Is it Wise to Retain Host Hotels Stock in Your Portfolio Now?

Host Hotels & Resorts Inc. HST is poised to witness revenue per available room (RevPAR) growth from a solid portfolio of upscale hotels across lucrative markets. Also, a strategic capital-recycling program and a healthy balance sheet augur well.

However, macroeconomic uncertainty and the competitive landscape are likely to hurt demand for its properties in the near term. The elevated interest expenses add to its concerns.

What’s Aiding Host Hotels?

Host Hotels has a strong Sunbelt exposure and presence in the top 21 U.S. markets. Its properties are advantageously located in the central business districts of major cities, with proximity to airports and resort and conference destinations, thus driving demand. The improvement in group travel demand and business transient demand, led by healthy demand from small and medium-sized businesses, has aided occupancy and RevPAR growth over the past few quarters. In 2025, the company expects comparable hotel RevPAR growth between 1.5% and 2.5%.

The company follows an aggressive capital-recycling strategy that entails the non-strategic dispositions of assets with lower growth potential or properties with significant capital expenditure requirements and redeploying the proceeds for investments in better-yielding assets. It has prioritized projects in assets and markets that are anticipated to recover faster.

Host Hotels has a healthy balance sheet and has been undertaking steps to strengthen its balance sheet. As of June 30, 2025, the company had $2.3 billion in total available liquidity. As of the same date, the weighted average maturity for its debt was 5.4 years, and the weighted average interest rate was 4.9%. Further, as of the end of the second quarter of 2025, the company enjoyed investment-grade ratings of Baa3/Positive from Moody’s, BBB-/Stable from S&P Global and BBB/Stable from Fitch, providing access to the debt market at favorable costs.

Solid dividend payouts are the biggest attraction for REIT investors, and Host Hotels remained committed to that. Encouragingly, the company has increased its dividend eight times in the last five years. Hence, with rebounding operating trends and a healthy financial position, we expect the latest dividend hike to be sustainable in the upcoming period.

What’s Hurting Host Hotels?

The current outlook for the lodging industry remains uncertain due to the impact of trade policy, financial market volatility and escalating geopolitical conflicts. Although outbound travel remains elevated, international inbound travel continues to face headwinds from shifting global travel patterns, as evolving trade and immigration policy tempers inbound demand.
Moreover, challenges in the supply chain have led to project delays across the United States, and a prolonged, tight lending environment has made it difficult to obtain construction financing for future projects.

Host Hotels competes with other owners and investors in the upper upscale and luxury full-service hotels, including other lodging REITs, such as Ashford Hospitality Trust AHT and Pebblebrook Hotel Trust PEB. This might adversely impact the revenues and profitability of Host Hotels.

The company has a substantial debt burden, and its total consolidated debt as of June 30, 2025, was approximately $5.08 billion. With a high debt level, interest expenses are likely to remain elevated. For 2025, we project interest expenses to increase 11.2% year over year.

In conclusion, given all the above-mentioned factors, it seems wise to retain HST in your portfolio right now.

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This article originally published on Zacks Investment Research (zacks.com).

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