James F. Risoleo
President, Chief Executive Officer and Director at Host Hotels & Resorts
Thank you, Jaime, and thanks to everyone for joining us this morning. We kicked off the first quarter of 2022 with meaningful outperformance and once again substantially beat all consensus metrics for the quarter. We delivered adjusted EBITDAre of $306 million and adjusted FFO per share of $0.39 during the quarter. All owned hotel pro forma EBITDA of $330 million in the first quarter, was just 18% below 2019, and March pro forma hotel EBITDA came in 8% above 2019 driven by significant rate growth at our resorts. Pro forma total revenues in the first quarter increased 10% sequentially over the fourth quarter, while pro forma hotel level operating expenses grew 5%. The increase in revenues was driven by improvements across rooms, F&B and other departments. Pro forma RevPAR for the first quarter was $167, an 11% improvement from the fourth quarter as rates continue to increase in our Sunbelt markets and hold up at our urban hotels.
This is the highest quarterly RevPAR we have seen since the onset of the pandemic, bringing our RevPAR to approximately 18% below first quarter 2019 levels. Our recent acquisitions, dispositions and renovated properties continued to contribute to our performance during the first quarter and notably, we had five hotels with ADRs of over $1,000. Preliminary April RevPAR is expected to be approximately $225 to $230, which is up slightly to our March RevPAR. It is worth pointing out that our preliminary April monthly RevPAR represents the first time that our monthly RevPAR is expected to exceed 2019 levels since the onset of the pandemic. However, consistent with historical monthly trends, we expect to see a pullback in May and June relative to 2019 levels. In addition to Maui and San Diego, we are pleased to see urban markets such as New York, Washington, D.C. and San Francisco, driving the outperformance to our forecast. In short, all business segments and markets are trending in a positive direction, and we are very pleased with our performance.
Subsequent to quarter end, we sold the 1,780-key Sheraton New York Times Square Hotel for $373 million or 28 times 2019 EBITDA. When calculating the EBITDA multiple, we included $136 million of an estimated foregone capex over the next five years. In connection with the sale, we are providing a $250 million bridge loan to the purchaser. In addition, we sold a 243-key hotel YVE Miami for $50 million, including $1 million for the FF&E replacement funds or 23.2 times 2019 EBITDA. When calculating the EBITDA multiple, we included $9.5 million of estimated foregone capex over the next five years. This brings our 2021 to 2022 year-to-date total dispositions to approximately $1.4 billion at a blended 17.8 times EBITDA multiple, including estimated foregone capital expenditures of $435 million, which compares favorably to our $1.6 billion of acquisitions at a blended 13 times EBITDA multiple. Our 2021 acquisitions continued to perform substantially ahead of our underwriting expectations. Based on first quarter performance, EBITDA from our seven new hotel acquisitions and two golf courses, is on track to meaningfully outperform our underwriting expectations.
Looking back on our transaction activity since 2018, we have acquired $3.2 billion of assets at a 14 times EBITDA multiple and disposed off $4.9 billion of assets at a 17 times EBITDA multiple, including $938 million of foregone capital expenditures over the next five years. Comparing pro forma 2019 results for our current portfolio to 2017, we have increased the RevPAR of our assets by 11%, EBITDA per key by 25%, EBITDA margins by 190 basis points and avoided considerable business disruption associated with capital projects over the past two years. As we continue to evaluate capital allocation opportunities, our efforts will remain focused on assets that have the potential to bolster our EBITDA growth profile. Turning to first quarter operations. Our total portfolio pro forma revenue was up 10% sequentially to the fourth quarter, driven by 16% rate growth. Transient revenue was up over 1% compared to the fourth quarter and rate was up 18%. Putting this into perspective, first quarter transient room revenue was 97% of first quarter 2019.
Transient was again driven by our Sunbelt and Hawaiian hotels, where revenue was up 17% sequentially with a 21% improvement in rate, and once again exceeded prior peak levels for the fourth quarter in a row. Drilling down to resorts, outperformance continued as ADR grew by 48%, leading to a transient revenue increase of 42% compared to 2019. Our one Hotel South Beach and Four Seasons Orlando grew transient revenue over $10 million each, with ADR up 60% to 2019. Group business continued to improve at our hotels during the first quarter. Group revenue was up 33%, driven fairly equally by rate and demand growth compared to the fourth quarter. Despite a weak January, we were encouraged by net booking activity in the quarter for the quarter, which resulted in 682,000 group rooms sold for the quarter. We saw meaningful improvement in banquet and AV revenue as group business continued to return. In the first quarter, banquet and AV revenue increased by $24 million, up 17% over the fourth quarter. As groups get back to in-person meetings, we expect the trend of higher out-of-room spend to continue.
Looking forward to our expectations for group in 2022, we currently have three million definite group room nights on the books, which compares favorably to the 2.7 million group room nights we had on the books for 2022 as of the fourth quarter after adjusting for our recent dispositions. Group rate in 2022 is up 4% to the first quarter of 2019, a 300 basis point increase over the last quarter, with one million definite group room nights on the books in the second quarter. This represents 82% of second quarter 2019 actual group room nights. Last quarter, our 2022 definite group room nights on the books represented 60% of 2019 actuals. Adjusted for our transactions and including bookings from the first quarter, 2022 definite group room nights now stand at approximately 70% of 2019 full year actuals. For the remainder of the year, 2022 definite group room night pace is down 14% to 2019, while total group revenue pace is down just 8% to 2019. Sourav will get into more detail on business mix and markets in a few minutes. In addition to delivering significant operational improvements, we continue to execute on our three strategic objectives, all of which are aimed at elevating the EBITDA growth profile of our portfolio.
As a reminder, our objectives include redefining the hotel operating model with our operators, gaining market share at hotels through comprehensive renovations and strategically allocating capital to development ROI projects. As a reminder, we are targeting a range of $147 million to $222 million of incremental stabilized EBITDA on an annual basis from the initiatives and projects underlying our three strategic objectives. $100 million to $150 million is expected to come from potential long-term cost savings over time based on 2019 revenues from redefining the operating model with our managers. We have achieved approximately 60% to 70% of these savings to date. Another $22 million to $37 million of incremental stabilized EBITDA is related to our goal of gaining three to five points of index growth at the 16 Marriott transformational capital program hotels and eight other hotels where comprehensive transformational renovations have been recently completed or are underway. Starting with the Marriott transformational capital program portion of our renovations.
During the first quarter, we completed the Marina del Rey Marriott and the Houston Marriott Medical Center. This brings the number of completed properties to 12 out of 16 in this program with 89% of the work complete, and we expect to be substantially complete by the end of 2022. The remaining Marriott transformational capital program properties include the Boston Copley Marriott, the San Diego Marriott Marquis, the JW Marriott in Houston, which will be substantially completed by year-end and the Marriott Metro Center in Washington, D.C., which we expect to complete in the first half of 2023. We expect to receive over $11 million in operating profit guarantees from Marriott this year related to these renovations. In total, we expect to invest approximately $750 million on the Marriott transformational capital program assets. As a reminder, we were planning to invest approximately 70% of the $750 million as part of our routine cycle-based renovations. The remaining 30% is ROI-focused capex and includes renovation scopes brought forward from future years to create comprehensive transformational renovations.
We believe these renovations allow us to capture incremental market share as is the case at the Ritz-Carlton Amelia Island, where we have seen a RevPAR index share gain of eight points since May 2021. The Ritz-Carlton Amelia Island is now the number one hotel in its competitive set, up from three or four historically. In addition to the 16 Marriott transformational capital program assets, we have eight hotels where we have completed or are in the process of completing major renovations. The completed hotels include The Don CeSar, Hyatt Regency Maui and Hyatt Regency Coconut Point. The Ritz-Carlton Naples Beach Resort and Miami Marriott Biscayne Bay, are both expected to be completed by year-end and the Westin Denver Downtown, the Westin Georgetown in Washington, D.C. and the Fairmont Kea Lani in Maui are scheduled to be finished by mid-2023. In total, we expect to invest approximately $420 million on these eight assets over four years, $157 million of which we expect to spend in 2022.
And finally, we are targeting another $25 million to $35 million of incremental stabilized EBITDA from four major development ROI projects. During the first quarter, we completed and opened the 2-acre River Falls Aquatics Park and substantially completed the 60,000 square foot meeting space expansion at our Orlando World Center Marriott. Both of these projects came in ahead of schedule and under budget. As mentioned by year-end, we expect to complete the expansion at the Ritz-Carlton Naples Beach Resort, which adds to the Andaz Maui Villas and AC Scottsdale North, both of which are complete. These four assets make up the current development ROI projects and our third strategic objective and we continue to identify new development projects that will unlock value within our portfolio. In total, we expect to invest $216 million on these four assets.
Stabilization of these projects is expected to occur within two to three years of completion, but we are seeing early signs of outperformance. In addition to the incremental stabilized EBITDA from our three strategic objectives, we expect approximately $120 million to come from the seven hotel and two golf course acquisitions we completed in 2021, all of which are meaningfully outperforming our underwriting for 2022. In closing, we continue to improve the quality of our portfolio with our recent dispositions, and we are very pleased with the $1.6 billion of acquisitions we closed on in 2021. As the lodging recovery continues to accelerate, we believe Host is very well positioned to capture a greater share of demand given the investments we have made in our hotels, our improved portfolio quality and our balance sheet strength. With that, I will now turn the call over to Sourav.