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XH

Xenia Hotels & Resorts, Inc. (XHR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was a clean beat on Street expectations: revenue $288.9M vs $275.3M consensus, EPS $0.15 vs $0.06 consensus, and EBITDA ahead; Same-Property RevPAR +6.3% YoY with occupancy +180bps and ADR +3.6% . Results were driven by strong group/business transient demand and the ramp at Grand Hyatt Scottsdale .
    Revenue and EPS beats: $288.9M vs $275.3M*, $0.163 EPS vs $0.057* (both Q1 2025). Values retrieved from S&P Global.
  • Guidance tempered despite outperformance: FY25 Adjusted EBITDAre moved to $235–$261M (from $244–$264M), Adjusted FFO to $152–$178M (from $161–$181M), and CapEx cut to $75–$85M (from $100–$110M), reflecting macro uncertainty and portfolio changes (Fairmont Dallas sale, Santa Clara land purchase) .
  • Capital allocation remains supportive: dividend raised 17% to $0.14, and 2.7% of shares repurchased in Q1; portfolio quality improved via Fairmont Dallas sale ($111M, 11.3% unlevered IRR) and Santa Clara land buy ($25M) .
  • Near-term stock catalysts: continued Scottsdale ramp (group pace and rate strength), prudent CapEx deferral under tariff risk, and improved FY margin outlook (+50bps for balance of year) could offset softer leisure trends .

What Went Well and What Went Wrong

What Went Well

  • Group/business transient resilience with no uptick in cancellations; group pace up ~22% for balance of year, +30% in 2H (ex-Scottsdale +20%) . “No uptick in cancellations or attrition… nothing to reflect any slowdown on the group side” — CFO Atish Shah .
  • Grand Hyatt Scottsdale ramp: Q1 RevPAR ~+60% YoY; group ADR pacing ~30% above 2019; EBITDA path to low-$20M in 2025 and stabilization thereafter (low-$40M target) . “We are optimistic… delivering EBITDA in the low $20 million range for this year” — CFO Atish Shah .
  • Cost control and margin improvement: Same-Property Hotel EBITDA margin +42bps YoY to 27.4%; rooms expense per occupied room up only ~2.5%; energy spend up just 1.6% given infrastructure investments .

What Went Wrong

  • Macroeconomic caution led to guidance reductions despite a strong Q1; FY25 RevPAR midpoint lowered by 50bps and EBITDA trimmed ($6M mid-point walk incl. transactions) .
  • Leisure softness persisted in several markets (Savannah, Key West, Napa; Orlando leisure softer at Grand Cypress) and winter storms hit Sunbelt (Texas/Houston), dampening rate and margin mix .
  • Tariff uncertainty prompted CapEx deferrals (Andaz Napa, Ritz-Carlton Denver) and broader reassessment of 2025 projects to preserve ROI .

Financial Results

Quarterly performance vs prior periods and estimates

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$236.8 $261.8 $288.9
Net Income per Share (Basic & Diluted)-$0.07 -$0.01 $0.15
Adjusted EBITDAre ($USD Millions)$44.3 $59.2 $72.9
Same-Property Hotel EBITDA Margin (%)20.3% 24.0% 27.4%
Occupancy (%)67.0% 64.4% 69.3%
ADR ($)$240.72 $257.52 $272.41
RevPAR ($)$161.20 $165.92 $188.73

Q1 2025 vs Street consensus

MetricConsensusActual
Revenue ($USD Millions)$275.3*$288.9
Primary EPS ($USD)$0.057*$0.163
EBITDA ($USD Millions)$65.0*$69.5
Values retrieved from S&P Global.

Q1 Same-Property revenue mix vs prior year

Metric ($USD Thousands)Q1 2024Q1 2025YoY Change
Rooms Revenues$151,950 $159,866 +5.2%
Food & Beverage Revenues$92,293 $104,699 +13.4%
Other Revenues$21,183 $24,362 +15.0%
Total Same-Property Revenues$265,426 $288,927 +8.9%
Same-Property Hotel EBITDA$71,709 $79,274 +10.5%
Same-Property Hotel EBITDA Margin (%)27.0% 27.4% +42bps

Select market KPIs (Q1 YoY RevPAR)

MarketQ1 2024 RevPAR ($)Q1 2025 RevPAR ($)YoY Change
Washington, DC-MD-VA$164.72 $201.95 +22.6%
Phoenix, AZ$214.58 $286.44 +33.5%
Atlanta, GA$156.19 $184.46 +18.1%
Nashville, TN$187.78 $214.16 +14.0%
San Diego, CA$201.58 $216.38 +7.3%
Portland, OR$120.85 $102.47 -15.2%

Guidance Changes

MetricPeriodPrevious Guidance (Feb 25, 2025)Current Guidance (May 2, 2025)Change
Net Income ($M)FY 2025$9 – $29 $43 – $69 Raised (includes sale gains)
Same-Property RevPAR ChangeFY 20253.5% – 6.5% (31 hotels) 2.5% – 6.5% (30 hotels) Lowered at low end; portfolio basis changed
Adjusted EBITDAre ($M)FY 2025$244 – $264 $235 – $261 Lowered
Adjusted FFO ($M)FY 2025$161 – $181 $152 – $178 Lowered
Adjusted FFO per Diluted Share ($)FY 2025$1.55 – $1.74 $1.50 – $1.75 Slightly lowered
Capital Expenditures ($M)FY 2025$100 – $110 $75 – $85 Lowered
Weighted-Average Diluted Shares (M)FY 2025103.8 101.6 Lowered
Interest Expense ($M)FY 2025~80 ~81 Raised
Cash G&A ($M)FY 2025~24 ~23 Lowered
Income Tax Expense ($M)FY 2025~3 ~2 Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 & Q4 2024)Current Period (Q1 2025)Trend
Group demand/pacingQ3: Ex-Scottsdale group room revenue +~4% YoY; FY25 group pace up nearly 20%, ex-Scottsdale mid-teens Group pace +22% balance of year; +30% in 2H; no cancellation uptick Strengthening
Business transientMidweek occupancy improving; gap vs 2019 narrowing (still behind) Continued recovery across major markets, supporting Q1 beat Improving
Leisure demandNormalization; softness in multiple resort/leisure markets Low single-digit RevPAR decline assumed at leisure assets; softness persists Soft
Scottsdale transformationQ3: rebrand completed Nov 1; ramp expected with ballroom in early 2025 Q1: RevPAR ~+60%; group ADR strong; EBITDA path low-$20M in 2025 Ramping per plan
Tariffs/supply chainNot prominent in prior quartersTariff uncertainty drives CapEx deferrals (Andaz Napa, Ritz-Carlton Denver) New headwind; prudence
Portfolio transactionsLorien sale in Q3; facility upsizing Santa Clara land buy ($25M); Fairmont Dallas sale ($111M) Portfolio quality improved
Balance sheet/leverageFacility upsized; liquidity ~650M (end Jan) Liquidity ~$613M at 3/31; leverage ratio ~5.4x TTM ND/EBITDA pro forma Strong, steady

Management Commentary

  • “Our portfolio performance in the first quarter exceeded expectations… nearly 12% growth in Adjusted EBITDAre and nearly 16% growth in Adjusted FFO per share” — CEO Marcel Verbaas .
  • “We are taking a more tempered view of the remainder of the year and have slightly reduced our expectations for full-year revenue and earnings growth” — CEO Marcel Verbaas .
  • “We currently expect hotel EBITDA margin to increase 50 basis points for the balance of the year… main driver is better expense management” — CFO Atish Shah .
  • “Group production… quite healthy… no uptick in cancellations or attrition” — CFO Atish Shah .
  • “We acquired the fee simple interest in the land underlying Hyatt Regency Santa Clara… eliminating risk due to a potentially significant ground rent escalation” — CEO Marcel Verbaas .

Q&A Highlights

  • Group stability: Management saw healthy production and “no uptick in cancellations or attrition” in Q1; group pace robust for the balance of 2025 .
  • Leisure outlook: Guidance assumes low single-digit RevPAR declines at leisure assets; varied by market/property specifics .
  • Scottsdale ramp: EBITDA trajectory low-$20M in 2025, low-$30M in 2026, stabilization thereafter with strong group rate and volume momentum .
  • Santa Clara land acquisition: Enhances optionality, removes ground lease risk; no near-term disposition action implied .
  • CapEx deferral and tariffs: Projects deferred to preserve ROI amidst tariff uncertainty; reassessed periodically .

Estimates Context

  • Q1 2025 versus consensus: XHR delivered a broad beat — revenue $288.9M vs $275.3M*, Primary EPS $0.163 vs $0.057*, and EBITDA $69.5M vs $65.0M*. Values retrieved from S&P Global.
  • Implications: Given a strong Q1 but tempered macro view and transaction impacts, Street models likely need lower FY revenue/EBITDA/FFO paths consistent with updated guidance ranges and reduced CapEx . Margin outlook for the balance of year improved by ~50bps, which may buffer estimate cuts on the bottom line .

Key Takeaways for Investors

  • Near-term: Favor the positive mix shift to group/business transient, continued Scottsdale ramp, and disciplined cost control; Q2 cadence (just under 30% of FY EBITDAre) should reflect further normalization in rate/occupancy mix .
  • Watch guidance cadence: FY25 ranges were lowered; monitor macro-leisure trends and tariff developments; Scottsdale’s group booking trajectory remains the key swing factor .
  • Capital allocation: Dividend increase and buybacks (2.7% retired in Q1) signal confidence; Fairmont Dallas sale and Santa Clara land purchase enhance portfolio quality/optionality .
  • Margin trajectory: Management now expects +50bps hotel margin for the balance of year on expense discipline; supportive for FFO despite modest RevPAR moderation .
  • Balance sheet flexibility: Liquidity >$600M with no major maturities until 2028 and ~75% fixed debt mix provide offense/defense through the cycle .
  • Markets: DC, Phoenix, Atlanta, Nashville show strong momentum; Portland and certain leisure markets remain soft — position exposure accordingly .
  • Risk management: CapEx deferrals are prudent under tariff uncertainty; updated CapEx range ($75–$85M) reduces disruption risk while preserving ROI .
Note: Some consensus estimate values marked with * are from S&P Global. Values retrieved from S&P Global.