Xenia Hotels & Resorts Posts $8.5 Million Net Income in Q1 2024, Showing Steady Growth

Published on May 3, 2024

Xenia Hotels & Resorts, known as Xenia, released its financial results for the quarter ending March 31, 2024. Here are the highlights:

• Net income for common stockholders stood at $8.5 million, equaling $0.08 per share.
• Adjusted EBITDAre was $65.3 million, marking an 8.5% decrease compared to the first quarter of 2023.
• Adjusted FFO per diluted share was $0.44, a $0.04 increase from the same period in 2023.
• Same-property occupancy rose to 67.4%, up by 130 basis points from the first quarter of 2023.
• Same-property ADR (average daily rate) was $262.39, a 3.5% decrease from the first quarter of 2023.
• Same-property RevPAR (revenue per available room) was $176.86, down by 1.5% from the first quarter of 2023. Excluding the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, which is undergoing renovation, RevPAR increased by 3.7% to $178.07.
• Same-property hotel net income was $36.7 million, a 10.1% decrease from the first quarter of 2023. Excluding the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, hotel net income increased by 15.6% to $34.6 million.
• Same-property hotel EBITDA was $70.7 million, an 8.5% decrease from the first quarter of 2023. Excluding the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, same-property hotel EBITDA increased by 4.7% to $67.2 million.
• Same-property hotel EBITDA margin was 26.4%, down by 228 basis points from the first quarter of 2023. Excluding the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, the hotel EBITDA margin decreased by 14 basis points.
• In capital markets activities, the company repurchased 468,107 shares of common stock at an average price of $13.51 per share, totaling approximately $6.3 million. Additionally, a first quarter dividend of $0.12 per share was declared for common stockholders recorded on March 28, 2024.

“We are pleased with our first quarter results as our portfolio RevPAR and Adjusted EBITDAre exceeded our expectations for the quarter,” said Marcel Verbaas, Chair and Chief Executive Officer of Xenia. “Despite the impact of the shift in the timing of Easter weighing on March results, our Same-Property RevPAR increased by 3.7% for the quarter when excluding the results at Hyatt Regency Scottsdale. While this healthy increase was driven by broad-based positive results in the portfolio, we saw strong growth at our larger group-oriented hotels in Santa Clara, Houston, Portland, San Francisco and San Diego as well as at our recently renovated hotels, particularly Grand Bohemian Hotel Orlando and Canary Hotel Santa Barbara. The continuation of group demand recovery, gradual improvement in business transient demand and stabilizing leisure demand, coupled with the growth potential we believe exists within our high-quality portfolio, continue to fuel our belief that we are poised for outperformance in the years ahead.”

“We are encouraged by early results in the second quarter, as we estimate that Same-Property RevPAR, excluding Hyatt Regency Scottsdale, grew by approximately 6.2% in April,” continued Mr. Verbaas. “The transformative renovation and upbranding of Hyatt Regency Scottsdale is progressing as planned and we continue to expect completion by the end of the year. While this large project will continue to weigh on overall near-term results and visibility into overall demand for the remainder of the year remains limited in the current operating environment, we are maintaining the midpoint of our previously provided Adjusted EBITDAre guidance range. We remain bullish that the soon-to-be launched Grand Hyatt Scottsdale, as well as other recently completed renovations and our most recent acquisitions, will drive meaningful earnings growth in 2025 and beyond.”

Operating Results

The Company’s results include the following:

The phrase “Same-Property” refers to all hotels under ownership as of March 31, 2024, accounting for renovation disruptions related to different capital projects within defined timeframes. Financial metrics excluding GAAP, such as EBITDA, EBITDAre, Adjusted EBITDAre, FFO, Adjusted FFO, Same-Property Hotel EBITDA, and Hotel EBITDA Margin, are employed in the analysis. Definitions and tables elaborating on these non-GAAP financial measures, along with reconciliations from net income to Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), EBITDA for Real Estate (“EBITDAre”), Adjusted EBITDAre, Funds From Operations (“FFO”), Adjusted FFO, Same-Property Hotel EBITDA, and Hotel EBITDA Margin, are provided later in this press release.

The results encompass all hotels owned during the periods specified, incorporating the outcomes of hotels sold or acquired for the actual duration of ownership by the Company.

Specific expansions occurred during the specified periods: three rooms were added at The Ritz-Carlton, Denver in April 2023, three rooms at Marriott Woodlands Waterway Hotel & Convention Center in November 2023, and one room at Grand Bohemian Hotel Orlando, Autograph Collection in March 2024.

Regarding Liquidity and Balance Sheet as of March 31, 2024, the Company held total outstanding debt of approximately $1.4 billion with a weighted-average interest rate of 5.47%. It possessed around $140 million in cash and cash equivalents, including hotel working capital, and full availability on its revolving line of credit, resulting in total liquidity of about $590 million. Furthermore, as of the conclusion of the first quarter, the Company possessed about $57 million in restricted cash and escrows. It faces no debt maturities until August 2025 and continues to maintain complete availability on its revolving line of credit.

In terms of Capital Markets, during the quarter, the Company repurchased 468,107 shares of common stock at an average price of $13.51 per share, totaling approximately $6.3 million. It still has $127.4 million in remaining capacity under its repurchase authorization. The Company did not issue any shares of its common stock through its At-The-Market (“ATM”) program in the quarter and had $200 million of remaining availability as of March 31, 2024.

During the quarter ending on March 31, 2024, the Company allocated $33.4 million toward enhancing its portfolio through Capital Expenditures.

An update on the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch indicates the ongoing transformative renovation and upbranding to a Grand Hyatt, encompassing various components such as pool complex renovations, guest room refurbishments, meeting space expansions, public spaces, food & beverage outlets, building façade redesign, and other infrastructure enhancements, all expected to be completed by specified timelines.

Noteworthy projects completed in the first quarter include the renovation of meeting rooms at Waldorf Astoria Atlanta Buckhead, the reconcepting and renovation of the Bohemian Hotel Savannah Riverfront, Autograph Collection’s restaurant into Coastal 15, a modern seafood concept, and the renovation of ELWAY’S Downtown restaurant at The Ritz-Carlton, Denver.

The Company’s updated full-year 2024 outlook considers macroeconomic uncertainty, with the guidance assuming no additional acquisitions, dispositions, equity issuances, or share and/or senior note repurchases. The Same-Property (32 Hotel) RevPAR change shown encompasses all hotels owned as of March 31, 2024, while the Same-Property (31 Hotel) RevPAR change shown includes all hotels owned as of March 31, 2024, excluding Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch.

The full-year 2024 guidance includes the following assumptions:

1. Renovation disruptions are expected to decrease Adjusted EBITDAre and Adjusted FFO by about $16 million, which is $2 million more than previously estimated.
2. General and administrative expenses are anticipated to be around $25 million, excluding non-cash share-based compensation, with no change from previous guidance.
3. Interest expenses are projected to be approximately $77 million, excluding non-cash loan-related costs, with no change from previous guidance.
4. Income tax expenses are estimated to be around $2 million, with no change from previous guidance.
5. Capital expenditures for Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch are expected to range between $65 million and $70 million, with no change from previous guidance.
6. The weighted-average diluted shares/units are forecasted to be 104.1 million, an increase of 0.1 million shares/units from previous guidance.

The First Quarter 2024 Earnings Call is scheduled for Friday, May 3, 2024, at 10:00 AM Eastern Time. To join the conference call, dial (833) 470-1428 with access code 514506. You can also access a live webcast of the call on the Company’s website, www.xeniareit.com. A recording of the call will be accessible in the Investor Relations portion of the website for a duration of 90 days.