Jim Risoleo
President & Chief Executive Officer at Host Hotels & Resorts
Thank you, Jaime. And thanks to everyone for joining us this morning. 2023 was a terrific year for Host on several fronts. First, we delivered strong operational improvements, driven largely by occupancy increases and continued rate growth. Second, we completed the work on the three strategic objectives we established in 2021 and we will continue to realize the benefits of our ongoing efforts well into the future. Third, we returned significant capital to stockholders in the form of dividends and share repurchases, continued to successfully allocate capital through reinvestment in our portfolio, and announced an agreement with Hyatt to complete transformational renovations at six properties in our portfolio. Lastly, we maintained an investment-grade balance sheet and continue to position Host to capitalize on the significant growth opportunities we see in the lodging space, including potential acquisition opportunities.
Turning to our results. We finished 2023 above the midpoint of our full-year guidance range. We delivered adjusted EBITDAre of $1.629 billion and adjusted FFO per share of $1.92. Comparable hotel total RevPAR grew 8.3% and comparable hotel RevPAR grew 8.1% compared to 2022. Notably, comparable hotel EBITDA margin was 60 basis points ahead of 2019 due in large part to our efforts to redefine the hotel operating model with our managers.
During the fourth quarter, we delivered adjusted EBITDAre of $378 million and adjusted FFO per share of $0.44, which includes $26 million of business interruption proceeds from Hurricane Ian. Comparable hotel RevPAR improved 1.5% compared to the fourth quarter of 2022. Our RevPAR performance for the quarter was driven by an increase in both occupancy and rate.
Despite an estimated 30 basis point impact from the wildfires in Maui, our fourth-quarter comparable hotel EBITDA margin of 28.1% was flat to 2019. This marks the seventh consecutive quarter since the onset of the pandemic that we have achieved total RevPAR, RevPAR comparable hotel EBITDA, and margins at or above 2019 levels. I will say that one more time. We have delivered operating metrics at or above 2019 levels for nearly two years. As a reminder, the operational results discussed today refer to our comparable hotel portfolio in 2023, which excludes Hyatt Coconut Point and Ritz-Carlton Naples.
In 2024, our comparable hotel portfolio only excludes Ritz-Carlton Naples. During the fourth quarter, our portfolio results were once again impacted by
The evolving nature of demand at our three resorts on Maui. We estimate that the Maui wildfires impacted fourth quarter comparable hotel RevPAR by 130 basis points, comparable hotel total RevPAR by 150 basis points, comparable hotel EBITDA by $9 million, and comparable hotel EBITDA margin by 30 basis points.
For the full year, we estimate that Maui impacted our comparable hotel RevPAR by 50 basis points, comparable hotel total RevPAR by 70 basis points, comparable hotel EBITDA by $13 million, and comparable hotel EBITDA margin by 10 basis points. [Technical Issues] Potential proceeds are not yet known. Shifting to another market that remains top of mind. San Francisco's results showed meaningful year-over-year improvement in the fourth quarter. RevPAR was up 10% driven by both rate and occupancy and F&B revenue was up 15%. Group business is driving strong results, with group room revenue up 36% for the fourth quarter compared to last year as our properties have shifted their focus to in-house groups until the citywide calendar improves in 2025.
We have seen positive trends from 2023 continuing in the first quarter of 2024 with conventions driving weekday demand. Infact, January was the best month in the history of the San Francisco Marriott Marquis with total revenue and EBITDA setting all-time records. Briefly looking at out-of-room spend in the fourth quarter, comparable hotel, food and beverage and other revenues were down slightly due to impacts from Maui. We estimate that Maui impacted fourth-quarter F&B and other revenues by 60 basis points and 540 basis points respectively. Encouragingly, the out-of-room revenue trends we have seen post-pandemic remain elevated for the rest of our portfolio.
In addition to driving strong RevPAR growth and operating improvements across the business, we continue to be recognized as a global leader in corporate responsibility over the course of 2023. We introduced new 2030 environmental and social targets which are aligned with our vision of becoming a net positive company by 2050, incorporate the progress made toward our prior goals, and are more reflective of our current portfolio by updating our baseline to 2019. These environmental and social targets will enable our team to focus on and measure our progress over the long term.
Our 2030 environmental targets are in their third generation and put Host on a linear path to net-zero operations by 2040, leaving 10 years to get to net positive by 2050. We now have 14 properties with LEED certification and projects in the pipeline at 19 properties. In addition, we are the only lodging REIT to have green building certifications linked to our sustainable financings. In this year's Corporate Responsibility Report, we highlighted our asset-level climate risk assessment across three near-term climate perils, including flood, wind, and wildfire, and three long-term perils, including heat, cold, and water stress. Based on the results, we have identified assets with elevated climate risks and their corresponding EBITDA contributions, which allows us to prioritize capital investments in resilience and better underwrite potential acquisitions.
Our 2030 social targets are in their second generation and now include two responsible supply chain targets around supplier diversity and responsible sourcing and one new community impact target. As an employer of choice, we aim to lead our industry by integrating diversity, equity, inclusion, and belonging best practices into all aspects of our culture.
Turning to capital allocation, we repurchased 1.9 million shares at an average price of $16.50 per share in the fourth quarter. For the full year, we repurchased 11.4 million shares at an average price of $15.93 per share for a total of $181 million. We have approximately $792 million of remaining capacity under the repurchase program. In the fourth quarter, we declared a quarterly cash dividend of $0.20 per share, an 11% increase over the prior quarter. We also announced a special dividend of $0.25 per share, bringing the total dividends declared for the year to $0.90 per share. In total, we returned over $700 million of capital to shareholders in 2023.
Additionally, in the fourth quarter, the buyer of the Sheraton New York repaid the $250 million seller financing loan we provided to effectuate the disposition. Our size, scale, and balance sheet have allowed us to provide seller financing on three recent dispositions at a time when debt capital was scarce, further demonstrating that our fortress balance sheet and unparalleled access to capital create unique opportunities and substantial value for shareholders.
Turning back to fourth-quarter operations. Our overall business mix results were skewed by Maui as leisure transient demand decreased and group demand increased, driven by recovery and relief groups. Outside of this temporary demand shift, business mix results were as expected. Group led the growth with nearly one million group room nights sold in the fourth quarter, bringing our total group nights sold for 2023 to $4.1 million or 112% of comparable 2022 actual group room nights. Business transient continued its gradual improvement with 7% revenue growth for the quarter, and leisure remaining strong with transient rates at our resorts up 58% to 2019, including our three Maui resorts.
As we look at the current backdrop for our business, we are optimistic about 2024 for several reasons. First, macroeconomic sentiment is incrementally more positive with consensus expectations of a soft landing. Second, supply levels and anticipated growth in supply is at historically low levels in our markets and chain scales. Third, we expect tailwinds from increased airline capacity and continued improvement in the international inbound demand imbalance. And lastly, the transactions market is expected to pick up as improved macroeconomic sentiment allows for more visibility on operating performance and the market is expecting that we will see rate cuts later this year.
As we consider these factors, we believe Host is best positioned to capitalize on acquisition opportunities with $2.9 billion of total available liquidity and a net leverage of 1.9 times. In addition, we have completed 24 transformational renovations and four development ROI projects, which we believe provide meaningful tailwinds for our portfolio.
Looking at results to date, of the 10 hotels that have stabilized post-renovation operations, the average RevPAR index share gain is 8.2 points, which is well in excess of our targeted gain of 3 points to 5 points. We are also continuing to reinvest in our portfolio with additional comprehensive renovations and resiliency investments underway. And we do not expect meaningful disruption this year. And most importantly, we believe that diverse demand drivers in our portfolio leave us well-positioned for top-line growth. Sourav will discuss more operational detail and our 2024 outlook in a few minutes.
Turning to portfolio reinvestment, in 2023 we invested nearly $650 million in capital expenditures at our properties, completing renovations to approximately 3,500 guestrooms, 111,000 square feet of meeting space, and approximately 110,000 square feet of public space. In addition, we substantially completed property restorations following Hurricane Ian. In 2024, our capital expenditure guidance range is $500 million to $605 million, which reflects approximately $225 million to $280 million of investment for redevelopment, repositioning, and ROI projects. Within the Hyatt Transformational Capital Program, we have already started renovations at the Grand Hyatt Atlanta and the Grand Hyatt Washington, which we expect to complete in the first half of 2025.
We will also start transformational renovations at the Hyatt Regency Reston in the fourth quarter of this year. Other major ROI projects include the completion of renovations at the Hilton Singer Island Resort and the construction of the Phoenician Canyon Suites Villa expansion. In addition to our capital expenditure investments, we expect to spend $50 million to $70 million on the luxury condominium development at Four Seasons Resort Orlando at Walt Disney World Resort this year.
We expect to benefit from approximately $9 million of operating profit guarantees related to the Hyatt Transformational Capital Program, which will offset the expected revenue disruption at those properties for 2024, we are extremely proud of our operational and financial performance in 2023 and the iconic portfolio and balance sheet we have built and maintain. Our people, our platform, and our portfolio have allowed us to create meaningful shareholder value and we are confident in the significant opportunities ahead for continued growth and value creation in 2024.
With that, I will now turn the call over to Sourav.
