Host Hotels & Resorts, Inc. (NYSE:HST) Q1 2018 Earnings Conference Call Transcript
May 03, 2018 • 10:00 am ET
James F. Risoleo
the year and we will be monitoring this segment closely.
As we anticipated, our group business was impacted by difficult comparisons in Washington, D.C. and Houston, which benefited from the Super Bowl, last year. In addition, the earlier timing of the Passover and Easter holidays impacted group demand, as these holidays are typically weaker for group demand and stronger on the transient side.
For the quarter, group revenue decreased 3.5% due to these events and holiday shifts. We expect group business to rebound in the second quarter as these calendar items abate. As we look to the remainder of the year, our group booking pace is strong, with group revenues up 4.5%. The fourth quarter of this year looks to be the strongest quarter with group revenue 6.5% ahead of last year.
Overall, our group revenue pace is up approximately 2.2% to where we are -- where we were at the same time, last year. With approximately 85% of our group revenues on the books for 2018 and occupancies at all-time highs, we continue to see the booking window extend. As was the story in 2017, we continue to do a great job improving profitability at our properties and driving comparable EBITDA margin growth.
In the first quarter, comparable EBITDA margins grew 60 basis points. We received a one-time tax rebate at the Westin Grand Central in New York, which positively impacted margins by 28 basis points. The balance of the margin lift was a result of increased productivity, strict cost controls, continued utility reductions as a result of sustainability investments and an increase in ancillary revenues.
I should point out that we had made over $170 million in sustainable investments since 2015, and are achieving combined annual saving yields in excess of 14% on those investments. We also received numerous awards and recognitions in this area, including the 2017 NAREIT Leader in the Light award. We are committed to sustainable business practices and happy to be recognized for our achievements.
Our asset management and enterprise analytics groups continue to be focused on driving cash flow to the bottom line. A 32 basis point improvement on -- in margin on comparable hotel revenue growth of 1.5% is a testament to their efforts.
To further enhance our analytic capabilities, we entered into an agreement with IBM Research, to leverage IBM's artificial intelligence expertise. This will allow us to improve our predicted capabilities by extracting insights from both structured and unstructured information. This is another example of taking advantage of our scale and access to information to develop leading-edge technologies and processes to drive long-term investment returns. This combination of better-than-expected first quarter results and increased macroeconomic optimism is driving the across-the-board raise to our full-year guidance.
The global economy continues to exhibit strength and appears supportive of industry growth. The economic indicators we closely follow, corporate profits and nonresidential fixed investment continues to remain strong. As mentioned earlier, the pickup in business transient travel is positive and gives us further reason