Xenia Hotels & Resorts, Inc. Q1 FY2025 earnings call

• First quarter results were strong with RevPAR growth exceeding expectations. Grand Hyatt Scottdale's renovation contributed to performance. - Had puts and takes impacting the portfolio, such as hotels benefiting from Presidential inauguration and Super Bowl. - Completed two transactions: acquired fee simple interest in land underlying Hyatt Regency from Santa Clara city for $25 million and sold Fairmont Dallas for $111 million. - Reduced capital expenditures, now expecting $75 - $85 million on property improvements, a $25 million reduction. - Increased quarterly dividend by 17% and repurchased 2.7% of outstanding shares during the first quarter.

For the first quarter of 2025, Xenia Hotels & Resorts reported net income of $15.6 million, adjusted EBITDAre of $72.9 million and adjusted FFO per share of $0.51. Same-property RevPAR for the 31-hotel portfolio was $188.73, with occupancy increasing by 180 basis points and ADR increasing by 3.6% compared to the first quarter of 2024. RevPAR grew by 6.3% year-over-year. One-third of the assets achieved double-digit RevPAR growth and several others had high single-digit growth. The Grand Hyatt Scottdale's renovation was a significant driver. On a same-property basis, first quarter hotel EBITDA was $79.3 million, 10.5% above 2024 levels, and hotel EBITDA margin increased 42 basis points.

• Lowered full year RevPAR growth expectations by approximately 50 basis points at the midpoint, with the bottom end lowered by 100 basis points. - Midpoint of 4.5% RevPAR growth is driven by Grand Hyatt Scottsdale, which accounts for two-thirds of expected growth. - Forecasted full year RevPAR growth for the rest of the portfolio has moderated. - Expect margin outlook to increase 50 basis points for the balance of the year due to better expense management. - Group room revenue pace for 30 hotels is healthy, with balance of year group pace up approximately 22%. - Adjusted FFO per diluted share forecast is down about 1% at the midpoint or $0.02, but expects adjusted FFO per diluted share of $1.62 or slightly ahead of last year.

• Macro-economic uncertainty, including potential impact on consumer spending. - Tariffs on goods sourced internationally affecting capital project costs. - Sale of Fairmont Dallas may negatively impact the group-focused hotel in the near and medium term due to expected need for significant renovation which was avoided by the sale.

Q: Have group booking trends evolved in response to current uncertainty? Have you seen any increase in cancellations or are groups in more of a wait-and-see mode right now?

A: Production in the first quarter was healthy relative to last year's first quarter, no uptick in cancellations or attrition, but monitoring closely.

Q: Have you seen any meaningful impact from lower international inbound travel thus far? And which of your markets are most exposed to international inbound?

A: Impact has been relatively limited, portfolio not very dependent on international visitation, markets like Orlando and Phoenix have some exposure but international business is a small percentage of overall business.

Q: Could you give some background on the process of the Santa Clara transaction? Who approached whom, and why now? And what does optionality mean for evaluating decisions?

A: Bought from city of Santa Clara as they marketed the parcel, unique opportunity to eliminate rent escalation and expiration risk. Optionality means asset is more valuable as fee simple, creating long-term optionality.

Q: On CapEx, is the plan to reevaluate projects later this year and do those next year? How do you weigh impact on returns and relative RevPAR index of properties by deciding not to spend CapEx?

A: Continual evaluation process, took step back due to tariff uncertainty and risk of uneconomic projects. Evaluate based on asset condition, seasonality, and ROI.

Q: Can you give color on leisure standpoint and implications for leisure segment in full year guide?

A: Leisure performance varies by market, property, and local factors. Implied slight low single digit percentage decline in RevPAR at leisure assets overall for balance of year.

Q: Anything to share on 2026 group bookings and Scottsdale group bookings?

A: Too early to talk about 2026 specifically, sales teams focused on 2026, Scottsdale group production strong with rate and volume up significantly from 2019.

Q: What portion of $25 million reduction in CapEx guidance is related to Fairmont?

A: A little north of $10 million, related to avoided infrastructure work planned for Fairmont Dallas if not sold.