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XH

Xenia Hotels & Resorts, Inc. (XHR)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered mixed results: GAAP revenue was $236.4M, essentially flat YoY; Adjusted EBITDAre fell 4.6% YoY to $42.2M; Adjusted FFO/share was $0.23 (-8% YoY), while GAAP diluted EPS was -$0.14 .
  • Against S&P Global consensus, XHR modestly beat on GAAP revenue and GAAP EPS, and beat on FFO/share, while missing EBITDA; management emphasized Houston hurricane-related tough comps and muted summer leisure demand, partially offset by group/banquet strength and the ramp at Grand Hyatt Scottsdale . Revenue*, EPS*, FFO/share*, EBITDA* estimates from S&P Global.
  • FY 2025 guidance was narrowed/lowered at the high end: Same-Property RevPAR midpoint down 50 bps, Adjusted EBITDAre midpoint to $254M (from $256M), and Adjusted FFO/share midpoint to $1.72 (from $1.73-$1.73 equivalent), while capex increased to $87.5–$92.5M; October preliminary Same-Property RevPAR rose ~5.8%, setting a constructive tone for Q4 .
  • Capital allocation remains supportive: $12.3M repurchases in Q3 and $83.8M YTD; liquidity $688M with revolver undrawn; leverage ~5x net debt/EBITDA; expected payoff of a $52M mortgage by March 2026 gives property-level debt-free status to 28 of 30 hotels .

What Went Well and What Went Wrong

  • What Went Well

    • Group-driven non-rooms revenue strength lifted Same-Property Total RevPAR 3.7% YoY despite flat RevPAR; Scottsdale’s post-renovation ramp was a key driver .
    • Preliminary October Same-Property RevPAR up ~5.8% and strong Q4 group pace (up ~12%; ex-Scottsdale ~5%), supporting near-term recovery and FY margin expansion (~90 bps expected) .
    • Balance sheet resilience: $688M liquidity, revolver undrawn, fixed-rate debt ~75%, and planned payoff of the March 2026 mortgage; continued buybacks signal confidence in asset value .

  • What Went Wrong

    • Houston faced tough comps from Hurricane Beryl-driven demand in Q3 2024; leisure demand was muted across summer, compressing Same-Property hotel EBITDA margin by 60 bps YoY to 19.9% .
    • Adjusted EBITDAre declined 4.6% YoY and Adjusted FFO/share fell 8% YoY; GAAP net loss widened to -$13.7M on higher interest expense and lower operating income .
    • FY 2025 guidance narrowed/lowered at the high end (RevPAR and EBITDAre) on softer transient expectations; capex plan increased by ~$10M vs prior midpoint, partly for the W Nashville F&B reconcepting .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Total Revenues ($USD Millions)$288.9 $287.6 $236.4
GAAP Diluted EPS ($)$0.15 $0.56 -$0.14
Adjusted EBITDAre ($USD Millions)$72.9 $79.5 $42.2
Adjusted FFO per Diluted Share ($)$0.51 $0.57 $0.23
Same-Property Hotel EBITDA Margin (%)27.0% 29.4% 19.9%

KPIs

KPIQ1 2025Q2 2025Q3 2025
Same-Property Occupancy (%)69.6% 72.3% 66.3%
Same-Property ADR ($)$275.47 $270.42 $248.09
Same-Property RevPAR ($)$191.80 $195.51 $164.50
Same-Property Total RevPAR ($)—$354.50 $289.76

Q3 2025 Actual vs S&P Global Consensus

MetricConsensus*ActualBeat/Miss
Revenue ($USD Millions)$235.8*$236.4 Bold Beat
GAAP Primary EPS ($)-$0.16*-$0.14 Bold Beat
EBITDA ($USD Millions)$40.7*$39.2 (Company EBITDA) Bold Miss
FFO/Share (REIT) ($)$0.218*$0.23 (Adjusted FFO/share) Bold Beat

Values marked with an asterisk were retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (Aug 1, 2025)Current Guidance (Oct 31, 2025)Change
Net Income ($M)FY 2025$58–$72 $59–$67 Narrowed; high lowered
Same-Property RevPAR Change (%)FY 2025 vs 20243.5%–5.5% 3.5%–4.5% Lowered at high end
Adjusted EBITDAre ($M)FY 2025$249–$263 $250–$258 Narrowed; high lowered
Adjusted FFO ($M)FY 2025$166–$180 $167–$175 Narrowed; high lowered
Adjusted FFO per Diluted Share ($)FY 2025$1.66–$1.80 $1.68–$1.76 Narrowed; high lowered
Capital Expenditures ($M)FY 2025$75–$85 $87.5–$92.5 Raised

Assumptions in current guidance: G&A ~$24M, interest expense ~$81M, income tax ~$2M, and weighted-average diluted shares/units 99.5M (down 0.4M vs prior) .

Earnings Call Themes & Trends

TopicQ1 2025 (May)Q2 2025 (Aug)Q3 2025 (Oct)Trend
Leisure demandManagement tempered FY outlook due to macro uncertainty; leisure normalization expected Leisure normalizing; group a bright spot; guidance raised on Q2 outperformance Summer leisure muted; narrative stabilizing into 2026 Stabilizing; still softer seasonally
Group demand & banquetsStrong setup; operators disciplined on expenses Group strength drove 11% Total RevPAR growth; banquets exceeded expectations Strong Q4 pace (+12%; ex-Scottsdale ~+5%); October RevPAR +5.8% prelim Improving; key driver
Grand Hyatt Scottsdale rampEarly ramp encouraging; ballroom/casitas upgrades Main driver of Q2 RevPAR gain; continued ramp Ramp consistent with underwriting; expected to drive outsized non-rooms revenue Positive ramp continuing
Tariffs/supply chainDeferred select capex due to reciprocal/retaliatory tariffs Monitoring costs; continued infrastructure upgrades Mitigated tariff-related increases; capex midpoint lifted Manageable headwind
Macro/governmentCautious FY view; macro uncertainty Outlook unchanged for H2 Limited impact from gov’t shutdown; exposure low Limited direct risk
Tech/AI exposure——Corporate demand improving; Santa Clara benefiting from AI-driven accounts Tailwind in NorCal

Management Commentary

  • “Our third quarter performance met our expectations and reflected a challenging operating environment... The Houston market... was a drag on portfolio performance. Despite these challenges, Same-Property RevPAR for the quarter was flat and, excluding our assets in Houston, increased 2.9%...” — Marcel Verbaas, CEO .
  • “We remain cautious in our near-term outlook... For the full year, we expect a Same-Property RevPAR increase of 4% and Adjusted EBITDAre of $254 million at the midpoint... encouraged by approximately 5.8% preliminary RevPAR increase in October.” — Marcel Verbaas .
  • “At quarter end, we had approximately $1.4 billion of outstanding debt... weighted average interest rate 5.63%... leverage ~5x net debt to EBITDA... liquidity $688 million.” — Atish Shah, CFO .
  • “We will be making an additional capital investment of approximately $9 million [W Nashville F&B]; we project relaunch to add $3–$5M to hotel EBITDA upon stabilization.” — Management remarks .

Q&A Highlights

  • Dividend payout ratio and taxable income: Company continues to utilize NOLs from COVID; detailed taxable impact to be provided offline .
  • Group pace dynamics: Pace increase driven “a little more” by volume, with better rate growth than recent years; shift back toward association group at large resorts .
  • Government shutdown impact: Minimal portfolio impact to date; limited exposure to government business; monitoring travel-related effects .
  • Transactions: Private market activity ticking up; near-term acquisitions less attractive vs buybacks; potential for selective dispositions over 12–18 months .
  • W Nashville earnings trajectory: F&B reconcepting expected to add $3–$5M to hotel EBITDA over several years; stabilization now “north of $20M” vs prior higher range; market still absorbing high-end supply .
  • Corporate demand: Strength in Northern California (Santa Clara), DC/Pentagon City, Atlanta, Pittsburgh; selling out more Tue/Wed nights aids compression pricing .

Estimates Context

  • Q3 2025 vs S&P Global consensus: Revenue $236.4M vs $235.8M* (beat); GAAP EPS -$0.14 vs -$0.16* (beat); EBITDA $39.2M (company EBITDA) vs $40.7M* (miss); Adjusted FFO/share $0.23 vs $0.218* (beat) . Values marked with an asterisk were retrieved from S&P Global.
  • Implications: Slight beats on revenue/EPS/FFO reflect resilient non-rooms revenue and rate, while an EBITDA miss aligns with margin pressure from muted leisure and Houston comps; estimate revisions likely lower on EBITDA and modestly higher on FFO given October/Q4 group strength .

Key Takeaways for Investors

  • Mixed quarter but improving intra-quarter momentum: October prelim +5.8% Same-Property RevPAR and strong Q4 group pace support near-term topline recovery despite summer softness; watch banquet/catering flow-through in Q4 .
  • Guidance prudently narrowed/lowered at high end; FY margin growth still expected (~90 bps), aided by non-rooms revenue; monitor transient trends and Houston normalization .
  • Scottsdale remains a structural growth driver into 2026; AI-linked corporate demand emerging tailwind in Santa Clara/NorCal .
  • Capital allocation is shareholder-friendly: $83.8M YTD buybacks and ample liquidity ($688M) with revolver undrawn; deleveraging aided by mortgage payoff plans .
  • W Nashville F&B relaunch is a targeted, brand-led strategy with expected $3–$5M EBITDA uplift on stabilization; near-term capex raised but revenue/EBITDA benefits should compound by 2026 .
  • REIT-specific metrics: Adjusted FFO/share beat and GAAP EPS beat vs S&P; sustained FFO strength alongside margin control is key for dividend capacity and buyback runway .
  • Trading setup: Near-term catalysts include Q4 banquet strength, October momentum confirmation, and 2026 group pace updates; risks include leisure normalization pace, macro uncertainty, and any lingering regional comps (e.g., Houston) .