Good morning, and welcome to the Host Hotels & Resorts First Quarter 2024 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Jaime Marcus, Senior Vice President of Investor Relations. You may begin.

Thank you, and good morning, everyone. Before we begin, please note that many of the comments made today are considered to be forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information, such as FFO, adjusted EBITDAre and comparable hotel level results. You can find this information together with reconciliations to the most directly comparable GAAP information in yesterday's earnings press release and our 8-K filed with the SEC and in the supplemental financial information on our website at hosthotels.com. With me on today's call are Jim Risoleo, President and Chief Executive Officer; and Sourav Ghosh, Executive Vice President and Chief Financial Officer. With that, I would like to turn the call over to Jim.

Thank you, Jaime, and thanks to everyone for joining us this morning. In the first quarter, we delivered adjusted EBITDAre of $483 million and adjusted FFO per share of $0.60, which includes $10 million of business interruption proceeds from Hurricane Ian. Excluding the business interruption proceeds, our adjusted EBITDAre was 7% above the first quarter of 2023, and our adjusted FFO per share was 8% above last year. We delivered a year-over-year comparable hotel total RevPAR improvement of 50 basis points, underscoring the continued strength of out-of-room revenue while comparable hotel RevPAR declined 1.2%. First quarter RevPAR faced headwinds from tough year-over-year comparisons, particularly in Maui. The year-over-year decline in Maui RevPAR had an actual drag of 170 basis points on our first quarter portfolio RevPAR. However, this understates the true impact of the wildfires as we would have expected Maui to contribute 140 basis points to portfolio RevPAR growth in the first quarter given the renovation disruption at Fairmont Kea Lani in 2023. As a result, the total estimated impact of the wildfires on first quarter RevPAR is 310 basis points. RevPAR was also impacted by unseasonable weather in Florida, Arizona, and California, and unanticipated renovation delays at the Singer Oceanfront Resort. Despite these headwinds, our first quarter comparable hotel EBITDA margin was 31.2% and was 30 basis points above 2019. As a reminder, our first quarter operational results discussed today refer to our comparable hotel portfolio, which excludes The Ritz-Carlton, Naples in 2024. In addition, while Alila Ventana Big Sur is included in our first quarter results, it is currently closed and has been removed from our comparable hotel set for the remainder of the year after a portion of Highway 1 collapsed in late March. At this time, we expect the resort to reopen towards the end of the second quarter. During the first quarter, our portfolio results continued to be impacted by the evolving nature of demand on Maui. Our risk management team has reached an agreement with our insurance carriers and we are now including between $18 million and $22 million of business interruption proceeds related to the Maui wildfires in our full year 2024 guidance. Turning to business mix. It is worth noting that this quarter, we are referring to revenue growth for our business mix segment as revenue per available room as a result of the leap year. Group revenue per available room grew 4% in the first quarter, driven by room nights. Our properties booked over 500,000 group room nights in the year for the year, bringing our definite group room nights on the books for 2024 to 3.6 million, with total group revenue pace up 7% compared to the same time last year. In the first quarter, business transient revenue per available room grew 5%, driven by both rate and room nights, and leisure remained steady, with transient rates at our comparable resorts up 52% compared to 2019, including our 3 Maui resorts. Briefly touching on out-of-room spend, food and beverage revenue per available room grew 2% in the first quarter compared to last year, driven by an all-time high banquet and catering contribution. Other revenue per available room grew 6%, driven by elevated attrition and cancellation fees. It is worth noting that nearly 40% of our total revenue in 2023 came from food and beverage and other revenue, and our 2024 guidance assumes a similar proportion. Since 2017, non-room revenue has steadily grown as our portfolio has shifted towards more complex, higher-end properties, which benefit from substantial out-of-room spend from both guests and non-guests. In fact, there may be instances where the property teams at our hotels strategically forgo room rate as they focus on the total revenue picture. The Ritz-Carlton, Naples is a clear example of the positive impact of out-of-room spending. In the first quarter, the resort achieved RevPAR of $900, which is only half of its $1,700 total RevPAR. As a result of our meaningful expansion and transformational renovation, transient rates in the quarter were up 40% compared to 2019, driven by club-level rooms, and food and beverage revenue grew 38%, driven by outlets. In March, the resort posted its best revenue month ever, aided by Easter week's RevPAR, which was 45% above the competitive set. In addition, the resort was recently named to Travel and Leisure's It List, and we are proud to say that it truly is firing on all cylinders. Turning to capital allocation, yesterday we announced the acquisition of the fee simple interest in a 2-hotel complex comprising the 215-room 1 Hotel Nashville and the 506-room Embassy Suites by Hilton Nashville Downtown for approximately $530 million in cash. The acquisition price represents a 12.6x EBITDA multiple or a cap rate of approximately 7.4% on 2024 estimated results. The properties are each expected to rank among our top 25 assets based on estimated full-year 2024 results, with an expected combined RevPAR of $275, RevPAR of $435, and EBITDA per key of $58,550, further improving the quality of our portfolio. The newly built LEED-silver complex opened in 2022 and stands directly across from the 2.1 million square foot Music City Convention Center adjacent to the Bridgestone Arena, which is home to the NHL Nashville Predators, and within a 10-minute drive of Nissan Stadium, the Country Music Hall of Fame Museum, Vanderbilt University, Tennessee State University, and Centennial Park. It sits on 1.2 fee simple acres in Nashville's Lower Broadway Entertainment District. The 2-hotel complex has a combined 721 oversized rooms that average approximately 500 square feet with a 75% suite mix. The properties offer 7 separate food and beverage outlets, including a rooftop restaurant at the 1 Hotel, which provides guests with exclusive views of the Music City skyline in an elevated nightlife setting. Other amenities include a spa, 2 fitness centers, a yoga studio, and 33,000 square feet of shared meeting space. From 2000 to 2023, the Nashville hotel market had a RevPAR CAGR of 7.7%, even while absorbing new supply. It is the #2 ranked convention destination in the United States, and the convention center has continued to set record attendance numbers by attracting larger events with promising definite bookings in future years. The new Nissan Stadium, home of the NFL Tennessee Titans, is also expected to generate increased demand as the stadium zone attracts more entertainment and sporting events with year-round activation. In addition, Nashville has the fastest-growing airport in the United States, with current passenger traffic 33% above 2019. The recent $1.5 billion airport expansion added 6 international gates and 8 satellite gates. Another $1.5 billion expansion is already underway, with expected completion in 2028. While supply growth is expected to continue in Nashville, most projects are in the planning stages and in the select-service chain scale. We believe the 1 Hotel Nashville and the Embassy Suites by Hilton Nashville Downtown are highly differentiated from the future supply due to their central location and diversified product offerings, which provide distinct value propositions to customers and guests. With multiple demand generators and no expected near-term capital expenditure requirements, we believe the combined properties will stabilize at approximately 10 to 12x EBITDA in the 2026 to 2028 timeframe, driving additional value creation for our portfolio. Due to the timing of the acquisition, the 1 Hotel Nashville and the Embassy Suites by Hilton Nashville Downtown are not yet included in our comparable hotel guidance metrics, but will be included starting in the second quarter. The acquisition is expected to generate $29 million of adjusted EBITDA for our ownership period, which is included in our adjusted EBITDAre and FFO guidance for 2024. Looking back on our transaction activity, we have acquired $4 billion of assets since 2018 at a 13.5x EBITDA multiple and disposed of $5 billion of assets at a 17x EBITDA multiple including $976 million of estimated foregone capital expenditures. This accretive capital recycling has allowed us to grow our adjusted EBITDAre and dividend in excess of full-year 2019 levels as we continue on the path towards $2 billion of adjusted EBITDAre. As we have demonstrated, we believe Host is well positioned to continue capitalizing on value-enhancing acquisition opportunities. After adjusting for post-quarter transactions, we have $1.7 billion of total available liquidity and net leverage of 2.3x, and we will continue using our size, scale, and relationships to uncover more acquisition opportunities. Turning to portfolio reinvestment, our 2024 capital expenditure guidance range remains $500 million to $605 million, which reflects approximately $225 million to $280 million of investment for redevelopment, repositioning, and ROI projects. During the first quarter, we started the Hyatt Transformational Capital program renovations at the Grand Hyatt, Atlanta and the Grand Hyatt, Washington, which we expect to complete in the first half of 2025. We received $2 million of operating guarantees in the first quarter to offset business disruptions related to the Hyatt Transformational Capital program, and we expect to benefit from an additional $7 million in 2024. More broadly, we have completed 24 transformational renovations since 2018, which we believe provide meaningful tailwinds for our portfolio. Of the 12 hotels that have stabilized post-renovation operations to date, the average RevPAR index share gain is 8.5 points, which is well in excess of our targeted gain of 3 to 5 points. Wrapping up, we believe Host is well positioned to continue to outperform. Our successful capital allocation strategy has allowed us to deliver 2023 adjusted EBITDAre and adjusted FFO per share above 2019 levels, outperforming the other full-service lodging REITs. We are encouraged by the supply picture for our markets and chain scales, which remains below historical levels, the improving international demand imbalance, the continued improvement in business transient demand, and increased activity in the transactions market. We believe our EBITDA growth profile, our investment-grade balance sheet, our diversified portfolio, and our continued portfolio reinvestment are key differentiators. As we have demonstrated, Host can and will continue to do it all. With that, I will now turn the call over to Sourav to discuss additional operational detail and our revised 2024 outlook.

Thank you, Jim, and good morning, everyone. Building on Jim's comments, I will go into detail on our first quarter operations, updated 2024 guidance, and our balance sheet. Starting with business mix. Overall transient revenue per available room was down 6% compared to the first quarter of 2023, driven by tough comparisons, including the evolving nature of demand in Maui, unseasonable weather in many markets, and unanticipated renovation delays at the Singer Oceanfront Resort. Combined, we estimate that the renovation delay and Maui had a 440 basis point impact on transient RevPAR in the quarter. However, leisure rate is still strong. Transient rates at our resorts remained resilient at 52% above the first quarter of 2019 and resort food and beverage outlet revenue per occupied room grew over last year. Gulf revenue continued to grow to record levels set in the first quarter of the last 2 years despite the impact from our Maui golf courses. Looking ahead to holidays in the second quarter, for Memorial Day weekend, transient room revenue pace for the overall portfolio is up over last year and up high single digits, excluding Maui. We are still outside the primary booking window for July 4, but thus far, we are encouraged by strong bookings in San Diego, Houston, and New York. Business transient revenue per available room was 5% above the first quarter of 2023, driven by an increase in rate and room nights as business transient demand continued its slow and steady recovery. Seattle, Boston, and San Francisco led room night growth, and both New York and Boston are within 2% of pre-pandemic demand. Turning to group, revenue per available room was up 4% in the first quarter, driven by room night growth in San Diego, San Francisco, Orlando, and Maui. Notably, group room night volume reached 96% of the first quarter of 2019 levels, led by corporate and SMERF groups. For full year 2024, we have 3.6 million definite group room nights on the books, representing a 17% increase since the fourth quarter and putting us ahead of the same time last year. Group rate on the books is up 4%, and total group revenue pace is up 7% over the same time last year. As Jim mentioned, our banquet and catering contribution per group room night in the first quarter was at an all-time high, coming in approximately 1% above the prior record set in the first quarter of 2023. We continue to be encouraged by the ongoing strength of group business as evidenced by strong pace, lingering booking windows, and double-digit citywide room night pace in key markets such as Nashville, New Orleans, San Antonio, Seattle, and Washington, D.C. Shifting gears to margins, as expected, margin declines year-over-year were driven by increases in wages, benefits, and fixed expenses, as well as impacts from Maui. Despite these headwinds, our comparable hotel EBITDA margin was 31.2% in the first quarter, representing a 30 basis point increase over 2019 as a result of our continued efforts to redefine the operating model. We expect year-over-year margin comparisons to improve as the year progresses. Turning to our revised outlook for 2024, the midpoint of our guidance continues to contemplate steady demand in travel and low supply growth. Our expectations for the year are driven by improvements in group business, a gradual recovery in business transient, softer short-term leisure transient demand and a continued evolution of demand on Maui as the island recovers from the recent wildfires. At the low end, we have assumed slow group pickup and softer leisure transient demand. And at the high end, we have assumed a faster recovery at our Maui resorts and increased group pickup. For full year 2024, we anticipate comparable hotel RevPAR growth of between 2% and 4% over 2023. We expect comparable hotel EBITDA margins to be down 80 basis points year-over-year at the low end of our guidance to down 30 basis points at the high end. Notably, we expect comparable hotel EBITDA margins to be up 10 basis points at the midpoint versus 2019 despite an estimated 20 basis point margin impact from Maui. At the midpoint of our guidance range, we anticipate comparable hotel total RevPAR growth of 3.7% and comparable hotel RevPAR growth of 3% compared to 2023. This 100 basis point reduction in our RevPAR growth midpoint is driven by lower-than-expected first quarter results, underperformance in Maui, and softer-than-expected short-term leisure transient demand. That said, the strength of out-of-room revenues allowed for total RevPAR to decline only 60 basis points relative to our prior midpoint. We expect a comparable hotel EBITDA margin midpoint of 29.6%, which has improved 30 basis points from our initial guidance and is now only 50 basis points below 2023. We estimate the Maui wildfires will impact full year comparable hotel TRevPAR by 90 basis points, RevPAR by 130 basis points, and comparable hotel EBITDA margin by 20 basis points. We also expect a 50 basis point impact from property taxes and insurance. In terms of RevPAR growth cadence for the year, we expect comparable hotel RevPAR growth to be flat to low single digits in the first half of the year based on the drivers I just mentioned. We continue to expect mid-single-digit comparable hotel RevPAR growth in the second half of the year as a result of strong group booking pace, less renovation disruption compared to the second half of 2023, and the diminishing year-over-year impacts of the Maui wildfires, which occurred in August of 2023. Our revised 2024 full-year adjusted EBITDAre midpoint is $1.670 billion, a $35 million or 2% increase over the prior quarter. This includes an expected additional $8 million from business interruption proceeds related to Hurricane Ian, $20 million of business interruption proceeds related to the Maui wildfires, an estimated $62 million contribution from operations at The Ritz-Carlton, Naples, which is up from $60 million in our prior guidance, and $6 million from operations at Alila Ventana Big Sur, a decline of $10 million compared to our prior guidance. As a reminder, Ritz-Carlton Naples and Alila Ventana Big Sur are excluded from our comparable hotel set for the full year 2024 forecast. Our adjusted EBITDA and FFO guidance also includes an estimated $29 million contribution from the 1 Hotel Nashville and Embassy Suites by Hilton Nashville downtown. Turning to our balance sheet and liquidity position. Our weighted average maturity is 4.3 years at a weighted average interest rate of 4.7% after repaying the $400 million Series G senior notes in April. As Jim noted, we currently have $1.7 billion in total available liquidity, which includes $231 million of FF&E reserves. Our quarter-end leverage ratio, adjusted for post-quarter transactions, was 2.3x, and we have $1.3 billion of availability on our credit facility. Also, since our last call, Moody's upgraded the company's issuer outlook from stable to positive. Further, in April, we paid a quarterly cash dividend of $0.20 per share, demonstrating our commitment to returning capital to stockholders. As always, future dividends are subject to approval by the company's Board of Directors. We will continue to be strategic and opportunistic in managing our balance sheet and liquidity position as we move through the remainder of 2024. To conclude, we believe our best-in-class portfolio and balance sheet uniquely position Host to capitalize on opportunities for growth in the future.

To ensure we have time to address as many questions as possible, please limit yourself to one question.

Jim, one long question for you on Nashville. Could you walk us through the timeline for this deal, maybe how your cost of capital and view of value evolved, especially given how much the capital markets have moved in the last 3 to 6 months? And then just lastly, how you're thinking about the continued ramp-up of these properties, given that they're both less than 2 years old?

Sure, Mike. Nashville is a market that we have had our eye on for a number of years. It is a market where I would say we're underrepresented given the dynamic that is occurring in Nashville. Years ago, we did a 50-50 joint venture with White Lodging on a Hyatt Place. We were one of the early ones in Nashville, and that property has continued to outperform all of our expectations. I think we refined it 2 or 3 times along the way. So we have been scouring the market and actually had reached out to our friends at Starwood Capital and Crescent before the 1 Hotel and Embassy Suites even opened when it was in the construction phase. We're not terribly keen on being developers, but that was one deal that I really wanted to see if we could participate in when it was coming out of the ground. And that was a nonstarter for the development team. So we've been following it for a long time. It came out very strong in 2022. It was open for a partial year, and it had RevPAR of $185 and EBITDA of $8.7 million. In proceeding cautiously and really not having a clear view at that point in time with respect to how the macro picture was going to play out, whether we were going to really have a hard landing and end up at a serious recession or the Fed was going to engineer a soft landing, we elected to just watch the property over '23 and keep the dialogue going. Our cost of capital is a fluid metric. We look at it over time, and it adjusts from time to time. As we engaged in this transaction earlier this year, the equity markets were in a different place. That said, we wanted to ensure that the property was going to perform as anticipated. In 2023, the asset had a RevPAR of $257, and the out-of-room spend was very, very strong to result in EBITDA for '23 of $37.7 million. Our underwriting this year has us at $275 RevPAR and $42.2 million of EBITDA. We think Nashville is really just getting started as a market. It's the #2 convention market in the United States behind Orlando. They have just completed a $1.5 billion expansion of the airport and are immediately starting on another $1.5 billion expansion. Oracle just announced that they're moving to Nashville to be closer to the center of health care tech. Amazon is developing a significant presence in the city as well. I think they're going to have about 5,000 jobs in Nashville. The demographics of the city are very positive. You have a lot of demographic inflows into Nashville. The tax environment is very favorable. It's a favorable business environment. The asset itself is unmatched; it is a main and main location literally right across the street from the Music City Convention Center, a $2.1 million facility. The facility for 2023 and '24 on the books exceeds 2029 nights, all over 1 million citywide room nights. The pace in '24 is 19% over '23 and the pace in '25 is 10% over the same time last year. So there are just a lot of very positive things that are happening in this market. I know there's been some talk about new supply, and we spent a lot of time in the market. I spent a lot of time myself in the market. To wrap my head around what could possibly happen, I will tell you that a lot of the planned projects are still in the planning stages because developers are realizing that it is costing more to build than they initially anticipated. Layering higher construction costs with a higher cost of debt and lower proceeds from a construction loan perspective, these deals just aren't getting done. In fact, there was a Ritz-Carlton planned for quite some time, and that transaction got completely pulled by Ritz because the site was tied up and nothing was progressing on it. There will be some select service coming online in the marketplace. We've taken that into consideration in our underwriting, but in terms of full-service, upper-upscale luxury hotels, if and when they happen, it's probably 3 or 4 years out, best-case scenario. That's how we're thinking about Nashville. It's a market we don't have exposure in. It's a market we want to enter, and we've followed this asset for a long time.

Our next question is coming from Shaun Kelley with Bank of America.

Jim, Sourav, and I apologize for going a little bit late. So if there's some piece of prepared remarks that's a repeat here, my apologies. But hoping you can just dig in on what you're seeing on the leisure transient softness that came up a couple of times. Just some examples to give when you started to see that behavior shift, is it continuing into April? Just any kind of sense by market or behavior that you can see right now? That would be great.

Sure, Shaun. Where we started really seeing it was in the short-term leisure transient demand. I want to specify demand because in our prepared remarks, we talked about how rates for leisure have still surprised us to the upside. For our portfolio in Q1, rates were 52% above 2019. If you recall, that's where we were in the prior quarter as well. So the rate is not letting down; it's just the short-term transient demand. Reality is we really started seeing that in March. Part of it is, we suspect, driven by the poor weather that we had in Q1. Going into April, we had the Easter shift, and we have a significant portion of our portfolio that is resorts. Q1 does extremely well for our resorts. The Easter shift is a little, I would say, less impactful for our portfolio. However, what happens with the timing of Easter is that it shortens the time that resorts can really drive rates and demand. So therefore, short-term pickup in April is certainly slower. However, rates are still holding strong. As for April, we don't have the full month data yet, but it is trending effectively flat for the portfolio. Remember, that includes Maui. If you exclude Maui, we were actually closer to slightly above 1% for April. Overall, things are still looking very strong. When we look at the second half of the year, the group piece is looking extremely strong, which gives us confidence for the full year. We picked up 421,000 room nights for the remainder of the year, and 60% of that was for the second half. We have tremendous confidence for the second half, and overall total revenue pace is actually close to 9% for the second half of the year.

Our next question is coming from Aryeh Klein with BMO.

Maybe just going back to Nashville, now that acquisition has been done, how are you thinking about future M&A? Perhaps which markets are of interest? Are there Nashville-type markets that you're not in that you'd still like to get into? And then maybe just on the overall M&A landscape, with rates seemingly higher for longer, has there been any shift in the market? Have you seen assets pulled or anything like that?

Yes. A couple of questions there, Aryeh. Let's talk about the M&A landscape first. There was a fair amount of anticipation among the brokerage community that we would see a pickup in transaction activity as the Fed moved to lower interest rates. We haven't seen that happen yet because of where the Fed is sitting. However, some owners out there will be sellers now because they just can't afford to wait any longer for a lot of reasons. They haven't invested in their assets over the course of the pandemic and might have loans coming due and will need to refinance into a higher interest rate environment. We're hearing chatter that we might see a more active M&A market in the second half of the year. That said, we at Host do not sit around and wait for marketed opportunities. We really prefer to continue working with our long-standing partners, which is how we got the Nashville deal done. You may recall that we also bought the 1 Hotel South Beach from Starwood Capital. We're very happy that Starwood Capital and Crescent have the confidence in Host as an owner to give us this deal on an off-market basis. We're talking to a lot of other folks out there and I'm hopeful that over the course of the year, we can complete additional transactions. We're in a unique position, and we will take advantage of our position. We do not have to go to the debt capital markets to get a deal done. Even post-Nashville, we sit here at 2.3x leverage with $1.7 billion of available liquidity. Maintaining our investment-grade rating is very important to us. With a leverage ratio of roughly 3x, we can acquire another $1.1 billion of assets this year, which remains our focus. We want to elevate the EBITDA growth profile of the portfolio. We briefly mentioned at our Investor Day last May that we're on track to get to $2 billion of EBITDA, and I encourage everyone to watch us and see what we do.

Our next question is coming from Smedes Rose with Citi.

Sourav, I wanted to circle back. I know you talked about this a little bit in your opening remarks, that on a comparable basis, your EBITDA outlook declined by over $20 million. That included some business interruption. It turned out it's going to be a lot more, which is great. But I just wanted to understand, of that about $22 million decline, how much do you think was isolated or managed to be realized in the first quarter? And how much is coming through the balance of the year, and maybe related to your 1-point reduction in sort of RevPAR forecasts?

Sure thing. I just want to clarify and quickly walk through the bridge from our prior guidance to this guidance. The comparable hotel operations actually saw a $13 million decline, which is a result of the change of 1 point from our prior midpoint, going down from 4% to 3%. The $13 million decline is actually impressive, as typically a 1 point decline in RevPAR would equate to about $30 million of EBITDA decline. We're only deducting $13 million from there. You have $20 million of comparable business interruption from the Maui wildfires that you will be adding to that. Then you take out $10 million for Ventana, which might be where you're getting the $22 million because that figure is moving from comps to non-comps. That's Alila Ventana, taking out $10 million of EBITDA. You're adding $2 million incremental for Naples, as our forecast went from $60 million for the year to $62 million. You're adding $29 million from Nashville, the 1 Hotel, and the Embassy Suite, and then another $8 million of business interruption for Ritz-Carlton, Naples. That if you really add that up, gets you to the $1.670 billion. I hope that helps bridge it from our prior guidance. In terms of where that 1-point decline comes from, I would say it's 2/3 in Q1 and about 1/3 in Q2. As I mentioned earlier, our second half is looking very strong. We have a great deal of confidence in the group for the second half, and that confidence has improved. Our total revenue pace for the second half is now over slightly 9%. That's sort of how it lays out. Hopefully, that makes it clear.

Our next question is coming from Stephen Grambling with Morgan Stanley.

Just a follow-up on that. So there's a lot of moving parts in terms of bridging that guidance. Some include business interruption, and some of it is core BI covering some of the disruption. What do you think is the right recurring EBITDA in the year to build off of as we think about longer term?

Sure. If you consider the $1.670 billion that we have guided for the year, the way to think about the long-term run rate is to take out $38 million of business interruption. So it's effectively the $10 million that we already had in the previous guidance plus the $28 million we added to the guidance. You'll take out the $38 million and then add $10 million for Alila Ventana. Additionally, you would add $13 million for Nashville. We're expecting $42.2 million this year; we already have $29 million in there. So that's where the $13 million is coming from Nashville. Furthermore, you would add another approximately $46 million for Maui. For this year, our estimated Maui EBITDA is about $114 million. If you add the $46 million, that sort of gets you back to where we were pre-fire. Overall, it leads us to a pretty even $1.7 billion in terms of ongoing run rate.

Our next question is coming from Bill Crow with Raymond James.

Perfect. Jim, the Four Seasons Orlando appears to be an intriguing resort. It seems that this asset, in particular, has benefited from pent-up inbound international demand and possibly from what could be described as aspiration or surge spending over the last couple of years. I'm interested in understanding how 2024 is looking compared to 2023. More generally, is surge spending starting to decline or cool off a bit?

Yes, I wouldn't necessarily say it's coming down or cooling off. The average daily rate in Orlando is likely to be lower this year than it was in 2023, but it remains significantly higher than it was in 2019. We're not experiencing a downturn in that regard. One factor that may affect us in Orlando this year is some disruption from our condo development, as we're directing guests away from a specific area of the building during construction. Overall, we still have five resorts this quarter that recorded average daily rates over $1,000. There's no noticeable slowdown among affluent customers. The imbalance between international inbound and outbound travel that we discussed last year is still occurring, but I believe it will eventually balance itself out. Regarding Orlando, the Four Seasons achieved an average daily rate of over $2,000 this quarter. People still want to visit Orlando and stay at the Four Seasons. However, we are facing challenges with a strong dollar that hasn't weakened yet. It’s expected to weaken once interest rates decline, which is currently keeping international travelers away from the U.S. We saw a significant increase in the first quarter. While considering the softer leisure demand, we realized that it hasn't completely vanished; people are just choosing to stay home. We found that international outbound travel to the Caribbean in the first quarter reached 135% of 2019 levels, with revenue per available room in the Caribbean rising by 17%. The affluent consumer remains strong, spending money and prioritizing experiences over physical goods. We're not seeing a reset in this area.

Our next question comes from Duane Pfennigwerth with Evercore ISI.

Most of my questions have been asked. But just on the Naples Ritz, can you remind us what seasonality is for that asset historically? I know your guidance implies about 50% of the full-year contribution in the March quarter. But does that align with historical seasonality? What did Q1 typically represent historically if there's such a thing as a 'normal year?'

Sure, Duane. So yes, your estimate is right. We did about $32 million of EBITDA from operations at the Ritz Naples. The $42 million you see in the income statement includes the $10 million of business interruption that was in our previous guidance. From operations alone, we did $32 million, which is about 50%. I would say Q2 is about 25%. Q3 is relatively close to 0%, and then Q4 is the remaining 25%. That's how it breaks up for the year and it is consistent with prior levels in terms of seasonality.

Our next question is coming from Robin Farley with UBS.

Most of my questions have already been addressed. But one thing I was looking at was your commentary about the revenue increase in the quarter, particularly the parts of revenue per room. It sounded like the biggest increase was coming from other revenue, which was up 6% from cancellation and attrition fees. I've wondered if that increase was an unusually high level? Is that something we should be thinking about comping next year or more onetime in nature?

Yes, Robin, clearly, the increase in attrition and cancellation revenue is higher, and I wouldn't say that's necessarily a systemic thing. We were expecting the attrition and cancellation revenues to go back closer to a norm. For the year, we had previously forecasted approximately $57 million, and now we have closer to $71 million for the year. It's not uniform across the portfolio, and part of it is our managers are doing a much better job of collecting those revenues and contracts are tighter. It's just been a trend we're seeing, and we may stabilize at those higher levels, but it's not a systemic issue about the portfolio or anything that jumps out as one-time in Q1.

Our next question is coming from David Katz with Jefferies.

Can you just talk about the deal market a little bit? Are there assets out there that would be sold but not for the cost of capital? Is there still some sort of seller posturing with respect to price that needs to adjust? What are the gating factors for a more active deal trading market to start to occur?

Yes, David, I think the limiting factor is really the cost of debt. It's not so much the availability of debt right now because the CMBS market for those buyers who need to tap into CMBS financing is wide open. A lot of volume has occurred this year across multiple asset classes in real estate. However, the cost of debt is such that it is preventing private equity firms from underwriting to their hurdle returns and concurrently giving the seller the price they are looking for in the asset. This is the biggest gating issue. This situation puts Host in a competitive advantage. I have talked about it before; we do not have to go to the debt window to complete a deal. I expect we will find opportunities over the course of the year where some private equity firms may need to exit on certain assets as they approach the end of their fund's life. We had similar experiences in 2018, starting with the 1 Hotel South Beach, which was an end-of-fund issue with Starwood Capital. Same with the Four Seasons Orlando, another transaction tied to the end of a fund life. I hope we can find additional opportunities in that vein as we work our way through 2024.

Our next question is from Chris Woronka with Deutsche Bank.

Wanted to ask about Hawaii, specifically Maui. You used the term evolution of demand. Can you give us a little more color on kind of what's happening? Are you seeing reservations coming in and getting canceled, or are you seeing the booking windows getting closer? What is your sense of how much visibility you have? Is it getting better or worse? And what are the factors around that?

Yes. I'll start, Chris, and let Sourav jump in with any additional color. We are close to what's happening on Maui. Demand continues to evolve on the island. When the wildfires occurred, those who might have been new to Maui, perhaps staying in Wailea in one of our two terrific properties, took the governor’s word to ‘stay away from Maui.’ Travelers did heed the governor's advice. That language has been tempered since, and the cleanup continues on the west side. The good news is displaced residents are moving to more permanent homes and apartments, which we like to see. The hotel association and all the hotel owners on the island are working together to put a marketing plan in place. That said, a factor still affecting the island is that air capacity, the number of available seats, is down around 19% compared to the first quarter of 2019, consistent with post-wildfire capacity reduction. This is a bit of a chicken-and-egg situation. We need to get people back to the island to show them its beauty and experiences that continue to exist, even if not on the west side. We are confident that once that starts to happen, airlines will increase capacity, and recovery will commence.

Ladies and gentlemen, we have reached the end of our allotted time for questions and answers. I will now turn the call back over to Mr. Risoleo for any closing comments he may have.

Thank you again for joining us. We appreciate the opportunity to discuss our quarterly results with you, and we look forward to seeing many of you on the road and certainly at NAREIT in New York. Have a good day. Thank you.

Thank you, everyone. This concludes today's conference, and you may disconnect your lines at this time. We thank you for your participation.