Direct Answer
Host Hotels and Resorts is the largest hotel REIT in the United States, owning approximately 75-80 luxury and upper-upscale hotels managed primarily by Marriott International, with highly cyclical RevPAR-driven cash flows and mandatory dividend distributions.
Host Hotels and Resorts (HST): Largest Lodging REIT
Company Snapshot
| Ticker | HST |
|---|---|
| Exchange | NASDAQ |
| Sector / Industry | Real Estate / Hotel and Resort REITs |
| Headquarters | Bethesda, MD |
| Founded | 1927 (REIT structure 1999) |
| Revenue (FY2024 approx.) | ~$5.6B |
| CIK | 0000203418 |
| SEC EDGAR | View filings |
What does Host Hotels and Resorts do?
Host Hotels and Resorts is the largest hotel real estate investment trust (REIT) by enterprise value in the United States. Unlike hotel operating companies such as Marriott International or Hilton Worldwide, Host owns the physical hotel properties but does not manage or operate them. Instead, Host engages third-party hotel management companies under management agreements to run day-to-day hotel operations.
Host's portfolio is concentrated in upper-upscale and luxury hotels (primarily Marriott-branded properties such as Marriott, Westin, Sheraton, W Hotels, and JW Marriott) located in major U.S. urban markets and resort destinations. The company operates as a REIT and is required to distribute at least 90% of its taxable income to shareholders as dividends.
Origins: the Marriott split of 1993
Host Hotels traces its origins to Marriott Corporation, which in October 1993 split into two entities: Marriott International (retaining the hotel management, franchising, and service businesses) and Host Marriott Corporation (retaining the hotel real estate assets and airport food and beverage concessions). The split separated Marriott's asset-light management business from its capital-intensive real estate ownership, a restructuring that created enormous value for the management company while providing real estate investors dedicated ownership of the hotel properties.
Host Marriott converted to a REIT structure in 1999, dropping "Marriott" from its name in 2006 when it became Host Hotels and Resorts to better reflect its independent identity from Marriott International (though Marriott International remains the dominant property manager).
Portfolio composition and capital allocation
Host owns approximately 75-80 hotels with roughly 42,000-45,000 rooms. Properties are concentrated in gateway cities (Washington D.C., Miami, New York, Boston, San Francisco, Houston) and resort markets (Scottsdale, Maui, Florida beaches). The company targets an average selling price of $300-500+ per night room rates.
As a REIT, Host regularly acquires and disposes of properties to optimize portfolio quality and geography. The company also invests significant capital in renovating and repositioning existing hotels (capital expenditures typically 7-10% of revenue annually) to maintain brand standards and competitive positioning. Host also returns capital to shareholders through quarterly dividends and share buybacks when shares trade below estimated net asset value.
COVID-19 impact and recovery
COVID-19 was the most severe demand shock in hospitality history. Host's RevPAR fell more than 70% in 2020 as travel ceased and hotels temporarily closed. The company suspended its dividend in early 2020 to preserve liquidity, drew on credit facilities, and accessed capital markets to ensure it could weather an extended disruption. Unlike some hotel companies, Host's owned-real-estate model meant it retained the option to renegotiate management agreements and minimize fixed costs during closures.
Recovery was rapid once travel resumed. RevPAR exceeded 2019 levels by 2022 for many properties, driven by pent-up leisure demand and higher ADRs. Business travel recovery lagged leisure but improved through 2023-2024. The dividend was reinstated and grew to reflect restored cash flows.
Frequently asked questions
How does Host Hotels and Resorts make money?
Host Hotels and Resorts earns revenue as a real estate investment trust (REIT) that owns luxury and upper-upscale hotels primarily in the United States. Host owns the real estate but does not operate the hotels itself; instead, properties are managed by third-party hotel operators under management agreements. Major operators include Marriott International (the dominant manager), Hyatt, and Westin. Revenue is driven by occupancy rates, average daily rates (ADR), and the combined metric revenue per available room (RevPAR). Host's income is primarily rental income from hotel operations net of operating expenses.
What is the relationship between Host Hotels and Marriott?
Host Hotels and Marriott International have a long-standing relationship. Host was originally created as the real estate holding company when Marriott Corporation split in 1993 into Marriott International (hotel management and franchising) and Host Marriott (hotel real estate ownership). Host legally separated from Marriott and converted to a REIT structure in 1999. Today, Marriott International manages the majority of Host's hotels under long-term management agreements, using brands like Marriott, Westin, Sheraton, W Hotels, and JW Marriott. Marriott receives management fees based on hotel revenues and profits.
What is RevPAR and why does it matter for Host Hotels?
Revenue per available room (RevPAR) is the primary operating metric for hotel companies. It is calculated as occupancy rate multiplied by average daily rate (ADR), or equivalently as total room revenue divided by total available room nights. For Host Hotels, RevPAR growth drives cash flow, because hotel operating costs are largely fixed in the short term (staffing, maintenance, utilities), so revenue increases disproportionately flow to EBITDA and funds from operations (FFO). RevPAR in the luxury and upper-upscale segment is more volatile than limited-service hotels because it has a higher proportion of discretionary travel.
How cyclical is Host Hotels' business?
Host Hotels is highly cyclical. Hotel demand falls sharply during recessions and disruptions (RevPAR collapsed during the 2008-2009 financial crisis and fell more than 70% during COVID-19 in 2020). The luxury and upper-upscale segment is more cyclical than economy lodging because it relies more on corporate travel and high-end leisure spending, both of which are discretionary. Host's REIT structure requires distributing most taxable income as dividends, which means the company cut its dividend during COVID-19 when cash flows collapsed. Recovery periods often generate strong RevPAR growth as pent-up demand returns, as was seen in 2021-2023.
What are the main risks for Host Hotels investors?
Key risks include: macroeconomic cycles and recessions reducing business and leisure travel; catastrophic disruptions like pandemics that can force hotel closures; rising interest rates that increase REIT borrowing costs and make dividend yields less attractive relative to bonds; high capital expenditure requirements for ongoing property renovation and maintenance; concentration in a few major U.S. markets (Washington D.C., Miami, San Francisco, Houston); dependence on Marriott International as the primary hotel manager; and corporate travel secular trends like video conferencing reducing some historical demand.