Xenia Hotels & Resorts Q1 2025 Earnings Call Highlights

Xenia Hotels & Resorts Inc ((XHR)) has held its Q1 earnings call. Read on for the main highlights of the call.

Xenia Hotels & Resorts Inc. recently held its earnings call, revealing a generally positive sentiment despite some challenges. The company reported strong financial results and successful strategic transactions, while also acknowledging the impact of weather conditions and macroeconomic uncertainties. Overall, Xenia remains optimistic about its growth prospects and market positioning.

Strong Financial Performance

Xenia Hotels & Resorts reported a robust financial performance for Q1 2025, with a net income of $15.6 million. The company achieved an adjusted EBITDAre of $72.9 million and an adjusted FFO per share of $0.51. Notably, RevPAR increased by 6.3% compared to Q1 2024, contributing to nearly 12% growth in adjusted EBITDAre and a 16% growth in adjusted FFO per share.

Grand Hyatt Scottsdale Success

The Grand Hyatt Scottsdale emerged as a standout performer following its renovation, boasting a remarkable 60% increase in RevPAR. The project was completed successfully, with strong group production and high guest satisfaction scores, underscoring the hotel’s enhanced market appeal.

Strategic Transactions

Xenia strategically acquired the land underlying the Hyatt Regency Santa Clara for $25 million, effectively eliminating future rent escalation risks. Additionally, the company sold the Fairmont Dallas for $111 million, avoiding costly renovations and achieving an unlevered IRR of 11.3%.

Group Business Growth

The company witnessed significant growth in its group business segment, with group room nights increasing by 6.6% and group rooms revenue rising over 15% in February and March. Impressively, the group revenue pace for 2025 now exceeds 2019 levels, highlighting a strong recovery and demand in this sector.

Shareholder Returns

Xenia demonstrated its commitment to shareholder returns by increasing its quarterly dividend by 17% and repurchasing 2.7% of outstanding shares during the first quarter, reflecting confidence in its financial health and future prospects.

Weather Impact on Sunbelt Locations

The company’s January results were negatively impacted by winter storms in several Sunbelt locations, particularly in Texas, which affected overall performance during the period.

Macroeconomic Uncertainty

Concerns regarding potential macroeconomic impacts and tariffs on internationally sourced goods have prompted Xenia to reduce capital expenditures and adjust its full-year guidance, reflecting a cautious approach amid economic uncertainties.

Soft Leisure Business in Certain Markets

While the leisure business at Hyatt Regency Grand Cypress was softer, this was offset by increased group business, demonstrating the company’s ability to adapt and balance different market segments.

Deferred Capital Projects

Due to uncertainties around tariffs and costs, Xenia deferred guestroom renovations at Andaz Napa and Ritz-Carlton Denver, impacting planned capital expenditures and reflecting a strategic pause in certain investments.

Forward-Looking Guidance

Xenia Hotels & Resorts provided forward-looking guidance that reflects recent strategic transactions and potential macroeconomic impacts. The company expects a full-year RevPAR growth midpoint of 4.5%, with strong contributions anticipated from the Grand Hyatt Scottsdale. Group revenue pace is forecasted to increase by 22% for the rest of the year. Despite reducing capital expenditure guidance by $25 million, Xenia remains optimistic due to its strong portfolio and geographic diversity, further evidenced by a 17% increase in its quarterly dividend.

In conclusion, Xenia Hotels & Resorts Inc. delivered a positive earnings call, highlighting strong financial performance and strategic successes. Despite challenges such as weather impacts and macroeconomic uncertainties, the company remains optimistic about its growth trajectory and market positioning, as evidenced by its robust forward-looking guidance and commitment to shareholder returns.