Xenia Hotels & Resorts Q2 Earnings Call Highlights

Xenia Hotels & Resorts NYSE: XHR reported second-quarter results that modestly exceeded its prior expectations, supported by rate-driven room revenue growth and continued strength in higher-end leisure and group demand. The company raised the midpoint of its full-year 2026 Adjusted EBITDAre outlook by $7 million to $273 million and increased its midpoint RevPAR growth forecast by 150 basis points to 5.5%.

Same-property RevPAR rose 5.6% year over year to $206.54 in the second quarter. The gain was driven entirely by a 5.7% increase in average daily rate to $285.71, while occupancy was essentially unchanged at 72.3%. Adjusted EBITDAre totaled $78.1 million, about $1 million above the expectations implied by the company’s prior quarterly guidance, while Adjusted FFO per share increased 7% from a year earlier to $0.61.

On a GAAP basis, Xenia reported a net loss attributable to common stockholders of $19.3 million. Chairman and Chief Executive Officer Marcel Verbaas said the loss reflected a non-cash impairment charge associated with the sale of the Kimpton RiverPlace Hotel in Portland, Oregon.

Transient Demand Leads Quarterly Growth

Transient business outpaced group business during the quarter, with transient same-property RevPAR increasing 6.9% and group RevPAR rising 3.4%. Verbaas said the FIFA World Cup contributed to demand and rate growth in June, when matches took place in six of the company’s markets, although the overall portfolio impact was limited.

“While the World Cup certainly provided compression and rate growth around game days, the overall positive impact on our portfolio was limited,” Verbaas said. He noted that group business in many World Cup markets was weaker because FIFA released large room blocks as the event approached and because some customers hesitated to book around the games.

June was the company’s strongest month of the quarter, with RevPAR increasing 8.6% year over year to $200.32. Xenia recorded nearly 9% growth in average daily rate during the month. Nineteen of the company’s 22 markets reported positive RevPAR growth in the quarter.

Among individual properties and markets, Kimpton Hotel Palomar Philadelphia posted 22% RevPAR growth, followed by Kimpton Hotel Monaco Salt Lake City at 13.1%. Xenia’s Phoenix properties grew 12.7% on a combined basis. Other notable gains included Grand Bohemian Hotel Mountain Brook, Park Hyatt Aviara and Hyatt Regency Santa Clara.

Same-property Total RevPAR, which includes non-room revenue, increased 3.3% to $366.17, trailing room RevPAR growth. President and Chief Operating Officer Barry Bloom said the result reflected a higher transient mix and an anticipated mix shift between association and corporate group business. Food-and-beverage revenue grew only modestly, while more-profitable banquet business declined 1.1% and less-profitable outlet business increased 1.5%.

Margins Decline as Expenses Outpace Revenue

Same-property hotel EBITDA rose 1% to $84.9 million, while the hotel EBITDA margin declined 65 basis points to 28.7%. Total same-property hotel operating expenses increased 4.2%, exceeding the 3.3% increase in total revenue.

The company attributed the margin decline primarily to the comparison with approximately $1.5 million in real estate tax refunds received in the second quarter of 2025, as well as expenses tied to the start-up of repositioned food-and-beverage operations at W Nashville. Bloom also cited higher credit-card commissions associated with the transient mix and increased gas and water expenses.

Chief Financial Officer Atish Shah said the company views expense growth on a per-occupied-room basis as relatively normalized, in a range of roughly 3% to 4%. Xenia expects higher occupancy in the third and fourth quarters to support expense performance toward the lower end of that range.

Capital Projects and Portfolio Changes

Xenia invested $15.4 million in portfolio improvements during the second quarter, bringing year-to-date capital expenditures to $30.6 million. The company reaffirmed its full-year capital expenditure outlook of $70 million to $80 million.

Projects planned for the second half include a guest-room and corridor renovation in the 68-room Monte Vista building at Royal Palms Resort and Spa, along with upgrades to T. Cook’s Restaurant. In the fourth quarter, Xenia expects to begin the first phase of a comprehensive guest-room and corridor renovation at Andaz Napa and renovations to guest rooms, corridors and meeting space at The Ritz-Carlton, Denver.

The company also said it is changing the names and market positioning of four Marriott Autograph Collection hotels while retaining their Autograph Collection affiliation. Management of the properties transitioned earlier this year to Davidson Hospitality Group. Bloom said Xenia does not expect meaningful operational disruption from the renaming effort.

During the quarter, Xenia completed the sale of the 85-room Kimpton RiverPlace Hotel for $11 million, or approximately $129,000 per key. Verbaas said the Portland property had generated minimal hotel EBITDA recently, faced substantial near-term capital needs and had been affected by market challenges, changes in the desirability of its location and new competitive supply.

Improved Second-Half Outlook

Xenia said its outlook is supported by stronger group pace and continued transient demand. At the end of June, second-half group room revenue pace was up 12% from a year earlier, an improvement of 300 basis points from the prior quarter. More than three-quarters of expected second-half group business was already booked.

The company expects July same-property RevPAR growth of approximately 10%, excluding the sold Kimpton RiverPlace Hotel, with both leisure and group demand contributing. Shah said transient pace for August and September was in the high-single-digit percentage range at the end of June and had continued to strengthen.

Xenia increased its midpoint Total RevPAR growth forecast by 75 basis points to 5.75% and now expects Adjusted FFO per diluted share of $2.02 at the midpoint, representing approximately 15% growth from 2025.

At quarter-end, Xenia had approximately $1.4 billion of debt, with roughly three-quarters at fixed rates and a weighted average interest rate of about 5.5%. The company reported $612 million of total liquidity, including $112 million of cash and a fully undrawn $500 million revolving credit facility.

About Xenia Hotels & Resorts (NYSE:XHR)

Xenia Hotels & Resorts is a self-administered real estate investment trust (REIT) that specializes in owning, operating and acquiring premium full-service hotels across the United States. The company's portfolio emphasizes upper-upscale and luxury properties, partnering with leading hotel brands to deliver a distinctive guest experience while targeting markets with strong leisure and corporate demand.

Founded as a spin-off from Marriott International in September 2016, Xenia has built a diversified collection of full-service hotels and resorts in key U.S.

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