Net Loss: $638,000 for Q4 2024. Adjusted EBITDAre: $59.2 million for Q4 2024. Adjusted FFO per Share: $0.39 for Q4 2024. Same-Property RevPAR: Increased 5.1% in Q4 2024 compared to the prior year. Hotel EBITDA: $62.9 million for Q4 2024, 0.6% below 2023 levels. Hotel EBITDA Margin: Decreased by 120 basis points in Q4 2024. Full Year 2024 Net Income: $16.1 million. Full Year 2024 Adjusted EBITDAre: $237.1 million. Full Year 2024 Adjusted FFO per Share: $1.59. Full Year 2024 Same-Property RevPAR: Increased 1.6% compared to 2023. Full Year 2024 Hotel EBITDA: $255.4 million, 5.5% below 2023 levels. Full Year 2024 Hotel EBITDA Margin: Decreased by 189 basis points compared to 2023. 2025 Guidance for Same-Property RevPAR Growth: 3.5% to 6.5%. 2025 Guidance for Adjusted EBITDAre: Expected to increase 7%. 2025 Guidance for Adjusted FFO per Share: Expected to increase 3.5%. Liquidity: Approximately $650 million at the end of January 2025. Net Debt-to-EBITDA Ratio: 5.4x at year-end 2024. Share Repurchase: Over 500,000 shares repurchased in Q4 2024 at an average price of $14.83 per share. Dividend: Expected first quarter 2025 dividend of $0.14 per share.

Warning! GuruFocus has detected 3 Warning Sign with XHR.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Xenia Hotels & Resorts Inc (NYSE:XHR) completed the transformational renovation and up-branding of Grand Hyatt Scottsdale, which is expected to drive significant revenue and earnings growth. The company reported a same-property RevPAR increase of 5.1% in the fourth quarter of 2024, with strong performance in markets like Nashville, Santa Barbara, and Phoenix. Group room revenues, excluding Grand Hyatt Scottsdale, increased by 5% compared to 2023, indicating strong group demand. Xenia Hotels & Resorts Inc (NYSE:XHR) addressed all near-term debt maturities, enhancing its balance sheet and liquidity position. The company repurchased over 500,000 shares of common stock in the fourth quarter, reflecting a commitment to returning capital to shareholders.

Negative Points

Xenia Hotels & Resorts Inc (NYSE:XHR) reported a net loss of $638,000 for the fourth quarter of 2024. Hotel EBITDA margin decreased by 120 basis points in the fourth quarter, indicating pressure on profitability. Leisure demand moderated in 2024, impacting RevPAR growth in leisure-focused markets like Savannah and Napa. The company expects hotel-level expenses to increase by about 4% in 2025, driven by rising wages and benefits. Xenia Hotels & Resorts Inc (NYSE:XHR) anticipates continued uncertainty in the economic climate, which could impact future performance.

Story Continues

Q & A Highlights

Q: Can you provide more insight into the RevPAR forecast, especially considering the strong group pace and improving business transient? A: Marcel Verbaas, CEO, explained that while the group base is strong, representing about 30% of their business, the economic climate creates uncertainty in other segments. They are seeing improvement in corporate transient demand but expect leisure demand to lag. The guidance reflects confidence but also caution due to uncertainties in these other segments.

Q: How much is Scottsdale expected to contribute to EBITDA in 2025, and has the timeline for stabilization changed? A: Marcel Verbaas, CEO, stated that Scottsdale is expected to take about three years to stabilize, with EBITDA in the low $20 million range this year, moving to low $30 million next year, and reaching stabilization in 2026. The strategy focuses on improving the business mix from 2019 levels, with the expanded Arizona Ballroom being a key component.

Q: Can you expand on the softening group demand outside urban and suburban locations? A: Barry Bloom, COO, noted that markets like Orlando and Park Hyatt Aviara in Carlsbad saw less robust group demand in 2024 compared to previous years. This was partly due to a shift in demand patterns post-COVID. However, both properties have strong group prospects for 2025, returning to a more balanced mix of corporate and association business.

Q: How are loyalty costs impacting margins, and what can be done to mitigate these pressures? A: Barry Bloom, COO, explained that loyalty costs are driven by increased volume rather than higher costs per room. The company benefits from brand loyalty programs, which drive business but also incur costs for providing points. Some brands are lowering these costs, but the increase in out-of-room spend also contributes to higher loyalty expenses.

Q: What are your assumptions for the West Coast markets in 2025? A: Barry Bloom, COO, expects continued growth in Northern California, particularly in business transient demand at Marriott San Francisco and Hyatt Regency Santa Clara. There is also anticipated recovery in leisure assets in California, such as Napa and Santa Barbara, and strong group prospects at Park Hyatt Aviara.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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