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Good morning. Welcome to the Host Hotels & Resorts first quarter 2026 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the call over to Jaime Marcus, Senior Vice President of Investor Relations. Jaime, please go ahead.

Thank you and good morning, everyone. Before we begin, please note that many of the comments made today are considered to be forward-looking statements on federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed. We are not obligated to publicly update or revise these forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information such as FFO, adjusted EBITDAre, and comparable hotel-level results. You can find this information together with reconciliations to the most directly comparable GAAP information in yesterday's earnings press release, in our 8-K filed with the SEC, and in the supplemental financial information on our website at hosthotels.com.

The operational results discussed today refer to our 74 hotel comparable hotel portfolio in 2026, which excludes The Don CeSar and Sheraton Parsippany. With me on today's call are Jim Risoleo, President and Chief Executive Officer, and Sourav Ghosh, Executive Vice President and Chief Financial Officer. With that, I would like to turn the call over to Jim.

Thank you, Jaime, and thanks to everyone for joining us this morning. Our first quarter results exceeded our expectations, representing a strong start to 2026. We delivered adjusted EBITDAre of $543 million, an increase of 5.6% over last year, and adjusted FFO per share of $0.67, an increase of 4.7% over last year. First quarter adjusted EBITDAre and adjusted FFO per share benefited from $7 million of business interruption proceeds related to Hurricanes Helene and Milton, compared to $10 million in the first quarter of 2025. Comparable hotel total RevPAR improved 4.6% compared to the first quarter of 2025, and comparable hotel RevPAR improved 4.4%, driven by rate growth and continued strength in out-of-room spending.

Comparable hotel EBITDA margin improved by 70 basis points year-over-year to 32.7%, driven by revenue growth. RevPAR growth in the first quarter was meaningfully better than expected. Strong rate growth was enabled by resilient demand, despite estimated weather impacts of approximately 120 basis points and tough comparisons to last year. We saw particularly strong performance at our resorts in Florida and Phoenix, as well as in San Francisco, which benefited from the Super Bowl and the ongoing market recovery. Notably, San Francisco achieved 26% RevPAR growth and more than 70% EBITDA growth in the quarter, reflecting continued momentum in the market's recovery. Turning to business mix, transient revenue grew by 5.5%, driven by rate growth, particularly at our resorts.

First quarter transient results benefited from Easter in early April, which compressed spring break demand in March, contributing to 9% transient revenue growth at our resorts. Feedback from our properties indicates that ongoing geopolitical uncertainty supported travelers favoring U.S. luxury destinations over international destinations. As a result, resort properties delivered particularly strong performance in the first quarter. Briefly touching on Maui. RevPAR grew 1.5%, and total RevPAR grew 1.6%, as growth was impacted by the Kona low rainstorm in March. Prior to the storm, overall demand at our Maui resorts was tracking ahead of our expectations for the first quarter. It is important to note that the impacts from the storm were contained and are not ongoing.

We have also seen strong rebookings since the storm, as a result, we continue to expect Maui to contribute approximately $120 million of EBITDA in 2026. Business transient revenue grew 4%, driven by strong rate growth, as we saw a continued mix shift from government to corporate negotiated customers in the first quarter. Group room revenue for the quarter was up 2.4% year-over-year, driven by improvements in both demand and rate. Our property sold 1.1 million group room nights in the first quarter, definite group room nights on the books for 2026 now stand at 3.5 million, with total group revenue pace up nearly 4% to the same time last year.

Turning to ancillary spend, F&B revenue grew 5% and other revenue grew 6%, with broad-based strength across departments, demonstrating the continued strength of the affluent consumer as well as the benefits of the strategic investments we have made in many of our properties over the last several years. Turning to capital allocation, we repurchased 4 million shares of common stock at an average price of $18.97 per share for a total of $75 million in the 1st quarter. Since 2017, we have repurchased 73.2 million shares at an average price of $16.76 per share, bringing our total share repurchases to approximately $1.2 billion. Yesterday, the board of directors authorized a quarterly common dividend of $0.20 per share and a special dividend of $0.72 per share.

The dividend will be paid on July 15th to stockholders of record on June 30th. The special dividend represents the distribution of the approximate $500 million taxable gain from the sale of the two Four Seasons resorts in the first quarter of this year. Creating value for our stockholders remains our top priority. By returning capital through a regular quarterly cash dividend, special dividends like the one we will pay out this quarter, and our share repurchase program, we are advancing our objective of delivering long-term value for our investors. Turning to portfolio reinvestment, during the first quarter, we completed the comprehensive renovation at the Hyatt Regency Reston. As of the end of the first quarter, the Hyatt Transformational Capital Program is more than 80% complete and is tracking on time and under budget.

Transformational Renovations are now complete at 4 of the 6 hotels in the program, including the Grand Hyatt Atlanta Buckhead, the Hyatt Regency Capitol Hill, the Hyatt Regency Austin, and the Hyatt Regency Reston. We are nearing completion on the Grand Hyatt Washington, D.C., which is expected to be finished later this month. The Manchester Grand Hyatt San Diego, the final asset in the program, has been phased to mitigate business interruption and is expected to be substantially complete by the end of this year. Additionally, the second Marriott Transformational Capital Program is well underway. Guest room renovations at the New Orleans Marriott are in progress and are scheduled to be completed in the third quarter. Renovations at The Ritz-Carlton Naples, Tiburón and the Westin Kierland are scheduled to start later this month.

The four-asset program is already more than 25% complete, and it is also tracking on time and under budget. In the first quarter, we received $3 million of operating guarantees related to our Transformational Capital Programs. As a reminder, we expect to benefit from approximately $19 million of operating profit guarantees in 2026 related to our two Transformational Capital Programs, which we expect will offset most of the EBITDA disruption at these properties. Looking at other ROI projects, we are nearing completion of the condo development at the Four Seasons Orlando. To date, we have closed on the sale of 20 of 31 units within the mid-rise building, and we have deposits and purchase agreements in place for 8 of the 9 villas, bringing total sales and deposits to 28 of 40 units.

Overall, the project is on budget and expected to sell out by the end of this year. For 2026, our capital expenditure guidance range is $545 million to $655 million. This includes approximately $250 million to $300 million of investment focused on redevelopment, repositioning, and ROI projects, and $20 million to $30 million of property damage reconstruction associated with the Kona low rainstorm in Hawaii. We also anticipate remediation costs of approximately $5 million. While we are still evaluating the total impacts of the storm, we expect our insurance coverage to cover the losses in excess of our deductible. In addition to our capital expenditure investment, we expect to spend $15 million to complete the condo development at the Four Seasons Orlando in 2026.

Our continued reinvestment across our portfolio is a true differentiator for Host. In fact, once the second Marriott Transformational Capital Program is complete, we will have invested $2.1 billion in comprehensive renovations at 34 hotels in our portfolio, which are expected to contribute approximately 60% of our total hotel EBITDA in 2026. We have now stabilized post-renovation data on 21 hotels, and the average RevPAR index year gain is nearly 9 points. As evidenced by our results, our capital allocation decisions over the past few years are driving value creation for our shareholders. We also reinforced our position as a global leader in corporate responsibility in the first quarter.

Last week, Host was proud to be included in the Dow Jones Sustainability World Index for the 7th consecutive year and North America for the 9th consecutive year, ranking number 3 globally in our sector. In fact, Host was one of only 2 North American companies on the World Index. Number 1 in our sector among 7 companies on the North America index. Turning to our outlook for 2026. We continue to expect strong leisure demand bolstered by special events, modest improvements to short-term group booking trends and stable business transient demand. As a result, we are raising our 2026 comparable hotel RevPAR guidance range to 3%-4.5% over 2025, and our comparable hotel total RevPAR growth guidance range to 3.5%-5% over last year.

Looking ahead to the remainder of the year, we are optimistic about the travel environment. High-end consumers continue to prioritize experiences, and supply across our markets and chain scales remains at historically low levels. Against this backdrop, our fortress balance sheet gives us the flexibility to continuously reinvest in our portfolio while also returning capital to shareholders through a sustainable quarterly dividend, periodic special dividends and share repurchases. As our results over the past few years have shown, our competitive advantages uniquely position Host to continue to capture additional upside in the current environment and for many years to come. With that, I will now turn the call over to Sourav.

Thank you, Jim. Good morning, everyone. Building on Jim's comments, I will go into detail on our first quarter operations, updated 2026 guidance and our balance sheet. Starting with total revenue trends, total RevPAR growth continued to outpace RevPAR growth due to broad-based strength across food and beverage and other department revenues. Comparable hotel food and beverage revenue for the quarter grew 5%, driven by recently repositioned outlets and strong banquet and catering contribution per group room night at convention hotels. As Jim mentioned, this is the benefit of the strategic investments we have made over the last few years, which is clearly evident in out-of-room spending by our guests. Banquet and catering revenue increased 3%, led by our San Diego properties, the San Francisco Marriott Marquis, the San Antonio Marriott River Center, and The Ritz-Carlton, Amelia Island.

These hotels all achieved banquet and catering contribution per group room night growth of over 7%. In fact, banquet and catering contribution at The Ritz-Carlton, Amelia Island grew 24%, driven by incentive groups and upsells. Outlet revenue grew 8%, driven by the New York Marriott Marquis, the 1 Hotel South Beach, and the Grand Hyatt San Diego, all of which have recently renovated restaurants. The San Francisco Marriott Marquis and Santa Clara Marriott also benefited from broad-based improvement in the 1st quarter, which was further enhanced by the Super Bowl in February. Other revenues increased 6%, once again propelled by strength in golf and spa operations. Spa revenue was up 4% driven by improved capture, particularly at The Ritz-Carlton, Amelia Island and Westin Kierland, which continued to benefit from recent spa renovations.

Golf revenue grew 9% despite impacts in Maui, led by strong performance at our Naples and Phoenix golf courses. Shifting to room revenues, overall transient revenue was up 5.5% compared to the first quarter of 2025, driven by rate growth and leisure demand. Notably, our Florida and Phoenix resorts generated approximately 60% of the transient revenue growth in the quarter. Transient revenue at our resorts increased by more than 9%, underscoring the continued strength of high-end demand. Looking ahead to the upcoming holiday weekends, transient revenue pace is up 6% for Memorial Day weekend compared to the same time last year, driven by resorts. Revenue pace for the weekend of July fourth is up nearly 50% over last year, driven by northeastern cities including Philadelphia, Washington, D.C., New York, and Boston.

While we expect that number to actualize lower, it is encouraging to see early strength in both demand and rate for World Cup matches and the America 250 celebrations. Business transient revenue was up 4% to the first quarter of 2025, driven primarily by rate growth. While overall business transient demand remains below pre-pandemic levels, government volume has stabilized, and we are encouraged by corporate activity from consulting, technology, and financial services firms. Turning to group, revenue was up 2.4% year-over-year. Growth was driven by both demand and rate improvements, particularly for association and other groups. Group revenue growth was led by San Francisco, which benefited from strong citywide performance in addition to the Super Bowl.

For full year 2026, we have 3.5 million definite group room nights on the books, representing a 12% increase since the fourth quarter. As Jim mentioned, total group revenue pace is up nearly 4% over the same time last year. More specifically, we are seeing meaningful total group revenue pace in San Francisco, New York, the Florida Gulf Coast, and Miami. Group booking pace remains strongest for the second and fourth quarters. Shifting gears to margins, comparable hotel EBITDA margin of 32.7% was 70 basis points above the first quarter of 2025 as a result of total revenue growth, which outpaced absolute wage and benefit increases. We expect year-over-year margin comparisons to moderate as the year progresses, primarily driven by lower average rate growth expectations in the second half of the year.

Turning to our outlook for 2026, we are increasing our comparable hotel RevPAR growth guidance range to 3%-4.5% and our comparable hotel total RevPAR growth guidance range to 3.5%-5%. The midpoint of our guidance contemplates a stable operating environment with the continuation of the trends seen in the first quarter. This includes leisure transient strength driven by special events such as the World Cup, modest improvements to short-term group booking trends, and stable business transient demand. At the low end of our guidance, we have assumed no improvement in short-term group booking trends and weaker special events demand. At the high end, we have assumed improving short-term group booking trends and increased demand around special events.

We expect comparable hotel EBITDA margins to be up 20 basis points year-over-year at the low end of our guidance to up 50 basis points at the high end, a 30 basis point improvement over our prior guidance. In terms of comparable hotel RevPAR growth cadence for the remainder of the year, we expect second quarter RevPAR growth to be similar to that of the first quarter, driven by the World Cup. We expect comparable hotel RevPAR for April to increase approximately 4.4% year-over-year. RevPAR growth in the second half of the year is expected to be in the low single digits. The midpoint assumes comparable hotel RevPAR growth of 3.75% compared to 2025, a 100 basis point improvement over our prior guidance.

We continue to expect an estimated 40 basis point net benefit from special events for the full year, with an estimated 60 basis point lift from the World Cup, partially offset by a 20 basis point headwind from the presidential inauguration in the first quarter of 2025. In addition, Maui is expected to contribute approximately 35 basis points to our full-year RevPAR growth. It is important to point out that bulk of the demand around the World Cup is expected to materialize within the 30-day booking window. That said, we are encouraged that transient revenue pace for our portfolio in World Cup markets is up nearly 40% year-over-year and has been steadily picking up occupancy as we get closer to the match dates. At the midpoint, we expect a comparable hotel EBITDA margin of 29.5%, which is 30 basis points above 2025.

Our margin performance reflects our continued success in partnering with our operators to drive productivity gains across our portfolio, as well as the capital allocation decisions we have made over the past few years. For the full year, we continue to expect wage rates to increase approximately 5%, which comprises approximately 50% of our total comparable hotel operating expenses. Our 2026 full year adjusted EBITDAre midpoint is $1,810 million. This implies a $40 million or more than 2% improvement over our prior guidance midpoint, driven by first quarter outperformance and a slightly more optimistic view of the second half of the year. Our adjusted EBITDAre midpoint includes $28 million of estimated EBITDA from operations at The Don CeSar, which is excluded from our comparable hotel set in 2026.

It also includes approximately $7 million of business interruption proceeds related to Hurricanes Helene and Milton, which we received in the first quarter. We also expect to receive business interruption proceeds for the recent Kona low rainstorm in Hawaii, it is still too early to estimate the timing or amount of any payments. Lastly, our 2026 full year adjusted EBITDARE midpoint includes between $20 million-$25 million of estimated net EBITDA from the Four Seasons condo development, which we expect to recognize concurrent with condo sale closings. In the first quarter, we recognized $4 million of EBITDA associated with condo sales. Turning to our balance sheet and liquidity position, our weighted average maturity is 4.9 years at a weighted average interest rate of 4.8%.

We currently have $3.4 billion in total available liquidity, which includes $151 million of FF&E reserves and $1.5 billion available under the revolver portion of the credit facility. In April, we paid a quarterly cash dividend of $0.20 per share. Yesterday, as Jim mentioned, the board of directors authorized a quarterly dividend of $0.20 per share and a special dividend of $0.72 per share to shareholders of record as of June 30th, which is payable on July 15th. Payment of these dividends will reduce our total available liquidity by approximately $770 million, bringing our adjusted leverage ratio to 2.5 times. As always, any future dividends are subject to approval by the company's board of directors.

In closing, we believe our investment-grade balance sheet as well as our size, scale, and diversification uniquely position Host to continue to outperform in the current environment while capitalizing on opportunities for growth in the future. With that, we would be happy to answer your questions. To ensure we have time to address as many questions as possible, please limit yourself to one question.

Thank you. We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Smedes Rose with Citi. Your line is open. Please go ahead.

Hey, good morning. I guess I wanted to ask you on, I'll ask on the World Cups. Robin, you mentioned that, I think transient revenues or I am not sure if it is revenues or bookings are up 40% in World Cup markets. Where does that have to get to in order to achieve your gross RevPAR expectations for a 60 basis points benefit from that event?

Yeah, just to back up a little bit. Majority of the bookings, really happen within the 45-day window. Believe it or not, in sort of the week leading up to the matches, 40% of the occupancy from a World Cup is actually booked in that last week. We are pacing well relative to where we stand right now. It's really a last-minute build-up, literally like 3 weeks leading into it with, like I said, 40% of the occupancy really being booked 1 week, out. That is in line with the World Cup, occupancy build that we have, from, stats that we got from the last World Cup in Russia and Qatar.

And the other thing I would point out is, you know, you've seen in the news sort of group block reductions, and that block reductions is not at all indicative of overall event. That sort of happens in the normal course. FIFA always there is a wash in terms of sort of the overall group bookings that takes place. It is really much more of a transient play than a group play and obviously differs from market to market.

Yes.

Thank you.

Smedes, just to help you think about a little, a little more color to it. You know, we think that about 2/3 of that 60 basis point pickup is going to occur in the second quarter and the remainder in the third quarter. It's, you know, the third quarter is much more difficult to forecast because of not knowing what teams are going to show up in the knockout rounds, et cetera. We're very pleased with how things are pacing. I mean, we have World Cup matches in, I think 10 of our markets, you know, led by New York and Miami in particular, where there are going to be knockout matches occurring. We feel good about our 60 basis point gross assumption.

You know, I do wanna point out that that's, 40 basis point net if you take out the inauguration benefit that we had last year.

Appreciate it. Thank you.

Your next question comes from the line of Rich Hightower with Barclays. Your line is open. Please go ahead.

Hey, good morning, guys. Thanks for taking the question here. Back to the significant dollars spent on all the collective ROI programs, but obviously mainly the Marriott and Hyatt transformational programs. You know, given the strength that you are obviously seeing on the non-room side, I mean, are you able to sort of break out what the returns have been on the non-room side versus the room side? You know, what does that tell us about the business going forward? You know, you mentioned the significant gain in RevPAR share index. I'm just, you know, maybe more general commentary on sort of the non-CapEx competitors, you know, as we sit here six years after COVID, what does that dynamic look like? A bit of a multi-parter. Thanks.

Yeah. Rich, there's an awful lot in that question. You know, let me start by saying that you know our transformative renovations of over $2.1 billion to date have served Host shareholders very well. The 9 points in yield index that we picked up on 21 stabilized assets out of 34 that we'll complete is way above our expectations. You know, we continue to see that run rate improving as we have the six properties from the Hyatt Transformational Capital Program coming back online and we complete the work at the four Marriott properties.

you know, just for reference, the four Marriott properties are the New Orleans Marriott, the Ritz-Carlton Tiburon, the Ritz-Carlton Marina del Rey, and the Westin Kierland Resort & Spa in Phoenix. we couldn't be more pleased with how assets are performing. we have not really stepped back and broken down, you know, the various components of where the returns came from. I think if you just look at the numbers, you know, our continued pickup in banquet and catering revenues, you know, out of room spend generally, you know, from spa investments, you know, has been meaningful. our outlet spend has been really quite good.

you know, the outlet renovations are not necessarily tied to the transformational capital program. I mean, the AVIV Restaurant at the 1 Hotel South Beach has opened above our pro forma expectations, as has The View at the New York Marriott Marquis. we think this is a really strong use of capital. we have clear sight lines to generating mid-teens cash on cash returns, and it's something we're gonna continue to do going forward. It's clearly a differentiator for Host. you know, it all began in when we went into COVID and you know, we had just started the Marriott Transformational Capital Program in 2018. you know, one good example, Rich, is what happened at the Marriott Marquis. we started the transformational renovation there in 19.

You know, while others pulled back when COVID hit, we accelerated the renovation. You know, it's a statistic I talked about at our recent general managers meeting that I think is worth repeating. In 2018, the Marriott Marquis generated $65 million in EBITDA. In 2025, it generated $100 million in EBITDA, and that's based on a $100 million total transformational renovation. It's a great use of capital. You can expect to see us continuing to do that going forward.

Great. Thanks.

Your next question comes from the line of Michael Bellisario with Baird. Your line is open. Please go ahead.

Thank you. Good morning, everyone.

Good morning, Mike.

Well, I want to focus on Hawaii here, two parts. Just first, could you quantify the RevPAR and EBITDA impacts in both Maui and Oahu? The rebookings that you mentioned, are those getting pushed into the second quarter, or is it more that you're seeing a shift into 4Q and the pickup is gonna occur a little bit further out? Thank you.

sure, Mike. The overall impact from weather was 120 basis points. That actually includes 80 basis points of RevPAR impact for Hawaii and 40 basis points from Winter Storm Fern. Just so clear, it's the Q1 impact is not just the Hawaii storm, but also the winter storm that took place on the East Coast. In terms of EBITDA impact, Maui was call it around $5-ish million, and then Oahu was about $1 million or so in terms of impact, negative impact for the quarter.

the rebookings?

The rebookings, as Jim mentioned, that is, we are picking some of that up in sort of late April and May and June. Certainly some of it did bleed into the beginning of April in terms of cancels, but we are seeing those rebookings pick up through the remainder of the year.

Yeah, Mike, you know, Maui was pacing ahead of our initial expectations in the first quarter. You know, we're very happy that we're able to maintain our guide for Maui of $120 million in EBITDA contribution to the midpoint. We've also seen a pickup in seat availability from the airlines going into Maui and going into Hawaii in general. We feel really good about how the market is recovering after, you know, some tough years post the wildfires.

Helpful. Thank you.

Your next question comes from the line of Duane Pfennigwerth with Evercore ISI. Your line is open. Please go ahead.

Hey. Thank you. Good morning. I appreciate it's tough to know the precise drivers of why somebody checks in or, you know, why demand was stronger in 1Q. If we think about a real winter in the Northeast, no snow in the Rockies, you know, safety concerns in Mexico, at least for a period of quarter, this may have been a good combination that funneled more demand to warm weather destinations in the U.S. I wonder, what do you think of that premise? More importantly, what are you seeing in your bookings that convinces you better demand is sustaining going forward? Thank you.

Yeah, Duane. You know, we did see, you know, a very, very strong quarter in Florida and Arizona, and in our resorts in both markets. You know, more broadly, as we think about our customer and, you know, the affluent customer who visits our properties, we have not seen a pullback, generally. I'd say a broad-based statement, the first quarter really proved that out. You know, there is some, you know, tangential evidence that as a result of what happened in Mexico and the Iran war, you know, dampening travel to certainly to the Middle East and anybody who was transiting through Dubai, which was the number one major international transit airport, caused people to stay in the U.S.

You know, we're hopeful that as they visited our properties, and they saw what great shape they're in, and they had fantastic experiences that we're gonna be able to retain those guests and get them to come back. I mean, we saw a shift in an imbalance in international inbound versus international outbound right after COVID hit, if you recall. You know, there was a lot of pent-up demand on the part of affluent U.S. travelers, U.S. consumers who couldn't travel to Europe and who couldn't travel to other international destinations due to quarantine restrictions and testing requirements and things of that nature. As soon as those restrictions came up, you know, people went.

I think, you know, we were like 120% international outbound last year relative to, you know, 90% international inbound. We saw that number improve just a slight bit in the month of March, and, you know, we're hopeful that that is gonna continue to improve going forward.

Thanks, Jim.

I would add, like, if you look at sort of our holidays, upcoming holidays, the transient pace is really strong. That gives us further confidence. I believe I mentioned in my prepared remarks, Memorial Day room revenue, overall transient is pacing, it's like 6%, so high single digits. When you look at on the group side, what also gives us confidence, in the first quarter, we picked up 95,000 rooms in Q1 for Q1. Despite Q2 with World Cup and being more heavily transient focused, Q2 to Q4, we picked up 280,000 room nights in the first quarter for the remainder of the year. We're really encouraged by that.

When you look at our group booking pace by quarter, Q2 and Q4 are both in the high single digits. That further gives us confidence in terms of our outlook for the balance of the year.

Thank you.

Your next question comes from the line of Floris van Dijkum with Ladenburg. Your line is open. Please go ahead.

Thank you. Jim, I'm curious if you could touch a little bit on the transaction markets. Obviously you've been very successful in selling your Four Seasons hotels. There are a number of hotels on the market. One of the hotel REITs is selling stuff. There's some private equity investors that are, you know, put some markets or some assets on the market. Could you talk a little bit about what you see in terms of returns available and where your most attractive investment opportunities are? Are they continuing to be in your core portfolio, in the ROI projects or share buybacks or new assets? If you can give a little bit more color, that'd be great.

Sure, Floris. You know, let me start by talking a bit about how we think about capital allocation, and then I can talk about both acquisitions and dispositions. You know, our focus remains unchanged. I mean, we're disciplined, we're return-focused, and we're very cycle aware when it comes to capital allocation. Every decision is evaluated against the same yardstick, and that is long-term total shareholder return. You know, we think about it by core primary uses of capital, I would say, dividends, share repurchases, portfolio reinvestment, and, you know, opportunistic acquisitions. We're in a great place with our, you know, fortress investment-grade balance sheet. We have low leverage even after we pay the dividends. We'll still be at 2.5 times leverage.

Our balance sheet allows us to be opportunistic. You know, we're not being forced into any single capital decision. You know, I think the fact that we paid, elected to pay a special dividend of $0.72 in connection with the sale of the 2 Four Seasons, it speaks loudly to the discipline that we have. There are a lot of acquisitions out there, a lot of potential acquisitions out there. We'll see what clears the market. I don't know. You know, the guide, the pricing guide is pretty high. It's a bar that we're not able to reach. We look at everything that comes into the market, but, you know, risk adjusted returns are just not there for us.

You know, we like to say buy the hoop. We, we like to hang around, and we'll see, we'll see what happens. You know, we're the best buyer for a lot of these assets because of the fact that we can do transactions on an all-cash basis. We don't have to access the debt markets, and we can move quickly. And we prove that time and time again. Given that, you know, the uncertain macro picture, I think discipline matters more than activity at this stage of the cycle. You know, how are we thinking about deploying capital? We do have $500 million left. You know, we continue to view the dividend as a core component of shareholder returns. I mentioned the $0.72 special.

We also declared a $0.20 quarterly regular dividend. You know, the special reflects our commitment to returning excess capital when appropriate, while maintaining the flexibility in the cap stack. Another place that we've been very active on deploying capital is on share buybacks. Share buybacks are always evaluated alongside all other capital uses. You know, we don't talk about this that often, but since 2017, we bought back 72.3 million shares of stock at an average price of $16.67. That's $1.2 billion of capital return. You could expect us to continue to tap the buyback market based on market conditions, our view of operations, and alternative uses of capital.

I mean, capital allocation at Host is really, you know, it's all-encompassing. It's acquisitions, it's dividends, it's share buybacks, it's dispositions, as you saw what we did with the two Four Seasons, and we're constantly testing the market, and we're willing to sell assets at the right price up and down the portfolio. Portfolio investment has served us really well. I mentioned in my remarks, or that, or maybe Sourav did, I don't remember, 60% of our EBITDA this year is expected to come from hotels that have undergone or are undergoing transformational renovations. You know, all this comes down to one thing for us. Ultimately, our goal is to grow free cash flow over time.

You know, we lead the full-service lodging in recent cumulative free cash flow since 2019. Capital allocation decisions are made through that lens, not just growth, but, you know, durable, repeatable, cash flow generation. To answer your question, you know, on the acquisition side, I think it's just wait and see.

Thanks, Jim.

Your next question comes from the line of Chris Woronka with Deutsche Bank. Your line is open. Please go ahead.

Hey, good morning, guys. Thanks for taking the question. Jim, or Sourav, wanted to ask a little bit more about San Francisco. Great quarter, obviously Super Bowl there. I think you have 6 assets in the market for kinda downtown, 2 outside. You know, there's a lot going on there. I think the market's in a pretty good recovery in the CBD, also some of the AI out closer to the airport and Silicon Valley. I guess if you break those 2 apart, which one do you think is more sustainable? Which one are you more excited about? Which one kind of helps your bottom line out there the most? Thanks.

Yeah, sure, Chris. You know, we've been a big believer on San Francisco. We haven't given up. We haven't sold any assets. We continuously are looking at potential opportunities in that market because there's a clear recovery that's underway, and it's accelerating. San Francisco is, you know, we're seeing office fundamentals improving meaningfully, entering 2026. You know, a pundit used the phrase that it is now a boom loop as opposed to a gloom loop. I can't take credit for that, but it is a boom loop. I mean, San Francisco had outstanding growth in the first quarter.

As I mentioned, we delivered RevPAR of 26% in the quarter, benefiting from the Super Bowl and continued demand recovery, and generated over 70% EBITDA growth. You know, it's a diversified demand base. We like the assets we own in San Francisco. You've seen them, I'm sure, you know, because they're well located, they're in great physical shape, and they can gear off of multiple demand generators, including leisure, group, and business transient. You know, importantly, our assets are well positioned to take on in-house medium and large groups, helping offset citywide demand gaps. AI is real. The office recovery, you know, supports lodging fundamentals. Leasing activity and net absorption improved in early 2026, driven by AI-related companies.

That is benefiting not only our properties in City Center, but also the Hyatt Burlingame, which is out by the airport, and the Santa Clara Marriott. We couldn't be happier with what's happening in that market and look forward to continued growth going forward.

Great. Thanks, Jim.

Your next question comes from the line of Daniel Politzer with JPMorgan. Your line is open. Please go ahead.

Hey, good morning, everyone, and thanks for the question. I know we've talked a bit about it, but I just wanted to circle back on Maui. I think RevPAR there was up, you know, 1.5, 1.6%. You mentioned, I think, 120 basis points of disruption, so, you know, close to 3%, I think. You know, RevPAR growth, like, as we think about that path to 120, right, it seems like you already saw a bit of a deceleration there. I guess what's the level of confidence in getting that $120 million for the year, and can you go, you know, maybe it's booking window or just a level of visibility in that path?

Just to be clear, the 120 basis points impact for the quarter was for Hawaii, the Kona low storm as well as the winter storm. It was really 80 basis points, and that's to the portfolio, not to Maui. Maui would have effectively been in the higher single digits if it wasn't for the storm. When you're looking at Maui RevPAR in the low single digits, that would have been in the high single digits. The impact that we were talking about is really the impact of the portfolio RevPAR for the first quarter. In terms of how much confidence we do have, as Jim mentioned, we started the year off really well. We were really pacing ahead of what our expectations were before the storm hit.

When we are looking at sort of the rebookings that are taking place from the cancels from the storm, that gives us further confidence as well as the overall group booking pace for Maui. When we look at it by quarter, like fourth quarter is probably the strongest, close to nearly 20% in terms of group booking pace. Our expectation for Maui RevPAR for the full year in order to get to the $120 million is almost close to 9%, I would say. Hopefully, that helps.

Got it. Thanks so much.

Sure.

Your next question comes from the line of Robin Farley with UBS. Your line is open. Please go ahead.

Great. Thank you. Most of my questions have been answered already. I guess a smaller one. You know, I think you're still the largest hotel owner for Marriott. I wonder if you could quantify if their recent change in the split of economics with the Bonvoy program, did that help or hurt you for Q1 or for the full year, you know, in either direction? Thanks.

Hey, Robin. Overall it has helped us because not only are we their largest, we also have a very high redemption of hotels within our portfolio. Certainly the way the program works, it has been beneficial to us with the changes that have occurred both in Q1, and that expectation is that it would continue to benefit us for the full year.

Is there any way to quantify kind of roughly what that benefit is from that change? I think it's sort of a I don't know if it's for you as well, a one-time step-up, or if it is something that would, you know, kind of recur in your base. I know for them it's kind of a one-time step-up. Just wanna think about if you can quantify. Thank you.

It's tough to exactly quantify. You know, we can maybe provide some ranges for you at some point in time, but I don't have that handy at this moment.

Okay, great. Thank you. Thanks.

Your next question comes from the line of Logan Epstein with Wolfe Research. Your line is open. Please go ahead.

Thanks for taking the question, and good morning. Maybe just one. You talked about the rate growth in the quarter, obviously strong, and then you touched on some expected deceleration there for the rest of the year. Just curious if you could break out for the implied 2Q to 4Q RevPAR of 3.5%, how is it breaking out between rate and occupancy growth? Maybe how did that trend also in April up 4.4% too? Thank you.

Sure. When we're looking at the second half, I would say about occupancy is growing about 80 basis points or so, and the remainder is rate. The rate for the second half is almost a point lower than the rate growth that we saw in the first half. That's primarily because when you think about our portfolio, a lot of our resorts, the high season is Q1, and we saw that outperformance in the first quarter. Obviously, there was a compressed spring break that also helped drive the Q1 results, particularly at our resorts. With World Cup, that's a meaningful transient rate pickup that we are expecting. Overall, that's why you just see much higher rate in the first half versus the second half.

In terms of first half occupancy, I would say the pickup was about 70 BPS, is what we're expecting for the first half. It's very similar to the second half in terms of occupancy or demand pickup. Rate is gonna be about, you know, the expectation is about a point lower or so.

Thank you.

Your next question comes from the line of Jack Armstrong with Wells Fargo. Your line is open. Please go ahead.

Hey, good morning. Thanks for taking the question. Can you take us through some of the building blocks on the expense side that are assumed in your annual guidance? We've heard from some of your peers over the last few days that total wage and benefits came in below expectations in the first quarter, but partially as a function of lower headcount. Is that something you're seeing in your portfolio?

For us in the first quarter, absolute wage and benefit growth was only 4.5%, and that really is being driven by productivity improvements. I mean, we work extremely closely with the operators, and are very, very focused in terms of how they are leveraging their labor management systems, In the case of Marriott, that's Atlas, and you have Olympia in the case of Hyatt. Particularly focused on really driving labor standards. Each of the labor standards, given how unique our properties are, they are very unique to each property and to setting sort of best in class labor standards. Scheduling and forecasting based on the labor standards becomes critical. There is As you will see in the income statement, the or the our comp numbers, rooms profit margin improved meaningfully. Did food and beverage profit margin. It's all being driven by this honed in focus on productivity across the portfolio.

That's why despite wage rates going up 5%, and that's the expectation that we set out at the beginning of the year for the full year, and we saw that as wage rates are sort of sticking to that 5% increase. Our absolute dollar amount, when you look at wage and benefit, that was only a 4.5% increase. I would say it's, you know, it's really driving more productivity and efficiencies across the portfolio.

Really helpful. Thank you.

Your next question comes from the line of Chris Darling with Green Street. Your line is open. Please go ahead.

Thank you. Good morning. Couple follow-ups related to capital allocation. First, Jim, I think you mentioned, you know, a high bar for acquisitions today. Does that suggest that incremental dispositions might be more likely through the rest of the year? Secondly, from a tax efficiency standpoint, would the potential need for another special dividend deter you from pursuing that strategy?

I'll answer the second question first, Chris, because that's the easier one of the two. No, it would not deter us. If we thought it was the right capital allocation decision, to sell assets that would result in a special dividend in the event we couldn't do a like-kind exchange, and, you know, we created significant shareholder value, that is certainly something we would do. You know, on dispositions versus acquisitions, you know, we constantly test the market with dispositions all the time. You know, we have, as I mentioned earlier, in the call, our key focus is on generating free cash flow. We think that's a good metric, and it adds to growth in FFO per share, which has, you know, done quite well over time.

I mean, from 2019 to 2025, our FFO per share was 19%, our growth. You know, relative to the other full service lodging REITs, they had -33% FFO per share. As we're thinking about how we approach capital allocation, dispositions are at many times as beneficial, if not more beneficial, than acquisitions. Stay tuned. We'll see how the year plays out, but we are prepared to be sellers. We're also hopeful at some point in time that we can get back into the market and be a buyer.

Okay. Understood. Thank you.

We have reached the end of the Q&A session. I will now turn the call back to Jim Risoleo for closing remarks.

Well, as always, folks, we really appreciate you joining us. We appreciate the opportunity to discuss our quarterly results with you and how we're thinking about the balance of 2026, and we look forward to seeing many of you at conferences in the coming months.

This concludes today's call. Thank you for attending. You may now disconnect

Good morning, and welcome to the Host Hotels & Resorts Fourth Quarter 2025 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Jaime Marcus, Senior Vice President of Investor Relations.

Thank you, and good morning, everyone. Before we begin, please note that many of the comments made today are considered to be forward-looking statements under Federal Securities Laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information, such as FFO, adjusted EBITDAre and comparable hotel level results. You can find this information together with reconciliations to the most directly comparable GAAP information in yesterday's earnings press release and our 8-K filed with the SEC and in the supplemental financial information on our website at hosthotels.com. The operational results discussed today refer to our 76 hotel comparable portfolio in 2025, which excludes Alila Ventana Big Sur, The Don CeSar and St. Regis Houston, which we sold in January. With me on today's call are Jim Risoleo, President and Chief Executive Officer; and Sourav Ghosh, Executive Vice President and Chief Financial Officer. With that, I would like to turn the call over to Jim.

Thank you, Jaime, and thanks to everyone for joining us this morning. 2025 was another strong year for Host. We delivered operational improvements across our portfolio driven by rate growth and out-of-room spending, and we continue to successfully allocate capital through dispositions, portfolio reinvestment, share repurchases and dividends. We also maintained an investment-grade balance sheet while positioning Host to take advantage of future opportunities. Turning to our results, we finished 2025 meaningfully above our most recent guidance estimates. For the full year, we delivered adjusted EBITDAre of $1,757 million, a 4.6% increase over 2024, and adjusted FFO per share of $2.07, a 3.5% increase year-over-year. Comparable hotel total RevPAR grew 4.2% and comparable hotel RevPAR grew 3.8% compared to 2024. Comparable hotel EBITDA margin of 28.9% was down 40 basis points year-over-year, driven by $21 million of business interruption proceeds that we received in 2024 for the Maui wildfires. Our full year RevPAR and adjusted EBITDAre exceeded our initial 2025 guidance by 2.3 percentage points and 8.5%, respectively. Notably, our portfolio outperformed the upper tier industry RevPAR growth by approximately 200 basis points for the year. During the fourth quarter, we delivered adjusted EBITDAre of $428 million and adjusted FFO per share of $0.51. Comparable hotel total RevPAR improved 5.4% compared to the fourth quarter of 2024, and comparable hotel RevPAR was up 4.6%, driven by strong leisure transient demand, higher room rates and increased out-of-room spending. Comparable hotel EBITDA margins declined by 30 basis points to 28% as these operational improvements were offset by certain onetime benefits in the fourth quarter of 2024. Turning to business mix. RevPAR growth in the fourth quarter was better than expected, driven by resilient transient demand, particularly at our luxury resorts. Transient revenue grew by 6%, driven almost entirely by rate increases. In terms of markets, we saw particularly strong transient performance in Maui, New York and San Francisco. In fact, Maui was a standout market, contributing more than 1/3 of the transient revenue growth in the fourth quarter. RevPAR grew 15% and TRevPAR grew 13%, driven by strong demand growth. For context, Maui contributed $111 million of EBITDA for the year, which was slightly ahead of our most recent forecast and significantly ahead of our initial $90 million expectation at the start of 2025. Looking forward, we expect Maui to contribute approximately $120 million of EBITDA in 2026. Turning to business transient. Revenue was up 1% in the fourth quarter as increases in rate offset a decline in room nights. Group revenue for the quarter was up approximately 1% year-over-year as rate increases offset group room night declines, which were driven by renovations and citywide softness in several markets. Our properties sold 900,000 group rooms in the fourth quarter, bringing our total group room nights sold for 2025 to $4.1 million. Ancillary spending remained strong in the quarter with continued growth in food and beverage revenues and out-of-room spending. Comparable hotel F&B revenue grew 6%, driven by strong outlet performance and banquet contribution per group room night. We also saw particularly strong growth in other revenue, which was up 10% in the quarter, including growth in golf and spa. Taken together, we continue to benefit from the strength of the affluent consumer across properties in our portfolio. Turning to capital allocation. In 2025, we sold The Westin Cincinnati and Washington Marriott at Metro Center for a combined $237 million. We also provided $114 million of seller financing for the Washington Marriott at Metro Center transaction at a 6.5% interest rate. Yesterday, we announced the sale of the Four Seasons Resort Orlando at Walt Disney World Resort and the Four Seasons Resort and Residences Jackson Hole for $1.1 billion, which represents a 14.9x EBITDA multiple on trailing 12-month EBITDA. The multiple includes approximately $88 million of estimated foregone capital expenditures over the next 5 years. We purchased the hotels in 2021 and '22, respectively, for a total of $925 million with no significant capital expenditures required under our ownership. The $1.1 billion sale price represents an 11% unlevered IRR and an EBITDA multiple that is more than 4 turns higher than our company's recent trading multiple. The IRR includes $58 million of capital expenditures, which was funded within the FF&E reserve as well as transaction costs. These items negatively impacted the IRR calculation by approximately 170 basis points. We are retaining the ongoing condo development at the Four Seasons Orlando, which is excluded from the sale. In 2025, we recognized $17 million of net adjusted EBITDAre from the sale of 16 condo units, and we expect to recognize an additional $20 million to $25 million when the remaining units are sold. As we assess the best use of capital in the current environment, our investment-grade balance sheet provides meaningful financial flexibility to pursue the highest return opportunities. We expect to recognize a taxable gain of approximately $500 million from the sale of the 2 hotels, subject to final prorations, and we have 45 days to identify a potential like-kind exchange. If we are unable to identify an accretive acquisition within that time frame, we would intend to return the taxable gain to shareholders through a special dividend. For the remaining sale proceeds, we will evaluate the best path forward based on market conditions, which could include returning additional capital to shareholders through special dividends or share repurchases, reinvesting in our portfolio or pursuing accretive acquisitions. We also completed the previously announced sale of the St. Regis Houston for $51 million. The sale price represents a 25x EBITDA multiple on trailing 12-month EBITDA. The multiple includes approximately $49 million of estimated foregone capital expenditures over the next 5 years. Finally, the Sheraton Parsippany is under contract to sell for $15 million with an expected close in the second quarter. Since 2018, we have disposed of approximately $6.4 billion of hotel assets at a blended 16.7x EBITDA multiple, including estimated foregone capital expenditures of $1.2 billion. This compares favorably to the $4.9 billion of acquisitions we completed over the same period at a blended 13.6x EBITDA multiple. In addition to successfully allocating capital through dispositions, we also returned capital to shareholders through share repurchases and dividends. In 2025, we repurchased 13.1 million shares at an average price of $15.68 per share for a total of $205 million. For context, we have repurchased 69.2 million shares at an average price of $16.63 per share for a total of approximately $1.2 billion since 2017. In the fourth quarter, we declared a quarterly common dividend of $0.20 per share and announced a special dividend of $0.15 per share, bringing the total dividends declared for the year to $0.95 per share. In total, we returned nearly $860 million of capital to shareholders in 2025, including share repurchases. Turning to portfolio reinvestment. In 2025, we invested approximately $644 million in capital expenditures, resiliency initiatives and hurricane restoration across our portfolio. As of the end of the fourth quarter, the Hyatt Transformational Capital Program is more than 75% complete and is tracking on time and under budget. Transformational renovations have been completed at the Grand Hyatt Atlanta Buckhead, the Hyatt Regency Capitol Hill and the Hyatt Regency Austin. We are nearing completion of the Hyatt Regency Reston and Grand Hyatt Washington D.C., both of which are expected to be finished in the first half of 2026. The Manchester Grand Hyatt San Diego, the final asset in the program has been phased to mitigate business interruption and is expected to be substantially complete by the end of 2026. Additionally, we started the transformational renovation of the New Orleans Marriott in the third quarter of 2025, which is part of the second Marriott Transformational Capital Program. In the fourth quarter, we received $3 million of operating guarantees related to our Transformational Capital Programs, bringing the total received to $26 million in 2025. We also completed several major ROI projects over the course of 2025, including the oceanfront ballroom expansion at The Don CeSar, villa development at The Phoenician, Canyon Suites; the new AVIV Restaurant at the 1 Hotel South Beach, and the meeting space expansion and reopening of The View Restaurant at the New York Marriott Marquis. We are nearing completion of the condo development at the Four Seasons Orlando, having completed the 31-unit mid-rise building, and we began closing on unit sales in the fourth quarter. To date, we have deposits and purchase agreements in place for 28 of the 40 units, including 8 of the 9 villas, which are expected to complete in the first half of this year. In 2026, our capital expenditure guidance range is $525 million to $625 million. This includes approximately $250 million to $300 million of investment focused on redevelopment, repositioning and ROI projects. As I just mentioned, we expect to substantially complete the Hyatt Transformational Capital Program renovations by the end of 2026. The second Marriott Transformational Capital Program is also well underway. We expect to start construction at The Ritz-Carlton Naples, Tiburon and Westin Kierland in the second quarter. As a reminder, we expect to benefit from approximately $19 million of operating profit guarantees in 2026 related to our Transformational Capital Programs, which we expect will offset the majority of the EBITDA disruption at these properties. In addition to our capital expenditure investment, we expect to spend $15 million to complete the condo development at the Four Seasons Orlando in 2026. Looking back on our portfolio reinvestments, we completed 23 transformational renovations between 2018 and 2023, which continue to provide meaningful tailwinds for our portfolio. Of the 21 hotels that have stabilized post renovation operations to date, the average RevPAR index share gain is 8.7 points, which is well in excess of our targeted gain of 3 to 5 points. As evidenced by our results, the continued reinvestments we have made in our portfolio yield strong returns and drive value creation for our shareholders. We continue to be recognized as a global leader in corporate responsibility over the course of 2025. As part of our climate risk and resiliency program, we completed the purchase and preinstallation of modular flood barriers that exceed FEMA 100-year flood elevation for 8 high-risk properties. We are also working to formalize the connection between our climate risk program and our property insurance premiums to validate proactive resilience investment opportunities, quantify the impact and return on investment and scale efforts across our portfolio where we see elevated climate risk. Wrapping up, we are very proud of the continued outperformance we delivered in 2025, which reflects the disciplined capital allocation decisions we have made since 2017. Our recent transactions represent an important step in advancing our capital allocation strategy and underscore our ability to generate meaningful shareholder value by monetizing assets at attractive returns and accretive multiples with an eye towards maximizing total shareholder returns. Looking ahead, we are optimistic about the travel environment, particularly at the upper end of the chain scale, and we are confident that Host is well positioned to capitalize on future opportunities. With our geographically diversified portfolio, ongoing reinvestment in our properties and fortress balance sheet, we will continue to leverage our competitive advantages to create value for our shareholders in 2026 and beyond. With that, I will now turn the call over to Sourav.

Thank you, Jim, and good morning, everyone. Building on Jim's comments, I will go into detail on our fourth quarter operations, full year 2026 guidance and our balance sheet. Starting with total revenue trends. Total RevPAR growth continued to outpace RevPAR growth as transient guests maintained elevated levels of out-of-room spending. Comparable hotel food and beverage revenue for the quarter grew approximately 6%, driven by outlet revenue and banquet contribution per group room night. Outlet revenue grew 9%, driven by resorts and new restaurants at the 1 Hotel South Beach and the New York Marriott Marquis. Resort outlet growth was led by the ongoing recovery in Maui as well as the Ritz-Carlton Naples and the continued ramp-up of the Singer Island Oceanfront Resort and the Ritz-Carlton Turtle Bay. Comparable banquet and catering revenue increased 4% in the fourth quarter, driven by 6% growth in banquet contribution per group room night. Other revenues increased 10%, propelled by sustained strength in golf and spa operations. Spa revenue was up 6%, driven by higher occupancy at luxury resorts and improved capture, particularly at the Ritz-Carlton, Amelia Island and Fairmont Kea Lani. Golf revenue grew 14% due to strong performance at our Maui and Naples golf courses. Shifting to rooms revenues. Overall transient revenue grew 6% compared to the fourth quarter of 2024, driven by improving leisure transient demand and rate growth across the portfolio. Notably, resorts generated 80% of the transient revenue growth in the quarter. Transient revenue at luxury properties increased by more than 10%, underscoring the strength of high-end demand. The Ritz-Carlton Naples and Fairmont Kea Lani delivered double-digit room night growth while maintaining rates above $1,000, representing a 5% increase year-over-year, further validating the meaningful impact of our transformational reinvestment strategy. Looking at holidays in the fourth quarter. Thanksgiving revenue grew 3%, while festive season revenue grew 9%. Festive season revenue growth, which includes the 2-week period around Christmas and New Year's, was broad-based across the portfolio but led by resorts with 4 resorts generating more than $1 million of incremental revenue over the festive period. Looking at recent and upcoming 2026 holidays, transient booking pace is up meaningfully. For President's Day weekend, transient revenue pace was up approximately 8% compared to the same time last year, driven by rate and occupancy growth at our convention properties. For the spring break and Easter period, which runs from the end of March through the end of April, transient revenue pace is up 17%. Strength is broad-based across property type and led by hotels in Maui, Orlando and New York. Business transient revenue grew approximately 1% versus the fourth quarter of 2024, driven primarily by rate growth as our managers continued shifting towards corporate negotiated business. Group revenue in the fourth quarter was up 1% year-over-year as 3% rate growth outpaced group room night declines. Corporate groups led growth in the quarter, particularly at our properties in New York, Boston, San Diego and San Francisco. For 2026, we have 3.1 million in definite group room nights on the books, representing a 16% increase since the third quarter of 2025 and putting us slightly ahead of where we were this time last year. Total group revenue pace is up 5% over the same time last year, driven by rate and banquet growth. More specifically, we are seeing meaningful total group revenue pace in San Francisco, Washington, D.C., Nashville, Miami, New York, Austin and Atlanta. Group booking pace is strongest for the second and fourth quarters, driven by World Cup bookings and a beneficial holiday calendar shift in October. We are encouraged by citywide room night pace in key markets such as San Antonio, San Francisco and Washington, D.C. Shifting gears to margins. Full year 2025 comparable hotel EBITDA margin of 28.9% was 40 basis points below 2024, driven by the $21 million of business interruption proceeds that we received for the Maui wildfires as well as certain onetime benefits in 2024. Turning to our outlook for 2026. The midpoint of our guidance contemplates a stable operating environment with a continuation of trends seen through the second half of 2025. This includes leisure transient strength driven by special events such as the World Cup, modest improvements to short-term group booking trends and stable business transient demand. At the low end of our guidance range, we have assumed no improvement in short-term group booking trends and weaker special events demand. And at the high end, we have assumed improving short-term group booking trends and increased demand around special events. For full year 2026, we anticipate comparable hotel total RevPAR growth of between 2.5% and 4%, and comparable hotel RevPAR growth of between 2% and 3.5% over 2025. Year-over-year, we expect comparable hotel EBITDA margins to be down 20 basis points at the low end of our guidance to up 20 basis points at the high end. In 2026, our 74 hotel comparable portfolio now includes the Alila Ventana Big Sur, but excludes The Don CeSar due to its closure in 2025. Our 2026 comparable portfolio also removed the Four Seasons Resort Orlando at Walt Disney World Resort, the Four Seasons Resort and Residences Jackson Hole and Sheraton Parsippany, which is under contract and expected to be sold in the second quarter. In terms of comparable hotel RevPAR growth cadence for the year, we expect the first quarter to be the weakest with growth in the low single digits due to tough comparisons related to the presidential inauguration and pickup from the Los Angeles wildfires last year. January 2026 performance exceeded expectations with comparable hotel RevPAR declining only 40 basis points despite challenging comparisons to January 2025. We expect the second quarter to be the strongest of the year with mid-single-digit RevPAR growth driven by the World Cup and an earlier Easter. RevPAR growth in the second half of the year is expected to be between first and second quarter growth. At the midpoint of our guidance range, we anticipate comparable hotel RevPAR growth of 2.75% compared to 2025. This includes an estimated 40 basis point net benefit from special events for the full year with an estimated 60 basis point lift from the World Cup, partially offset by a 20 basis point headwind from last year's presidential inauguration. In addition, Maui is expected to contribute approximately 35 basis points to our full year RevPAR growth. At the midpoint, we expect a comparable hotel EBITDA margin of 29.2%, which is flat to 2025. Our margin performance reflects our continued success in partnering with our operators to drive productivity gains across our portfolio as well as the value-enhancing capital allocation decisions we have made over the past few years. In 2026, we expect wage rates to increase approximately 5%. For context, in 2025, wages grew at slightly over 6%. As a reminder, wages and benefits comprise approximately 50% of our total comparable hotel operating expenses. Our 2026 full year adjusted EBITDAre midpoint is $1,770 million. On a year-over-year basis, this reflects an expected 1% increase despite a decline of $87 million from dispositions, a $17 million net decline in business interruption proceeds and a $7 million net decline in transformational renovation program operating profit guarantees. Our adjusted EBITDAre midpoint includes $28 million of estimated EBITDA from operations at The Don CeSar, which is excluded from our comparable hotel set in 2026, as previously mentioned. It also includes approximately $7 million of business interruption proceeds related to Hurricanes Helene and Milton, which we already received in January. Lastly, our 2026 full year adjusted EBITDAre midpoint includes between $20 million and $25 million of estimated net EBITDA from the Four Seasons condo development, which we expect to recognize concurrent with condo sale closings. Turning to our balance sheet and liquidity position. Our weighted average maturity is 5.1 years at a weighted average interest rate of 4.8%. We have no debt maturities in 2026. We ended 2025 at a leverage ratio of 2.6x, and we have $2.4 billion in total available liquidity including $167 million of FF&E reserves and $1.5 billion of availability on our credit facility. Our fortress balance sheet continues to be a distinct competitive advantage for Host. Wrapping up, in January, we paid a quarterly cash dividend of $0.20 per share and a special dividend of $0.15, bringing the total dividends declared in 2025 to $0.95 per share. On February 17, the Board of Directors authorized a quarterly cash dividend of $0.20 on our common stock to be paid on April 15 to shareholders of record on March 31. As always, future dividends are subject to approval by the company's Board of Directors. To conclude, we are proud of our accomplishments in 2025, and we believe that our diversified portfolio, continued reinvestment in our assets and strong balance sheet uniquely position Host to capitalize on future opportunities. With that, we would be happy to take your questions. To ensure we have time to address as many questions as possible, please limit yourself to one question.

[Operator Instructions] Our first question comes from Michael Bellisario from Baird.

Jim, on the Four Seasons sales, certainly great execution there and you're proving out value. So of two parts here. One, how deep is that buyer pool today? And then two, can you, and next maybe, would you sell more of your top assets? Or what's the outlook and thinking around more high-value dispositions going forward?

Sure, Mike. Good questions. As you always have good questions for us, and we appreciate that very much. Before I talk about the Four Seasons specifically, I just want to take a moment and go back and highlight our performance in 2025 and our guide in 2026. We -- Sourav said it. I said it as well. We're very proud of our '25 performance. TRevPAR of 4.2%, RevPAR of 3.8% and adjusted EBITDAre of $1,757 million. And our '26 guide, I think, is very strong with TRevPAR at the midpoint of 3.25% and RevPAR of 2.75%, and adjusted EBITDAre of $1,770 million. I think it is worth noting again, saying again that, that $1,770 million is after we sold $87 million of hotel EBITDA, and we won't benefit from BI proceeds and operating partner guarantees, disruption guarantees of $24 million. So the run rate is really closer to $1.9 billion for 2025. And that didn't happen by accident. That's a result of all the capital allocation decisions that we made over the last 9 years. And as you know, we have been exploring ways to unlock the value embedded in our shares. In other words, looking for ways to expand our trading multiple with the goal of maximizing total shareholder returns. In addition to acquiring $4.9 billion of assets at 13.6x, we sold $6.4 billion of assets with $1.2 billion of avoided CapEx at 16.7x. The shares haven't really responded. We haven't received credit for portfolio recycling despite buying well below where we were selling on a blended basis. So I think it goes back to a healthy amount of skepticism with regard to some of the large acquisitions that we made, starting with the 1 Hotel South Beach, which in 2018, had $46 million of EBITDA. And in 2025, we ended the year with $65 million of EBITDA. So the story is solid, and it holds together very well. But to answer your question, is there a market for these assets? If so, at what valuation? Are we sellers of "the crown jewels" to realize the value that we've created. And the short answer is, yes. I mean you've heard us say that we're constantly testing the market with dispositions and that everything is for sale at the right price, and we mean it. This was an opportunistic transaction to create immediate and tangible value for our shareholders. We were looking for an opportunity to realize that value and we found one and we executed on it. So even though the 2 Four Seasons were top performers for Host, and we fully expect luxury to continue outperforming. We believe that it was prudent to maximize value for our shareholders by selling these assets at an attractive profit and accretive multiple. Quick summary of the transaction. We sold these 2 assets for $175 million more than where we bought them. A 14.9x multiple, which is a 5.9% cap rate that is 4 turns higher than where Host shares have been trading. And we think that provides a really favorable read-through on the value of our portfolio. We generated an 11% unlevered IRR for our ownership period, which clearly demonstrates our ability to create value. That includes $58 million of CapEx, which was funded within the FF&E reserve as well as transaction costs that hit the IRR by 170 basis points. We kept the condos in Orlando, and we expect the IRR and the condos to be above 11% with our guide to roughly $40 million of net EBITDA in total. And as you said in one of your notes, Mike, we sold 6.5% of enterprise value, but only 4.7% of our consolidated hotel EBITDA. So we think this was a really fantastic trade, the Four Seasons Orlando, based on 2019 year-end EBITDA saw an 18.4% CAGR from the time we bought it to our ownership period through '25, so it's performed very well. And we're very, very happy with the round-trip investment we made with these 2 resorts. Not only we feel that the transaction demonstrates the value of our portfolio, it also shows the value that we create for shareholders as a management team, including our unwavering focus on maximizing total shareholder return, which is what we've done here, we believe. So are there other opportunities to maximize value within the portfolio? I think there is, we'll be opportunistic. The buyer pool for these types of assets is, I think, a lot deeper than people realize. There are a lot of sovereigns out there who are very interested in luxury hotels. There are high net worth individuals who are interested in luxury properties as well. And there are a couple of big private equity firms that have a lot of capital that have been sitting on the sidelines waiting to -- waiting for the inflection point to jump back into the market. And we're hopeful that this is the inflection point that we can prove out that there is value here, value to be created, and we're certainly hopeful that we're going to get the read through and see some multiple expansion as a result of not only this decision, but all the capital allocation decisions that we've made over the last 9 years.

Our next question comes from David Katz from Jefferies.

I apologize if I missed it in your prepared remarks, but the Transformational Capital Program you included in the release with Marriott. Can you just put a little more color around that and sort of why those hotels, why now and what we can expect on the back end of that endeavor?

Sure. Why those hotels, David. They're great assets, and they need to be repositioned, and we believe that by investing in these assets in a transformational way that we're going to meaningfully increase our yield index and realize mid-teens cash-on-cash returns as a result of our incremental investment that will benefit our shareholders. So the thesis is that we prove this out very strongly in our first Marriott Transformational Capital Program, which was 16 assets as well as 8 additional assets. We underwrote 3 to 5 points increase in yield index. On the stabilized hotels to date, we've picked up 8.7 points in yield index, which means other hotels in the market have lost yield index to our properties. And we think that this is a very, very solid use of our capital, and it's a clear read-through to our ability to really invest wisely for the benefit of our shareholders and see the proceeds drop right to the bottom line. And the brands see it as well with Host. I mean we have -- not only is this our second Transformational Capital Program with Marriott. After we did 16 in the first round, we did 4 in this round. But we are in the midst of finishing up 6 properties with Hyatt. So it's great to be able to partner with the brands. And they provide the support that we need to effectuate these transformational renovations while covering off anticipated disruption involved with the renovation and providing enhanced owner priority returns. So we couldn't be happier with our relationship with the brands and the support that they give us and the fact that we are investing in these assets, which elevates not only the EBITDA profile for Host, but the EBITDA profile for the brand as well, and we benefit from that all the way around. It's a round-trip investment, if you will.

And have you shared with us what the sort of reimbursement for Marriott will be and sort of how that cadence works for our model?

Well, I'm sorry, the reimbursement, when we talk about the operating profit guarantees, sure. And Sourav can give you color on what they are, what we got last year, what we'll get this year. And the -- our anticipated property performance is reflected in our guidance. So that's already there for you.

And just to expand on the guarantees. In 2025, we did receive some operating guarantee from the MTCP2, that was about $2 million. It was $1 million in the third quarter, $1 million in the fourth quarter. But remember, we did get a $24 million for HTCP, the Hyatt Transformational Capital Program, throughout 2025. In 2026, we will get operating profit -- guarantee for HTCP that's about $7 million, and that's really for the Hyatt Manchester in San Diego. And the MTCP2, we will get about $12 million through the year. So that's a total of $19 million. So in other words, it's about a $7 million delta in terms of what we'll get for '26 versus '25, so $7 million lower.

Our next question comes from Dan Politzer from JPMorgan.

I wanted to touch on Maui a bit here. You came into last year forecasting, I think, $90 million of EBITDA, ended at $110 million, and now you're forecasting $120 million for 2026. I guess what's -- is there some element of conservatism in there as we think about the path getting back to $160 million? And what are the puts and takes to that 2026 outlook?

Sure. So when you look at -- you're right, we started off like last year at forecasting $90 million for 2025, and we ended up at $111 million. And now we are forecasting an additional $9 million. Based on the current booking pace and how things are shaping up, we feel pretty confident in terms of the $120 million guide. The reality is, as we had talked about earlier, that the Hyatt Regency, that's the one in Ka'anapali, that's the one which is going to take a little bit of time to come back because of the lead time required for the groups to come back in a meaningful way. I will say that the Wailea Hotel, the Fairmont Kea Lani actually reached a high watermark in 2025 with $49 million of EBITDA, and Andaz as well on the way there as well. So the Wailea side is almost completely recovered, if you will, relative to pre-fire. The Hyatt Regency has a little ways to go and has made meaningful progress, and we are expecting a significant amount of growth for the Hyatt Regency Maui. I mean just to put it into perspective, that property, we're expecting to go from about $28 million of EBITDA to close to $34 million for 2026. So significant growth there, and we're making considerable progress. At this point in time, we feel comfortable with the $120 million. Does that change over the course of the year as we see potential group pace pick up and short-term pick up? Absolutely. So we will provide an update on the next call. So there could be potential upside in those numbers.

Our next question comes from Smedes Rose from Citigroup.

I just wanted to ask a little bit about as these CapEx programs that you're doing with the brands kind of finish up over the course of this year, and it looks like total CapEx spending is kind of on a downward trend. Is it fair to think that, that could continue to kind of move down slightly? And does that change the way you're thinking about -- you and the Board are thinking about your quarterly dividend payments versus kind of year-end true-ups?

See, Smedes, we're always looking for opportunities to invest in our assets if we can generate an acceptable return on that investment. So we have done a lot of transformational renovations in the portfolio. I think it's a total of 33 assets will have been transformationally renovated now, and that excludes the Washington Marriott at Metro Center, which we sold, or would have been 34, that was one of the original 16 programs. So I think stay tuned. We'll look for other opportunities after we complete these assets going forward. The portfolio is in terrific shape given the amount of capital that we put in it. And you can see that in the performance that we've been able to generate. So with respect to the dividend, our objective is to pay out our taxable income and to pay a sustainable dividend going forward. So it's something that we will revisit from time to time. And if a policy change is warranted, that's something we'll discuss with the Board of Directors, and we will inform you at that point in time. But at this point in time, we are on track for our $0.20 dividend that's paid this quarter coming up and stay tuned for the next dividend announcement.

Our next question comes from Aryeh Klein from BMO Capital Markets.

Jim, you talked a bit about selling the Four Seasons and your general view on realizing value within the portfolio. I was hoping maybe you can talk a little bit about the other side of that and what you're seeing out there on the acquisition side, particularly with the $500 million of capital gains that could theoretically go towards acquisition.

Sure, Aryeh. I would say that the acquisition market generally is better than it was last year, but it's still not robust. And we do have an opportunity to effectuate a reverse like-kind exchange. If we were in a position to identify assets, accretive asset acquisitions within 45 days, and I want to make that point very clear. If we do a reverse like-kind exchange, it's going to be an accretive transaction. We're not going to acquire an asset just to effectuate a like-kind exchange. I think the proof is in the pudding, and I've talked about it earlier today and talked about it in the past. So we are going to look at what's out there relative to our current trading multiple. And generally, most of the deals that we've done, Aryeh, have been based on relationships that we have in the industry. So we're thinking about it as a team, the investments team and others here at Host are thinking about what assets might be available to us to effectuate this. But we're perfectly comfortable returning $0.5 billion in the form of a special dividend to our shareholders. I mean that is tangible. It's $0.72 a share roughly, it's meaningful, and it is a piece of total shareholder return. So I'd say, stay tuned. But at this point in time, I think it's more likely than not that we will pay the special dividend.

Our next question comes from Cooper Clark from Wells Fargo.

As we think about the $600 million in proceeds outside of the taxable gains, you noted a few options as it relates to allocation in terms of returning capital through dividend, buybacks, reinvesting in the portfolio and potentially acquisitions. As you sit here today, can you talk about which one of those options looks most attractive and where you're seeing the best opportunity?

Cooper, this is going to evolve. It's not something that we have to -- we don't have to act on the balance of the proceeds in any short-term time frame. So we're going to sit back and take measure of how the market evolves, how our operating performance evolves over the course of the year, what happens in the acquisition market. And at the appropriate point in time, we will make some decisions with respect to what we do with the incremental cash that's left over. But I can't sit here today and tell you what the highest and best use of that cash is. It's something that we're going to take a measured approach to as we always do, and we'll just have to wait and see how the year plays out.

Our next question comes from Chris Darling from Green Street.

Jim or Sourav, I'd like to dive a little bit deeper on the expense outlook for the year. I think you mentioned wage and benefit expected to grow about 5%. Anything you can share on labor availability, whether you're seeing sort of an easing in the market? And then if you're able, it'd be helpful to break down some of your other expenses, any other major line items where you have visibility.

Sure thing, Chris. So obviously, given at the midpoint, we're expecting flat margins. Our expense growth is -- total expense growth is assumed at 3.3% with total revenue growth of 3.3%. Yes, the wage rates are expected to go up 5% for the year. But obviously, we do have certain other benefits that our overall expenses can be lower for the year. That's being driven by a few things. It's productivity enhancements. There's a lot of focus on really honing in on what the best labor standards should be. And we literally are going position by position and working with our managers to make sure that there is keen focus on the ideal standards that drive scheduling and forecasting for labor. So that's a big piece of it. The other thing is insurance should be down for the year. Obviously, we did not have any weather-related events in 2025. So hoping for a good outcome for our insurance renewal. So that stuff should help our overall expense growth as well. In terms of labor availability, we have not seen any challenges. And honestly, didn't see any challenges at all even coming out of COVID. And that's primarily because, as we have stated earlier, we are really predisposed to brand-managed hotels, which really do a great job with talent acquisition and talent retention. So from that perspective, we haven't really had any issues being able to sort of staff at the hotel level.

Our next question comes from Duane Pfennigwerth from Evercore ISI.

Just headwinds and tailwinds from a market perspective. You've talked pretty consistently about Maui tracking better, maybe San Francisco. Maybe you could just comment on group pacing in Maui and for those 2 markets, what you expect the level of improvement to be? And then, I guess, away from those 2 markets, any markets you'd highlight in your portfolio that you think are going to be a material driver this year?

I'll let Sourav get into the pacing on Maui and some of the other markets, Duane. But one thing that we're excited about for the year that should be a benefit for our portfolio is the World Cup matches. So World Cup, we expect 60 basis points of full year RevPAR benefit from the World Cup. That's a net 40 basis point pickup if you take into consideration that 2025 benefited from the inauguration to the tune of 20 basis points. So we have -- given the geographic diversification of our portfolio, we have World Cup matches in 10 of our markets, which is, I think, really quite attractive for us going forward. So we would expect a benefit in quarter 2 as there are more matches in more markets in quarter 2 than in quarter 3. At this point in time, we don't have a good handle on how things are going to evolve because we believe that the booking pace is going to be 30 to 60 days out. And we'll have a much better indication in our May earnings call how World Cup is going to affect our performance for the year. So that's a big plus for us. I'll let Sourav talk about pace in Maui and maybe pace in San Francisco as well because those are 2 other really strong markets for us in 2026.

Yes. Overall, just as a reminder, group makes up about only 22% in Maui. So the big push is really getting that group at the Hyatt Regency, and our RevPAR expectations right now for the Hyatt Regency is north of 10%, it's close to 11.5%. And we are pleased with how that is pacing. Overall, Maui pace is relatively flat to last year, but that's just given how well Wailea performed and where pace was last year for the 2 hotels in Wailea. But Hyatt Regency where the group matters meaningfully, we are pacing really strong. In terms of other markets where we're pacing really well, and this is specifically for the Host portfolio, we did mention Nashville, Atlanta, Miami, San Francisco, D.C. and Austin, which is benefiting just from the reno at the Hyatt Regency. Nashville, we were expecting to pace up 13%. Atlanta, we are pacing up right now close to 10%. Miami is double digits, close to 15%. And San Francisco is almost pacing 20%. This is all total group revenue. D.C. is double digit as well at 10%. And Austin is at 26%. And the ones which are pacing behind are where there is a citywide impact. So specifically, San Diego, which you all know about, to some extent, Chicago, Boston and Seattle.

Our next question comes from Robin Farley from UBS.

Great. Most of my questions have been asked already. But just circling back to what you're looking to do with the proceeds from the Four Seasons sale. I know you mentioned you're maybe even leaning towards the dividend. But just wondering if you could talk a little bit about what type of assets you're looking at to use those proceeds for?

Robin, it's a broad question. So let me answer it in the context of the types of assets that we feel that we can create value with and also think about as we're deploying capital, maintaining our geographic diversification, which has served us very well over the course of the last 9 years or so. So it's an asset that we believe will have meaningful upside opportunities from our asset management platform and our enterprise analytics platform. It will have diverse demand generators, a combination of group, leisure transient and business transient, and in a market that we feel has strong growth drivers going forward. So I can't get more specific in that because I don't have a specific asset in mind today, but those are the types of properties that we would be looking to acquire.

And we are out of time for questions. I would like to turn the call back over to Jim Risoleo.

Well, thank you again for joining us today. We always appreciate the opportunity to discuss our quarterly results with you and our, in this case, our full year 2025 results, and we look forward to seeing many of you at conferences in the coming weeks. Have a great day, and thanks again.

This concludes today's conference call. Thank you for your participation. You may now disconnect.