Xenia Hotels & Resorts, Inc. (XHR)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered total revenues of $261.85M, Adjusted EBITDAre of $59.2M, Adjusted FFO/share of $0.39, and Same-Property RevPAR growth of 5.1% YoY; GAAP diluted EPS was -$0.01 as margins remained pressured by cost inflation and mix .
• Management said Adjusted FFO “exceeded the midpoint of the guidance range,” and introduced FY2025 guidance calling for Same-Property RevPAR growth of 3.5%–6.5%, Adjusted EBITDAre of $244–$264M, and Adjusted FFO/share of $1.55–$1.74 .
• Balance sheet/liquidity improved via upsized $825M credit facility (fully undrawn revolver post-January draw of delayed term loan) and $400M of 6.625% Senior Notes due 2030; YE liquidity was ~$668M, and the quarterly dividend was raised to $0.14 for Q1 2025 .
• Street consensus comparisons were unavailable from S&P Global at time of retrieval; no beat/miss vs consensus is shown. Values referenced to S&P Global were unavailable.
• Catalysts: substantial completion and upbranding of Grand Hyatt Scottsdale, ballroom expansion live in January, and strong group pace (portfolio +17%; Scottsdale ADR pacing ~30% above 2019), expected to drive over half of 2025 RevPAR growth .

What Went Well and What Went Wrong

• What Went Well

  • Same-Property RevPAR rose 5.1% YoY; CEO highlighted double‑digit RevPAR gains in Phoenix, Nashville, Santa Barbara, Pittsburgh, Birmingham, Salt Lake City, New Orleans, and Charleston, and noted Adjusted FFO exceeded guidance midpoint .
  • Group demand strength: 2025 group room revenue booking pace up 17% portfolio‑wide (ex‑Scottsdale +12%); ~75% of expected 2025 group revenue already definite; Scottsdale’s group ADR pacing ~30% above 2019 .
  • Balance sheet optionality: ~3/4 of debt fixed, YE net debt/EBITDA 5.4x with ~$650M liquidity at January and undrawn $500M revolver post delayed draw term loan funding .

• What Went Wrong

  • Margin compression: Same-Property Hotel EBITDA margin fell 120 bps YoY in Q4 to 24.0% (ex-Scottsdale -68 bps), with Adjusted EBITDAre down 0.5% YoY .
  • Mix and expense headwinds: banquet revenue softness, loyalty costs and digital marketing drove sales and marketing up, and repairs/maintenance rose; food & beverage margins declined 79 bps in Q4 .
  • Leisure moderation and renovation displacement: leisure demand remained soft in markets like Savannah, Napa, Phoenix; Scottsdale’s renovation depressed results through Q3/Q4 before becoming a tailwind late in Q4 .

Financial Results

Revenue breakdown (sequential):

KPIs:

Consensus (actual vs Street) for Q4 2024:

• S&P Global consensus estimates were unavailable at time of retrieval (S&P Global rate limit). No comparison to Street estimates provided.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Same-Property RevPAR came in 5.1% higher… while Adjusted FFO exceeded the midpoint of the guidance range we provided last quarter.” — Marcel Verbaas, CEO .
• “We estimate that Same-Property RevPAR for the first quarter through February 20th grew 7.3% versus the comparable period in 2024.” — Marcel Verbaas, CEO .
• “We addressed all near term debt maturities and have further strengthened our balance sheet… We had approximately $650 million in liquidity at the end of January, inclusive of an undrawn $500 million line of credit.” — Atish Shah, CFO .
• “2025 group room revenue booking pace… is up 17%… Excluding Scottsdale, group revenue pace is up 12%.” — Atish Shah, CFO .
• “Scottsdale is driving over half of our expected 2025 RevPAR growth… as we recover from displacement from last year.” — Atish Shah, CFO .

Q&A Highlights

• Scottsdale EBITDA trajectory: management targets low‑$20M in 2025, low‑$30M in 2026, and stabilization thereafter; noted seasonality and ramp from ballroom completion (majority of EBITDA historically earned in first five months) .
• RevPAR guide ex‑Scottsdale (~2% implied): strong group base but uncertainty remains in transient, especially leisure; business transient recovery helps the upper end .
• Cost structure details: loyalty program costs tied to higher branded volume; difficult to quantify standalone, but increased out‑of‑room spend raises loyalty costs .
• Capital allocation: $100M delayed draw term loan funded in January; cash earmarked for general corporate purposes, potential acquisitions and buybacks depending on opportunity set .
• Market outlook: expected outperformance in Houston, Orlando, Nashville; West Coast tech demand recovering benefits San Francisco/Santa Clara; Park Hyatt Aviara set for a strong group year .

Estimates Context

• Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at time of retrieval due to a S&P Global rate limit. No comparison to consensus is provided. Values typically retrieved from S&P Global were unavailable.

Where estimates may need to adjust:

• Management’s FY2025 guide implies ~5% Same‑Property RevPAR growth at midpoint, ~7% Adjusted EBITDAre growth (to ~$254M midpoint), and ~3.5% Adjusted FFO/share growth, with Scottsdale as >50% contributor to RevPAR growth and strong group pace; models may need higher group/occupancy assumptions and flattish hotel EBITDA margin ex‑Scottsdale given expense inflation .

Key Takeaways for Investors

• Q4 showed demand improvement (RevPAR +5.1% YoY) but margins remained pressured; EBITDAre and Adjusted FFO were broadly stable YoY, with EPS negative on higher interest/tax and non‑cash items .
• 2025 setup is constructive: strong group pace, business transient recovery, and Grand Hyatt Scottsdale ramp are expected to drive ~5% RevPAR growth and ~7% EBITDAre growth at the midpoint .
• Balance sheet flexibility is high (mostly fixed debt, undrawn revolver, extended maturities); optionality across acquisitions, buybacks, and selective dispositions supports capital allocation discipline .
• Expect near‑term expense pressure (wages/benefits ~45% of hotel costs, loyalty/marketing, repairs/maintenance); management guides hotel expenses per occupied room up ~4% in 2025 and flattish margins overall, ex‑Scottsdale down ~100 bps .
• Dividend increased to $0.14 for Q1 2025 and buyback capacity remains sizable ($117.9M authorization remaining YE 2024), offering shareholder return levers during the ramp .
• Watch markets with improving corporate demand (Philadelphia, Denver, Pittsburgh, Nashville, Buckhead) and West Coast tech recovery (San Francisco/Santa Clara) for midweek occupancy gains; leisure markets are normalizing from prior peaks .
• Key 2025 risk factors: macro uncertainty affecting leisure/transient; cost inflation; and execution/ramp at Scottsdale—though early indicators (group ADR +~30% vs 2019, >75% group definite) are favorable .