James Risoleo, Host Hotels CEO, joins 'The Exchange' to discuss Q2 earnings and demand. He says luxury travel has been outperforming and the affluent consumer is raring to go.

Host Hotels CEO James Rosolio stated that the luxury hotel segment remains robust, with no signs of slowdown among affluent travelers. The company's portfolio, which includes Ritz-Carlton and Four Seasons properties, has seen strong performance, leading to an increase in its full-year financial guidance and EBITDA forecast.

Rosolio attributed the growth to significant investments in property upgrades and a focus on high-end customers. He noted that luxury hotel revenue per available room (RevPAR) has consistently outperformed other segments, with notable increases in food and beverage revenues. The CEO also highlighted that affluent consumers are benefiting from gains in both stock and housing markets, supporting continued demand for luxury accommodations.

Host Hotels CEO: Luxury has been outperforming for a while

Host Portfolio includes a handful of Ritz-Carlton, four seasons, and one hotel properties. For more, we're joined by Host Hotel CEO James Rosolio. Jim, any shifts, notably, that you're seeing in international travel with the currency things happening, or is the luxury consumer still raring to go? Hi, John. Thanks for having me. Good to be with you again. The affluent consumer is still raring to go. We have seen no slowdown whatsoever. Our assets are performing extremely well. We couldn't be happier with our second quarter results and our ability to not only beat but raise our four-year guide and our EBITDA by $60 million to a new midpoint of $1,705,000,000. It's really being driven by the money that we've invested in our assets, $1.7 billion over the last six years in ROI CapEx, and the capital allocation decisions we made over the last eight years, where we are really geared toward the affluent customer. The affluent customer is doing quite well. When they show up at our properties, we're getting no rate resistance to some of the assets that you mentioned early on, and the out-of-room spend keeps going up. We had a very strong increase in food and beverage revenues in the quarter of 4% as well, driven by outlet growth, really strong growth in our outlets. Does that tend historically to reflect the rise in the stock market? I imagine a lot of your luxury consumers do have quite a bit of their wealth in stocks. They're getting a decent rate on their more conservative investments, a fixed income as well, I imagine, so they're maybe feeling a little flush, no? I think they're very well-positioned when they look at their balance sheet today. But interestingly, John, luxury Red Par has consistently outperformed the other hotel segments over long periods of time. Luxury Red Par in the quarter was up 5.9% on a compound annual growth basis. If you go all the way down to the bottom of the chain scale, economy Red Par lost ground to the tune of about 5% in the quarter. Luxury has been outperforming for quite a while. Yes, the consumer is looking at the balance sheet based on how their stock portfolio is going, but there's a lot of wealth that's been created in housing as well.

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