in expenses for 2021 compared to 2020. As a result, expenses changed as follows:

Rooms. Rooms expenses increased $66 million for the quarter, and declined $56 million, or 24.3%, year-to-date.

Food and beverage. F&B expenses increased $66 million for the quarter and decreased $117 million, or 41.2%, year-to-date.

Other departmental and support expenses. Other departmental and support expenses increased $96 million, or 85.0%, for the quarter and decreased $63 million, or 14.6%, year-to-date.

Management fees. Base management fees, which generally are calculated as a percentage of total revenues, increased $16 million for the quarter, and decreased $3 million, or 9.7%, year-to-date. Incentive management fees, which generally are based on the

28


 

amount of operating profit at each hotel after we receive a priority return on our investment, increased $7 million for both the quarter and year-to-date.

Other property-level expenses. These expenses generally do not vary significantly based on occupancy and include expenses such as property taxes and insurance. Other property level expenses increased $9 million, or 12.9%, for the quarter and decreased $6 million, or 3.7%, year-to-date. Other property-level expenses also were partially offset by operating profit guarantees received from Marriott under the transformational capital program.

Other Income and Expense

Corporate and other expenses. The following table details our corporate and other expenses for the quarter and year-to-date (in millions):

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

General and administrative costs

 

$

20

 

 

$

21

 

 

$

40

 

 

$

43

 

Non-cash stock-based compensation expense

 

 

5

 

 

 

4

 

 

 

9

 

 

 

7

 

       Total

 

$

25

 

 

$

25

 

 

$

49

 

 

$

50

 

 

Interest expense. Interest expense increased for the quarter and year-to-date primarily due to the higher outstanding balance on the revolver portion of the credit facility. The following table details our interest expense for the quarter and year-to-date (in millions):

 

 

 

Quarter ended June 30,

 

 

Year-to-date ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Cash interest expense(1)

 

$

40

 

 

$

38

 

 

$

80

 

 

$

73

 

Non-cash interest expense

 

 

3

 

 

 

1

 

 

 

5

 

 

 

3

 

Cash debt extinguishment costs(1)

 

 

 

 

 

1

 

 

 

 

 

 

1

 

Total interest expense

 

$

43

 

 

$

40

 

 

$

85

 

 

$

77

 

___________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Including the change in accrued interest, total cash interest paid was $48 million and $46 million for the quarters ended June 30, 2021 and 2020, respectively, and $83 million and $73 million for the year-to-date 2021 and 2020, respectively.  

Other gains. Other gains decreased $12 million, or 80.0%, for the quarter and $11 million, or 84.6%, year-to-date, primarily due to the sale of a parcel of land adjacent to The Phoenician hotel in the second quarter of 2020, which resulted in a gain of approximately $12 million.

Equity in earnings (losses) of affiliates. Equity in earnings of affiliates increased $50 million for the second quarter and $55 million year-to-date, primarily due to unrealized gains on our investment in Fifth Wall Ventures, L.P. in 2021, while 2020 included an impairment of inventory at our Maui timeshare of $14 million.

Benefit for income taxes. We lease substantially all our properties to consolidated subsidiaries designated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes. Taxable income or loss generated/incurred by the TRS primarily represents hotel-level operations and the aggregate rent paid to Host L.P. by the TRS, on which we record an income tax provision or benefit. For the quarter and year-to-date, we recorded an income tax benefit of $22 and $68 million, respectively, due primarily to the domestic net operating loss incurred by our TRS. Any domestic net operating loss incurred by our TRS in 2021 may be carried forward indefinitely, its use in future years being subject to a limit of 80% of annual taxable income. Our TRS is expected to generate additional net operating losses in 2021.

Hotel RevPAR Overview

To facilitate a quarter-to-quarter comparison of our operations, we typically present certain operating statistics for the periods included in this presentation on a comparable hotel basis. However, due to the COVID-19 pandemic and its effects on operations, there is little comparability between periods. For this reason, we temporarily suspended our comparable hotel presentation to instead present pro forma hotel operating results for all hotels. See “All Owned Hotel Pro Forma Hotel Operating Statistics and Results” for a complete description of our methodology. We also discuss our Hotel RevPAR results by geographic location and mix of business (i.e., transient, group, or contract).

29


 

 

Hotel Operating Data by Location

The following tables set forth performance information for our hotels by geographic location for the quarter and year-to-date ended June 30, 2021 compared to 2020 and compared to 2019, respectively, to provide a comparison of hotel statistics in the current period to last year as well as pre-pandemic levels:

All Owned Hotels (pro forma) by Location in Constant US$

 

 

As of June 30, 2021

 

 

Quarter ended June 30, 2021

 

 

Quarter ended June 30, 2020

 

 

 

 

 

 

 

 

 

Location

No. of

Properties

 

 

No. of

Rooms

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Percent

Change in

RevPAR

 

 

Percent

Change in

Total RevPAR

 

Miami

 

3

 

 

 

1,276

 

 

$

496.88

 

 

 

61.3

%

 

$

304.64

 

 

$

469.79

 

 

$

276.13

 

 

 

8.3

%

 

$

22.86

 

 

$

39.35

 

 

 

1,232.6

%

 

 

1,093.9

%

Jacksonville

 

1

 

 

 

446

 

 

 

559.42

 

 

 

68.9

 

 

 

385.55

 

 

 

730.42

 

 

 

469.00

 

 

 

28.1

 

 

 

131.95

 

 

 

219.50

 

 

 

192.2

 

 

 

232.8

 

Florida Gulf Coast

 

5

 

 

 

1,842

 

 

 

404.15

 

 

 

66.5

 

 

 

268.58

 

 

 

506.14

 

 

 

278.24

 

 

 

17.7

 

 

 

49.11

 

 

 

102.21

 

 

 

446.9

 

 

 

395.2

 

Maui/Oahu

 

4

 

 

 

2,006

 

 

 

457.70

 

 

 

78.5

 

 

 

359.35

 

 

 

543.98

 

 

 

75.47

 

 

 

3.7

 

 

 

2.77

 

 

 

8.23

 

 

 

12,890.4

 

 

 

6,510.8

 

Phoenix

 

4

 

 

 

1,822

 

 

 

311.33

 

 

 

61.6

 

 

 

191.85

 

 

 

382.50

 

 

 

185.02

 

 

 

6.8

 

 

 

12.58

 

 

 

53.48

 

 

 

1,425.5

 

 

 

615.2

 

Orlando

 

2

 

 

 

2,448

 

 

 

427.88

 

 

 

27.0

 

 

 

115.67

 

 

 

204.69

 

 

N/M

 

 

 

0.0

 

 

 

N/M

 

 

 

19.13

 

 

N/M

 

 

 

970.1

 

Houston

 

4

 

 

 

1,716

 

 

 

141.99

 

 

 

61.3

 

 

 

87.08

 

 

 

117.76

 

 

 

112.05

 

 

 

13.9

 

 

 

15.63

 

 

 

20.43

 

 

 

457.1

 

 

 

476.3

 

Los Angeles/Orange County

 

5

 

 

 

2,119

 

 

 

171.25

 

 

 

63.5

 

 

 

108.66

 

 

 

147.12

 

 

 

206.66

 

 

 

8.1

 

 

 

16.84

 

 

 

23.12

 

 

 

545.4

 

 

 

536.3

 

Philadelphia

 

2

 

 

 

810

 

 

 

160.86

 

 

 

59.6

 

 

 

95.82

 

 

 

147.30

 

 

 

120.32

 

 

 

10.6

 

 

 

12.75

 

 

 

15.74

 

 

 

651.3

 

 

 

835.7

 

Atlanta

 

4

 

 

 

1,682

 

 

 

172.58

 

 

 

49.5

 

 

 

85.50

 

 

 

115.83

 

 

 

138.09

 

 

 

9.6

 

 

 

13.23

 

 

 

18.55

 

 

 

546.4

 

 

 

524.5

 

Washington, D.C. (CBD)

 

5

 

 

 

3,238

 

 

 

152.55

 

 

 

40.4

 

 

 

61.69

 

 

 

68.15

 

 

 

221.94

 

 

 

4.6

 

 

 

10.14

 

 

 

10.76

 

 

 

508.2

 

 

 

533.1

 

San Diego

 

3

 

 

 

3,288

 

 

 

194.88

 

 

 

46.0

 

 

 

89.63

 

 

 

134.93

 

 

 

181.47

 

 

 

2.5

 

 

 

4.57

 

 

 

17.07

 

 

 

1,859.2

 

 

 

690.6

 

Northern Virginia

 

3

 

 

 

1,252

 

 

 

157.97

 

 

 

42.4

 

 

 

67.01

 

 

 

101.80

 

 

 

129.21

 

 

 

7.9

 

 

 

10.20

 

 

 

15.45

 

 

 

557.1

 

 

 

558.8

 

San Antonio/Austin

 

3

 

 

 

1,960

 

 

 

162.93

 

 

 

43.6

 

 

 

70.96

 

 

 

101.33

 

 

 

135.64

 

 

 

6.3

 

 

 

8.49

 

 

 

12.80

 

 

 

736.1

 

 

 

691.9

 

New York

 

3

 

 

 

4,261

 

 

 

172.42

 

 

 

32.6

 

 

 

56.16

 

 

 

63.98

 

 

 

134.19

 

 

 

30.2

 

 

 

40.47

 

 

 

43.18

 

 

 

38.8

 

 

 

48.2

 

Denver

 

3

 

 

 

1,340

 

 

 

133.42

 

 

 

43.3

 

 

 

57.76

 

 

 

74.07

 

 

 

112.47

 

 

 

7.9

 

 

 

8.87

 

 

 

10.96

 

 

 

551.3

 

 

 

575.6

 

New Orleans

 

1

 

 

 

1,333

 

 

 

125.59

 

 

 

44.8

 

 

 

56.27

 

 

 

77.37

 

 

N/M

 

 

 

0.0

 

 

 

0.29

 

 

 

1.94

 

 

 

19,219.2

 

 

 

3,881.3

 

Chicago

 

4

 

 

 

1,816

 

 

 

149.79

 

 

 

33.2

 

 

 

49.78

 

 

 

59.22

 

 

 

110.04

 

 

 

9.8

 

 

 

10.82

 

 

 

13.03

 

 

 

360.1

 

 

 

354.4

 

San Francisco/San Jose

 

7

 

 

 

4,529

 

 

 

145.03

 

 

 

30.8

 

 

 

44.69

 

 

 

59.49

 

 

 

175.74

 

 

 

4.2

 

 

 

7.43

 

 

 

14.51

 

 

 

501.2

 

 

 

309.9

 

Seattle

 

2

 

 

 

1,315

 

 

 

166.90

 

 

 

22.2

 

 

 

37.13

 

 

 

45.54

 

 

 

196.68

 

 

 

1.1

 

 

 

2.26

 

 

 

5.68

 

 

 

1,545.2

 

 

 

702.3

 

Boston

 

3

 

 

 

2,715

 

 

 

145.54

 

 

 

20.4

 

 

 

29.70

 

 

 

38.73

 

 

N/M

 

 

 

0.2

 

 

 

0.28

 

 

 

2.05

 

 

 

10,627.5

 

 

 

1,791.4

 

Other

 

6

 

 

 

2,509

 

 

 

145.72

 

 

 

40.7

 

 

 

59.29

 

 

 

78.10

 

 

 

109.28

 

 

 

13.5

 

 

 

14.77

 

 

 

18.40

 

 

 

301.3

 

 

 

324.5

 

Domestic

 

77

 

 

 

45,723

 

 

 

234.48

 

 

 

43.8

 

 

 

102.71

 

 

 

157.19

 

 

 

165.12

 

 

 

8.7

 

 

 

14.41

 

 

 

24.20

 

 

 

612.6

 

 

 

549.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

 

1,499

 

 

 

66.34

 

 

 

19.2

 

 

 

12.75

 

 

 

19.99

 

 

 

62.96

 

 

 

8.4

 

 

 

5.29

 

 

 

13.43

 

 

 

141.2

 

 

 

48.9

 

All Locations -

Constant US$

 

82

 

 

 

47,222

 

 

 

232.10

 

 

 

43.0

 

 

 

99.86

 

 

 

152.84

 

 

 

161.98

 

 

 

8.7

 

 

 

14.12

 

 

 

23.86

 

 

 

607.0

 

 

 

540.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Owned Hotels (pro forma) in Nominal US$

 

 

As of June 30, 2021

 

 

Quarter ended June 30, 2021

 

 

Quarter ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

No. of

Properties

 

 

No. of

Rooms

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Percent

Change in

RevPAR

 

 

Percent

Change in

Total RevPAR

 

International

 

5

 

 

 

1,499

 

 

$

66.34

 

 

 

19.2

%

 

$

12.75

 

 

$

19.99

 

 

$

59.79

 

 

 

8.4

%

 

$

5.02

 

 

$

12.44

 

 

 

154.0

%

 

 

60.7

%

Domestic

 

77

 

 

 

45,723

 

 

 

234.48

 

 

 

43.8

 

 

 

102.71

 

 

 

157.19

 

 

 

165.12

 

 

 

8.7

 

 

 

14.41

 

 

 

24.20

 

 

 

612.6

 

 

 

549.6

 

All Locations

 

82

 

 

 

47,222

 

 

 

232.10

 

 

 

43.0

 

 

 

99.86

 

 

 

152.84

 

 

 

161.89

 

 

 

8.7

 

 

 

14.11

 

 

 

23.83

 

 

 

607.5

 

 

 

541.5

 

 

30


 

 

All Owned Hotels (pro forma) by Location in Constant US$

 

 

As of June 30, 2021

 

 

Quarter ended June 30, 2021

 

 

Quarter ended June 30, 2019

 

 

 

 

 

 

 

 

 

Location

No. of

Properties

 

 

No. of

Rooms

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Percent

Change in

RevPAR

 

 

Percent

Change in

Total RevPAR

 

Miami

 

3

 

 

 

1,276

 

 

$

496.88

 

 

 

61.3

%

 

$

304.64

 

 

$

469.79

 

 

$

299.54

 

 

 

80.6

%

 

$

241.56

 

 

$

390.25

 

 

 

26.1

%

 

 

20.4

%

Jacksonville

 

1

 

 

 

446

 

 

 

559.42

 

 

 

68.9

 

 

 

385.55

 

 

 

730.42

 

 

 

414.11

 

 

 

84.1

 

 

 

348.40

 

 

 

753.61

 

 

 

10.7

 

 

 

(3.1

)

Florida Gulf Coast

 

5

 

 

 

1,842

 

 

 

404.15

 

 

 

66.5

 

 

 

268.58

 

 

 

506.14

 

 

 

313.53

 

 

 

73.9

 

 

 

231.56

 

 

 

496.76

 

 

 

16.0

 

 

 

1.9

 

Maui/Oahu

 

4

 

 

 

2,006

 

 

 

457.70

 

 

 

78.5

 

 

 

359.35

 

 

 

543.98

 

 

 

384.31

 

 

 

92.3

 

 

 

354.62

 

 

 

577.55

 

 

 

1.3

 

 

 

(5.8

)

Phoenix

 

4

 

 

 

1,822

 

 

 

311.33

 

 

 

61.6

 

 

 

191.85

 

 

 

382.50

 

 

 

277.88

 

 

 

74.6

 

 

 

207.40

 

 

 

488.38

 

 

 

(7.5

)

 

 

(21.7

)

Orlando

 

2

 

 

 

2,448

 

 

 

427.88

 

 

 

27.0

 

 

 

115.67

 

 

 

204.69

 

 

 

280.14

 

 

 

72.2

 

 

 

202.14

 

 

 

411.47

 

 

 

(42.8

)

 

 

(50.3

)

Houston

 

4

 

 

 

1,716

 

 

 

141.99

 

 

 

61.3

 

 

 

87.08

 

 

 

117.76

 

 

 

181.69

 

 

 

74.6

 

 

 

135.49

 

 

 

193.31

 

 

 

(35.7

)

 

 

(39.1

)

Los Angeles/Orange County

 

5

 

 

 

2,119

 

 

 

171.25

 

 

 

63.5

 

 

 

108.66

 

 

 

147.12

 

 

 

220.32

 

 

 

87.0

 

 

 

191.79

 

 

 

286.02

 

 

 

(43.3

)

 

 

(48.6

)

Philadelphia

 

2

 

 

 

810

 

 

 

160.86

 

 

 

59.6

 

 

 

95.82

 

 

 

147.30

 

 

 

247.35

 

 

 

89.7

 

 

 

221.94

 

 

 

366.74

 

 

 

(56.8

)

 

 

(59.8

)

Atlanta

 

4

 

 

 

1,682

 

 

 

172.58

 

 

 

49.5

 

 

 

85.50

 

 

 

115.83

 

 

 

188.81

 

 

 

76.7

 

 

 

144.87

 

 

 

232.21

 

 

 

(41.0

)

 

 

(50.1

)

Washington, D.C. (CBD)

 

5

 

 

 

3,238

 

 

 

152.55

 

 

 

40.4

 

 

 

61.69

 

 

 

68.15

 

 

 

278.76

 

 

 

91.5

 

 

 

255.04

 

 

 

367.23

 

 

 

(75.8

)

 

 

(81.4

)

San Diego

 

3

 

 

 

3,288

 

 

 

194.88

 

 

 

46.0

 

 

 

89.63

 

 

 

134.93

 

 

 

257.34

 

 

 

83.0

 

 

 

213.66

 

 

 

394.65

 

 

 

(58.1

)

 

 

(65.8

)

Northern Virginia

 

3

 

 

 

1,252

 

 

 

157.97

 

 

 

42.4

 

 

 

67.01

 

 

 

101.80

 

 

 

214.09

 

 

 

77.9

 

 

 

166.82

 

 

 

280.83

 

 

 

(59.8

)

 

 

(63.8

)

San Antonio/Austin

 

3

 

 

 

1,960

 

 

 

162.93

 

 

 

43.6

 

 

 

70.96

 

 

 

101.33

 

 

 

196.21

 

 

 

78.9

 

 

 

154.89

 

 

 

235.22

 

 

 

(54.2

)

 

 

(56.9

)

New York

 

3

 

 

 

4,261

 

 

 

172.42

 

 

 

32.6

 

 

 

56.16

 

 

 

63.98

 

 

 

292.59

 

 

 

84.9

 

 

 

248.42

 

 

 

378.93

 

 

 

(77.4

)

 

 

(83.1

)

Denver

 

3

 

 

 

1,340

 

 

 

133.42

 

 

 

43.3

 

 

 

57.76

 

 

 

74.07

 

 

 

176.07

 

 

 

79.4

 

 

 

139.88

 

 

 

210.69

 

 

 

(58.7

)

 

 

(64.8

)

New Orleans

 

1

 

 

 

1,333

 

 

 

125.59

 

 

 

44.8

 

 

 

56.27

 

 

 

77.37

 

 

 

196.98

 

 

 

81.0

 

 

 

159.65

 

 

 

233.90

 

 

 

(64.8

)

 

 

(66.9

)

Chicago

 

4

 

 

 

1,816

 

 

 

149.79

 

 

 

33.2

 

 

 

49.78

 

 

 

59.22

 

 

 

237.05

 

 

 

82.5

 

 

 

195.46

 

 

 

278.10

 

 

 

(74.5

)

 

 

(78.7

)

San Francisco/San Jose

 

7

 

 

 

4,529

 

 

 

145.03

 

 

 

30.8

 

 

 

44.69

 

 

 

59.49

 

 

 

267.87

 

 

 

82.7

 

 

 

221.55

 

 

 

313.95

 

 

 

(79.8

)

 

 

(81.1

)

Seattle

 

2

 

 

 

1,315

 

 

 

166.90

 

 

 

22.2

 

 

 

37.13

 

 

 

45.54

 

 

 

234.35

 

 

 

85.1

 

 

 

199.47

 

 

 

271.52

 

 

 

(81.4

)

 

 

(83.2

)

Boston

 

3

 

 

 

2,715

 

 

 

145.54

 

 

 

20.4

 

 

 

29.70

 

 

 

38.73

 

 

 

272.01

 

 

 

87.8

 

 

 

238.87

 

 

 

324.76

 

 

 

(87.6

)

 

 

(88.1

)

Other

 

6

 

 

 

2,509

 

 

 

145.72

 

 

 

40.7

 

 

 

59.29

 

 

 

78.10

 

 

 

175.50

 

 

 

83.0

 

 

 

145.69

 

 

 

207.76

 

 

 

(59.3

)

 

 

(62.4

)

Domestic

 

77

 

 

 

45,723

 

 

 

234.48

 

 

 

43.8

 

 

 

102.71

 

 

 

157.19

 

 

 

256.49

 

 

 

82.5

 

 

 

211.49

 

 

 

341.16

 

 

 

(51.4

)

 

 

(53.9

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

 

1,499

 

 

 

66.34

 

 

 

19.2

 

 

 

12.75

 

 

 

19.99

 

 

 

143.72

 

 

 

69.7

 

 

 

100.16

 

 

 

154.14

 

 

 

(87.3

)

 

 

(87.0

)

All Locations -

Constant US$

 

82

 

 

 

47,222

 

 

 

232.10

 

 

 

43.0

 

 

 

99.86

 

 

 

152.84

 

 

 

253.44

 

 

 

82.0

 

 

 

207.94

 

 

 

335.20

 

 

 

(52.0

)

 

 

(54.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Owned Hotels (pro forma) in Nominal US$

 

 

As of June 30, 2021

 

 

Quarter ended June 30, 2021

 

 

Quarter ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

No. of

Properties

 

 

No. of

Rooms

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Percent

Change in

RevPAR

 

 

Percent

Change in

Total RevPAR

 

International

 

5

 

 

 

1,499

 

 

$

66.34

 

 

 

19.2

%

 

$

12.75

 

 

$

19.99

 

 

$

158.97

 

 

 

69.7

%

 

$

110.79

 

 

$

169.04

 

 

 

(88.5

)%

 

 

(88.2

)%

Domestic

 

77

 

 

 

45,723

 

 

 

234.48

 

 

 

43.8

 

 

 

102.71

 

 

 

157.19

 

 

 

256.49

 

 

 

82.5

 

 

 

211.49

 

 

 

341.16

 

 

 

(51.4

)

 

 

(53.9

)

All Locations

 

82

 

 

 

47,222

 

 

 

232.10

 

 

 

43.0

 

 

 

99.86

 

 

 

152.84

 

 

 

253.85

 

 

 

82.0

 

 

 

208.28

 

 

 

335.67

 

 

 

(52.1

)

 

 

(54.5

)

 

31


 

 

All Owned Hotels (pro forma) by Location in Constant US$

 

 

As of June 30, 2021

 

 

Year-to-date ended June 30, 2021

 

 

Year-to-date ended June 30, 2020

 

 

 

 

 

 

 

 

 

Location

No. of

Properties

 

 

No. of

Rooms

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Percent

Change in

RevPAR

 

 

Percent

Change in

Total RevPAR

 

Miami

 

3

 

 

 

1,276

 

 

$

525.00

 

 

 

58.5

%

 

$

306.95

 

 

$

470.12

 

 

$

425.83

 

 

 

39.6

%

 

$

168.56

 

 

$

268.97

 

 

 

82.1

%

 

 

74.8

%

Jacksonville

 

1

 

 

 

446

 

 

 

534.27

 

 

 

52.3

 

 

 

279.35

 

 

 

539.18

 

 

 

398.29

 

 

 

42.6

 

 

 

169.62

 

 

 

342.83

 

 

 

64.7

 

 

 

57.3

 

Florida Gulf Coast

 

5

 

 

 

1,842

 

 

 

455.98

 

 

 

59.7

 

 

 

272.11

 

 

 

497.88

 

 

 

400.35

 

 

 

44.2

 

 

 

177.03

 

 

 

375.72

 

 

 

53.7

 

 

 

32.5

 

Maui/Oahu

 

4

 

 

 

2,006

 

 

 

440.07

 

 

 

59.4

 

 

 

261.61

 

 

 

401.86

 

 

 

451.32

 

 

 

39.1

 

 

 

176.41

 

 

 

268.10

 

 

 

48.3

 

 

 

49.9

 

Phoenix

 

4

 

 

 

1,822

 

 

 

330.65

 

 

 

55.8

 

 

 

184.62

 

 

 

359.23

 

 

 

352.56

 

 

 

37.0

 

 

 

130.34

 

 

 

303.21

 

 

 

41.6

 

 

 

18.5

 

Orlando

 

2

 

 

 

2,448

 

 

 

454.91

 

 

 

22.2

 

 

 

101.17

 

 

 

180.02

 

 

 

337.30

 

 

 

28.8

 

 

 

97.01

 

 

 

208.69

 

 

 

4.3

 

 

 

(13.7

)

Houston

 

4

 

 

 

1,716

 

 

 

134.73

 

 

 

56.1

 

 

 

75.63

 

 

 

102.44

 

 

 

163.52

 

 

 

37.6

 

 

 

61.51

 

 

 

91.53

 

 

 

23.0

 

 

 

11.9

 

Los Angeles/Orange County

 

5

 

 

 

2,119

 

 

 

167.63

 

 

 

44.0

 

 

 

73.73

 

 

 

98.96

 

 

 

212.33

 

 

 

37.8

 

 

 

80.18

 

 

 

119.42

 

 

 

(8.0

)

 

 

(17.1

)

Philadelphia

 

2

 

 

 

810

 

 

 

151.04

 

 

 

48.3

 

 

 

72.98

 

 

 

108.91

 

 

 

165.99

 

 

 

36.7

 

 

 

60.90

 

 

 

98.18

 

 

 

19.8

 

 

 

10.9

 

Atlanta

 

4

 

 

 

1,682

 

 

 

165.27

 

 

 

43.6

 

 

 

72.11

 

 

 

95.56

 

 

 

185.37

 

 

 

36.3

 

 

 

67.36

 

 

 

107.33

 

 

 

7.1

 

 

 

(11.0

)

Washington, D.C. (CBD)

 

5

 

 

 

3,238

 

 

 

152.25

 

 

 

44.9

 

 

 

68.30

 

 

 

73.29

 

 

 

229.66

 

 

 

29.3

 

 

 

67.21

 

 

 

97.24

 

 

 

1.6

 

 

 

(24.6

)

San Diego

 

3

 

 

 

3,288

 

 

 

184.52

 

 

 

31.6

 

 

 

58.33

 

 

 

91.91

 

 

 

241.83

 

 

 

31.8

 

 

 

77.01

 

 

 

154.12

 

 

 

(24.3

)

 

 

(40.4

)

Northern Virginia

 

3

 

 

 

1,252

 

 

 

154.95

 

 

 

36.0

 

 

 

55.79

 

 

 

82.65

 

 

 

196.57

 

 

 

30.3

 

 

 

59.55

 

 

 

98.07

 

 

 

(6.3

)

 

 

(15.7

)

San Antonio/Austin

 

3

 

 

 

1,960

 

 

 

148.39

 

 

 

37.6

 

 

 

55.74

 

 

 

79.40

 

 

 

189.54

 

 

 

27.0

 

 

 

51.17

 

 

 

84.93

 

 

 

8.9

 

 

 

(6.5

)

New York

 

3

 

 

 

4,261

 

 

 

162.82

 

 

 

24.3

 

 

 

39.56

 

 

 

46.67

 

 

 

190.39

 

 

 

43.1

 

 

 

82.11

 

 

 

120.16

 

 

 

(51.8

)

 

 

(61.2

)

Denver

 

3

 

 

 

1,340

 

 

 

127.52

 

 

 

30.3

 

 

 

38.66

 

 

 

49.03

 

 

 

154.85

 

 

 

29.0

 

 

 

44.89

 

 

 

68.03

 

 

 

(13.9

)

 

 

(27.9

)

New Orleans

 

1

 

 

 

1,333

 

 

 

121.54

 

 

 

29.1

 

 

 

35.40

 

 

 

52.52

 

 

 

202.76

 

 

 

32.6

 

 

 

66.19

 

 

 

99.87

 

 

 

(46.5

)

 

 

(47.4

)

Chicago

 

4

 

 

 

1,816

 

 

 

138.56

 

 

 

24.7

 

 

 

34.28

 

 

 

41.10

 

 

 

136.92

 

 

 

28.7

 

 

 

39.26

 

 

 

54.32

 

 

 

(12.7

)

 

 

(24.3

)

San Francisco/San Jose

 

7

 

 

 

4,529

 

 

 

142.47

 

 

 

22.1

 

 

 

31.47

 

 

 

41.73

 

 

 

287.40

 

 

 

31.8

 

 

 

91.26

 

 

 

134.44

 

 

 

(65.5

)

 

 

(69.0

)

Seattle

 

2

 

 

 

1,315

 

 

 

162.69

 

 

 

14.8

 

 

 

24.06

 

 

 

30.12

 

 

 

193.49

 

 

 

27.6

 

 

 

53.38

 

 

 

77.51

 

 

 

(54.9

)

 

 

(61.1

)

Boston

 

3

 

 

 

2,715

 

 

 

137.77

 

 

 

14.2

 

 

 

19.61

 

 

 

25.51

 

 

 

176.94

 

 

 

26.6

 

 

 

47.06

 

 

 

71.97

 

 

 

(58.3

)

 

 

(64.6

)

Other

 

6

 

 

 

2,509

 

 

 

141.77

 

 

 

34.0

 

 

 

48.19

 

 

 

63.11

 

 

 

155.53

 

 

 

35.4

 

 

 

55.07

 

 

 

76.39

 

 

 

(12.5

)

 

 

(17.4

)

Domestic

 

77

 

 

 

45,723

 

 

 

238.03

 

 

 

35.5

 

 

 

84.58

 

 

 

130.40

 

 

 

247.59

 

 

 

33.9

 

 

 

84.03

 

 

 

141.69

 

 

 

0.7

 

 

 

(8.0

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

5

 

 

 

1,499

 

 

 

75.57

 

 

 

16.1

 

 

 

12.19

 

 

 

17.74

 

 

 

123.88

 

 

 

30.9

 

 

 

38.23

 

 

 

58.74

 

 

 

(68.1

)

 

 

(69.8

)

All Locations -

Constant US$

 

82

 

 

 

47,222

 

 

 

235.65

 

 

 

34.9

 

 

 

82.28

 

 

 

126.83

 

 

 

244.00

 

 

 

33.8

 

 

 

82.57

 

 

 

139.05

 

 

 

(0.3

)

 

 

(8.8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Owned Hotels (pro forma) in Nominal US$

 

 

As of June 30, 2021

 

 

Year-to-date ended June 30, 2021

 

 

Year-to-date ended June 30, 2020

 

 

 

 

 

 

 

 

 

 

No. of

Properties

 

 

No. of

Rooms

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Percent

Change in

RevPAR

 

 

Percent

Change in

Total RevPAR

 

International

 

5

 

 

 

1,499

 

 

$

75.57

 

 

 

16.1

%

 

$

12.19

 

 

$

17.74

 

 

$

127.54

 

 

 

30.9

%

 

$

39.36

 

 

$

59.43

 

 

 

(69.0

)%

 

 

(70.2

)%

Domestic

 

77

 

 

 

45,723

 

 

 

238.03

 

 

 

35.5

 

 

 

84.58

 

 

 

130.40

 

 

 

247.59

 

 

 

33.9

 

 

 

84.03

 

 

 

141.69

 

 

 

0.7

 

 

 

(8.0

)

All Locations

 

82

 

 

 

47,222

 

 

 

235.65

 

 

 

34.9

 

 

 

82.28

 

 

 

126.83

 

 

 

244.10

 

 

 

33.8

 

 

 

82.61

 

 

 

139.07

 

 

 

(0.4

)

 

 

(8.8

)

 

32


 

 

All Owned Hotels (pro forma) by Location in Constant US$

 

 

As of June 30, 2021

 

 

Year-to-date ended June 30, 2021

 

 

Year-to-date ended June 30, 2019

 

 

 

 

 

 

 

 

 

Location

No. of

Properties

 

 

No. of

Rooms

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Average

Room Rate

 

 

Average

Occupancy

Percentage

 

 

RevPAR

 

 

Total RevPAR

 

 

Percent

Change in

RevPAR

 

 

Percent

Change in

Total RevPAR

 

Miami

 

3

 

 

 

1,276

 

 

$

525.00

 

 

 

58.5

%

 

$

306.95

 

 

$

470.12

 

 

$

355.53

 

 

 

83.2

%

 

$

295.96

 

 

$

455.82

 

 

 

3.7

%

 

 

3.1

%

Jacksonville

 

1

 

 

 

446

 

 

 

534.27

 

 

 

52.3

 

 

 

279.35

 

 

 

539.18

 

 

 

391.86

 

 

 

81.4

 

 

 

318.88

 

 

 

722.04

 

 

 

(12.4

)

 

 

(25.3

)

Florida Gulf Coast

 

5

 

 

 

1,842

 

 

 

455.98

 

 

 

59.7

 

 

 

272.11

 

 

 

497.88

 

 

 

379.76

 

 

 

78.4

 

 

 

297.90

 

 

 

612.66

 

 

 

(8.7

)

 

 

(18.7

)

Maui/Oahu

 

4

 

 

 

2,006

 

 

 

440.07

 

 

 

59.4

 

 

 

261.61

 

 

 

401.86

 

 

 

410.35

 

 

 

90.6

 

 

 

371.89

 

 

 

589.24

 

 

 

(29.7

)

 

 

(31.8

)

Phoenix

 

4

 

 

 

1,822

 

 

 

330.65

 

 

 

55.8

 

 

 

184.62

 

 

 

359.23

 

 

 

327.86

 

 

 

78.6

 

 

 

257.82

 

 

 

566.03

 

 

 

(28.4

)

 

 

(36.5

)

Orlando

 

2

 

 

 

2,448

 

 

 

454.91

 

 

 

22.2

 

 

 

101.17

 

 

 

180.02

 

 

 

299.99

 

 

 

75.6

 

 

 

226.78

 

 

 

461.20

 

 

 

(55.4

)

 

 

(61.0

)

Houston

 

4

 

 

 

1,716

 

 

 

134.73

 

 

 

56.1

 

 

 

75.63

 

 

 

102.44

 

 

 

182.15

 

 

 

75.2

 

 

 

136.92

 

 

 

197.16

 

 

 

(44.8

)

 

 

(48.0

)

Los Angeles/Orange County

 

5

 

 

 

2,119

 

 

 

167.63

 

 

 

44.0

 

 

 

73.73

 

 

 

98.96

 

 

 

220.13

 

 

 

85.8

 

 

 

188.88

 

 

 

282.74

 

 

 

(61.0

)

 

 

(65.0

)

Philadelphia

 

2

 

 

 

810

 

 

 

151.04

 

 

 

48.3

 

 

 

72.98