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What changed in Host Hotels & Resorts's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Host Hotels & Resorts's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+434 added−450 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-22)

Top changes in Host Hotels & Resorts's 2023 10-K

434 paragraphs added · 450 removed · 346 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

69 edited+10 added−11 removed118 unchanged
Biggest changeThe following table details the locations and numbers of rooms at our consolidated hotels as of February 17, 2023: 13 Location Rooms Location Rooms Arizona Maryland AC Hotel Scottsdale North 165 Gaithersburg Marriott Washingtonian Center 284 The Phoenician, A Luxury Collection Resort, Scottsdale 645 Massachusetts The Camby, Autograph Collection 277 Boston Marriott Copley Place ⁽¹⁾ 1,144 The Westin Kierland Resort & Spa 735 The Westin Waltham Boston 351 California Minnesota Alila Ventana Big Sur 59 Minneapolis Marriott City Center 585 Axiom Hotel 152 New Jersey Coronado Island Marriott Resort & Spa ⁽¹⁾ 300 Newark Liberty International Airport Marriott ⁽¹⁾ 591 Grand Hyatt San Francisco 669 Sheraton Parsippany Hotel 370 Hyatt Regency San Francisco Airport 790 New York Manchester Grand Hyatt San Diego ⁽¹⁾ 1,628 New York Marriott Downtown 515 Marina del Rey Marriott ⁽¹⁾ 370 New York Marriott Marquis 1,971 Marriott Marquis San Diego Marina ⁽¹⁾ 1,360 Ohio San Francisco Marriott Fisherman's Wharf 285 The Westin Cincinnati ⁽¹⁾ 456 San Francisco Marriott Marquis ⁽¹⁾ 1,500 Pennsylvania Santa Clara Marriott ⁽¹⁾ 766 Philadelphia Airport Marriott ⁽¹⁾ 419 The Ritz-Carlton, Marina del Rey ⁽¹⁾ 304 The Logan Philadelphia, Curio Collection by Hilton 391 The Westin South Coast Plaza, Costa Mesa ⁽²⁾ 393 Texas Colorado Hotel Van Zandt 319 Denver Marriott Tech Center 605 Houston Airport Marriott at George Bush Intercontinental ⁽¹⁾⁽³⁾ 573 Denver Marriott West ⁽¹⁾ 305 Houston Marriott Medical Center/Museum District ⁽¹⁾ 398 The Westin Denver Downtown 430 Hyatt Regency Austin 448 Florida JW Marriott Houston by The Galleria 516 1 Hotel South Beach 433 Marriott San Antonio Riverwalk 512 Baker's Cay Resort Key Largo, Curio Collection by Hilton 200 San Antonio Marriott Rivercenter ⁽¹⁾ 1,000 Four Seasons Resort Orlando at Walt Disney World® Resort 444 The Laura Hotel, Houston Downtown, Autograph Collection 223 Hilton Singer Island Oceanfront/Palm Beaches Resort 223 The St.
Biggest changeThe following table details the locations and numbers of rooms at our consolidated hotels as of February 23, 2024: Location Rooms Location Rooms Arizona Hawaii AC Hotel Scottsdale North 165 Andaz Maui at Wailea Resort 320 The Phoenician, A Luxury Collection Resort, Scottsdale 645 Fairmont Kea Lani, Maui 450 The Westin Kierland Resort & Spa 735 Hyatt Place Waikiki Beach 426 California Hyatt Regency Maui Resort and Spa 810 Alila Ventana Big Sur 59 Illinois Axiom Hotel 152 Embassy Suites by Hilton Chicago Downtown Magnificent Mile 455 Coronado Island Marriott Resort & Spa ⁽¹⁾ 300 Swissôtel Chicago 662 Grand Hyatt San Francisco 669 The Westin Chicago River North 445 Hyatt Regency San Francisco Airport 790 Louisiana Manchester Grand Hyatt San Diego ⁽¹⁾ 1,628 New Orleans Marriott 1,333 Marina del Rey Marriott ⁽¹⁾ 370 Maryland Marriott Marquis San Diego Marina ⁽¹⁾ 1,366 Gaithersburg Marriott Washingtonian Center 284 San Francisco Marriott Fisherman's Wharf 285 Massachusetts San Francisco Marriott Marquis ⁽¹⁾ 1,500 Boston Marriott Copley Place ⁽¹⁾ 1,145 Santa Clara Marriott ⁽¹⁾ 766 The Westin Waltham Boston 351 The Ritz-Carlton, Marina del Rey ⁽¹⁾ 304 Minnesota The Westin South Coast Plaza, Costa Mesa ⁽²⁾ 393 Minneapolis Marriott City Center 585 Colorado New Jersey Denver Marriott Tech Center 605 Newark Liberty International Airport Marriott ⁽¹⁾ 591 Denver Marriott West ⁽¹⁾ 305 Sheraton Parsippany Hotel 370 The Westin Denver Downtown 430 New York Florida New York Marriott Downtown 515 1 Hotel South Beach 433 New York Marriott Marquis 1,971 Baker's Cay Resort Key Largo, Curio Collection by Hilton 200 Ohio Four Seasons Resort Orlando at Walt Disney World® Resort 444 The Westin Cincinnati ⁽¹⁾ 456 Hilton Singer Island Oceanfront/Palm Beaches Resort 223 Pennsylvania Hyatt Regency Coconut Point Resort and Spa 462 Philadelphia Airport Marriott ⁽¹⁾ 419 Miami Marriott Biscayne Bay 600 The Logan Philadelphia, Curio Collection by Hilton 391 Orlando World Center Marriott 2,004 Texas Tampa Airport Marriott ⁽¹⁾ 298 Hotel Van Zandt 319 The Don CeSar 348 Houston Airport Marriott at George Bush Intercontinental ⁽¹⁾⁽³⁾ 573 The Ritz-Carlton, Amelia Island 446 Houston Marriott Medical Center/Museum District ⁽¹⁾ 398 The Ritz-Carlton, Naples 474 Hyatt Regency Austin 448 The Ritz-Carlton Naples, Tiburón 295 JW Marriott Houston by The Galleria 516 Georgia Marriott San Antonio Riverwalk 512 The Alida, Savannah, a Tribute Portfolio Hotel 173 San Antonio Marriott Rivercenter ⁽¹⁾ 1,000 Grand Hyatt Atlanta In Buckhead 439 The Laura Hotel, Houston Downtown, Autograph Collection 223 JW Marriott Atlanta Buckhead 371 The St.
While our primary investment focus is the upper-upscale and luxury chain scales, we also seek opportunities to elevate our growth profile through investment in select service hotels, extended stay hotels and new development deals.
While our primary focus is the upper-upscale and luxury chain scales, we also seek opportunities to elevate our growth profile through investment in select service hotels, extended stay hotels and new development deals.
The lodging industry is viewed as consisting of six different categories, each of which caters to a discrete set of customer tastes and needs: luxury, upper upscale, upscale, upper midscale, midscale and economy.
The lodging industry is viewed as consisting of six different categories, each of which caters to a discrete set of customer tastes and needs: luxury, upper upscale, upscale, upper midscale, midscale and economy.
Regis ® , The Don Cesar ® , The Luxury Collection ® and W ® , or as upper upscale properties under such brand names as Autograph Collection ® , Curio – A Collection by Hilton ® , Embassy Suites ® , Hilton ® , Hyatt Regency ® , Marriott ® , Marriott Marquis ® , Sheraton ® , Swissôtel ® , Tribute Portfolio ® and Westin ® . 1 While our hotels compete primarily with other hotels in the luxury and upper upscale category, they also may compete with hotels in other lower-tier categories.
Regis ® , The Don Cesar ® , The Luxury Collection ® and W ® , or as upper upscale properties under such brand names as Autograph Collection ® , Curio – A Collection by Hilton ® , Embassy Suites by Hilton ® , Hilton ® , Hyatt Regency ® , Marriott ® , Marriott Marquis ® , Sheraton ® , Swissôtel ® , Tribute Portfolio ® and Westin ® . 1 While our hotels compete primarily with other hotels in the luxury and upper upscale category, they also may compete with hotels in other lower-tier categories.
For certain hotels, we have negotiated flexibility with the manager that reduces the funding commitment required as follows: o For certain of our Marriott-managed hotels, we have entered into an agreement with Marriott to allow for such expenditures to be funded from one pooled reserve account, rather than periodic reserve fund contributions being deposited into separate reserve accounts at each of the subject hotels, with the minimum required balance maintained on an ongoing basis in that pooled reserve account being significantly less than the amount that would have been maintained otherwise in such separate hotel reserve accounts.
For certain hotels, we have negotiated flexibility with the manager that reduces the funding commitment required as follows: ◦ For certain of our Marriott-managed hotels, we have entered into an agreement with Marriott to allow for such expenditures to be funded from one pooled reserve account, rather than periodic reserve fund contributions being deposited into separate reserve accounts at each of the subject hotels, with the minimum required balance maintained on an ongoing basis in that pooled reserve account being significantly less than the amount that would have been maintained otherwise in such separate hotel reserve accounts.
Upon sale, a hotel-level reserve account would be funded (either by the purchaser or by us, as the seller) in the full amount of the reserve balance associated with the subject hotel. o For certain of the Starwood Hotels, periodic reserve fund contributions, which otherwise would be deposited into reserve accounts maintained by managers at each hotel, are distributed to us and we are responsible for providing funding of expenditures which otherwise would be funded from reserve accounts for each of the subject hotels.
Upon sale, a hotel-level reserve account would be funded (either by the purchaser or by us, as the seller) in the full amount of the reserve balance associated with the subject hotel. ◦ For certain of the Starwood Hotels, periodic reserve fund contributions, which otherwise would be deposited into reserve accounts maintained by managers at each hotel, are distributed to us and we are responsible for providing funding of expenditures which otherwise would be funded from reserve accounts for each of the subject hotels.
Allocate and recycle capital to seek returns that exceed our cost of capital and actively return capital to stockholders; 1 • Investment grade balance sheet - Maintain a strong and flexible capital structure that allows us to execute our strategy throughout all phases of the lodging cycle; and • Employer of choice and responsible corporate citizen - Align our organizational structure with our business objectives to be an employer of choice and a responsible corporate citizen.
Allocate and recycle capital to seek returns that exceed our cost of capital and actively return capital to stockholders; • Investment grade balance sheet - Maintain a strong and flexible capital structure that allows us to execute our strategy throughout all phases of the lodging cycle; and • Employer of choice and responsible corporate citizen - Align our organizational structure with our business objectives to be an employer of choice and a responsible corporate citizen.
Expenditures for these major repairs and improvements affecting the hotel building typically are funded 8 directly by owners, although our agreements with Marriott in respect of the Starwood Hotels contemplate that certain such expenditures also may be funded from the FF&E reserve account. • Treatment of additional owner funding .
Expenditures for these major repairs and improvements affecting the hotel building typically are funded directly by owners, although our agreements with Marriott in respect of the Starwood Hotels contemplate that certain such expenditures also may be funded from the FF&E reserve account. • Treatment of additional owner funding .
The manager typically receives compensation in the form of a base management fee, which is calculated as a percentage (generally 2-3%) of annual gross revenues, and an incentive management fee, which typically is calculated as a percentage (generally 10-20%) of operating profit after the owner has received a priority return on its 7 investment in the hotel.
The manager typically receives compensation in the form of a base management fee, which is calculated as a percentage (generally 2-3%) of annual gross revenues, and an incentive management fee, which typically is calculated as a percentage (generally 10-20%) of operating profit after the owner has received a priority return on its investment in the hotel.
Please note that the information contained on our website is not incorporated by reference in, or considered to be a part of, any document, unless expressly incorporated by reference therein. 18
Please note that the information contained on our website is not incorporated by reference in, or considered to be a part of, any document, unless expressly incorporated by reference therein.
This joint venture owns seven hotels and an office building in Delhi, Bangalore and Chennai, India, totaling approximately 1,720 rooms. The hotels are managed by AccorHotels under the Pullman, ibis and Novotel brands. For additional information see Part II Item 8. “Financial Statements and Supplementary Data – Note 4. Investments in Affiliates.” Competition The lodging industry is highly competitive.
This joint venture owns seven hotels and an office building in Delhi, Bangalore and Chennai, India, totaling approximately 1,718 rooms. The hotels are managed by AccorHotels under the Pullman, ibis and Novotel brands. For additional information see Part II Item 8. “Financial Statements and Supplementary Data – Note 4. Investments in Affiliates.” Competition The lodging industry is highly competitive.
Our hotels typically include meeting and banquet facilities, a variety of restaurants and lounges, swimming pools, exercise facilities and/or spas, gift shops and parking facilities, the combination of which enable them to serve business, leisure and group travelers. 11 Our consolidated portfolio includes 28 hotels that have more than 500 rooms.
Our hotels typically include meeting and banquet facilities, a variety of restaurants and lounges, swimming pools, exercise facilities and/or spas, gift shops and parking facilities, the combination of which enable them to serve business, leisure and group travelers. 11 Table of Contents Our consolidated portfolio includes 28 hotels that have more than 500 rooms.
(2) The land, building and improvements are leased from a third-party under a long-term lease agreement. (3) This property is not wholly owned. By Market Location: With our geographically diverse portfolio, no individual market represents more than 10% of total revenues.
(2) The land, building and improvements are leased from a third party under a long-term lease agreement. (3) This property is not wholly owned. By Market Location: With our geographically diverse portfolio, no individual market represents more than 9% of total revenues.
Host Inc. owns hotels and conducts operations through Host L.P., of which Host Inc. is the sole general partner and of which it holds approximately 99% of the partnership interests (“OP units”) as of December 31, 2022. The remaining partnership interests are owned by various unaffiliated limited partners.
Host Inc. owns hotels and conducts operations through Host L.P., of which Host Inc. is the sole general partner and of which it holds approximately 99% of the partnership interests (“OP units”) as of December 31, 2023. The remaining partnership interests are owned by various unaffiliated limited partners.
Copies of these charters and policies, Host Inc.’s Bylaws and Host L.P.’s partnership agreement also are available in print to stockholders and unitholders upon request to Host Hotels & Resorts, Inc., 4747 Bethesda Avenue, Suite 1300, Bethesda, Maryland 20814, Attn: Secretary.
Copies of these charters and policies, Host Inc.’s Bylaws and Host L.P.’s partnership agreement also are available in print to stockholders and unitholders upon request to Host Hotels & Resorts, Inc., 4747 Bethesda Ave, Suite 1300, Bethesda, Maryland, 20814, Attn: Secretary.
“Risk Factors—We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor.” None of Host’s employees are covered by collective bargaining agreements. 17 Where to Find Additional Information The address of our principal executive office is 4747 Bethesda Avenue, Suite 1300, Bethesda, Maryland, 20814. Our phone number is (240) 744-1000.
“Risk Factors—We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor.” None of Host’s employees are covered by collective bargaining agreements. Where to Find Additional Information The address of our principal executive office is 4747 Bethesda Ave, Suite 1300, Bethesda, Maryland, 20814. Our phone number is (240) 744-1000.
The average age of our properties is 35 years, although substantially all of them have benefited from significant renovations or major additions, as well as regularly scheduled renewal and replacement expenditures and other capital improvements.
The average age of our properties is 36 years, although substantially all of them have benefited from significant renovations or major additions, as well as regularly scheduled renewal and replacement expenditures and other capital improvements.
For the hotels that are subject to the pooled arrangement described above, the amount of any additional FF&E reserve account funding is allocated to each of such hotels on a pro rata basis, determined with reference to the net operating income of each hotel and the total net operating income of all such pooled hotels for the most recent operating year. • Territorial protections .
For the hotels that are subject to the pooled arrangement described above, the amount of any additional FF&E reserve account funding is allocated to each of such hotels on a pro rata basis, determined with reference to the net operating income of each hotel and the total net operating income of all such pooled hotels for the most recent operating year. 9 Table of Contents • Territorial protections .
For 2023, we will continue our disciplined approach to capital allocation and intend to take advantage of our strong balance sheet and overall scale. We are constantly evaluating potential acquisitions of iconic upper-upscale and luxury properties that we believe have sustainable competitive advantages. Similarly, we intend to continue our capital recycling program with strategic and 2 opportunistic dispositions.
For 2024, we will continue our disciplined approach to capital allocation and intend to take advantage of our strong balance sheet and overall scale. We are constantly evaluating potential acquisitions of iconic upper-upscale and luxury properties that we believe have sustainable competitive advantages. Similarly, we intend to continue our capital recycling program with strategic and opportunistic dispositions.
We also have a selection of hotels managed by independent operators where we believe these operators have more flexibility to drive revenues and control costs to maximize profits. • Improve asset value through the extension or purchase of ground leases or the restructuring of management agreements to increase contract flexibility. Disciplined Capital Allocation.
We also have a selection of hotels managed by independent operators where we believe these operators have more flexibility to drive revenues and control costs to maximize profits. 2 Table of Contents • Improve asset value through the extension or purchase of ground leases or the restructuring of management agreements to increase contract flexibility. Disciplined Capital Allocation.
Our portfolio primarily consists of luxury and upper upscale properties, which are operated under internationally recognized brand names such as Marriott, Westin, Ritz-Carlton, Hyatt, Four Seasons and Hilton. There also has been a trend towards specialized, smaller boutique hotels that are customized towards a particular customer profile.
Our portfolio primarily consists of luxury and upper upscale properties, which are operated under internationally recognized brand names such as Marriott, Westin, Ritz-Carlton, Hyatt, Four Seasons and Hilton. There are also specialized, smaller boutique hotels that are customized towards a particular customer profile.
While approximately 61% of our revenues in 2022 were generated from rooms sales, the majority of our properties feature a variety of amenities that help drive demand and profitability.
While approximately 61% of our revenues in 2023 were generated from rooms sales, the majority of our properties feature a variety of amenities that help drive demand and profitability.
Due to the ownership structure and economic or participating rights of our partners, we do not consolidate the operations of the properties owned by these entities and they are included in equity in earnings in our consolidated results of operations. Our investments in these entities include the following: Noble Joint Venture.
Due to the ownership structure and economic or participating rights 14 Table of Contents of our partners, we do not consolidate the operations of the properties owned by these entities and they are included in equity in earnings in our consolidated results of operations. Our investments in these entities include the following: Noble Joint Venture.
Target markets with diverse demand generators, high barriers to entry, favorable supply and demand dynamics and attractive long-term projected RevPAR growth; • Strong scale and integrated platform - Utilize our scale to create value through enterprise analytics, asset management and capital investment initiatives, while aiding external growth by leveraging scale as a competitive advantage to acquire assets befitting our strategy.
Target markets with diverse demand generators, high barriers to entry, favorable supply and demand dynamics and attractive long-term projected RevPAR growth; 1 Table of Contents • Strong scale and integrated platform - Utilize our scale to create value through enterprise analytics, asset management and capital investment initiatives, while aiding external growth by leveraging scale as a competitive advantage to acquire assets befitting our strategy.
Trends in economic indicators such as gross domestic product (“GDP”) growth, business investment, corporate profits and employment growth are key indicators of the relative strength of lodging demand. Lodging demand also will be affected by changes to international travel patterns.
Trends in economic indicators such as gross domestic product 5 Table of Contents (“GDP”) growth, business investment, corporate profits and employment growth are key indicators of the relative strength of lodging demand. Lodging demand also will be affected by changes to international travel patterns.
Most of our hotels operate in urban and resort markets either as luxury properties under such brand names as 1 Hotels ® , Alila ® , Andaz ® , Fairmont ® , Four Seasons ® , Grand Hyatt ® , JW Marriott ® , Ritz-Carlton ® , St.
Most of our hotels operate in urban and resort markets either as luxury properties under such brand names as 1 Hotels ® , Alila ® , Andaz ® , Fairmont ® , Four Seasons ® , Grand Hyatt ® , JW 15 Table of Contents Marriott ® , Ritz-Carlton ® , St.
The hotels also may be operated as an independent hotel by an independent hotel manager. • Owner/Managers —own the hotel and operate the property with their own management team. These hotels may be branded under a franchise agreement, operated as an independent hotel or operated under the owner’s brand.
These hotels may be branded and operated under the manager’s brand or branded under a franchise agreement and operated by the franchisee or by an independent hotel manager. The hotels also may be operated as an independent hotel by an independent hotel manager. • Owner/Managers —own the hotel and operate the property with their own management team.
We also are responsible for providing funds to meet the cash needs for hotel operations if at any time the funds available from working capital are insufficient to meet the financial requirements of the hotels.
We also are responsible for providing funds to meet the cash needs for hotel operations if at any time the 8 Table of Contents funds available from working capital are insufficient to meet the financial requirements of the hotels.
Item 1. B usiness We are the largest publicly traded lodging REIT, with a geographically diverse portfolio of luxury and upper upscale hotels.
Item 1. Business We are the largest publicly traded lodging REIT, with a geographically diverse portfolio of luxury and upper upscale hotels.
The charts below detail our third party verified Total Energy Consumption and Total Water Consumption for 2019 through 2021, the last three fiscal years for which data is available (1) .
The charts below detail our third-party verified Total Energy Consumption and Total Water Consumption for 2020 through 2022, the last three fiscal years for which data is available (1) .
Additionally, all employees receive annual performance reviews that incorporate our EPIC values of Excellence, Partnership, Integrity and Community, and our competencies, which include adaptability, communication, teamwork and complete thinking. We encourage regular and ongoing feedback tied to performance and career development.
Additionally, all employees receive annual performance reviews that incorporate our EPIC values and our competencies, which include adaptability, communication, teamwork and complete thinking. We encourage regular and ongoing feedback tied to performance and career development.
In our consolidated portfolio, approximately 87% of our hotels, by room count, are managed by their own brand managers, and 13% are managed by independent managers as a franchise or as an independent brand. By Brand.
In our consolidated portfolio, approximately 88% of our hotels, by room count, are managed by their own brand managers, and 12% are managed by independent managers as a franchise or as an independent brand. By Brand.
Similar to the majority of the lodging industry, we further categorize business within these broad groups based on characteristics they have in common as follows: Transient business broadly represents individual business and/or leisure travelers.
Our customers fall into three broad groups: transient business, group business and contract business. Similar to the majority of the lodging industry, we further categorize business within these broad groups based on characteristics they have in common as follows: Transient business broadly represents individual business and/or leisure travelers.
As of February 17, 2023, our consolidated lodging portfolio consists of 78 primarily luxury and upper-upscale hotels containing approximately 42,200 rooms, with substantially all located in the United States (five of the hotels are located outside of the U.S. in Brazil and Canada).
As of February 23, 2024, our consolidated lodging portfolio consists of 77 primarily luxury and upper-upscale hotels containing approximately 42,000 rooms, with substantially all located in the United States (five of the hotels are located outside of the U.S. in Brazil and Canada).
We have a 25% interest in a joint venture with RECO Hotels JV Private Limited, an affiliate of the Government of Singapore Investment Corporation Pte Ltd. The agreement may be terminated by either partner at any time, which would trigger the liquidation of the joint venture. The commitment period for equity contributions to the joint venture has expired.
Asia/Pacific Joint Venture. We have a 25% interest in a joint venture with RECO Hotels JV Private Limited, an affiliate of the Government of Singapore Investment Corporation Pte Ltd. The agreement may be terminated by either partner at any time, which would trigger the liquidation of the joint venture.
Human Capital Resources As of February 17, 2023, we had 165 employees, all of whom work in the United States, including our regional office in Miami. The current average tenure of our employees is more than 13 years and the voluntary and total turnover rates in 2022 were each 6%.
Human Capital Resources As of February 23, 2024, we had 163 employees, all of whom work in the United States, including our regional office in Miami. The current average tenure of our employees is more than 13 years, and the voluntary and total turnover rates in 2023 were 5% and 7%, respectively.
The following table details our consolidated hotel portfolio by brand as of February 17, 2023: Brand Number of Hotels Rooms Percentage of Revenues ⁽¹⁾ Marriott: Marriott 26 19,026 34.7 % Ritz-Carlton 5 1,890 8.2 Autograph Collection 2 500 0.8 Tribute Portfolio 1 173 0.4 JW Marriott 4 1,909 3.1 AC Hotels 1 165 0.2 W 1 424 0.6 St.
The following table details our consolidated hotel portfolio by brand as of February 23, 2024: Brand Number of Hotels Rooms Percentage of Revenues ⁽¹⁾ Marriott: Marriott 26 19,033 37.6 % Ritz-Carlton 5 1,917 7.6 % Autograph Collection 1 223 0.4 % Tribute Portfolio 1 173 0.4 % JW Marriott 4 1,909 3.5 % AC Hotels 1 165 0.2 % W 1 424 0.6 % St.
Certain funding commitments remain, however, related to its existing investments in India. As of December 31, 2022, this joint venture has invested approximately $109 million (of which our share is $27 million) in a separate joint venture in India with Accor S.A. and InterGlobe Enterprises Limited, in which it holds a 36% interest.
As of December 31, 2023, this joint venture has invested approximately $109 million (of which our share is $27 million) in a separate joint venture in India with Accor S.A. and InterGlobe Enterprises Limited, in which it holds a 36% interest.
Our Corporate Responsibility ("CR") program is centered around the concept of responsible investment—an overarching strategy that guides our focus and actions across our three main themes of Environmental Stewardship, Social Responsibility and Governance: • Environmental Stewardship : We are investing in solutions that conserve and restore natural capital to assist us in mitigating climate change and biodiversity impacts with the goal of achieving best-in-class returns. • Social Responsibility: We are committed to advancing health, well-being and opportunity for all of our stakeholders, including investors, employees, partners and communities. • Governance: Our responsible investment strategies are guided by executive and board-level oversight, our EPIC values and ethical standards, and a disciplined approach to risk management and sustainable value creation.
This approach directly supports Host’s business strategy and goals. • Environmental Stewardship : We are investing in solutions that conserve and restore natural capital to assist us in mitigating climate change and biodiversity impacts with the goal of achieving best-in-class returns. • Social Responsibility : We are committed to advancing health, well-being and opportunity for all of our stakeholders, including investors, employees, partners and communities. • Governance : Our responsible investment strategies are guided by executive and board-level oversight, our EPIC values of Excellence, Partnership, Integrity and Community, our ethical standards, and a disciplined approach to risk management and sustainable value creation.
Historically, business travelers have made up the majority of transient demand at our hotels, although leisure has driven the majority of our demand during the COVID-19 pandemic in 2020 through 2022, with business transient seeing an accelerated recovery in the second half of 2022.
Historically, business travelers have made up the majority of transient demand at our hotels; however, leisure drove the majority of our demand during the recovery from the COVID-19 pandemic from 2020 through 2022, with business transient seeing a recovery in the second half of 2022 and through 2023.
Under these agreements, we pay the brand owners a franchise or licensing fee equal to a specified percentage of gross room revenues, as well as other system fees and reimbursements.
Under these agreements, we pay the brand owners a franchise or licensing fee equal to a specified percentage of gross room revenues, as well as other system fees and reimbursements. In addition, we are obligated to maintain applicable brand standards at our franchised hotels.
Retail room rates will fluctuate more freely depending on anticipated demand levels (e.g., seasonality and weekday vs. weekend stays). • Non-Qualified Discount : This category includes special rates offered by the hotels, including packages, advance-purchase discounts and promotional offers.
It includes the “rack rate,” which typically is applied to rooms during high demand periods and is the highest rate category available. Retail room rates will fluctuate more freely depending on anticipated demand levels (e.g., seasonality and weekday vs. weekend stays). • Non-Qualified Discount: This category includes special rates offered by the hotels, including packages, advance-purchase discounts and promotional offers.
We are prohibited from operating and managing hotels by applicable REIT rules. • Franchisors —own a brand or brands and strive to grow their revenues by expanding the number of hotels in their franchise system.
These hotels may be branded under a franchise agreement, operated as an independent hotel or operated under the owner’s brand. We are prohibited from operating and managing hotels by applicable REIT rules. • Franchisors —own a brand or brands and strive to grow their revenues by expanding the number of hotels in their franchise system.
The three key sub-categories of the group business category are: • Association : group business related to national and regional association meetings and conventions. • Corporate : group business related to corporate meetings (e.g., product launches, training programs, contract negotiations, and presentations). • Other : group business predominately related to social, military, education, religious, fraternal and youth and amateur sports teams, otherwise known as SMERF business.
The three key sub-categories of the group business category are: • Association : group business related to national and regional association meetings and conventions. • Corporate : group business related to corporate meetings (e.g., product launches, training programs, contract negotiations, and presentations). • Other : group business predominately related to social, military, education, religious, fraternal and youth and amateur sports teams, otherwise known as SMERF business. 7 Table of Contents Contract business refers to blocks of rooms sold to a specific company for an extended period at significantly discounted rates.
In addition, we are obligated to maintain applicable brand standards at our franchised hotels. 9 Operating Structure Host Inc. operates through an umbrella partnership structure in which substantially all its assets are owned by Host L.P., of which Host Inc. is the sole general partner and holds approximately 99% of the OP units as of December 31, 2022.
Operating Structure Host Inc. operates through an umbrella partnership structure in which substantially all its assets are owned by Host L.P., of which Host Inc. is the sole general partner and holds approximately 99% of the OP units as of December 31, 2023.
The charts below detail the historical supply, demand and revenue per available room (“RevPAR”) growth for the U.S. lodging industry and for the U.S. luxury and upper upscale categories for 2017 to 2022. U.S.
The charts below detail the historical supply, demand and revenue per available room (“RevPAR”) growth for the U.S. lodging industry and for the U.S. luxury and upper upscale categories for 2018 to 2023. U.S. Lodging Industry Supply, Demand and RevPAR Growth 6 Table of Contents U.S. Luxury and Upper Upscale Supply, Demand and RevPAR Growth Our Customers.
To maintain its qualification as a REIT, Host Inc. is required to distribute 90% of its taxable income (other than net capital gain) to its stockholders each year and, as a result, generally relies on external sources of capital, as well as cash from operations, to finance growth.
To maintain its qualification as a REIT, Host Inc. is required to distribute 90% of its taxable income (other than net capital gain) to its stockholders each year and, as a result, generally relies on external sources of capital, as well as cash from operations, to finance growth. 3 Table of Contents Management believes that a strong balance sheet is a key competitive advantage that affords us a lower cost of debt and positions us for external growth.
The declines in Total Energy Consumption and Total Water Consumption for 2020 reflect the significant decrease in occupancy at our hotels as a result of the COVID-19 pandemic, while the increases in 2021 reflect the return of business: ___________ (1) Energy and water metrics relate to our consolidated hotels owned for the entire year presented.
The increases in Total Energy Consumption and Total Water Consumption for 2021 and 2022 reflect the return of business at our hotels as compared to the loss of occupancy from the COVID-19 pandemic in prior years: 4 Table of Contents ___________ (1) Energy and water metrics relate to our consolidated hotels owned for the entire year presented.
We own a 49.9% interest in a joint venture with R/V-C Association that owns the 650-room Fort Lauderdale Marriott Harbor Beach Resort & Spa in Florida. The joint venture has approximately $150 million of mortgage debt that is non-recourse to us. Asia/Pacific Joint Venture.
We own a 49.9% interest in a joint venture with R/V-C Association that owns the 650-room Fort Lauderdale Marriott Harbor Beach Resort & Spa in Florida.
As of December 31, 2022, our total workforce consists of 44% men and 56% women, with 43% of management positions held by women. Our workforce also consists of 38% minorities, with 23% of management positions held by minorities.
As of December 31, 2023, our total workforce consists of 42% men and 58% women, with 46% of management positions held by women. Our workforce also consists of 39% minorities, with 23% of management positions held by minorities.
We also compete with other REITs and other public and private investors for the acquisition of new properties and investment opportunities as we attempt to position our portfolio to best take advantage of changes in markets and travel patterns of our customers. ___________ [1] This annual report contains registered trademarks that are the exclusive property of their respective owners, which are companies other than us.
We also compete with other REITs and other public and private investors for the acquisition of new properties and investment opportunities as we attempt to position our portfolio to best take advantage of changes in markets and travel patterns of our customers.
Assuming that all OP units held by unaffiliated limited partners were converted into common shares, there would have been 723.6 million common shares of Host Inc. outstanding at December 31, 2022.
As of December 31, 2023, unaffiliated limited partners owned 9.5 million OP units, which were convertible into 9.7 million Host Inc. common shares. 10 Table of Contents Assuming that all OP units held by unaffiliated limited partners were converted into common shares, there would have been 713.3 million common shares of Host Inc. outstanding at December 31, 2023.
Regis 1 232 0.4 Luxury Collection 1 645 4.1 Westin 8 3,968 7.5 Sheraton 1 370 0.4 Total Marriott 51 29,302 60.4 Hyatt: Alila 1 59 1.0 Andaz 1 321 2.2 Grand Hyatt 4 3,633 7.8 Hyatt Place 1 426 0.7 Hyatt Regency 6 3,866 9.3 Total Hyatt 13 8,305 21.0 Hilton: Curio 2 591 1.8 Hilton 1 223 0.5 Embassy Suites 1 455 0.6 Total Hilton 4 1,269 2.9 AccorHotels: Swissôtel 1 662 1.1 Fairmont 1 450 2.2 ibis 1 256 0.1 Novotel 1 149 — Total AccorHotels 4 1,517 3.4 Four Seasons 2 569 4.5 Other/Independent 4 1,252 7.1 78 42,214 99.3 % ___________ (1) Based on our 2022 revenues; sold hotels accounted for the remaining 1% of our revenues.
Regis 1 232 0.4 % Luxury Collection 1 645 3.7 % Westin 8 3,970 7.6 % Sheraton 1 370 0.4 % Total Marriott 50 29,061 62.4 % Hyatt: Alila 1 59 0.9 % Andaz 1 320 1.9 % Grand Hyatt 4 3,633 8.0 % Hyatt Place 1 426 0.6 % Hyatt Regency 6 3,866 8.7 % Total Hyatt 13 8,304 20.1 % Hilton: Curio 2 591 1.7 % Hilton 1 223 0.3 % Embassy Suites 1 455 0.6 % Total Hilton 4 1,269 2.6 % AccorHotels: Swissôtel 1 662 1.1 % Fairmont 1 450 2.3 % ibis 1 256 0.1 % Novotel 1 149 0.1 % Total AccorHotels 4 1,517 3.6 % Four Seasons 2 569 5.2 % Other/Independent 4 1,252 6.1 % 77 41,972 100.0 % ___________ (1) Based on our 2023 revenues; no individual hotel contributed more than 6% of total revenues in 2023.
Contract business refers to blocks of rooms sold to a specific company for an extended period at significantly discounted rates. Airline crews are typical generators of contract demand for our airport hotels. Contract rates may be utilized by hotels that are in markets that are experiencing consistently lower levels of demand.
Airline crews are typical generators of contract demand for our airport hotels. Contract rates may be utilized by hotels that are in markets that are experiencing consistently lower levels of demand.
Additionally, for every share of common stock issued by Host Inc., Host L.P. will issue .97895 OP units to Host Inc. in exchange for the consideration received from the issuance of the common stock. As of December 31, 2022, unaffiliated limited partners owned 10.0 million OP units, which were convertible into 10.2 million Host Inc. common shares.
Additionally, for every share of common stock issued by Host Inc., Host L.P. will issue .97895 OP units to Host Inc. in exchange for the consideration received from the issuance of the common stock.
No individual hotel contributed more than 6% of total revenues in 2022. Hotels that are not considered upper upscale or luxury constitute approximately 1% of our revenues. 12 By Location.
Hotels that are not considered upper upscale or luxury constitute approximately 1% of our revenues. 12 Table of Contents By Location.
Our consolidated hotels located outside the United States collectively have approximately 1,500 rooms. Approximately 1% of our revenues in 2022, 2021 and 2020 were attributed to the operations of these five foreign hotels.
Approximately 2% of our revenues in 2023, and approximately 1% of our revenues in both 2022 and 2021 were attributed to the operations of these five foreign hotels.
Accordingly, the net effect of the TRS leases is that a portion of the net operating cash flow from our hotels is subject to federal, state and, if applicable, foreign corporate income tax. 10 Our Consolidated Hotel Portfolio As of February 17, 2023, we owned a portfolio of 78 hotels, of which 73 are in the United States and five are located in Brazil and Canada.
Accordingly, the net effect of the TRS leases is that a portion of the net operating cash flow from our hotels is subject to federal, state and, if applicable, foreign corporate income tax.
Local legislation has the potential to limit supply growth for these online short-term rentals in many top markets, though the growth of professional management for legal rentals remains a key trend. 5 Our portfolio primarily consists of upper upscale and luxury hotels and, accordingly, its performance is best understood in comparison to the luxury and upper upscale categories rather than the entire industry.
Local legislation has the potential to limit supply growth for these online short-term rentals in many top markets, though the growth of professional management for legal rentals remains a key trend.
Generally, we look to minimize the number of assets that are encumbered by mortgage debt, minimize near-term maturities and maintain a staggered maturity schedule.
Generally, we look to minimize the number of assets that are encumbered by mortgage debt, minimize near-term maturities and maintain a staggered maturity schedule. Depending on market conditions, we also may utilize variable rate debt which can provide greater protection during a decline in the lodging industry.
We invested an aggregate of $35 million of cash and issued approximately $56 million of Host L.P. 15 OP units to acquire a minority equity interest in Noble Management Holdings, LLC and Noble Investment Holdings, LLC representing 49% of (a) the net fee income of the Noble Investment Group business in respect of existing and future Noble Investment Group funds and other revenue-based activities, (b) 40% of the gross carried interest earned on the funds formed after closing, and (c) proceeds earned by the general partner on commitments to future funds.
Accordingly, in 2022, we entered into definitive agreements with Noble Investment Group, LLC, a leading private hospitality asset manager in the upscale, select service and extended stay chain scales, and certain other entities and persons related to Noble Investment Group, LLC, to acquire a minority equity interest in Noble Management Holdings, LLC and Noble Investment Holdings, LLC representing 49% of (a) the net fee income of the Noble Investment Group business in respect of existing and future Noble Investment Group funds and other revenue-based activities, (b) 40% of the gross carried interest earned on the funds formed after closing, and (c) proceeds earned by the general partner on commitments to future funds.
Our 2022 Corporate Responsibility Report, which details our CR program and responsible investment strategy, along with our environmental, social and governance performance and framework for our 2050 vision, as well as full SASB disclosure and EEO-1 report, was issued in September 2022.
Our latest Corporate Responsibility Report, which was issued in September 2023, details our CR program and responsible investment strategy; along with our environmental, social and governance performance and our new 2030 environmental and social targets that will serve as the initial roadmap for achieving our aspirational vision of becoming net positive by 2050.
The lodging industry has several key participants: • Owners —own the hotel and typically enter into an agreement for an independent third-party to manage the hotel. These hotels may be branded and operated under the manager’s brand or branded under a franchise agreement and operated by the franchisee or by an independent hotel manager.
The Lodging Industry The lodging industry in the United States consists of private and public entities that operate in a diversified market under a variety of brand names. The lodging industry has several key participants: • Owners —own the hotel and typically enter into an agreement for an independent third party to manage the hotel.
None of the owners of these trademarks, their affiliates or any of their respective officers, directors, agents or employees, has or will have any responsibility or liability for any information contained in this annual report. 16 Seasonality Our hotel sales traditionally have experienced moderate seasonality, which varies based on the individual hotel and the region.
None of the owners of these trademarks, their affiliates or any of their respective officers, directors, agents or employees, has or will have any responsibility or liability for any information contained in this annual report. 16 Table of Contents we are meeting our human capital objectives, we conduct employee surveys to obtain feedback on various topics, informing how we execute on specific programs.
Other Real Estate Interests We own non-controlling interests in several entities that, as of February 17, 2023, owned, or owned an interest in, 23 hotels.
The following chart summarizes the composition of our consolidated hotels as of February 23, 2024 by each market location based on its percentage of 2023 revenues: Other Real Estate Interests We own non-controlling interests in several entities that, as of February 23, 2024, owned, or owned an interest in, 35 properties and a vacation ownership development.
As part of our investment, we have made a $150 million capital commitment to the next Noble fund. Upon certain triggers being met, we have the ability to acquire up to 100% of Noble Management Holdings, LLC and Noble Investment Holdings, LLC.
As of December 31, 2023, we have funded $33 million to Noble Fund V, which currently owns 25 select service and extended stay hotels and two land sites to be developed. Upon certain triggers being met, we have the ability to acquire up to 100% of Noble Management Holdings, LLC and Noble Investment Holdings, LLC.
In 2019, prior to the pandemic, our sales were approximately 26%, 27%, 23% and 24% for the first, second, third and fourth calendar quarters, respectively.
Seasonality Our hotel sales traditionally have experienced moderate seasonality, which varies based on the individual hotel and the region. Hotel sales for our consolidated portfolio were approximately 26%, 26%, 23% and 25% for the first, second, third and fourth calendar quarters, respectively, in 2023.
The Ritz-Carlton Naples, Tiburón 295 Grand Hyatt Washington 897 Georgia Hyatt Regency Washington on Capitol Hill 838 The Alida, Savannah, a Tribute Portfolio Hotel 173 JW Marriott Washington, DC 777 Grand Hyatt Atlanta In Buckhead 439 The Westin Georgetown, Washington D.C. 267 JW Marriott Atlanta Buckhead 371 Washington Marriott at Metro Center 459 Hawaii Wyoming Andaz Maui at Wailea Resort 321 Four Seasons Resort and Residences Jackson Hole 125 Fairmont Kea Lani, Maui 450 Brazil Hyatt Place Waikiki Beach 426 ibis Rio de Janeiro Parque Olimpico 256 Hyatt Regency Maui Resort and Spa 810 JW Marriott Hotel Rio de Janeiro 245 Illinois Novotel Rio de Janeiro Parque Olimpico 149 Embassy Suites by Hilton Chicago Downtown Magnificent Mile 455 Canada Swissôtel Chicago 662 Calgary Marriott Downtown Hotel 388 The Westin Chicago River North 445 Marriott Downtown at CF Toronto Eaton Centre ⁽¹⁾ 461 Louisiana Total 42,214 New Orleans Marriott 1,333 ___________ 14 (1) The land on which this hotel is built is leased from a third-party under one or more lease agreements.
Canada Grand Hyatt Washington 897 Calgary Marriott Downtown Hotel 388 Hyatt Regency Washington on Capitol Hill 838 Marriott Downtown at CF Toronto Eaton Centre ⁽¹⁾ 461 JW Marriott Washington, D.C. 777 Total 41,972 The Westin Georgetown, Washington D.C. 269 Washington Marriott at Metro Center 459 ___________ (1) The land on which this hotel is built is leased from a third party under one or more lease agreements.
The contents of our Corporate Responsibility Report are not incorporated by reference into this Form 10-K and do not form a part of this Form 10-K. 4 The Lodging Industry The lodging industry in the United States consists of private and public entities that operate in a diversified market under a variety of brand names.
The Corporate Responsibility Report also includes Task Force on Climate-Related Financial Disclosures (TCFD) and full SASB disclosures, as well as an EEO-1 report. The contents of our Corporate Responsibility Report are not incorporated by reference into this Form 10-K and do not form a part of this Form 10-K.
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Management believes that a strong balance sheet is a key competitive advantage that affords us a lower cost of debt and positions us for external growth.
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Corporate Responsibility We are committed to creating long-term value through investing responsibly in our business, environment, people and community. Our Corporate Responsibility ("CR") program is centered around the concept of responsible investment—an overarching strategy that guides our focus and actions across our three main themes of Environmental Stewardship, Social Responsibility and Governance.
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Depending on market conditions, we also may utilize variable rate debt which can provide greater protection during a decline in the lodging industry. 3 Corporate Responsibility We are committed to creating long-term value through investing responsibly in our business, environment, people and community.
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We believe that a disciplined and proactive approach to addressing critical environmental, social and governance (ESG) topics enables us to create long-term value for our stockholders and helps us to optimize our portfolio and human capital investments, while maintaining our position as a sustainability leader in the lodging REIT sector.
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Lodging Industry Supply, Demand and RevPAR Growth Source: STR *2020, 2021 & 2022 Supply, Demand and RevPAR estimates reflect economic methodology that does not remove room counts for any temporary hotel closures. U.S.
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Our management approach is driven by people, culture, policies, targets and performance monitoring to improve the value from our investments of time, talent and financial resources.
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Luxury and Upper Upscale Supply, Demand and RevPAR Growth Source: STR *2020, 2021 & 2022 Supply, Demand and RevPAR estimates reflect economic methodology that does not remove room counts for any temporary hotel closures. 6 Our Customers. Our customers fall into three broad groups: transient business, group business and contract business.
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Our portfolio primarily consists of upper upscale and luxury hotels and, accordingly, its performance is best understood in comparison to the luxury and upper upscale categories rather than the entire industry.
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It includes the “rack rate,” which typically is applied to rooms during high demand periods and is the highest rate category available.
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Our Consolidated Hotel Portfolio As of February 23, 2024, we owned a portfolio of 77 hotels, of which 72 are in the United States and five are located in Brazil and Canada. Our consolidated hotels located outside the United States collectively have approximately 1,500 rooms.
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These termination rights also may restrict the number of agreements that may be terminated over any annual or other period; impose limitations on the number of agreements terminated as measured by EBITDA; require that a certain number of hotels continue to maintain the brand affiliation; or be restricted to a specific pool of assets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOther circumstances affecting the lodging industry which may affect our performance and the forecasts we make include: • the effect on lodging demand of changes in national and local economic and business conditions, including concerns about U.S. economic growth and the potential for an economic recession in the United States, the current high level of inflation, rising interest rates, global economic prospects, consumer confidence and the value of the U.S. dollar; • factors that may shape public perception of travel to a particular location, such as natural disasters, weather events, including Hurricane Ian in 2022, pandemics and outbreaks of contagious diseases, such as the COVID-19 pandemic, and the occurrence or potential occurrence of terrorist attacks, all of which will affect occupancy rates at our hotels and the demand for hotel products and services; • risks that U.S. immigration policies and border closings will suppress international travel to the United States generally or decrease the labor pool; • the impact of geopolitical developments outside the U.S., such as large-scale wars or international conflicts, slowing global growth, trade tensions and tariffs between the United States and its trading partners such as China, all of which could affect global travel and lodging demand within the United States; • volatility in global financial and credit markets, and the impact of budget deficits and pending and future U.S. governmental action to address such deficits through reductions in spending and similar austerity measures, as well as the impact of potential U.S. government shutdowns, which could materially adversely affect U.S. and global economic conditions, business activity, credit availability, borrowing costs, and lodging demand; • operating risks associated with the hotel business, including the effect of labor stoppages or strikes, increasing operating or labor costs, including increased labor costs in the current inflationary environment, the ability of our managers to adequately staff our hotels as a result of shortages in labor, severance and furlough payments to hotel employees or changes in workplace rules that affect labor costs, and risks relating to the continued response to the COVID-19 pandemic by our hotel managers, such as increased hotel costs for cleaning protocols; • the ability of our hotels to compete effectively against other lodging businesses in the highly competitive markets in which we operate in areas such as access, location, quality of accommodations and room rate structures; • changes in the desirability of the geographic regions of the hotels in our portfolio or in the travel patterns of hotel customers; • changes in taxes and governmental regulations that influence or set wages, hotel employee health care costs, prices, interest rates or construction and maintenance procedures and costs; and 19 • decreases in the frequency of business travel that may result from alternatives to in-person meetings, including virtual meetings hosted online or over private teleconferencing networks.
Biggest changeOther circumstances affecting the lodging industry which may affect our performance and the forecasts we make include: • the effect on lodging demand of changes in national and local economic and business conditions, including concerns about U.S. economic growth and the potential for an economic recession in the United States or globally, the recent high level of inflation, rising interest rates, global economic prospects, consumer confidence and the value of the U.S. dollar; • factors that may shape public perception of travel to a particular location, including natural disasters, such as the Maui wildfires in 2023, weather events, such as Hurricane Ian in 2022, pandemics and other public health crises, such as the COVID-19 pandemic, and the occurrence or potential occurrence of terrorist attacks, all of which will affect occupancy rates at our hotels and the demand for hotel products and services; • risks that U.S. immigration policies and border closings, travel restrictions or advisories, changes in energy prices or changes in foreign exchange rates will suppress international travel to the United States generally or decrease the labor pool; • the impact of geopolitical developments outside the U.S., such as large-scale wars or international conflicts, slowing global growth, or trade tensions and tariffs between the United States and its trading partners such as China, all of which could affect global travel and lodging demand within the United States; • volatility in global financial and credit markets, which could materially adversely affect U.S. and global economic conditions, business activity, and lodging demand as well as negatively impact our ability to obtain financing and increase our borrowing costs; • future U.S. governmental action to address budget deficits through reductions in spending and similar austerity measures, as well as the impact of potential U.S. government shutdowns, all of which could materially adversely affect U.S. economic conditions, business activity, credit availability and borrowing costs; • operating risks associated with the hotel business, including the effect of labor stoppages or strikes, increasing operating or labor costs, including increased labor costs in the current inflationary environment, the ability of our managers to adequately staff our hotels as a result of shortages in labor, severance and furlough payments to hotel employees or changes in workplace rules that affect labor costs; • the ability of our hotels to compete effectively against other lodging businesses in the highly competitive markets in which we operate in areas such as access, location, quality of accommodations and room rate structures; • changes in the desirability of the geographic regions of the hotels in our portfolio or in the travel patterns of hotel customers; • changes in taxes and governmental regulations that influence or set wages, hotel employee health care costs, prices, interest rates or construction and maintenance procedures and costs; and • decreases in the frequency of business travel that may result from alternatives to in-person meetings, including virtual meetings hosted online or over private teleconferencing networks.
Sub-limits exist for certain types of claims, such as service interruption, debris removal, expediting costs, landscaping replacement and natural disasters such as earthquakes, floods and hurricanes, and may be subject to annual aggregate coverage limits. The dollar amounts of these sub-limits are significantly lower than the dollar amounts of the overall coverage limit.
Sub-limits exist for certain types of claims, such as service interruption, debris removal, expediting costs, landscaping replacement, and certain natural disasters such as earthquakes, floods and hurricanes, and may be subject to annual aggregate coverage limits. The dollar amounts of these sub-limits are significantly lower than the dollar amounts of the overall coverage limit.
Host Inc.’s charter contains provisions relating to restrictions on transfer and ownership of Host Inc.’s stock, fixing the size of the Board of Directors within the range set forth in the charter, removal of directors, the filling of vacancies, exculpation and indemnification of directors, calling special stockholder meetings and other provisions, all of which may be amended only by a resolution adopted by the Board of Directors and approved by Host Inc.’s stockholders holding two-thirds of the votes entitled to be cast on the matter.
Host Inc.’s charter contains provisions relating to restrictions on transfer and ownership of Host Inc.’s stock, fixing the size of the Board of Directors within the range set forth in the charter, removal of directors, the filling of vacancies, exculpation and indemnification of directors, calling special stockholder meetings and certain other provisions, all of which may be amended only by a resolution adopted by the Board of Directors and approved by Host Inc.’s stockholders holding two-thirds of the votes entitled to be cast on the matter.
Our failure to realize the intended benefits from one or more acquisitions could have a significant adverse effect on our business, liquidity, financial position and/or results of operations. These 22 adverse effects may occur because the performance of the hotel does not support the additional indebtedness and related interest expense that we incurred as a result of the acquisition.
Our failure to realize the intended benefits from one or more acquisitions could have a significant adverse effect on our business, liquidity, financial position and/or results of operations. These adverse effects may occur because the performance of the hotel does not support the additional indebtedness and related interest expense that we incurred as a result of the acquisition.
Marriott International, the manager of a majority of our hotels, experienced a material data security breach involving the unauthorized access to the Starwood guest reservation database between 2014 and 2018. The UK Information Commissioner's Office has fined Marriott £18.4 million, and 25 Marriott remains subject to other lawsuits and investigations arising around the world.
Marriott International, the manager of a majority of our hotels, experienced a material data security breach involving the unauthorized access to the Starwood guest reservation database between 2014 and 2018. The UK Information Commissioner's Office has fined Marriott £18.4 million, and Marriott remains subject to other lawsuits and investigations arising around the world.
We believe that all the hotels leased to our TRS are qualified lodging facilities. However, the REIT 28 provisions of the Code provide only limited guidance for making determinations of whether a leased hotel is considered a qualified lodging facility, and there can be no assurance that our leased hotels will be so considered in all cases.
We believe that all the hotels leased to our TRS are qualified lodging facilities. However, the REIT provisions of the Code provide only limited guidance for making determinations of whether a leased hotel is considered a qualified lodging facility, and there can be no assurance that our leased hotels will be so considered in all cases.
Moreover, unless entitled to statutory relief, the non-qualifying REIT could not qualify as a REIT for the four taxable years following the year during which REIT qualification was lost. 29 Risks Relating to Redemption of OP Units A holder who offers its OP units for redemption may have adverse tax consequences.
Moreover, unless entitled to statutory relief, the non-qualifying REIT could not qualify as a REIT for the four taxable years following the year during which REIT qualification was lost. Risks Relating to Redemption of OP Units A holder who offers its OP units for redemption may have adverse tax consequences.
In addition to the information technologies and systems of our managers used to operate our hotels, we have our own corporate technologies and systems that are used to access, store, transmit, and manage or support a variety of our business processes and information.
In addition to the information technologies and systems of our managers used to operate our hotels, we have our own corporate technologies and systems that are used to access, store, transmit, and manage or support a variety of our business processes and proprietary information.
Host Inc.’s charter provides that, except for any directors who may be elected by holders of a class or series of shares of capital stock other than common stock, directors may be removed only for cause and by the affirmative vote of stockholders holding at least two-thirds of all the votes entitled to be cast in the election of directors.
Host Inc.’s charter provides that, except for any directors who may be elected by holders of a class or series of capital stock other than common stock, directors may be removed only for cause and only by the affirmative vote of stockholders holding at least two-thirds of all the votes entitled to be cast for the election of directors.
Any vacancy resulting from the removal of a director by the stockholders may be filled by the affirmative vote of holders of at least two-thirds of the votes entitled to be cast in the election of directors. • Preferred shares; classification or reclassification of unissued shares of capital stock without stockholder approval.
Any vacancy resulting from the removal of a director by the stockholders may be filled by the affirmative vote of holders of at least two-thirds of the votes entitled to be cast for the election of directors. • Preferred shares; classification or reclassification of unissued shares of capital stock without stockholder approval .
Certain provisions of the MGCL may have the effect of inhibiting a third-party from acquiring Host Inc., including: • “business combination” provisions that, subject to limitations, prohibit certain business combinations between a corporation and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of the corporation’s then outstanding shares of voting stock) or an affiliate of any interested stockholder for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes two super-majority stockholder voting requirements on these combinations; and • “control share” provisions that provide that holders of “control shares” of a corporation (defined as voting shares of stock that, if aggregated with all other shares of stock owned or controlled by the acquirer, would entitle the acquirer to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” have no voting rights except to the extent approved by the stockholders by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, excluding all interested shares. 27 Host Inc. is subject to the Maryland business combination statute.
Certain provisions of the MGCL may have the effect of inhibiting a third party from acquiring Host Inc., including: ◦ “business combination” provisions that, subject to limitations, prohibit certain business combinations between a corporation and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of the voting power of the corporation’s then outstanding shares of voting stock) or an affiliate of any interested stockholder for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes two super-majority stockholder voting requirements on these combinations; and ◦ “control share” provisions providing that holders of “control shares” of a corporation (defined as voting shares of stock that, if aggregated with all other shares of stock owned or controlled by the acquirer, would entitle the acquirer to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” have no voting rights except to the extent approved by the stockholders by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, excluding all interested shares.
Host Inc.’s charter and by-laws, the partnership agreement of Host L.P., and the Maryland General Corporation Law (the “MGCL”) contain a number of provisions, the exercise or existence of which could delay, defer or prevent a transaction or a change in control that might involve a premium price for Host Inc.’s stockholders or Host L.P.’s unitholders, including the following: • Restrictions on transfer and ownership of Host Inc.’s stock.
Host Inc.’s charter and bylaws, the partnership agreement of Host L.P., and the Maryland General Corporation Law (the “MGCL”) contain a number of provisions, the exercise or existence of which could delay, defer or prevent a transaction or a change in control that might involve a premium price for Host Inc.’s stockholders or Host L.P.’s unitholders, including the following: • Restrictions on transfer and ownership of Host Inc.’s stock .
The resolution of labor disputes or re-negotiated labor contracts could lead to increased labor costs, a significant component of our hotel operating costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs.
The resolution of labor disputes or re-negotiated labor contracts could lead to increased labor costs, which is a significant component of our hotel operating costs, either by increases in wages or benefits or by changes in work rules that raise hotel operating costs.
As a result, an increase in interest rates will reduce our cash flow available for other corporate purposes, including investments in our portfolio. As of December 31, 2022, approximately 24% of our debt is subject to floating interest rates.
As a result, an increase in interest rates will reduce our cash flow available for other corporate purposes, including investments in our portfolio. As of December 31, 2023, approximately 24% of our debt is subject to floating interest rates.
Together, these limitations are referred to as the “ownership limit.” Stock acquired or held in violation of the ownership limit will be transferred automatically to a trust for the benefit of a designated charitable beneficiary, and the intended acquirer of the stock in violation of the ownership limit will not be entitled to vote those shares of stock or to receive the economic benefits of owning shares of Host Inc.’s stock in excess of the ownership limit.
Together, these limitations are referred to as the “ownership limit.” Stock acquired or held in violation of the ownership limit will be transferred automatically to a trust for the benefit of a designated charitable beneficiary, and the intended acquirer of the stock in violation of the ownership limit will not be entitled to vote those shares of stock or to receive the economic benefits of owning shares of Host Inc.’s stock in 26 Table of Contents excess of the ownership limit.
For example, if a hurricane were to cause widespread damage to Florida, claims from each of our hotels would be aggregated against the policy limit or sub-limit and likely would exceed the applicable limit or sub-limit.
For example, if a hurricane were to cause widespread damage to Florida, claims from each of our hotels would be aggregated against the policy limit or sub-limit and could exceed the applicable limit or sub-limit.
We also could become the subject of future claims by the operators of our hotels, individuals or companies who use our hotels, our investors, our joint venture partners or regulating entities and these claims could have a significant adverse effect on our financial condition and results of operations. Environmental liabilities are possible and can be costly.
We also could become the subject of future claims by the operators of our hotels, individuals or companies who use our hotels, our investors, our joint venture partners or regulating entities and these claims could have a significant adverse effect on our financial condition and results of operations. 30 Table of Contents Environmental liabilities are possible and can be costly.
This competition could limit the number of investment opportunities that we find suitable for our business. It also may increase the bargaining power of hotel owners seeking to sell to us, making it more difficult for us to acquire new hotels on attractive terms or on the terms contemplated in our business plan.
This competition could limit the number of investment opportunities that we find suitable for our business. It also may increase the bargaining power of hotel 19 Table of Contents owners seeking to sell to us, making it more difficult for us to acquire new hotels on attractive terms or on the terms contemplated in our business plan.
Any adverse developments in Marriott’s business and affairs or financial condition could impair its ability to manage our hotels and could have a material adverse effect on us. We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor.
Any adverse developments in Marriott’s business and affairs or financial condition could impair its ability to manage our hotels and could have a material adverse effect on us. 22 Table of Contents We are subject to risks associated with the employment of hotel personnel, particularly with hotels that employ unionized labor.
Also, insurance coverage for war, infectious disease, and nuclear, biological, chemical and radiological perils is extremely limited. We also may encounter challenges with an insurance provider regarding whether it will pay a particular claim that we believe to be covered under our policy.
Also, insurance coverage for war, infectious disease, and nuclear, biological, chemical and radiological perils is extremely limited. We also may encounter challenges with an insurance provider regarding whether it will pay a particular claim that we believe to be covered under our policy, which may require litigation.
For example, during the COVID-19 pandemic, large urban markets with enhanced restrictions on social gatherings, such as New York and San Francisco where we have a significant number of hotel rooms, were disproportionately impacted by the decline in lodging demand.
In addition, during the COVID-19 pandemic, large urban markets with enhanced restrictions on social gatherings, such as New York and San Francisco where we have a significant number of hotel rooms, were disproportionately impacted by the decline in lodging demand.
As the requirements for qualification and taxation as a REIT are extremely complex and interpretations of the federal income tax laws governing qualification and taxation as a REIT are limited, no assurance can be provided that Host Inc. currently qualifies as a REIT or will continue to qualify as a REIT or that Host Inc.’s subsidiary REIT qualifies as a REIT or will continue to qualify as a REIT.
As the requirements for qualification and taxation as a REIT are extremely complex and interpretations of the federal income tax laws governing qualification and taxation as a REIT are limited, no assurance can be provided that Host Inc. currently qualifies as a REIT or will continue to qualify as a REIT or that Host Inc.’s subsidiary REIT qualifies as a REIT or will 27 Table of Contents continue to qualify as a REIT.
Any of these events could, in turn, result in disruption of the operations of the hotels that we own that are managed by them, in increased costs (e.g., to comply with regulatory requirements or to remediate systems) and in potential litigation, regulatory enforcement and liability.
Any of these events could, in turn, result in disruption of the operations of the hotels that we own that are managed by them, increased costs (e.g., to comply with regulatory requirements or to remediate systems), potential litigation (including class actions), and regulatory enforcement and liability.
Failure to comply with current and future laws, industry standards and other legal obligations or any security incident resulting in the unauthorized access to, or acquisition, release or transfer of personal information may result in governmental enforcement actions, litigation, fines and penalties or adverse publicity and could cause a material adverse effect on both the managers of our hotels and our business and results of operations.
Failure to comply with current and future laws, industry standards and other legal obligations or any security 25 Table of Contents incident resulting in operational disruptions and/or the unauthorized access to, or acquisition, release or transfer of personal information may result in governmental enforcement actions, litigation, fines and penalties and adverse publicity and could cause a material adverse effect on both the managers of our hotels and our business and results of operations.
Marriott has also experienced other, lesser data breaches since 2018 as well. No assurances can be made as to the outcome of these data breach lawsuits or investigations. We rely on the security systems of our managers to protect proprietary and hotel customer information from these threats.
Marriott has also experienced other, lesser data breaches since 2018 as well. No assurances can be made as to the outcome of these data breach lawsuits or investigations. We rely on the security systems of our managers to maintain hotel operations and to protect proprietary and hotel customer information.
In addition, real estate ownership is subject to various risks, including: • government regulations relating to real estate ownership or operations, including tax, environmental, zoning and eminent domain laws; • loss in value of real estate due to changes in market conditions or the area in which it is located or losses in value due to changes in tax laws or increased property tax assessments; • potential civil liability for accidents or other occurrences on owned or leased properties; • the ongoing need for owner-funded capital improvements and expenditures in order to maintain or upgrade hotels; • periodic total or partial closures due to renovations and facility improvements; and • force majeure events, such as earthquakes, hurricanes, floods or other possibly uninsured losses. 21 We have significant indebtedness and may incur additional indebtedness.
In addition, real estate ownership is subject to various risks, including: • government regulations relating to real estate ownership or operations, including tax, environmental, zoning and eminent domain laws; • loss in value of real estate due to changes in market conditions or the area in which it is located or losses in value due to changes in tax laws or increased property tax assessments; • potential civil liability for accidents or other occurrences on owned or leased properties; • the ongoing need for owner-funded capital improvements and expenditures in order to maintain or upgrade hotels; • periodic total or partial closures due to renovations and facility improvements; and • force majeure events, such as earthquakes, hurricanes, floods or other possibly uninsured losses.
We currently maintain two stock-based compensation plans: (i) the comprehensive stock and cash incentive plan, and (ii) an employee stock purchase plan. At December 31, 2022, there were approximately six million shares of Host Inc.’s common stock reserved and available for issuance under the comprehensive stock plan and employee stock purchase plan.
We currently maintain two stock-based compensation plans: (i) the comprehensive stock and cash incentive plan, and (ii) an employee stock purchase plan. At December 31, 2023, there were approximately three million shares of Host Inc.’s common stock reserved and available for issuance under the comprehensive stock plan and employee stock purchase plan.
We are subject to the risks associated with natural disasters and the physical effects of climate change, which can include more frequent or severe storms, droughts, hurricanes, flooding and extreme temperatures, any of which could have a material adverse effect on our hotels, operations and business including, but not limited to, by damaging properties, by increasing the costs associated with our properties, or by decreasing the attractiveness of certain locations.
We are subject to the risks associated with natural disasters and the physical effects of climate change, including more frequent or severe storms, droughts, hurricanes, flooding, earthquakes, wildfires, power shortages or outages and extreme temperatures, any of which could have a material adverse effect on our hotels, operations and business including, but not limited to, by damaging properties, by increasing the costs associated with our properties, or by decreasing the attractiveness of certain locations.
Our hotel managers may store and process such proprietary and customer information both on systems located at the hotels that we own and other hotels that they operate and manage, their corporate locations and at third-party owned facilities, including, for example, in a third-party hosted cloud environment.
Our hotel managers may store and process such customer information as well as proprietary information both on systems 24 Table of Contents located at the hotels that we own and other hotels that they operate and manage, their corporate locations and at third-party owned facilities, including, for example, in a third-party hosted cloud environment.
Hotels in the following cities and states represented approximately 72% of our 2022 revenues: New York, Washington, D.C., San Diego, San Francisco, Florida, Hawaii, Los Angeles and Phoenix.
Hotels in the following cities and states represented approximately 69% of our 2023 revenues: New York, Washington, D.C., San Diego, San Francisco, Florida, Hawaii, Los Angeles and Phoenix.
In addition, limited partners of Host L.P. who redeem their OP units and receive, at Host Inc.’s election, shares of Host Inc. common stock will be able to sell those shares freely. As of December 31, 2022, there are approximately 10.0 million Host L.P.
In addition, limited partners of Host L.P. who redeem their OP units and receive, at Host Inc.’s election, shares of Host Inc. common stock will be able to sell those shares freely. As of December 31, 2023, there are approximately 9.5 million Host L.P.
A delay in receiving these approvals could affect adversely the returns we expect to receive. • Any new construction involves the possibility of construction delays and cost overruns that may increase project costs. • Defects in design or construction may result in delays and additional costs to remedy the defect or require a portion of a hotel to be closed during the period required to remedy the defect. • We may not be able to meet the loan covenants in any indebtedness obtained to fund the new development, creating default risks. • Risks related to change in economic and market conditions between development commencement and hotel stabilization.
A delay in receiving these approvals could affect adversely the returns we expect to receive. 21 Table of Contents • Any new construction involves the possibility of construction delays and cost overruns that may increase project costs, including increased costs due to shortages of supplies as a result of supply chain disruptions. • Defects in design or construction may result in delays and additional costs to remedy the defect or require a portion of a hotel to be closed during the period required to remedy the defect. • We may not be able to meet the loan covenants in any indebtedness obtained to fund the new development, creating default risks. • Risks related to change in economic and market conditions between development commencement and property stabilization.
We are still evaluating the property and business interruption impact, including related insurance coverage, to our hotels caused by Hurricane Ian in September 2022, as further discussed in "Item 8. Financial Statements and Supplementary Data – Note 17.
We are still evaluating the business interruption impact, including related insurance coverage, to our Florida hotels caused by Hurricane Ian in September 2022, as well as to our Maui hotels caused by the August 2023 wildfires, as further discussed in "Item 8. Financial Statements and Supplementary Data – Note 17.
An economic downturn, an increase in hotel supply in these cities and markets, a natural disaster, a terrorist attack or similar disaster in any one of these cities and markets likely would cause a decline in hotel demand and adversely affect occupancy rates, the financial performance of our hotels in these cities and markets and our overall results of operations.
An economic downturn, an increase in hotel supply in these cities and markets, natural disasters, weather events, terrorist attacks, health epidemics, or similar events in any one of these cities and markets likely would cause a decline in hotel demand and adversely affect occupancy rates, the financial performance of our hotels in these cities and markets and our overall results of operations.
There can be no assurance that the security measures we, our managers or third party providers have taken to protect systems and information will detect or prevent failures, inadequacies or interruptions in system services or that system security will not be breached through physical or electronic break-ins, computer viruses, and attacks by hackers.
There can be no assurance that the security measures we, our managers or third-party providers have taken to protect systems and information will be fully implemented, complied with or effective in detecting or preventing failures, inadequacies or interruptions in system services or that system security will not be breached through physical or electronic break-ins, computer viruses, and attacks by hackers or insiders.
Any compromise of our managers’ networks could result in a disruption to our managers’ operations, such as the disruption in fulfilling guest reservations, delayed bookings or sales, or lost guest reservations.
Any compromise of our managers’ or their critical third-party networks could result in a disruption to our managers’ operations, such as the disruption in fulfilling guest reservations, delayed bookings or sales, lost guest reservations, or compromises to information.
Our bylaws contain a provision exempting us from the control share provisions of the MGCL. There can be no assurance that this bylaw provision exempting us from the control share provisions will not be amended or eliminated at any time in the future. • Certain charter amendments.
Host Inc. is subject to the Maryland business combination statute. Our bylaws contain a provision exempting us from the control share provisions of the MGCL. There can be no assurance that this bylaw provision exempting us from the control share provisions will not be amended or eliminated at any time in the future. • Certain charter amendments.
However, we remain subject to many of the costs and risks generally associated with the hotel labor force, particularly at those hotels with unionized labor. From time to time, hotel operations may be disrupted because of strikes, lockouts, public demonstrations or other negative actions and publicity. In 2023, collective bargaining agreements will expire at hotels in New Jersey and Chicago.
However, we remain subject to many of the costs and risks generally associated with the hotel labor force, particularly at those hotels with unionized labor. From time to time, hotel operations may be disrupted because of strikes, lockouts, public demonstrations or other negative actions and publicity.
In addition, the operations of our foreign hotels are subject to a variety of United States and international laws and regulations, including the United States Foreign Corrupt Practices Act and other anti-corruption laws, but we cannot assure that we will continue to be found to be operating in compliance with, or be able to detect violations of, any such laws or regulations. 30 Litigation judgments or settlements could have a significant adverse effect on our financial condition.
In addition, the operations of our foreign hotels are subject to a variety of United States and international laws and regulations, including the United States Foreign Corrupt Practices Act and other anti-corruption laws, but we cannot assure that we will continue to be found to be operating in compliance with, or be able to detect violations of, any such laws or regulations.
These policies offer coverage features and insured limits that we believe are customary for similar types of properties. Generally, our “all-risk” property policies provide coverage that is available on a per-occurrence basis and that, for each occurrence, has an overall limit, as well as various sub-limits, on the amount of insurance proceeds we can receive.
Generally, our “all-risk” property policies provide coverage that is available on a per-occurrence basis and that, for each occurrence, has an overall limit, as well as various sub-limits, on the amount of insurance proceeds we can receive.
A C corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of its stock or securities automatically will be treated as a TRS.
A C corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of its stock or securities automatically will be treated as a TRS. No more than 20% of the total value of a REIT’s assets may consist of stock or securities of one or more TRS.
Item 1A. Ri sk Factors For an enterprise as large and complex as we are, a wide range of factors could materially affect future results and performance. The statements in this section describe the major risks to our business and should be considered carefully.
Item 1A. Risk Factors For an enterprise as large and complex as we are, a wide range of factors could materially affect future results and performance. The statements in this section describe the major risks to our business and should be considered carefully. In addition, these statements constitute our cautionary statements under the Private Securities Litigation Reform Act of 1995.
In addition, the U.S. economy is currently experiencing high rates of inflation, which has increased our operating expenses due to higher wages and costs. Moreover, our interest expense has increased due to higher interest rates on our variable rate debt.
In addition, the U.S. economy experienced high rates of inflation from 2021 to 2023, which has increased our operating expenses due to higher wages and costs, and rates of inflation may remain elevated in the future. Moreover, our interest expense has increased due to higher interest rates on our variable rate debt.
As of December 31, 2022, we and our subsidiaries had total indebtedness of approximately $4.2 billion.
We have significant indebtedness and may incur additional indebtedness. As of December 31, 2023, we and our subsidiaries had total indebtedness of approximately $4.2 billion.
Those negotiations potentially could result in disruptions in operations and additional costs. We also may incur increased legal costs and indirect labor costs because of disputes involving our third-party managers and their labor force.
In 2024, collective bargaining agreements will expire at hotels in Seattle, San Francisco and Washington, D.C. Those negotiations potentially could result in disruptions in operations and additional costs. We also may incur increased legal costs and indirect labor costs because of disputes involving our third-party managers and their labor force.
We cannot make any assurances that any of these sources of funds will be available to us or, if available, will be on terms that we would find acceptable or in amounts sufficient to meet our obligations or fulfill our business plan.
We cannot make any assurances that any of these sources of funds will be available to us or, if available, will be on terms that we would find acceptable or in amounts sufficient to meet our obligations or fulfill our business plan. 20 Table of Contents The terms of our indebtedness place restrictions on us and on our subsidiaries, and these restrictions reduce our operational flexibility and create default risks.
Our ability to access external capital could be hampered by several factors, many of which are outside of our control, including: • price volatility, dislocations and liquidity disruptions in the U.S. and global equity and credit markets; • changes in market perception of our growth potential, including rating agency downgrades by Moody’s Investors Service, Standard & Poor’s Ratings Services or Fitch Ratings; if our credit ratings were to be downgraded, our access to capital and the cost of debt financing could be further negatively impacted, particularly if we were downgraded to below an investment grade rating; • decreases in our current or estimated future earnings or decreases or fluctuations in the market price of the common stock of Host Inc.; • increases in interest rates; and • the terms of our existing indebtedness, which currently restrict our incurrence of additional debt while we are below required covenant levels. 20 The occurrence of any of the above factors, individually or in combination, could prevent us from being able to obtain the external capital we require on terms that are acceptable to us, or at all, which could have a material adverse effect on (i) our ability to finance our future growth and acquire hotels, (ii) our ability to meet our anticipated requirements for working capital, debt service and capital expenditures, and (iii) our results of operations and financial condition.
Our ability to access external capital could be hampered by several factors, many of which are outside of our control, including: • price volatility, dislocations and liquidity disruptions in the U.S. and global equity and credit markets; • changes in market perception of our growth potential, including rating agency downgrades by Moody’s Investors Service, Standard & Poor’s Ratings Services or Fitch Ratings; if our credit ratings were to be downgraded, our access to capital and the cost of debt financing could be further negatively impacted, particularly if we were downgraded to below an investment grade rating; • decreases in our current or estimated future earnings or decreases or fluctuations in the market price of the common stock of Host Inc.; • increases in interest rates; and • the terms of our existing indebtedness, which would restrict our incurrence of additional debt if we were to fall below required covenant levels.
We are involved in various legal proceedings in the ordinary course of business and are defending these claims vigorously; however, no assurances can be given as to the outcome of any pending legal proceedings.
Litigation judgments or settlements could have a significant adverse effect on our financial condition. We are involved in various legal proceedings in the ordinary course of business and are defending these claims vigorously; however, no assurances can be given as to the outcome of any pending legal proceedings.
We also may sell interests in existing hotels or existing entities to a third-party as part of forming a joint venture with the third-party. Investments in joint ventures may involve risks not present were a third-party not involved, including the possibility that partners or co-venturers might become 24 bankrupt or fail to fund their share of required capital contributions.
Investments in joint ventures may involve 23 Table of Contents risks not present were a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions. Co-venturers may control or share control over the operations of a joint venture.
The terms of our indebtedness place restrictions on us and on our subsidiaries and these restrictions reduce our operational flexibility and create default risks. We are, and may in the future become, party to agreements and instruments that place restrictions on us and on our subsidiaries.
We are, and may in the future become, party to agreements and instruments that place restrictions on us and on our subsidiaries.
New U.S. privacy and security laws, such as the California Consumer Privacy Act and similar laws being enacted in other states, are introducing significant privacy rights and, in the California Consumer Privacy Act's case, a private right of action for certain types of data breaches.
Evolving U.S. privacy and security laws, such as the California Consumer Privacy Act and similar laws being enacted or already in force in other states, are imposing significant requirements on companies and, in the California Consumer Privacy Act's case, providing a private right of action with statutory damages available to plaintiffs for certain types of data breaches.
The performance of the lodging industry traditionally has been affected by the strength of the general economy and, specifically, growth in gross domestic product. Because lodging industry demand typically follows the general economy, the lodging industry is highly cyclical, which contributes to potentially large fluctuations in our financial condition and our results of operations.
Because lodging industry demand typically follows the general economy, the lodging industry is highly cyclical, which contributes to potentially large fluctuations in our financial 17 Table of Contents condition and our results of operations.
It is possible that the amount of gain and/or the tax liability related thereto that the limited partner recognizes and pays could exceed the value of the common stock or cash received from the redemption of its OP units.
It is possible that the amount of gain and/or the tax liability related thereto that the limited partner recognizes and pays could exceed the value of the common stock or cash received from the redemption of its OP units. 29 Table of Contents General Risk Factors Shares of Host Inc.’s common stock that are or become available for sale could affect the share price of Host Inc.’s common stock.
A majority of our hotels in Florida were affected by Hurricane Ian, which made landfall on September 28, 2022, with the most significant damage occurring at The Ritz-Carlton, Naples and the 26 Hyatt Regency Coconut Point Resort and Spa. While the Hyatt Regency Coconut Point Resort and Spa has since re-opened, the Ritz Carlton, Naples remains closed.
For example, lodging demand in Maui, one of our largest markets by revenues, was significantly impacted by wildfires in 2023, and a majority of our hotels in Florida were affected by Hurricane Ian, which made landfall on September 28, 2022, with the most significant damage occurring at The Ritz-Carlton, Naples and the Hyatt Regency Coconut Point Resort and Spa.
Similarly, decisions with respect to the repositioning of a hotel, such as the outsourcing of food and beverage outlets, also may require the manager’s consent. 23 The hotels managed by Marriott International account for most of our revenues and operating income. Adverse developments in Marriott’s business and affairs or financial condition could have a material adverse effect on us.
Our ability to finance or sell our hotels, depending upon the structure of the transactions, may require the manager’s consent. Similarly, decisions with respect to the repositioning of a hotel, such as the outsourcing of food and beverage outlets, also may require the manager’s consent. The hotels managed by Marriott International account for most of our revenues and operating income.
These information networks and systems have been and continue to be vulnerable to threats such as system, network or internet failures; computer hacking or business disruption (e.g., due to ransomware); cyber-terrorism; viruses, worms or other malicious software programs; social engineering (e.g., phishing); and employee error, negligence, malfeasance or fraud.
These information networks and systems are vulnerable to numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of systems and information such as system, network or internet failures; computer hacking or operational disruption (e.g., due to ransomware); cyber-terrorism; viruses, worms or other malicious software programs; social engineering (e.g., phishing); employee error, negligence, malfeasance or fraud; and misconfigurations, "bugs" or other vulnerabilities in software and hardware.
This is particularly so because cyberattack methodologies change frequently or are often not recognized until launched. We, our managers and third-party providers may be unable to identify, investigate or remediate cyber events or incidents because attackers are increasingly using techniques and tools designed to avoid detection, to circumvent security controls, and to remove or obfuscate forensic evidence.
We, our managers and third-party providers may be unable to identify, investigate or remediate cyber events or incidents because attackers are increasingly using sophisticated techniques and tools (including artificial intelligence and machine learning) that can avoid detection, circumvent security controls, and even remove or obfuscate forensic evidence.
Co-venturers may control or share control over the operations of a joint venture. Actions by a co-venturer also could subject the hotels to additional risks because our co-venturer might have economic or business interests or goals that are inconsistent with our interests or goals.
Actions by a co-venturer also could subject the hotels to additional risks because our co-venturer might have economic or business interests or goals that are inconsistent with our interests or goals. Disputes between us and our partners or co-venturers may result in litigation that would increase our expenses and may negatively impact hotel operations.
A large proportion of our hotels are located in a limited number of large urban cities and, accordingly, we could be disproportionately harmed by adverse changes to these markets, a natural disaster or the threat of a terrorist attack.
Moreover, we may not necessarily realize a significant, or any, improvement in the performance of the hotels at which we make these investments. A large proportion of our hotels are located in a limited number of large urban cities and, accordingly, we could be disproportionately harmed by adverse changes to these markets or events impacting these markets.
Disputes between us and our partners or co-venturers may result in litigation that would increase our expenses and may negatively impact hotel operations. Some potential losses are not covered by insurance. We carry comprehensive insurance coverage for property, business interruption, terrorism and other risks with respect to all our hotels and other properties.
Some potential losses are not covered by insurance. We carry comprehensive insurance coverage for property, business interruption, terrorism, and other risks with respect to all our hotels and other properties. We also carry, or in certain instances cause our hotel managers to carry, general liability insurance with respect to all our hotels and other properties.
We may acquire or develop hotels in joint ventures with third parties that could result in conflicts. We have made investments in joint ventures and are exploring further investment or development opportunities. We may, from time to time, invest as a co-venturer in other entities owning hotels instead of purchasing them directly.
We may acquire or develop hotels in joint ventures with third parties that could result in conflicts. We have made investments in joint ventures, such as our 2022 joint venture with Noble Investment Group, LLC, and are exploring further investment or development opportunities.
The size of our TRS is limited and our transactions with our TRS will cause us to be subject to a 100% excise tax on certain income or deductions if such transactions are not conducted on arm’s-length terms.
Although we monitor ownership of our shares by our hotel managers and their owners, and certain provisions of our charter are designed to prevent ownership of our shares in violation of these rules, there can be no assurance that these ownership limits will not be exceeded. 28 Table of Contents The size of our TRS is limited and our transactions with our TRS will cause us to be subject to a 100% excise tax on certain income or deductions if such transactions are not conducted on arm’s-length terms.
From time to time, we have had, and continue to have, disputes with the managers of our hotels over their performance and compliance with the terms of our management agreements. If we are unable to reach satisfactory results through discussions and negotiations, we may choose to litigate the dispute or submit the matter to third-party dispute resolution.
From time to time, we have had, and continue to have, disputes with the managers of our hotels over their performance and compliance with the terms of our management agreements.
There are inherent risks with investments in real estate, including their relative illiquidity. Investments in real estate are inherently illiquid and generally cannot be sold quickly.
Internet travel intermediaries may also target group and convention business, which could divert such business and materially adversely affect our revenues and profitability. There are inherent risks with investments in real estate, including their relative illiquidity. Investments in real estate are inherently illiquid and generally cannot be sold quickly.
As a result, we could become subject to significant losses and/or repair costs that may or may not be fully covered by insurance.
Over time, our coastal markets also are expected to continue to experience increases in storm intensity and rising sea levels causing damage to our hotels. As a result, we could become subject to significant losses and/or repair costs that may or may not be fully covered by insurance.
Moreover, the current inflationary environment can increase the costs of hotel renovations and the purchasing power of our cash resources can decline, which can have an adverse impact on our business or financial results.
Moreover, an inflationary environment can increase the costs of hotel renovations and the purchasing power of our cash resources can decline, which can have an adverse impact on our business or financial results. 18 Table of Contents We cannot assure you that adverse changes in the general economy or other circumstances that affect the lodging industry will not have an adverse effect on the hotel revenues or earnings at our hotels.
We cannot assure you that adverse changes in the general economy or other circumstances that affect the lodging industry will not have an adverse effect on the hotel revenues or earnings at our hotels. Our efforts to mitigate the risks associated with these adverse changes may not be successful and our business and growth could be adversely affected.
Our efforts to mitigate the risks associated with these adverse changes may not be successful and our business and growth could be adversely affected.
We also carry, or in certain instances cause our hotel managers to carry, general liability insurance with respect to all our hotels and other properties. Certain coverages related to hotel managers’ employer status, such as worker's compensation, are insured under the hotel manager’s policies.
Certain coverages related to hotel managers’ employer status, such as worker's compensation, are insured under the hotel manager’s policies. These policies offer coverage features and insured limits that we believe are customary for similar types of properties.
For taxable years beginning after December 31, 2017, no more than 20% of the total value of a REIT’s assets may consist of stock or securities of one or more TRS. Our TRS will pay federal corporate income tax and applicable state and local corporate income tax and, if applicable, foreign corporate income tax on its taxable income.
Our TRS will pay federal corporate income tax and applicable state and local corporate income tax and, if applicable, foreign corporate income tax on its taxable income.
Approximately 60% of our hotels (as measured by 2022 revenues) are managed or franchised by Marriott International.
Adverse developments in Marriott’s business and affairs or financial condition could have a material adverse effect on us. Approximately 62% of our hotels (as measured by 2023 revenues) are managed or franchised by Marriott International.
In addition, these statements constitute our cautionary statements under the Private Securities Litigation Reform Act of 1995. Financial Risks and Risks of Operation Our revenues and the value of our hotels are subject to conditions affecting the lodging industry.
Financial Risks and Risks of Operation Our revenues and the value of our hotels are subject to conditions affecting the lodging industry. The performance of the lodging industry traditionally has been affected by the strength of the general economy and, specifically, growth in gross domestic product.
Removed
The continuing effects from the COVID-19 pandemic may materially and adversely impact our business, financial condition, results of operations, liquidity and cash flows. The COVID-19 pandemic significantly adversely impacted U.S. and global economic activity, resulted in a global recession in 2020, and contributed to significant volatility in financial markets.
Added
The occurrence of any of the above factors, individually or in combination, could prevent us from being able to obtain the external capital we require on terms that are acceptable to us, or at all, which could have a material adverse effect on (i) our ability to finance our future growth and acquire hotels, (ii) our ability to meet our anticipated requirements for working capital, debt service and capital expenditures, and (iii) our results of operations and financial condition.
Removed
While the initial restrictive measures put in place in jurisdictions where we own hotels have been lifted and operations have returned close to pre-pandemic levels, existing or future COVID-19 variants may still have a material adverse effect on operations and future bookings.
Added
If we are unable to reach a satisfactory resolution to these disputes through discussions and negotiations, we may choose to litigate the dispute or submit the matter to third-party dispute resolution.
Removed
The rapid development and fluidity of the COVID-19 pandemic makes it extremely difficult to assess the potential future adverse economic impact on our business, financial condition, results of operations, liquidity and cash flows.
Added
For example, lodging demand in Maui, one of our largest markets by revenues, was significantly impacted by wildfires in 2023, and the effect on lodging demand is expected to continue in 2024.
Removed
Also, although internet travel intermediaries traditionally have competed to attract transient business rather than group and convention business, in recent years they have expanded their business to include marketing to large group and convention business. If they are successful, it could divert group and convention business and materially adversely affect our revenues and profitability.
Added
We may, from time to time, invest as a co-venturer in other entities owning hotels instead of purchasing them directly. We also may sell interests in existing hotels or existing entities to a third party as part of forming a joint venture with the third party.
Removed
We significantly increased our indebtedness due to the pandemic and utilized the revolver portion of our credit facility in order to increase our cash position and to preserve financial flexibility in light of the impact resulting from COVID-19, which borrowings were repaid in 2021 and 2022.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed3 unchanged
Biggest changeWe believe, based on currently available information, that the results of such proceedings, in the aggregate, will not have a material adverse effect on our financial condition, but might be material to our operating results for any period, depending, in part, upon the operating results for such period.
Biggest changeWe believe, based on currently available information, 32 Table of Contents that the results of such proceedings, in the aggregate, will not have a material adverse effect on our financial condition, but might be material to our operating results for any period, depending, in part, upon the operating results for such period.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

9 edited+0 added−0 removed3 unchanged
Biggest changeHe became treasurer in February 2010. In 2015, he was named managing director of investment activities for the east coast and in 2017 he was named executive vice president, chief investment officer. 32 PART II
Biggest changeTyrrell joined our finance department in 2005. He became treasurer in February 2010. In 2015, he was named managing director of investment activities for the east coast, and in 2017 he was named executive vice president, chief investment officer. 34 Table of Contents PART II
Ottinger Senior Vice President, Corporate Controller 46 Joseph C. Ottinger joined our company in August 1999, where he has held a series of financial reporting positions with increasing responsibilities. In 2012, he was promoted to vice president, financial reporting and became assistant controller in 2017. On January 1, 2021, Mr. Ottinger began serving as senior vice president and corporate controller.
Ottinger Senior Vice President, Corporate Controller 47 Joseph C. Ottinger joined our company in August 1999, where he has held a series of financial reporting positions with increasing responsibilities. In 2012, he was promoted to vice president, financial reporting and became assistant controller in 2017. On January 1, 2021, Mr. Ottinger began serving as senior vice president, corporate controller.
Aslaksen spent 14 years with General Dynamics Corporation, where she most recently served as staff vice president, deputy general counsel and assistant secretary. Michael E. Lentz Executive Vice President Development, Design & Construction 59 Michael E. Lentz joined our company in March 2016 as managing director, global development, design and construction.
Aslaksen spent 14 years with General Dynamics Corporation, where she most recently served as staff vice president, deputy general counsel and assistant secretary. Michael E. Lentz Executive Vice President Development, Design & Construction 60 Michael E. Lentz joined our company in March 2016 as managing director, global development, design and construction.
Name and Title Age Business Experience Prior to Becoming an Executive Officer of Host Inc. Richard E. Marriott Chairman of the Board 84 Richard E. Marriott joined our company in 1965 and has served in various executive capacities. In 1979, Mr. Marriott was elected to the board of directors.
Name and Title Age Business Experience Prior to Becoming an Executive Officer of Host Inc. Richard E. Marriott Chairman of the Board 85 Richard E. Marriott joined our company in 1965 and has served in various executive capacities. In 1979, Mr. Marriott was elected to the board of directors.
In 1984, he was elected executive vice president and in 1986, he was elected vice chairman of the board of directors. In 1993, Mr. Marriott was elected chairman of the board. James F. Risoleo President, Chief Executive Officer and Director 67 James F. Risoleo joined our company in 1996 as senior vice president for acquisitions.
In 1984, he was elected executive vice president, and in 1986, he was elected vice chairman of the board of directors. In 1993, Mr. Marriott was elected chairman of the board. James F. Risoleo President, Chief Executive Officer and Director 68 James F. Risoleo joined our company in 1996 as senior vice president for acquisitions.
Sourav Ghosh Executive Vice President and Chief Financial Officer 46 Sourav Ghosh joined our company in 2009 as vice president of business intelligence & portfolio strategy. In 2017, he became the head of strategy & analytics and in 2020 he became chief financial officer and treasurer. Julie P. Aslaksen Executive Vice President, General Counsel and Secretary 48 Julie P.
Sourav Ghosh Executive Vice President and Chief Financial Officer 47 Sourav Ghosh joined our company in 2009 as vice president of business intelligence & portfolio strategy. In 2017, he became the head of strategy & analytics and in 2020 he became chief financial officer and treasurer. Julie P. Aslaksen Executive Vice President, General Counsel and Secretary 49 Julie P.
Mari Sifo Executive Vice President, Chief Human Resources Officer 41 Mari Sifo joined our company as executive vice president, chief human resources officer in November 2022.
Mari Sifo Executive Vice President, Chief Human Resources Officer 42 Mari Sifo joined our company as executive vice president, chief human resources officer in November 2022.
Prior to joining our company, she was the chief human resource officer for SWM International from 2018 to 2022; senior director, human resources at CP Kelco from 2015 to 2018; and human resources, director at Mondelez International from 2014 to 2015. Nathan S. Tyrrell Executive Vice President, Chief Investment Officer 50 Nathan S. Tyrrell joined our finance department in 2005.
Prior to joining our company, she was the chief human resources and communications officer for SWM International from 2018 to 2022; senior director, human resources at CP Kelco from 2015 to 2018; and human resources, director at Mondelez International from 2014 to 2015. Nathan S. Tyrrell Executive Vice President, Chief Investment Officer 51 Nathan S.
Item 4. Mine Saf ety Disclosures None. 31 INFORMATION ABOUT OUR EXECUTIVE OFFICERS In the following table, we set forth certain information regarding those persons currently serving as executive officers of Host Inc. as of February 17, 2023. As a partnership, Host L.P. does not have executive officers.
Item 4. Mine Safety Disclosures None. 33 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS In the following table, we set forth certain information regarding those persons currently serving as executive officers of Host Inc. as of February 23, 2024. As a partnership, Host L.P. does not have executive officers.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−1 removed5 unchanged
Biggest change(or any of their respective subsidiaries) under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. Fourth Quarter 2022 Host Inc.
Biggest change(or any of their respective subsidiaries) under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. Fourth Quarter 2023 Host Inc. Purchases of Equity Securities On August 3, 2022, the Board of Directors authorized a $1 billion share repurchase program.
The common stock may be purchased from time to time depending upon market conditions, and repurchases may be made in the open market or through private transactions or by other means, including principal transactions with various financial institutions, accelerated share repurchases, forwards, options and similar transactions, and 33 through one or more trading plans designed to comply with Rule 10b5-1 under the Securities Act of 1934, as amended.
The common stock may be purchased from time to time depending upon market conditions, and repurchases may be made in the open market 35 Table of Contents or through private transactions or by other means, including principal transactions with various financial institutions, accelerated share repurchases, forwards, options and similar transactions, and through one or more trading plans designed to comply with Rule 10b5-1 under the Securities Act of 1934, as amended.
However, because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders, we believe that there are considerably more beneficial owners of our common stock than record holders. As of February 17, 2023, there were 1,094 limited partners of Host L.P. (in addition to Host Inc.).
However, because many of the shares of our common stock are held by brokers and other institutions on behalf of stockholders, we believe that there are considerably more beneficial owners of our common stock than record holders. As of February 23, 2024, there were 1,051 limited partners of Host L.P. (in addition to Host Inc.).
Item 5. Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities for Host Inc. Host Inc.’s common stock is listed on the Nasdaq Stock Market and trades under the symbol “HST.” As of February 17, 2023, there were 15,832 holders of record of Host Inc.’s common stock.
Item 5. Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities for Host Inc. Host Inc.’s common stock is listed on the Nasdaq Stock Market and trades under the symbol “HST.” As of February 23, 2024, there were 15,190 holders of record of Host Inc.’s common stock.
Common Shares Purchased Average Price Paid per Common Share* Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Common Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2022 – October 31, 2022 — $ — — $ 1,000 November 1, 2022 – November 30, 2022 — — — 1,000 December 1, 2022 – December 31, 2022 1,675,421 15.93 1,675,421 973 Total 1,675,421 $ 15.93 1,675,421 $ 973 ___________ * Prices shown are exclusive of commissions paid.
Common Shares Purchased Average Price Paid per Common Share* Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Common Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2023 – October 31, 2023 — $ — — $ 823 November 1, 2023 – November 30, 2023 1,903,152 16.50 1,903,152 792 December 1, 2023 – December 31, 2023 — — — 792 Total 1,903,152 $ 16.50 1,903,152 $ 792 ___________ * Prices shown are exclusive of commissions paid.
Common OP Units Purchased Average Price Paid per Common OP Unit Total Number of OP Units Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of OP Units that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2022 – October 31, 2022 65,781 * 1.021494 shares of Host Hotels & Resorts, Inc. common stock — — November 1, 2022 – November 30, 2022 24,186 * 1.021494 shares of Host Hotels & Resorts, Inc. common stock — — December 1, 2022 – December 31, 2022 1,767,450 ** 1.021494 shares of Host Hotels & Resorts, Inc. common stock — — Total 1,857,417 — — ___________ * Reflects common OP units offered for redemption by limited partners in exchange for shares of Host Inc.’s common stock. ** Reflects (i) 1,711,432 common OP units repurchased to fund the repurchase by Host Inc. of 1,675,421 shares of common stock as part of its publicly announced share repurchase program, and (ii) 56,018 common OP units redeemed by holders in exchange for shares of Host Inc.’s common stock.
Common OP Units Purchased Average Price Paid per Common OP Unit Total Number of OP Units Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of OP Units that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2023 – October 31, 2023 14,775 * 1.021494 shares of Host Hotels & Resorts, Inc. common stock — — November 1, 2023 – November 30, 2023 1,864,814 ** 1.021494 shares of Host Hotels & Resorts, Inc. common stock — — December 1, 2023 – December 31, 2023 22,717 * 1.021494 shares of Host Hotels & Resorts, Inc. common stock — — Total 1,902,306 — — ___________ * Reflects common OP units offered for redemption by limited partners in exchange for shares of Host Inc.’s common stock. ** Reflects (i) 1,863,106 common OP units repurchased to fund the repurchase by Host Inc. of 1,903,152 shares of common stock as part of its publicly announced share repurchase program, and (ii) 1,708 common OP units redeemed by holders in exchange for shares of Host Inc.’s common stock.
The number of holders of record of Host L.P.’s common OP units on February 17, 2023 was 1,094. The number of outstanding common OP units as of February 17, 2023 was 708,445,021, of which 698,474,425 were owned by Host Inc. Fourth Quarter 2022 Host L.P. Purchases of Equity Securities Period Total Number of Host L.P.
The number of holders of record of Host L.P.’s common OP units on February 23, 2024 was 1,051. The number of outstanding common OP units as of February 23, 2024 was 698,324,144, of which 688,824,612 were owned by Host Inc. Fourth Quarter 2023 Host L.P. Purchases of Equity Securities Period Total Number of Host L.P.
Comparison of Five-Year Cumulative Stockholder Returns 2017 – 2022 2017 2018 2019 2020 2021 2022 Host Hotels & Resorts, Inc. $ 100.00 $ 87.80 $ 102.36 $ 82.14 $ 97.63 $ 93.13 NAREIT Lodging Index $ 100.00 $ 87.18 $ 100.82 $ 77.03 $ 91.07 $ 77.13 S&P 500 Index $ 100.00 $ 95.62 $ 125.72 $ 148.85 $ 191.58 $ 156.88 This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing of Host Inc. or Host L.P.
Comparison of Five-Year Cumulative Stockholder Returns 2018 – 2023 2018 2019 2020 2021 2022 2023 Host Hotels & Resorts, Inc. $ 100.00 $ 116.57 $ 93.55 $ 111.20 $ 106.06 $ 135.27 NAREIT Lodging Index $ 100.00 $ 115.65 $ 88.36 $ 104.46 $ 88.47 $ 109.63 S&P 500 Index $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing of Host Inc. or Host L.P.
Removed
Purchases of Equity Securities On August 3, 2022, the Board of Directors authorized an increase in the amount authorized under our share repurchase program from the existing $371 million remaining available to $1 billion.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

177 edited+63 added−78 removed103 unchanged
Biggest change(CBD) 5 3,238 259.57 61.7 160.13 230.71 245.82 81.5 200.27 288.52 (20.0 ) (20.0 ) Chicago 3 1,562 240.66 65.1 156.57 217.31 217.88 78.0 169.88 242.18 (7.8 ) (10.3 ) San Francisco/ San Jose 6 4,162 230.88 63.0 145.42 211.87 279.18 82.4 230.14 321.91 (36.8 ) (34.2 ) Northern Virginia 2 916 219.41 65.6 143.96 227.21 221.33 75.3 166.61 276.13 (13.6 ) (17.7 ) Seattle 2 1,315 229.92 62.4 143.52 188.58 225.12 82.4 185.50 250.12 (22.6 ) (24.6 ) Boston 2 1,495 244.35 58.5 142.90 193.67 239.93 83.1 199.32 288.47 (28.3 ) (32.9 ) New Orleans 1 1,333 200.59 66.2 132.74 198.18 187.65 79.0 148.30 216.97 (10.5 ) (8.7 ) San Antonio 2 1,512 199.52 66.3 132.30 206.09 185.33 69.7 129.14 189.71 2.4 8.6 Atlanta 2 810 181.81 72.2 131.35 205.87 184.71 82.7 152.76 251.41 (14.0 ) (18.1 ) Houston 5 1,942 182.97 63.8 116.73 163.85 177.93 72.0 128.14 185.48 (8.9 ) (11.7 ) Denver 3 1,340 182.33 61.9 112.85 163.64 173.47 72.9 126.48 190.45 (10.8 ) (14.1 ) Other 10 3,061 320.85 60.7 194.89 294.37 226.14 74.6 168.70 262.68 15.5 12.1 Domestic 73 40,710 301.54 66.4 200.26 327.32 261.48 78.5 205.38 335.37 (2.5 ) (2.4 ) International 5 1,499 162.33 55.1 89.51 130.24 153.01 70.9 108.44 160.74 (17.5 ) (19.0 ) All Locations 78 42,209 297.42 66.0 196.33 320.39 257.96 78.3 201.91 329.17 (2.8 ) (2.7 ) Results by Location Compared to 2021 - actual based on ownership period (1) As of December 31, 2022 2021 Year ended December 31, 2022 Year ended December 31, 2021 Location No. of Properties No. of Properties Average Room Rate Average Occupancy Percentage RevPAR Total RevPAR Average Room Rate Average Occupancy Percentage RevPAR Total RevPAR Percent Change in RevPAR Percent Change in Total RevPAR Maui/Oahu 4 4 $ 560.86 74.7 % $ 418.70 $ 646.24 $ 486.22 69.0 % $ 335.71 $ 509.02 24.7 % 27.0 % Miami 2 3 585.71 62.7 367.36 607.26 489.24 59.1 289.20 449.18 27.0 35.2 Jacksonville 1 1 527.16 65.3 344.37 749.99 494.80 59.9 296.61 609.54 16.1 23.0 Orlando 2 2 410.76 63.8 262.20 508.78 361.22 30.5 110.24 205.66 137.9 147.4 Florida Gulf Coast 5 5 418.86 62.2 260.47 509.76 407.02 56.1 228.20 442.49 14.1 15.2 Phoenix 4 4 368.20 70.1 258.18 568.19 316.35 60.5 191.42 393.86 34.9 44.3 New York 2 3 317.20 67.9 215.38 305.31 220.05 36.9 81.23 108.52 165.1 181.3 Los Angeles/ Orange County 3 3 288.81 79.4 229.44 337.54 202.69 55.4 112.37 161.97 104.2 108.4 San Diego 3 3 272.28 74.6 203.24 371.28 222.93 49.1 109.43 180.41 85.7 105.8 Austin 2 2 271.65 69.5 188.91 324.19 200.48 61.9 124.02 183.98 52.3 76.2 Philadelphia 2 2 218.52 80.6 176.19 270.04 176.82 63.3 111.97 169.50 57.3 59.3 Washington, D.C.
Biggest change(CBD) 5 3,240 276.74 70.1 % 193.92 280.31 259.57 61.7 % 160.13 230.71 21.1 % 21.5 % Philadelphia 2 810 231.94 79.7 % 184.83 288.44 218.52 80.6 % 176.19 270.04 4.9 % 6.8 % Austin 2 767 269.26 65.7 % 176.88 311.25 271.65 69.5 % 188.91 324.19 (6.4 %) (4.0 %) Northern Virginia 2 916 243.70 70.4 % 171.48 268.97 219.41 65.6 % 143.96 227.21 19.1 % 18.4 % Chicago 3 1,562 243.59 68.9 % 167.80 238.73 240.66 65.1 % 156.57 217.31 7.2 % 9.9 % San Francisco/San Jose 6 4,162 251.98 66.4 % 167.25 244.44 230.88 63.0 % 145.42 211.87 15.0 % 15.4 % Seattle 2 1,315 239.33 66.8 % 159.81 218.64 229.92 62.4 % 143.52 188.58 11.4 % 15.9 % Atlanta 2 810 190.67 74.0 % 141.12 227.52 181.81 72.2 % 131.35 205.87 7.4 % 10.5 % Houston 5 1,942 201.17 69.4 % 139.51 195.30 182.97 63.8 % 116.73 163.85 19.5 % 19.2 % New Orleans 1 1,333 196.29 68.6 % 134.72 203.93 200.59 66.2 % 132.74 198.18 1.5 % 2.9 % San Antonio 2 1,512 215.77 61.4 % 132.55 212.13 199.52 66.3 % 132.30 206.09 0.2 % 2.9 % Denver 3 1,340 192.48 63.3 % 121.90 181.72 182.33 61.9 % 112.85 163.64 8.0 % 11.1 % Other 10 3,061 313.84 64.2 % 201.47 308.08 320.85 60.7 % 194.89 294.37 3.4 % 4.7 % Domestic 70 39,532 304.48 70.7 % 215.33 351.26 299.40 66.8 % 199.90 325.31 7.7 % 8.0 % International 5 1,499 186.14 62.4 % 116.16 168.42 162.33 55.1 % 89.51 130.24 29.8 % 29.3 % All Locations 75 41,031 $ 300.66 70.4 % $ 211.71 $ 344.63 $ 295.24 66.3 % $ 195.87 $ 318.25 8.1 % 8.3 % 48 Table of Contents Results by Location - actual, based on ownership period (1) As of December 31, 2023 2022 Year ended December 31, 2023 Year ended December 31, 2022 Location No. of Properties No. of Properties Average Room Rate Average Occupancy Percentage RevPAR Total RevPAR Average Room Rate Average Occupancy Percentage RevPAR Total RevPAR Percent Change in RevPAR Percent Change in Total RevPAR Maui/Oahu 4 4 $ 576.75 71.9 % $ 414.84 $ 612.98 $ 560.86 74.7 % $ 418.70 $ 646.24 (0.9 %) (5.1) % Miami 2 2 533.31 66.9 % 356.86 624.20 585.71 62.7 % 367.36 607.26 (2.9 %) 2.8 % Jacksonville 1 1 503.57 69.9 % 351.80 784.10 527.16 65.3 % 344.37 749.99 2.2 % 4.5 % New York 2 2 349.99 82.7 % 289.53 412.23 317.20 67.9 % 215.38 305.31 34.4 % 35.0 % Phoenix 3 4 397.16 71.7 % 284.75 628.10 368.20 70.1 % 258.18 568.19 10.3 % 10.5 % Florida Gulf Coast 5 5 388.97 60.6 % 235.74 497.91 418.86 62.2 % 260.47 509.76 (9.5 %) (2.3 %) Orlando 2 2 384.63 67.9 % 261.32 521.26 410.76 63.8 % 262.20 508.78 (0.3 %) 2.5 % Los Angeles/Orange County 3 3 300.29 81.7 % 245.49 360.91 288.81 79.4 % 229.44 337.54 7.0 % 6.9 % San Diego 3 3 282.20 78.4 % 221.29 414.34 272.28 74.6 % 203.24 371.28 8.9 % 11.6 % Boston 2 2 264.18 78.2 % 206.66 275.90 240.63 56.9 % 136.95 184.93 50.9 % 49.2 % Washington, D.C.
Base management fees are computed as a percentage of gross revenues. Incentive management fees generally are paid when operating profits exceed certain thresholds. 5 % 5 % ● Other property-level expenses . These expenses consist primarily of real and personal property taxes, ground rent, equipment rent and property insurance.
Base management fees are computed as a percentage of gross revenues. Incentive management fees generally are paid when operating profits exceed certain thresholds. 5 % • Other property-level expenses . These expenses consist primarily of real and personal property taxes, ground rent, equipment rent and property insurance.
We agreed to invest amounts in excess of the FF&E reserves required under our management agreements and, in exchange, Marriott has provided additional priority returns on the agreed upon investments and operating profit guarantees of $83 million, before reductions for incentive management fees, to offset expected business disruption.
We agreed to invest amounts in excess of the FF&E reserves required under our management agreements and, in exchange, Marriott has provided additional priority returns on the agreed upon investments and $83 million in operating profit guarantees, before reductions for incentive management fees, to offset expected business disruption.
Often, related to events that cause property damage and the closure of a hotel, we will collect business interruption insurance proceeds for the near-term loss of business. These proceeds are included in gain on property insurance and business interruption settlements on our consolidated statements of operations.
Often, related to events that cause property damage and the closure of a hotel, we will collect business interruption insurance proceeds for the near-term loss of business. These proceeds are included in gain on insurance settlements on our consolidated statements of operations.
We believe that including these items is not consistent with our ongoing operating performance. • Severance Expense – In certain circumstances, we will add back hotel-level severance expenses when we do not believe that such expenses are reflective of the ongoing operation of our properties.
We believe that including these items is not consistent with our ongoing operating performance. • Severance Expense – In certain circumstances, we will add back hotel-level severance expenses when we do not believe that such expenses are reflective of the ongoing operation of our properties.
Situations that would result in a severance add back include, but are not limited to: (i) costs incurred as part of a broad-based reconfiguration of the operating model with the specific hotel operator for a portfolio of hotels and (ii) costs incurred at a specific hotel due to a broad-based and significant reconfiguration of a hotel and/or its workforce.
Situations that would result in a severance add back include, but are not limited to: (i) costs incurred as part of a broad-based reconfiguration of the operating model with the specific hotel operator for a portfolio of hotels and (ii) costs incurred at a specific hotel due to a broad-based and significant reconfiguration of a hotel and/or its workforce.
We lease substantially all our properties to consolidated subsidiaries designated as TRS for U.S. federal income tax purposes. Taxable income or loss generated/incurred by the TRS primarily represents hotel-level operations 44 and the aggregate rent paid to Host L.P. by the TRS, on which we record an income tax provision or benefit.
We lease substantially all our properties to consolidated subsidiaries designated as TRS for U.S. federal income tax purposes. Taxable income or loss generated/incurred by the TRS primarily represents hotel-level operations and the aggregate rent paid to Host L.P. by the TRS, on which we record an income tax provision or benefit.
To facilitate a year-to-year comparison of our operations, we will present certain operating statistics (i.e., Total RevPAR, RevPAR, average daily rate and average occupancy) and operating results (revenues, expenses, hotel EBITDA and associated margins) for the periods included in our reports on a comparable hotel basis in order to enable our investors to better evaluate our operating performance.
To facilitate a year-to-year comparison of our operations, we present certain operating statistics (i.e., Total RevPAR, RevPAR, average daily rate and average occupancy) and operating results (revenues, expenses, hotel EBITDA and associated margins) for the periods included in our reports on a comparable hotel basis in order to enable our investors to better evaluate our operating performance.
We also have counter-party credit risk with respect to our outstanding notes receivable, although upon event of a default of the notes, we would seek to enforce our rights against the collateral in accordance with the terms of the loan agreement. Critical Accounting Estimates Our consolidated financial statements have been prepared in conformity with U.S.
We also have counter-party credit risk with respect to our outstanding note receivable, although upon event of a default of the notes, we would seek to enforce our rights against the collateral in accordance with the terms of the loan agreement. Critical Accounting Estimates Our consolidated financial statements have been prepared in conformity with U.S.
We eliminate from our hotel level operating results severance costs related to broad-based and significant property-level reconfiguration that is not considered to be within the normal course of business, as we believe this elimination provides useful supplemental information that is beneficial to an investor’s understanding of our ongoing operating performance.
We eliminate from our comparable hotel level operating results severance costs related to broad-based and significant property-level reconfiguration that is not considered to be within the normal course of business, as we believe this elimination provides useful supplemental information that is beneficial to an investor’s understanding of our ongoing operating performance.
Because of the elimination of corporate-level costs and expenses, gains or losses on disposition, certain severance expenses and depreciation and amortization expense, the hotel operating results we present do not represent our total revenues, expenses, operating profit or net income and should not be used to evaluate our performance as a whole.
Because of the elimination of corporate-level costs and expenses, gains or losses on disposition, certain severance expenses and depreciation and amortization expense, the comparable hotel operating results we present do not represent our total revenues, expenses, operating profit or net income and should not be used to evaluate our performance as a whole.
These expenses include labor and other costs associated with other ancillary revenues, such as parking, golf courses, spas, entertainment and other guest services, as well as labor and other costs associated with administrative departments, allocated brand costs, sales and marketing, repairs and minor maintenance and utility costs. 29 % 28 % ● Management fees .
These expenses include labor and other costs associated with other ancillary revenues, such as parking, golf courses, spas, entertainment and other guest services, as well as labor and other costs associated with administrative departments, allocated brand costs, sales and marketing, repairs and minor maintenance and utility costs. 29 % • Management fees .
The credit facility includes a sustainability pricing adjustment that can result in a change in the interest rate applicable to borrowings. The adjustment can result in an increase or decrease of the interest rate for revolving loans of up 55 to 4 basis points and an increase or decrease of the facility fee of up to 1 basis point.
The credit facility includes a sustainability pricing adjustment that can result in a change in the interest rate applicable to borrowings. The adjustment can result in an increase or decrease of the interest rate for revolving loans of up to 4 basis points and an increase or decrease of the facility fee of up to 1 basis point.
Host Inc. is a REIT and its only significant asset is the ownership of general and limited partner interests of Host L.P.; therefore, its financing and investing activities are conducted through Host L.P., 48 except for the issuance of its common and preferred stock.
Host Inc. is a REIT and its only significant asset is the ownership of general and limited partner interests of Host L.P.; therefore, its financing and investing activities are conducted through Host L.P., except for the issuance of its common and preferred stock.
Other property-level expenses consist of property taxes, which are highly dependent on local taxing authorities, and property and general liability insurance, and do not necessarily change based on changes in revenues at our hotels.
Other property-level expenses consist of property taxes, which are highly dependent on local jurisdiction taxing authorities, and property and general liability insurance, and do not necessarily change based on changes in revenues at our hotels.
Food & beverage revenues consist of revenues from group functions, which may include banquet revenues and audio and visual revenues, as well as outlet revenues from the restaurants and lounges at our hotels. 29 % 30 % ● Other revenues .
Food & beverage revenues consist of revenues from group functions, which may include banquet revenues and audio and visual revenues, as well as outlet revenues from the restaurants and lounges at our hotels. 30 % • Other revenues .
To mitigate some of these physical risks, we execute capital expenditure projects, including replacements and restorations of exterior walls, doors and windows, roofs, grounds, relocated/elevated critical equipment and distributed energy systems to further increase the resilience of our hotels. A portion of our capital expenditures for 2022 include these types of projects, which we expect to continue in future years.
To mitigate some of these physical risks, we execute capital expenditure projects, including replacements and restorations of exterior walls, doors and windows, roofs, grounds, relocated/elevated critical equipment and distributed energy systems to further increase the resilience of our hotels. A portion of our capital expenditures for 2023 include these types of projects, which we expect to continue in future years.
Overview Host Inc. operates as a self-managed and self-administered REIT that owns hotels and conducts operations through Host L.P., of which Host Inc. is the sole general partner and of which it holds approximately 99% of its common OP units as of December 31, 2022. The remainder of Host L.P.’s common OP units are owned by various unaffiliated limited partners.
Overview Host Inc. operates as a self-managed and self-administered REIT that owns hotels and conducts operations through Host L.P., of which Host Inc. is the sole general partner and of which it holds approximately 99% of its common OP units as of December 31, 2023. The remainder of Host L.P.’s common OP units are owned by various unaffiliated limited partners.
In the long term, renewal and replacement ("R&R") capital expenditures are designed to maintain the quality and competitiveness of our hotels and typically occur at intervals of seven to ten years. The projects are primarily funded through the FF&E reserves established at each hotel. Average annual R&R spend over the last five years has been $197 million.
In the long term, renewal and replacement ("R&R") capital expenditures are designed to maintain the quality and competitiveness of our hotels and typically occur at intervals of seven to ten years. The projects are primarily funded through the FF&E reserves established at each hotel. Average annual R&R spend over the last five years has been $232 million.
In addition, upon the occurrence of certain insolvency or bankruptcy related events of default, all amounts due under the credit facility automatically will become due and payable and the lenders’ commitments automatically will terminate. Mortgage Debt, Including Unconsolidated Joint Ventures. At December 31, 2022, we own one consolidated property that is encumbered by mortgage debt.
In addition, upon the occurrence of certain insolvency or bankruptcy related events of default, all amounts due under the credit facility automatically will become due and payable and the lenders’ commitments automatically will terminate. Mortgage Debt, Including Unconsolidated Joint Ventures. At December 31, 2023, we own one consolidated property that is encumbered by mortgage debt.
So long as Host L.P. maintains the required level of interest coverage and satisfies these and other conditions in the senior notes indenture, it may incur additional debt. As of December 31, 2022, we have met the minimum financial covenant levels under our senior notes indentures.
So long as Host L.P. maintains the required level of interest coverage and satisfies these and other conditions in the senior notes indenture, it may incur additional debt. As of December 31, 2023, we have met the minimum financial covenant levels under our senior notes indentures.
Many of these expenses are relatively inflexible and do not necessarily change based on changes in revenues at our hotels. 8 % 8 % ● Depreciation and amortization expense . This is a non-cash expense that changes primarily based on the acquisition and disposition of hotels and the amounts of historical capital expenditures.
Many of these expenses are relatively inflexible and do not necessarily change based on changes in revenues at our hotels. 9 % • Depreciation and amortization expense . This is a non-cash expense that changes primarily based on the acquisition and disposition of hotels and the amounts of historical capital expenditures.
All of our mortgage debt is recourse solely to specific assets, except in instances of fraud, misapplication of funds and other customary recourse provisions. As of December 31, 2022, our mortgage debt has an interest rate of 4.67% and matures in 2027, with principal and interest payments due monthly.
All of our mortgage debt is recourse solely to specific assets, except in instances of fraud, misapplication of funds and other customary recourse provisions. As of December 31, 2023, our mortgage debt has an interest rate of 4.67% and matures in 2027, with principal and interest payments due monthly.
For a detailed discussion of the critical accounting policy related to impairment testing on our property and equipment, which requires us to exercise our business judgment or make significant estimates, see “Item 8. Financial Statements and Supplementary Data – Note 1. Summary of Significant Accounting Policies”.
For a detailed discussion of the critical accounting policy related to impairment testing on our property and equipment, which requires us to exercise our business judgment or make significant estimates, see “Item 8. Financial Statements and Supplementary Data – Note 1.
We do not consider this adjustment to be reflective of our ongoing operating performance and, therefore, we excluded this item from Adjusted FFO. 61 The following table provides a reconciliation of the differences between our non-GAAP financial measures, NAREIT FFO and Adjusted FFO (separately and on a per diluted share basis), and net income (loss), the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable: Host Inc.
We do not consider this adjustment to be reflective of our ongoing operating performance and, therefore, we excluded this item from Adjusted FFO. 63 Table of Contents The following table provides a reconciliation of the differences between our non-GAAP financial measures, NAREIT FFO and Adjusted FFO (separately and on a per diluted share basis), and net income (loss), the financial measure calculated and presented in accordance with GAAP that we consider most directly comparable: Host Inc.
Additionally, hotels that we sell are excluded from the comparable hotel set once the transaction has closed or the hotel is classified as held-for-sale. The hotel business is capital-intensive and renovations are a regular part of the business. Generally, hotels under renovation remain comparable hotels.
Additionally, operating results of hotels that we sell are excluded from the comparable hotel set once the transaction has closed or the hotel is classified as held-for-sale. The hotel business is capital-intensive and renovations are a regular part of the business. Generally, hotels under renovation remain comparable hotels.
We define our comparable hotels as those that: (i) are owned or leased by us as of the reporting date and are not classified as held-for-sale; and (ii) have not sustained substantial property damage or business interruption, or undergone large-scale capital projects requiring closures lasting one month or longer (as further defined below) during the reporting periods being compared.
We define our comparable hotels as those that: (i) are owned or leased by us as of the reporting date and are not classified as held-for-sale; and (ii) have not sustained substantial property damage or business interruption, or undergone large-scale capital projects, in each case requiring closures lasting one month or longer (as further defined below), during the reporting periods being compared.
Funds used by Host Inc. to pay dividends are provided by distributions from Host L.P. As of December 31, 2022, Host Inc. is the owner of approximately 99% of Host L.P.’s common OP units. The remaining common OP units are owned by various unaffiliated limited partners.
Funds used by Host Inc. to pay dividends are provided by distributions from Host L.P. As of December 31, 2023, Host Inc. is the owner of approximately 99% of Host L.P.’s common OP units. The remaining common OP units are owned by various unaffiliated limited partners.
We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the company. • Litigation Gains and Losses – We exclude the effect of gains or losses associated with litigation recorded under GAAP that we consider outside the ordinary course of business.
We exclude the effect of these costs because we believe they are not reflective of the ongoing performance of the Company. • Litigation Gains and Losses – We exclude the effect of gains or losses associated with litigation recorded under GAAP that we consider to be outside the ordinary course of business.
(3) Earnings per diluted share and NAREIT FFO and Adjusted FFO per diluted share are adjusted for the effects of dilutive securities.
(3) Diluted earnings per common share, NAREIT FFO per diluted share and Adjusted FFO per diluted share are adjusted for the effects of dilutive securities.
While management believes that presentation of All Owned Hotel results is a supplemental measure that provides useful information in evaluating our ongoing performance, this measure is not used to allocate resources or to assess the operating performance of each of our hotels, as these decisions are based on data for individual hotels and are not based on All Owned Hotel results in the aggregate.
While management believes that presentation of comparable hotel results is a supplemental measure that provides useful information in evaluating our ongoing performance, this measure is not used to allocate resources or to assess the operating performance of each of our hotels, as these decisions are based on data for individual hotels and are not based on comparable hotel results in the aggregate.
In the near term, we expect to fund our above cash requirements, including our capital expenditures program, debt service, operating and corporate costs, primarily through hotel operations and our existing cash reserves. Based on our cash balance at December 31, 2022 and our expected cash obligations, we believe we will have sufficient liquidity to meet our near-term obligations.
In the near term, we expect to fund our above cash requirements, including our dividends, capital expenditures program, debt service and operating and corporate costs, primarily through hotel operations and our existing cash reserves. Based on our cash balance at December 31, 2023 and our expected cash obligations, we believe we will have sufficient liquidity to meet our near-term obligations.
We present All Owned Hotel EBITDA to help us and our investors evaluate the ongoing operating performance of our hotels after removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization expense). Corporate-level costs and expenses also are removed to arrive at property-level results.
We present comparable hotel EBITDA to help us and our investors evaluate the ongoing operating performance of our comparable hotels after removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization expense). Corporate-level costs and expenses also are removed to arrive at property-level results.
These expenses primarily include food, beverage and the associated labor costs and will correlate closely with food and beverage revenues. Group functions with banquet sales and audio and visual components generally will have lower overall costs as a percentage of revenues than outlet sales. 22 % 24 % ● Other departmental and support expenses .
These expenses primarily include food, beverage and the associated labor costs and will correlate closely with food and beverage revenues. Group functions with banquet sales and audio and visual components generally will have lower overall costs as a percentage of revenues than outlet sales. 23 % • Other departmental and support expenses .
For these reasons, NAREIT adopted the FFO metric in order to promote a uniform industry-wide measure of REIT operating performance. 60 We also present Adjusted FFO per diluted share when evaluating our performance because management believes that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance.
For these reasons, NAREIT adopted the FFO metric in order to promote a uniform industry-wide measure of REIT operating performance. We also present Adjusted FFO per diluted share when evaluating our performance because management believes that the exclusion of certain additional items described below provides useful supplemental information to investors 62 Table of Contents regarding our ongoing operating performance.
It includes ancillary revenues that are not included in the calculation of RevPAR. RevPAR changes that are driven by occupancy have different implications on overall revenue levels, as well as incremental operating profit, than do changes that are driven by average room rate.
It includes ancillary revenues that are not included in the calculation of RevPAR. 38 Table of Contents RevPAR changes that are driven by occupancy have different implications on overall revenue levels, as well as incremental operating profit, than do changes that are driven by average room rate.
All Owned Hotel EBITDA measures property-level results before debt service, depreciation and corporate expenses (as this is a property level measure) and is a supplemental measure of aggregate property-level profitability. We use All Owned Hotel EBITDA and associated margins to evaluate the profitability of our hotels. • EBITDA, EBITDAre and Adjusted EBITDAre.
Hotel EBITDA measures property-level results before debt service, depreciation and corporate-level expenses (as this is a property level measure) and is a supplemental measure of aggregate property-level profitability. We use comparable hotel EBITDA and associated margins to evaluate the profitability of our comparable hotels. • EBITDA, EBITDAre and Adjusted EBITDAre.
Management also believes the use of EBITDA facilitates comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital-intensive companies.
Management also believes the use of EBITDA facilitates comparisons between us and other lodging REITs, hotel owners that are not REITs and other capital-intensive companies.
We also own non-controlling interests in joint ventures that are not consolidated and that are accounted for under the equity method. The portion of the mortgage and other debt of these joint ventures attributable to us, based on our ownership percentage thereof, was $205 million at December 31, 2022. The debt of our unconsolidated joint ventures is non-recourse to us.
We also own non-controlling interests in joint ventures that are not consolidated and that are accounted for under the equity method. The portion of the mortgage and other debt of these joint ventures attributable to us, based on our ownership percentage thereof, was $208 million at December 31, 2023. The debt of our unconsolidated joint ventures is non-recourse to us.
This discussion focuses on our financial condition and results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021.
This discussion focuses on our financial condition and results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Financial Condition As of December 31, 2022, our total debt was approximately $4.2 billion, of which 76% carried a fixed rate of interest.
Financial Condition As of December 31, 2023, our total debt was approximately $4.2 billion, of which 76% carried a fixed rate of interest.
For a discussion and analysis of the year ended December 31, 2021 compared to the same period in 2020, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part II Item 7 of our Annual Report on Form 10‑K for the year ended December 31, 2021, filed with the SEC on February 24, 2022.
For a discussion and analysis of the year ended December 31, 2022 compared to the same period in 2021, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part II Item 7 of our Annual Report on Form 10‑K for the year ended December 31, 2022, filed with the SEC on February 22, 2023.
Any retirement before the maturity date will affect earnings and NAREIT FFO per diluted share as a result of the payment of any applicable call premiums and the accelerated expensing of previously deferred and capitalized financing costs.
Any retirement before the maturity date will affect earnings and NAREIT FFO per diluted share as a result of the payment of any applicable call premiums and the accelerated expensing of 52 Table of Contents previously deferred and capitalized financing costs.
Our equity investments consist of interests ranging from 11% to 67% in eight domestic and international partnerships that own a total of 23 hotels and a vacation ownership development. Due to the voting rights of the outside owners, we do not control and, therefore, do not consolidate these entities.
Our equity investments consist of interests ranging from 11% to 67% in eight domestic and international partnerships that own a total of 35 properties and a vacation ownership development. Due to the voting rights of the outside owners, we do not control and, therefore, do not consolidate these entities.
We also adjust NAREIT FFO for gains and losses on extinguishment of debt, certain acquisition costs, litigation gains or losses outside the ordinary course of business and severance costs outside the ordinary course of business. • All Owned Hotel EBITDA.
We also adjust NAREIT FFO for gains and losses on extinguishment of debt, certain acquisition costs, litigation gains or losses outside the ordinary course of business and severance costs outside the ordinary course of business. • Comparable hotel EBITDA.
We intend to use available cash in the near term predominantly to fund, and believe that we have sufficient liquidity to fund, our corporate expenses, capital expenditures and hotel acquisitions. We remain well positioned to execute additional transactions to the extent opportunities arise.
We intend to use available cash in the near term predominantly to fund, and believe that we have sufficient liquidity to fund, corporate expenses, capital expenditures, hotel acquisitions and dividends and remain well positioned to execute additional investment transactions to the extent opportunities arise. Cash Requirements.
There are no restrictions on our ability to pay dividends. Under the terms of our senior notes, Host L.P.’s ability to incur debt is subject to restrictions and the satisfaction of various conditions, including the achievement of an EBITDA-to-interest coverage ratio of at least 1.5x by Host L.P.
These covenants are primarily limitations on our ability to incur additional debt. There are no restrictions on our ability to pay dividends. Under the terms of our senior notes, Host L.P.’s ability to incur debt is subject to restrictions and the satisfaction of various conditions, including the achievement of an EBITDA-to-interest coverage ratio of at least 1.5x by Host L.P.
For these reasons, we believe All Owned Hotel operating results, when combined with the presentation of GAAP operating profit, revenues and expenses, provide useful information to investors and management. The following table presents certain operating results and statistics for our All Owned Hotel results for the periods presented herein: All Owned Hotel Results for Host Inc. and Host L.P.
For these reasons, we believe comparable hotel operating results, when combined with the presentation of GAAP operating profit, revenues and expenses, provide useful information to investors and management. 65 Table of Contents The following table presents certain operating results and statistics for our comparable hotel results for the periods presented herein: Comparable Hotel Results for Host Inc. and Host L.P.
Cash used in financing activities in 2022 included a repayment on the revolver portion of the credit facility, payment of common stock dividends, following the reinstatement of the quarterly common stock dividend in the first quarter of 2022, as well as the repurchase of common stock.
Cash used in financing activities in 2022 included a repayment on the revolver portion of the credit facility and payment of common stock dividends, following the reinstatement of the quarterly common stock dividend in the first quarter of 2022, as well as the repurchase of common stock. Equity/Capital Transactions.
We believe that the presentation of Adjusted EBITDA re , when combined with the primary GAAP presentation of net income, is beneficial to an investor’s understanding of our operating performance. Adjusted EBITDA re also is similar to what is used in calculating certain credit ratios for our credit facility and senior notes.
We believe that the presentation of Adjusted EBITDA re , when combined with the primary GAAP presentation of net income, is beneficial to an investor’s understanding of our operating performance. Adjusted EBITDA re also is similar to the measure used to calculate certain credit ratios for our credit facility and senior notes.
Interest on the term loans consists of floating rates equal to SOFR (plus a credit spread adjustment of 10 basis points) plus a margin ranging from 80 to 160 basis points (depending on Host L.P.’s unsecured long-term debt rating).
Interest on the term loans consists of floating rates equal to SOFR (plus a credit spread adjustment of 10 basis points) plus a margin ranging from 80 to 160 basis points (depending on Host L.P.’s unsecured long-term debt rating) and adjusted for sustainability pricing.
As of February 17, 2023, we own 78 hotels in the United States, Canada and Brazil and have minority ownership interests in an additional 23 hotels through joint ventures in the United States and in India. These hotels are operated primarily under brand names that are among the most respected and widely recognized in the lodging industry.
As of February 23, 2024, we own 77 hotels in the United States, Canada and Brazil and have minority ownership interests in an additional 35 hotels through joint ventures in the United States and in India. These hotels are operated primarily under brand names that are among the most respected and widely recognized in the lodging industry.
Hotel Sales by Business Mix. The majority of our customers fall into three broad categories: transient, group and contract business. The information below is derived from business mix results from the 78 hotels owned as of December 31, 2022.
Hotel Sales by Business Mix. The majority of our customers fall into three broad categories: transient, group and contract business. The information below is derived from business mix results from the 75 comparable hotels owned as of December 31, 2023.
The following table presents certain components of interest expense (in millions): Year ended December 31, 2022 2021 Cash interest expense ⁽¹⁾ $ 146 $ 157 Cash incremental interest expense ⁽¹⁾⁽²⁾ — 1 Non-cash interest expense 10 10 Cash debt extinguishment costs ⁽¹⁾ — 22 Non-cash debt extinguishment costs — 1 Total interest expense $ 156 $ 191 ___________ (1) Total cash interest expense paid was $142 million and $183 million in 2022 and 2021, respectively, which includes an increase (decrease) due to the change in accrued interest of $(4) million and $3 million for 2022 and 2021, respectively.
The following table presents certain components of interest expense (in millions): Year ended December 31, 2023 2022 Cash interest expense ⁽¹⁾ $ 178 $ 146 Non-cash interest expense 9 10 Cash debt extinguishment costs ⁽¹⁾ 3 — Non-cash debt extinguishment costs 1 — Total interest expense $ 191 $ 156 ___________ (1) Total cash interest expense paid was $183 million and $142 million in 2023 and 2022, respectively, which includes an increase(decrease) due to the change in accrued interest of $2 million and $(4) million for 2023 and 2022, respectively.
For the fourth quarter of 2022, Host Inc. paid a regular quarterly cash dividend of $0.12 per share and a special dividend of $0.20 per share on its common stock on January 17, 2023 to stockholders of record as of December 30, 2022. Any future dividend will be subject to approval by Host Inc.’s Board of Directors.
For the fourth quarter of 2023, Host Inc. paid a regular quarterly cash dividend of $0.20 per share and a special dividend of $0.25 per share on its common stock on January 16, 2024 to stockholders of record as of December 29, 2023. Any future dividend will be subject to approval by Host Inc.’s Board of Directors.
NAREIT defines FFO as net income (calculated in accordance with GAAP) excluding depreciation and amortization related to certain real estate assets, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment expense of certain real estate assets and investments and adjustments for consolidated partially-owned entities and unconsolidated affiliates.
As noted in NAREIT’s Funds From Operations White Paper – 2018 Restatement, NAREIT defines FFO as net income (calculated in accordance with GAAP) excluding depreciation and amortization related to certain real estate assets, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment expense of certain real estate assets and investments and adjustments for consolidated partially-owned entities and unconsolidated affiliates.
We believe these property-level results provide investors with supplemental information about the ongoing operating performance of our hotels. All Owned Hotel results are presented both by location and for our properties in the aggregate.
We believe these property-level results provide investors with supplemental information about the ongoing operating performance of our comparable hotels. Comparable hotel results are presented 64 Table of Contents both by location and for our properties in the aggregate.
While the number of projects and overall cost varies from year to year, on average approximately 6% our capital expenditures have related to these types of projects over the past six years. We are nearing completion on the Marriott transformational capital program, which began in 2018.
While the number of projects and overall cost varies from year to year, on average approximately 7% our capital expenditures have related to these types of projects over the past six years. In 2023, we completed the Marriott transformational capital program, which began in 2018.
The range of potential outcomes on the economy and the lodging industry specifically remains exceptionally wide, reflecting varying analyst assumptions surrounding the impact of higher interest rates, inflation, ongoing labor shortages in key industries, geopolitical conflicts, and the unpredictability of new COVID-19 variants.
However, the range of potential outcomes on the economy and the lodging industry specifically remains exceptionally wide, reflecting varying analyst assumptions surrounding the impact of higher interest rates, inflation, ongoing labor shortages in key industries, and escalating geopolitical conflicts.
As of December 31, 2022, we had $667 million of cash and cash equivalents, $200 million in our FF&E escrow reserve and $1.5 billion available under the revolver portion of our credit facility.
As of December 31, 2023, we had $1,144 million of cash and cash equivalents, $217 million in our FF&E escrow reserve and $1.5 billion available under the revolver portion of our credit facility.
The following table summarizes significant equity transactions that have been completed from January 1, 2021 through February 17, 2023 (in millions): Transaction Date Description of Transaction Transaction Amount Equity of Host Inc.
The following table summarizes significant equity transactions that have been completed from January 1, 2022 through February 23, 2024 (in millions): Transaction Date Description of Transaction Transaction Amount Equity of Host Inc.
Other property-level expenses were partially offset by the receipt of operating profit guarantees from Marriott under the transformational capital program in both 2022 and 2021. Depreciation and amortization.
Other property-level expenses were partially offset by the receipt of operating profit guarantees from Marriott under the transformational capital program in both 2023 and 2022. Other Income and Expenses Corporate and other expenses .
The following table summarizes the financial tests contained in the credit facility and our actual credit ratios as of December 31, 2022: Actual Ratio Covenant Requirement for all years Leverage ratio 2.4 x Maximum ratio of 7.25x Fixed charge coverage ratio 9.4 x Minimum ratio of 1.25x Unsecured interest coverage ratio ⁽¹⁾ 10.2 x Minimum ratio of 1.75x ___________ (1) If at any time our leverage ratio is above 7.0x, our minimum unsecured interest coverage ratio requirement will decrease to 1.50x.
The following table summarizes the financial tests contained in the credit facility and our actual credit ratios as of December 31, 2023: Actual Ratio Covenant Requirement for all years Leverage ratio 1.9x Maximum ratio of 7.25x Fixed charge coverage ratio 6.7x Minimum ratio of 1.25x Unsecured interest coverage ratio ⁽¹⁾ 8.8x Minimum ratio of 1.75x ___________ (1) If at any time our leverage ratio is above 7.0x, our minimum unsecured interest coverage ratio requirement will decrease to 1.50x.
We believe this will provide investors with a better understanding of underlying growth trends for our current portfolio, without impact from properties that experienced closures due to renovations or property damage sustained. We will remove Hyatt Regency Coconut Point Resort and Spa and The Ritz-Carlton, Naples from our comparable operations for 2023 due to closures caused by Hurricane Ian.
We believe this provides investors with a better understanding of underlying growth trends for our current portfolio, without impact from properties that experienced closures. We have removed Hyatt Regency Coconut Point Resort and Spa and The Ritz-Carlton, Naples from our comparable operations for 2023 due to closures caused by Hurricane Ian.
Of the 16 hotels included in the program, we have completed projects at the Coronado Island Marriott Resort & Spa, New York Marriott Downtown, San Francisco Marriott Marquis, and Santa Clara Marriott in 2019; projects at the Minneapolis Marriott City Center, San Antonio Marriott Rivercenter and JW Marriott Atlanta Buckhead in 2020; projects at The Ritz-Carlton Amelia Island, New York Marriott Marquis and Orlando World Center Marriott in 2021 and projects at Boston Marriott Copley Place, Houston Marriott Medical Center, JW Marriott Houston by the Galleria, and Marina del Rey Marriott in 2022.
The Marriott transformational capital program included 16 hotels, which were completed as follows: projects at the Coronado Island Marriott Resort & Spa, New York Marriott Downtown, San Francisco Marriott Marquis, and Santa Clara Marriott in 2019; projects at the Minneapolis Marriott City Center, San Antonio Marriott Rivercenter and JW Marriott Atlanta Buckhead in 2020; projects at The Ritz-Carlton Amelia Island, New York Marriott Marquis and Orlando World Center Marriott in 2021; projects at Boston Marriott Copley Place, Houston Marriott Medical Center, JW Marriott Houston by the Galleria, and Marina del Rey Marriott in 2022; and projects at the Marriott Marquis San Diego Marina and Washington Marriott at Metro Center in 2023.
The following table summarizes the financial tests contained in the senior notes indenture for our senior notes and our actual credit ratios as of December 31, 2022: Actual Ratio Covenant Requirement Unencumbered assets tests 484 % Minimum ratio of 150% Total indebtedness to total assets 21 % Maximum ratio of 65% Secured indebtedness to total assets 1 % Maximum ratio of 40% EBITDA-to-interest coverage ratio 9.9 x Minimum ratio of 1.5x 54 Credit Facility.
The following table summarizes the financial tests contained in the senior notes indenture for our senior notes and our actual credit ratios as of December 31, 2023: Actual Ratio Covenant Requirement Unencumbered assets tests 496 % Minimum ratio of 150% Total indebtedness to total assets 20 % Maximum ratio of 65% Secured indebtedness to total assets Maximum ratio of 40% EBITDA-to-interest coverage ratio 8.6x Minimum ratio of 1.5x Credit Facility.
Total debt was comprised of the following (in millions): As of December 31, 2022 2021 Series E senior notes, with a rate of 4% due June 2025 $ 499 $ 498 Series F senior notes, with a rate of 4½% due February 2026 399 398 Series G senior notes, with a rate of 3⅞% due April 2024 399 398 Series H senior notes, with a rate of 3⅜% due December 2029 642 641 Series I senior notes, with a rate of 3½% due September 2030 736 735 Series J senior notes, with a rate of 2.9% due December 2031 440 439 Total senior notes 3,115 3,109 Credit facility revolver ⁽¹⁾ (4 ) 676 Credit facility term loan due January 2027⁽¹⁾ 499 498 Credit facility term loan due January 2028⁽¹⁾ 499 499 Mortgage and other debt, with an average interest rate of 4.9% at December 31, 2022 and 2021, maturing through November 2027 106 109 Total debt $ 4,215 $ 4,891 ___________ (1) There were no outstanding credit facility borrowings at December 31, 2022.
Total debt was comprised of the following (in millions): As of December 31, 2023 2022 Series E senior notes, with a rate of 4% due June 2025 $ 499 $ 499 Series F senior notes, with a rate of 4½% due February 2026 399 399 Series G senior notes, with a rate of 3⅞% due April 2024 400 399 Series H senior notes, with a rate of 3⅜% due December 2029 643 642 Series I senior notes, with a rate of 3½% due September 2030 738 736 Series J senior notes, with a rate of 2.9% due December 2031 441 440 Total senior notes 3,120 3,115 Credit facility revolver ⁽¹⁾ (8) (4) Credit facility term loan due January 2027 499 499 Credit facility term loan due January 2028 498 499 Mortgage and other debt, with an average interest rate of 4.67% and 4.9% at December 31, 2023 and 2022, respectively, maturing through November 2027 100 106 Total debt $ 4,209 $ 4,215 ___________ (1) There were no outstanding credit facility borrowings at December 31, 2023 or 2022.
We may acquire additional hotels or dispose of hotels through various structures, including transactions involving single assets, portfolios, joint ventures, acquisitions of the securities or assets of other REITs or distributions of hotels to our stockholders. Sources and Uses of Cash. In 2022, our primary sources of cash included cash from operations and proceeds from asset sales.
We may acquire additional hotels or dispose of hotels through various structures, including transactions involving single assets, portfolios, joint ventures, acquisitions of the securities or assets of other REITs or distributions of hotels to our stockholders. Sources and Uses of Cash.
However, the most significant expense for rooms, food and beverage, and other departmental and support is wages and employee benefits, which comprise approximately 55% of these expenses in any year. During 2022, these expenses increased 58% compared to 2021, reflecting the increase in hiring as operations have recovered.
However, the most significant expense for the rooms, food and beverage, and other departmental and support expenses is wages and employee benefits, which comprise approximately 55% of these expenses in any given year. During 2023, these expenses increased 13% compared to 2022, reflecting an increase in hiring as operations have recovered, as well as wage and benefit inflationary pressures.
Each of these non-GAAP financial measures should be considered by investors as supplemental measures to GAAP performance measures such as total revenues, operating profit, net income and earnings per share.
We also evaluate the performance of our business through certain non-GAAP financial measures. Each of these non-GAAP financial measures should be considered by investors as supplemental measures to GAAP performance measures such as total revenues, operating profit, net income and earnings per share.
Reconciliation of Diluted Earnings (Loss) per Common Share to NAREIT and Adjusted Funds From Operations per Diluted Share (in millions, except per share amount) Year ended December 31, 2022 2021 Net income (loss) $ 643 $ (11 ) Less: Net income attributable to non-controlling interests (10 ) — Net income (loss) attributed to Host Inc 633 (11 ) Adjustments: Gain on dispositions (1) (16 ) (303 ) Tax on dispositions — (4 ) Gain on property insurance settlement (6 ) — Depreciation and amortization 663 669 Non-cash impairment expense — 92 Equity investment adjustments: Equity in earnings of affiliates (3 ) (31 ) Pro rata FFO of equity investments⁽²⁾ 25 18 Consolidated partnership adjustments: FFO adjustment for non-controlling partnerships (1 ) (1 ) FFO adjustments for non-controlling interests of Host L.P.
Reconciliation of Diluted Earnings per Common Share to NAREIT and Adjusted Funds From Operations per Diluted Share (in millions, except per share amount) Year ended December 31, 2023 2022 Net income $ 752 $ 643 Less: Net income attributable to non-controlling interests (12) (10) Net income attributable to Host Inc 740 633 Adjustments: Gain on dispositions (1) (70) (16) Gain on property insurance settlement (3) (6) Depreciation and amortization 695 663 Equity investment adjustments: Equity in earnings of affiliates (6) (3) Pro rata FFO of equity investments⁽²⁾ 20 25 Consolidated partnership adjustments: FFO adjustment for non-controlling partnerships (1) (1) FFO adjustments for non-controlling interests of Host L.P.
Corporate and other expenses include the following items (in millions): Year ended December 31, 2022 2021 General and administrative costs $ 81 $ 81 Non-cash stock-based compensation expense 26 18 Total $ 107 $ 99 General and administrative costs primarily consist of wages and benefits, travel, corporate insurance, legal fees, audit fees, building rent and systems costs.
Corporate and other expenses include the following items (in millions): Year ended December 31, 2023 2022 General and administrative costs $ 85 $ 76 Non-cash stock-based compensation expense 30 26 Litigation accruals 17 5 Total $ 132 $ 107 General and administrative costs primarily consist of wages and benefits, travel, corporate insurance, legal fees, audit fees, building rent and systems costs.
Wages and benefits represented approximately 40% of our 2022 other departmental and support expenses and 42% of our 2021 other departmental and support expenses. Management fees . Total management fees increased $120 million, or 123.7%, in 2022. Base management fees, which generally are calculated as a percentage of total revenues, increased $56 million, or 66.7%, compared to 2021.
Wages and benefits represented approximately 40% of our 2023 and 2022 other departmental and support expenses. Management fees . Total management fees increased $32 million, or 14.7%, in 2023. Base management fees, which generally are calculated as a percentage of total revenues, increased $10 million, or 7.1%, compared to 2022.
See “Non-GAAP Financial Measures” for more information on these measures, including why we believe these supplemental measures are useful, reconciliations to the most directly comparable GAAP measure, and the limitations on the use of these supplemental measures. Additionally, All Owned Hotel results and statistics include adjustments for dispositions and acquisitions.
See “Non-GAAP Financial Measures” and “Comparable Hotel Operating Statistics and Results” for more information on these measures, including why we believe these supplemental measures are useful, reconciliations to the most directly comparable GAAP measure, and the limitations on the use of these supplemental measures.
Dilutive securities may include shares granted under comprehensive stock plans, preferred OP units held by non-controlling limited partners, exchangeable debt securities and other non-controlling interests that have the option to convert their limited partner interests to common OP units.
Dilutive securities may include shares granted under comprehensive stock plans, preferred OP units held by non-controlling limited partners and other non-controlling interests that have the option to convert their limited partner interests to common OP units. No effect is shown for securities if they are anti-dilutive.
Occupancy is the major driver of rooms expenses. These costs can increase based on increases in salaries and wages, as well as on the level of service and amenities that are provided. 18 % 19 % ● Food and beverage expenses .
These costs include housekeeping, reservation systems, room supplies, laundry services and front desk costs. Occupancy is the major driver of rooms expenses. These costs can increase based on increases in salaries and wages, as well as on the level of service and amenities that are provided. 18 % • Food and beverage expenses .
Management believes this will provide investors with a better understanding of underlying growth trends for the Company’s current portfolio, without impact from properties that experienced closures due to renovations or property damage sustained.
We believe this provides investors with a better understanding of underlying growth trends for our current portfolio, without impact from properties that experienced closures due to renovations or property damage sustained.
Morgan Securities LLC, BofA Securities, Inc., BTIG, LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Scotia Capital (USA) Inc., Truist Securities, Inc. and Wells Fargo Securities, LLC, as sales agents, through which Host Inc. may issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $600 million.
LLC, Scotia Capital (USA) Inc., Truist Securities, Inc. and Wells Fargo Securities, LLC, as sales agents pursuant to which Host Inc. may offer and sell, from time to time, shares of Host Inc. common stock having an aggregate offering price of up to $600 million.
(2) In connection with the sale of the Sheraton New York Times Square Hotel, we extended a $250 million bridge loan to the purchaser. The disposition proceeds shown are net of the bridge loan. (3) In connection with the sale of the Sheraton Boston, we extended a $163 million bridge loan to the purchaser.
(2) In connection with the sale of the Sheraton New York Times Square Hotel, we extended a $250 million bridge loan to the purchaser. The loan was repaid in November 2023. (3) In connection with the sale of the Sheraton Boston, we extended a $163 million bridge loan to the purchaser. The loan was repaid in September 2023.
These results led to an increase in diluted earnings per common share for Host Inc. of $0.88. 38 Adjusted EBITDA re, which excludes gain on sale of assets and impairment expense, among other items, increased to $1,498 million.
These results led to an 18.2% increase in diluted earnings per common share for Host Inc. to $1.04. Adjusted EBITDA re, which excludes gain on sale of assets, among other items, increased 8.7% to $1,629 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeExchange Rate Sensitivity We have currency exchange risk because of our hotel ownership in Brazil and Canada and our minority investment in a joint venture in India.
Biggest change(2) The interest rate for our floating rate payments is based on the rate in effect as of December 31, 2023. No adjustments are made for forecast changes in the rate. Exchange Rate Sensitivity We have currency exchange risk because of our hotel ownership in Brazil and Canada and our minority investment in a joint venture in India.
If market rates of interest on our variable rate debt increase or decrease by 100 basis points, interest expense would increase or decrease, respectively, our earnings and cash flows by approximately $10 million in 2023.
If market rates of interest on our variable rate debt increase or decrease by 100 basis points, interest expense would increase or decrease, respectively, our earnings and cash flows by approximately $10 million in 2024.
Item 7A. Quantitative and Qualit ative Disclosures about Market Risk All information in this section applies to both Host Inc. and Host L.P. Interest Rate Sensitivity Our future income, cash flows and fair values with respect to financial instruments are dependent upon prevailing market interest rates.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk All information in this section applies to both Host Inc. and Host L.P. Interest Rate Sensitivity Our future income, cash flows and fair values with respect to financial instruments are dependent upon prevailing market interest rates.
As of December 31, 2022, the fair value of these contracts was $2.0 million. These contracts are marked-to-market with changes in fair value recorded to other comprehensive income (loss) for contracts designated as a hedge of a net investment in a foreign operation, and through net income for contracts acting as a natural hedge of intercompany loans.
As of December 31, 2023, the fair value of these contracts was $(1.2) million. These contracts are marked-to-market with changes in fair value recorded to other comprehensive income (loss) for contracts designated as a hedge of a net investment in a foreign operation, and through net income for contracts acting as a natural hedge of intercompany loans.
In replacement of the maturing contracts, we entered into three new foreign currency forward purchase contracts with the same total notional amount of CAD 99 million ($75 million), which will mature in August and September 2023. The foreign currency exchange agreements into which we have entered strictly are to hedge foreign currency risk and are not for trading purposes.
In replacement of the maturing contracts, we entered into three new foreign currency forward purchase contracts with the same total notional amount of CAD 99 million ($74 million), which will mature in August 2024. The foreign currency exchange agreements into which we have entered strictly are to hedge foreign currency risk and are not for trading purposes.
Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We have no derivative financial instruments that are held for trading purposes. We use derivative financial instruments to manage, or hedge, interest rate risks. As of February 17, 2023, we do not have any interest rate derivatives outstanding.
Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We have no derivative financial instruments that are held for trading purposes. We use derivative financial instruments to manage, or hedge, interest rate risks.
For 2022 and 2021, revenues from our consolidated foreign operations were $71 million and $24 million, respectively, or approximately 1% of our total revenues.
For 2023 and 2022, revenues from our consolidated foreign operations were $92 million and $71 million, respectively, or approximately 2% and 1%, respectively, of our total revenues.
We also evaluate counterparty credit risk when we calculate the fair value of the derivatives. 65
We also evaluate counterparty credit risk when we calculate the fair value of the derivatives. 68 Table of Contents
The table below presents scheduled maturities and related weighted average interest rates by expected maturity dates (in millions, except percentages): Expected Maturity Date 2023 2024 2025 2026 2027 Thereafter Total Fair Value Liabilities Debt: Fixed rate ⁽¹⁾ $ (3 ) $ 402 $ 498 $ 399 $ 87 $ 1,838 $ 3,221 $ 2,868 Average interest rate 3.9 % 3.8 % 3.8 % 3.6 % 3.6 % 3.6 % Variable rate ⁽¹⁾ $ (5 ) $ (1 ) $ — $ — $ 500 $ 500 $ 994 $ 1,000 Average interest rate ⁽²⁾ 5.7 % 5.7 % — % — % 5.7 % 5.7 % Total debt $ 4,215 $ 3,868 ___________ (1) The amounts are net of unamortized discounts, premiums and deferred financing costs; therefore, negative amounts prior to maturity represent the amortization of original issue discounts and deferred financing costs.
The table below presents scheduled maturities and related weighted average interest rates by expected maturity dates (in millions, except percentages): Expected Maturity Date 2024 2025 2026 2027 2028 Thereafter Total Fair Value Liabilities Debt: Fixed rate ⁽¹⁾ $ 397 $ 498 $ 399 $ 88 $ (4) $ 1,842 $ 3,220 $ 3,001 Average interest rate 3.8 % 3.8 % 3.6 % 3.6 % 3.6 % 3.6 % Variable rate ⁽¹⁾ $ (4) $ (4) $ (3) $ 500 $ 500 $ — $ 989 $ 1,000 Average interest rate ⁽²⁾ 6.4 % 6.4 % 6.4 % 6.4 % 6.4 % — % Total debt $ 4,209 $ 4,001 ___________ (1) The amounts are net of unamortized discounts, premiums and deferred financing costs; therefore, negative amounts prior to maturity represent the amortization of original issue discounts and deferred financing costs.
In the first quarter of 2022, three foreign currency forward purchase contracts matured, with a total notional amount of CAD 99 million ($79 million), and we received $0.2 million in the aggregate upon settlement of these contracts.
In the third quarter of 2023, three foreign currency forward purchase contracts matured, with a total notional amount of CAD 99 million ($75 million), and we received $1.9 million in the aggregate upon settlement of these contracts.
The interest payments on 76% of our debt are fixed in nature. Valuations for mortgage debt and the credit facility are determined based on expected future payments, discounted at risk-adjusted rates. The senior notes are valued based on quoted market prices.
As of February 23, 2024, we do not have any interest rate derivatives outstanding. 67 Table of Contents The interest payments on 76% of our debt are fixed in nature. Valuations for mortgage debt and the credit facility are determined based on expected future payments, discounted at risk-adjusted rates. The senior notes are valued based on quoted market prices.
Removed
Maturity dates related to the outstanding credit facility term loans reflect the extensions provided by the amended and restated credit facility agreement effective January 4, 2023. (2) The interest rate for our floating rate payments is based on the rate in effect as of December 31, 2022. No adjustments are made for forecast changes in the rate.
Removed
We replaced these contracts with new forward purchase contracts with the same notional amount that expired in the third quarter of 2022, and we received $3.4 million in the aggregate upon settlement of these contracts.

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