Xenia Hotels & Resorts(XHR) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q1 2025, the company reported net income of $15.6 million, adjusted EBITDAre of$72.9 million, and adjusted FFO per share of $0.51, reflecting nearly 12$188.73, occupancy increasing by 80 basis points, and ADR increasing by 3.6% [5][17] Business Line Data and Key Metrics Changes - The Grand Hyatt Scottsdale's RevPAR grew by approximately 60% in Q1 2025 compared to the same quarter last year, driven by the completion of its transformative renovation [9][22] - One-third of the company's assets achieved double-digit percentage RevPAR growth, while several others experienced high single-digit percentage growth [6][17] Market Data and Key Metrics Changes - Hotels in Washington DC and New Orleans benefited from significant events, such as the presidential inauguration and the Super Bowl, contributing positively to RevPAR [6] - The Houston market experienced softness due to winter storms impacting travel, leading to a 2.1% increase in January RevPAR but a decline in occupancy [18] Company Strategy and Development Direction - The company completed two significant transactions, acquiring land in Santa Clara for $25 million and selling Fairmont Dallas for$111 million, reflecting prudent capital allocation [10][12] - The company plans to reduce capital expenditures for 2025 to between $75 million and$85 million, a reduction of $25 million compared to previous guidance, in response to macroeconomic uncertainties [14][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience despite macroeconomic uncertainties, noting that all high-quality branded hotels cater to more resilient customers [15][30] - The company expects RevPAR growth to be driven more by occupancy than rate, with a forecasted full-year RevPAR growth of approximately 4.5$75 million [28][29] Q&A Session Summary Question: Have group booking trends evolved in response to the current uncertainty? - Management noted that group booking activity remains healthy with no uptick in cancellations or attrition, indicating a positive outlook for group business [40][41] Question: Have you seen any meaningful impact from lower international inbound travel? - Management indicated limited impact from lower international visitation, as the portfolio is not heavily dependent on international travel [42][43] Question: Can you provide background on the Santa Clara acquisition? - The acquisition was a unique opportunity from the city of Santa Clara, aimed at eliminating future rent escalation risks and increasing asset value [46][50] Question: What is the plan for deferred CapEx projects? - Management stated that they will continually evaluate deferred projects and may consider executing them in 2026, depending on macroeconomic conditions and tariff impacts [52][70] Question: What are the trends in leisure business? - Management observed varied performance in leisure business across properties, with a slight decline expected in leisure RevPAR for the year [57][62]