Xenia Hotels & Resorts, Inc. Q3 FY2024 earnings call

• Marcel Verbaas mentioned the rebranding of the former Hyatt Regency Scottsdale to Grand Hyatt Scottsdale Resort, with completed renovations including guest rooms, meeting space, lobby, etc. • Discussed financial results for the third quarter, noting factors like leisure demand normalization, hurricane impact, and renovation disruption. • Barry Bloom provided details on operating results, including RevPAR, occupancy, ADR, performance of specific hotels, impact of hurricanes, and expense and profit details. • Mentioned capital expenditure projects, including updated spending projections and progress on the Scottsdale renovation. • Atish Shah updated on the balance sheet, including extending and upsizing the corporate credit facility.

For the third quarter of 2024, the company had a net loss of $7.1 million. Adjusted EBITDAre was $44.3 million, and adjusted FFO per share was $0.25. Same property RevPAR for the thirty-one hotel portfolio increased by 1.5% for the quarter, while RevPAR increased by 1.1% when excluding Scottsdale. Same property occupancy increased by 320 basis points, while ADR decreased by 3.3%. Third quarter same property hotel EBITDA of $48.1 million was 6.3% below 2023 levels, and hotel EBITDA margin decreased 200 basis points. Excluding Scottsdale, third quarter hotel EBITDA decreased 3.4%, and hotel EBITDA margin decreased by 144 basis points. Group and corporate transient demands remained relative bright spots during the quarter. Same property group room revenues, excluding Scottsdale, increased 3.8% as compared to the third quarter last year. Midweek corporate transient occupancy continued its positive momentum.

• Reduced full-year adjusted EBITDAre guidance due to third quarter results and reduced fourth quarter outlook. • Fourth quarter outlook moderated by Hurricane Milton impact, demand trends, and Scottsdale relaunch delay. • Lowered RevPAR growth expectations. • Reduced adjusted FFO per diluted share guidance. • Full-year capital expenditure guidance increased by $5 million at the midpoint. • Cash, G&A expense declined by $1 million to $23 million. • Group revenue pace up over 10% and transient revenue pace up over 6% in November and December. • Group business for 2025 continues strong, with about half of 2025 group revenue currently on the books and group revenue pace up nearly 20%.

Q: Dori Kesten asked about guidelines on how the Grand Hyatt Scottsdale may ramp over the next few years.

A: Marcel Verbaas said it will take a few years to get to the low $40 million hotel EBITDA range, with a slower ramp up initially and traction as the year goes on.

Q: Michael Bellisario asked about the $3 million EBITDA impact on Scottsdale and expense pressures.

A: Marcel Verbaas said the $3 million is due to disruption from inaccessible facilities and later launch, and Barry Bloom said expense pressures are fairly even across the portfolio, with margin erosion in smaller hotels due to staffing.

Q: Ari Klein asked about EBITDA contribution of Scottsdale and expense surprises.

A: Marcel Verbaas said Scottsdale isn't contributing much EBITDA this year but expected to get disruption back next year. Barry Bloom said the unexpected was the balance between occupancy and rate, with operators shifting to an occupancy forward strategy.

Q: Austin Wurschmidt asked about early thoughts on leisure rate normalization.

A: Marcel Verbaas said it's early to tell but optimistic with a strong group base.

Q: Tyler Batory asked about potential acquisitions and capital recycling.

A: Marcel Verbaas said they continue to evaluate portfolio, expect more opportunities, and balance internal ROI and asset buying/selling