Xenia Hotels & Resorts Q3 Earnings Call Highlights

Key Points

• Strong third-quarter performance: Same-property RevPAR rose 12.5% year over year, while adjusted EBITDAre increased 26% to $53.2 million and adjusted FFO per share climbed nearly 57% to $0.36. Xenia nevertheless recorded a GAAP net loss of $2.7 million.
• Broad demand lifted margins: Growth across group, corporate transient and leisure travel helped drive same-property hotel EBITDA up 29.3% and expand the EBITDA margin by 295 basis points to 22.9%.
• Outlook raised again: For the third consecutive quarter, Xenia increased its 2026 forecast, now expecting same-property RevPAR growth of 7.75%–8.25% and adjusted EBITDAre of $281 million at the midpoint.

Xenia Hotels & Resorts NYSE: XHR reported third-quarter results that exceeded its prior expectations, citing broad-based demand growth across group, corporate transient and higher-end leisure travel. The company raised its full-year outlook for a third consecutive quarter after same-property RevPAR rose 12.5% from a year earlier.

Chairman and Chief Executive Officer Marcel Verbaas said the portfolio’s strong top-line performance translated into higher profitability, with same-property hotel EBITDA margin expanding nearly 300 basis points year over year. On a GAAP basis, Xenia recorded a net loss of $2.7 million for the quarter. Adjusted EBITDAre rose 26% to $53.2 million, while adjusted FFO per share increased nearly 57% to $0.36.

Third-quarter demand broadens across segments

Same-property RevPAR for Xenia’s 29-hotel portfolio was $184.75 in the third quarter, with occupancy increasing 380 basis points to 70% and average daily rate rising 6.4% to $264, according to President and Chief Operating Officer Barry Bloom. Total RevPAR increased 12.7% to $325.71, supported by out-of-room spending.

Twenty-six of the company’s 29 hotels posted RevPAR gains, with 14 recording double-digit increases. Kimpton Hotel Palomar Philadelphia led the portfolio with RevPAR growth of 34.5%, followed by Loews New Orleans at 29%, Park Hyatt Aviara at 28.5% and Marriott Woodlands Waterway at 23.9%.

September was the strongest month of the quarter, as RevPAR rose 16.8% to $207.33. Occupancy increased 641 basis points to 73.5%, while average daily rate increased 6.6% to $282.26.

Group business was a significant contributor. Same-property group room revenue increased 16.2%, driven primarily by an approximately 11% increase in group room nights. The stronger group volume also supported a 15% increase in food-and-beverage revenue, including banquet and catering business.

Verbaas said corporate transient demand was the biggest source of upside relative to the company’s expectations, particularly during September and October. Bloom added that stronger group base business and higher midweek demand helped create more compression opportunities, especially in markets including Santa Clara, San Francisco, Houston and Dallas.

Margins expand as revenue outpaces costs

Same-property total revenue grew 12.7%, exceeding the 8.5% increase in total operating expenses. As a result, same-property hotel EBITDA climbed 29.3% to $60.2 million and hotel EBITDA margin rose 295 basis points to 22.9%.

Rooms revenue grew 12.5%, while rooms expense increased 6.6%. Food-and-beverage expenses rose 10.3%, below the segment’s revenue growth. Other operating departments, including spa, parking and golf, increased revenue by 15.5%.

Bloom said utilities expense rose nearly 14%, reflecting higher occupancy, extreme weather in several markets and the reclassification of golf water expenses in 2026. General and administrative expense at the property level increased 10.2%, largely because of revenue-related costs such as credit-card commissions.

Capital projects and portfolio actions

Xenia invested $16.4 million in portfolio improvements during the third quarter, bringing year-to-date capital expenditures to $47 million. The company now expects 2026 capital spending of $70 million to $75 million, lowering the high end of its prior range by $5 million.

At Royal Palms Resort and Spa, the company completed renovations of the 68-room Monte Vista Building, its corridors and T. Cook’s Restaurant. Major projects scheduled to begin next month include the first phase of a guest-room and corridor renovation at Andaz Napa, covering about half of the hotel’s 141 rooms, and renovations to guest rooms, corridors and meeting space at The Ritz-Carlton, Denver.

The Andaz Napa project is expected to conclude in the first quarter of 2027, while the Ritz-Carlton Denver work is expected to finish in early March. Chief Financial Officer Atish Shah said the company expects approximately $1 million of EBITDA displacement in 2027, concentrated mostly in the first quarter.

The company also completed the renaming of four Marriott Autograph Collection hotels following their management transition to Davidson. The Orlando property is now Hotel Beauden, the Savannah property is Hotel Orielle, the Charleston property is Hotel Operis and the Mountain Brook property is Hotel Wildemont.

During July, Xenia sold the 85-room Kimpton RiverPlace Hotel in Portland for $11 million, representing a 19.4-times multiple on trailing 12-month hotel EBITDA, according to Verbaas.

Raised 2026 outlook and early view of 2027

Xenia raised its full-year same-property RevPAR growth outlook to 7.75% to 8.25%, up 250 basis points at the midpoint from its previous forecast. It expects same-property total RevPAR growth of 7% to 7.5% and approximately 120 basis points of hotel EBITDA margin expansion.

• Adjusted EBITDAre is projected at $281 million at the midpoint, up $8 million from prior guidance.
• Adjusted FFO per diluted share is forecast at $2.08 to $2.14.
• Full-year general and administrative expense is projected at $26 million.
• October same-property RevPAR increased an estimated 8% from a year earlier.

Shah said Xenia expects business transient demand to continue recovering in 2027. Tuesday and Wednesday occupancy remains about seven percentage points below 2019 levels, with larger gaps on Mondays and Thursdays. Corporate transient business represents about 40% of the company’s room revenue mix.

Group room revenue pace for 2027 was down approximately 4% at the end of the third quarter, with the decline concentrated in the second half. About half of 2027 group room revenue was definite, and the company said first-half pace was roughly flat, or slightly positive after adjusting for canceled FIFA-related business from the prior comparison period.

The company expects Grand Hyatt Scottsdale hotel EBITDA to rise from the low-$30 million range in 2026 to the high-$30 million range in 2027, with a longer-term stabilized target in the low-$40 million range. Xenia also estimates that special events in 2026 will create a 50-basis-point RevPAR headwind and a $3 million EBITDA headwind in 2027.

At quarter-end, Xenia had approximately $1.4 billion of debt, about three-quarters of it fixed-rate, with a weighted average interest rate of 5.55%. The company reported $661 million of total liquidity, including $161 million of cash and a fully available $500 million revolving credit facility.

About Xenia Hotels & Resorts (NYSE:XHR)

Xenia Hotels & Resorts, Inc is a real estate investment trust that owns a portfolio of luxury and upper-upscale hotels and resorts in the United States. The company focuses on acquiring, owning and selectively renovating lodging properties in major business and leisure destinations.

Xenia's properties operate under a range of well-known hotel brands, including Marriott, Hyatt, Hilton and other leading hospitality companies, as well as independent or lifestyle brands. Its hotels offer accommodations, food and beverage services, meeting and event facilities, and other amenities designed for business and leisure travelers.

The company's portfolio is concentrated in urban and destination markets with strong lodging demand, including major gateway cities, resorts and other high-quality locations across the United States.

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