The company now forecasts funds from operations between 27 cents to 29 cents per share for the third quarter and $1.75 to $1.85 per share for the full year.

Analysts polled by Thomson Financial, on average, expect FFO of 34 cents per share for the third quarter, and $1.88 per share for the year.

In April, the company had said it expected annual FFO between $1.88 and $1.98 per share.

Funds from operations, or FFO, which adds such items as amortization and depreciation back to net income, is considered a key measure of REIT strength because it gives a more accurate picture of cash performance.

The full-year outlook, as well as its third-quarter forecast, assumes a same-hotel revenue per available room decline between about 2 percent and 4 percent for the third quarter. Host Hotels expects it to range from a decrease of 1 percent to an increase of 1 percent for the full year.

Revenue per available room, also known as revpar, is a key gauge of a lodging company's performance.

The company expects earnings per share between 7 cents to 9 cents for the third quarter and 84 cents to 94 cents for the full year.

In morning trading, Host Hotel shares fell 17 cents to $11.43.