In an effort to evaluate performance, we compare how the quarter measured up to previous management commentary and guidance.
OVERALL: BETTER - You wouldn't know it from the stock action but HST more than delivered in Q1 and forward commentary remained positive. Guidance was raised.
- 2012 GUIDANCE
- BETTER: HST raised RevPAR guidance by 1%, EBITDA guidance by $20-30MM and Adjusted FFO by 4 cents
- GROUP BOOKINGS
- BETTER: Stronger demand has driven group bookings up 7.5% YoY for the remaining three quarters. ADR is up 2% and recent bookings were up 8%. Transient bookings also continue to run well ahead of last year's levels and suggest strong rate growth.
- TRANSACTION ACTIVITY OUTLOOK
- SAME: Reiterated a growing investment pipeline and expect further transactions later in 2012.
- DISPOSITION ACTIVITY
- SAME: The disposition of the San Francisco Airport Marriott at $113MM is in-line with its guidance of $100-115MM for the 1H of 2012.
- COST INFLATION/MARGIN IMPACT
- SAME: 2012 comparable hotel adjusted operating profit margins is expected to increase 50 bps- in the middle of HST's previous guidance range of 25-75 bps.
- REGIONAL GUIDANCE
- SLIGHTLY BETTER: Most of the markets' REVPAR expectations came in as expected. Atlanta outperformed in 1Q with 2Q looking rosy as well.
- EUROPEAN JV
- SLIGHTLY BETTER: European JV REVPAR (in constant euros), excluding the Sheraton Roma, came in at 4.8% in 1Q. Even though this is within the company's previous guidance of 3-5%, HST had mentioned that they were more conservative with the REVPAR assumptions at the corporate level. The Westin Europa & Regina in Venice, the Sheraton Warsaw, the Sheraton Skyline in London and the Paris Versailles all had double digit RevPAR increases 1Q.
- CAPITAL RECYCLING PLAN
- SAME: The $48MM spent on redevelopment and ROI capital projects is on schedule with HST's plan to be an active recycler of capital in the next 2-3 years. HST expects to spend $150-170MM in 2012 for these capital reinvestment projects.
