Host Hotels & Resorts will leave the chandelier on for you. The largest hotel real estate investment trust (REIT) in the US, Host Hotels owns about 120 luxury and upscale hotels with some 63,000 rooms in North America, South America, and Europe. Its properties are managed by third parties; most operate under the Marriott brand and are managed by sister firm Marriott International. Other primary brands include Hyatt, Ritz-Carlton, Sheraton, and Westin. To maintain its REIT status, which carries tax advantages, Host operates through majority-owned Host Hotels & Resorts LP.
Host's strategy is to acquire hotels in central business districts of major cities or near airports, resorts, and convention centers; maintain sufficient capital and liquidity to take advantage of such opportunities; diversify portfolio holdings and revenue sources through investment funds and joint ventures; and dispose of non-core assets, including smaller or older hotels and those in suburban or slow-growth areas. The company has also said it will consider the acquisition of midscale properties to compliment its traditional focus on upscale and luxury hotels.
After acquiring four upscale hotels around the globe in 2010, Host continued its spree in 2011. The company bought the New York Helmsley Hotel from Helmsley Enterprises and announced plans to renovate the 775-room property and reopen it under the Westin brand. In a separate deal, Host acquired the Manchester Grand Hyatt, San Diego's largest hotel, for $570 million.
The global recession severely impacted the hospitality industry and Host was no exception. Lodging demand fell in 2008 and 2009, and revenues followed. But Host's capital and asset management skills helped it weather the downturn. While still below historical levels, demand increased in 2010 as the economy exhibited signs of improvement. The company expects the trend to continue.
While Host emphasizes US acquisitions, it still looks to diversity its holdings abroad, especially in Asia, Europe, and Latin America. As such, the REIT bought seven hotels in New Zealand in 2011. To further extend its foothold in international markets, Host has taken a joint venture approach when buying new properties. It owns nearly a third of a joint venture with Dutch pension fund Stichting Pensioenfonds that owns 11 hotels in six European countries.
Host also owns a quarter of a joint venture with Singapore's GIC Real Estate that arranged to acquire a minority interest in another joint venture that is developing seven hotel properties in India. It is also looking at opportunities in Australia, China, Japan, and Vietnam. Host is eying Brazil for growth, as well.
Formerly known as Host Marriott, Host Hotels & Resorts split from Marriott International in 1993. The company adopted its current name in 2006 after it diversified its portfolio beyond the Marriott brand. The Marriott family has mostly sold its interest in Host.