The Company operates as a self-managed and self-administered real estate investment trust with its operations conducted solely through an operating partnership, Host Hotels & Resorts, L.P. or Host LP and its subsidiaries.
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Host Hotels and Resorts, Inc. (HST) is a hotel REIT (real estate investment trust) company, which is engaged in the ownership, acquisition, and redevelopment of hotel properties. The Group owns 128 luxury and upper upscale hotel properties in 27 states that are concentrated primarily in central business districts of major cities, airport areas and resort/conference destinations. In addition, HST maintains an ownership interest in a European joint venture, which owns 7 additional properties.
The US lodging industry has rebounded after the downturn from 2000 to 2003 caused by 9/11 attacks that plummeted travel industry and left hotels half empty. Since then, the industry is witnessing higher occupancy rate led by recovery in travel industry and supply constraint. For 2006, industry occupancy increased by 0.5% to 63.4%, average room rate increased 7% to $97.31 and revenue per available room (RevPAR) gained 7.5% to $61.69.
Although, the industry room supply increased 0.6% in 2006, but demand (roomnights sold) gained by 1.1% and as a result room revenue increased by 8.1% to $100 billion. During 2007, the industry outlook remains bright as demand among all travelers remains high, and bookings for conferences and meetings continue to increase. Endorsing the same, RevPar is expected to grow by around 6% in the coming year.
For 2007, the company has guided RevPAR growth of 6 to 8%, increase in special corporate rate in the range of 8-10%, new supply around 1%. Combined with healthy demand, HSTs portfolio is well positioned to deliver another strong year of earnings and EBITDA growth. The company is also working to enhance its hotels portfolio, which is evident by its recent acquisition of a resort hotel. With robust booking expectation and positive industry synergies, HST makes a good investment proposition.