On November 6, 2024, Xenia Hotels & Resorts Inc (XHR, Financial) released its 8-K filing detailing the financial results for the third quarter of 2024. Xenia Hotels & Resorts Inc is a real estate investment trust that invests in premium full-service, lifestyle, and urban upscale hotels and resorts across the United States. The company's portfolio includes properties operated by major brands such as Marriott, Hilton, and Hyatt.
Quarterly Financial Performance
Xenia Hotels & Resorts Inc reported a net loss attributable to common stockholders of $7.1 million, or $0.07 per share, aligning with the analyst estimate of -$0.07 per share. The company generated total revenues of $236.81 million, slightly below the estimated $239.06 million. Adjusted EBITDAre was $44.3 million, a 4.4% decrease compared to the same quarter last year, while Adjusted FFO per diluted share was $0.25, down 3.8% year-over-year.
Operational Highlights and Challenges
The company experienced a 67.0% same-property occupancy rate, an increase of 320 basis points from the previous year. However, the same-property Average Daily Rate (ADR) decreased by 3.3% to $240.72, impacting the Hotel EBITDA Margin, which fell by 200 basis points to 20.3%. The decrease in ADR was attributed to renovation disruptions at the Grand Hyatt Scottsdale Resort and softer leisure demand.
“Our third quarter Adjusted EBITDARe came in modestly below our expectations, as greater renovation impact at the now newly branded Grand Hyatt Scottsdale Resort, softer leisure demand, impact from multiple hurricanes and continued expense pressures weighed on our results,” said Marcel Verbaas, Chair and Chief Executive Officer of Xenia.
Strategic Transactions and Capital Activities
During the quarter, Xenia sold the Lorien Hotel & Spa in Alexandria, VA for $30.0 million. The company also repurchased 146,863 shares of common stock at an average price of $12.78 per share, totaling approximately $1.9 million. These activities are part of Xenia's strategy to optimize its portfolio and enhance shareholder value.
Balance Sheet and Liquidity
As of September 30, 2024, Xenia had total outstanding debt of approximately $1.4 billion with a weighted-average interest rate of 5.50%. The company maintained a strong liquidity position with $161 million in cash and cash equivalents and full availability on its revolving line of credit, resulting in total liquidity of approximately $611 million.
Year-to-Date Performance and Outlook
For the first nine months of 2024, Xenia reported net income attributable to common stockholders of $16.8 million, or $0.16 per share, a significant improvement from the $11.5 million reported in the same period last year. Despite challenges, the company remains optimistic about its growth potential, driven by strategic renovations and strong group revenue pace at many of its hotels.
“Although recent results have trended below our prior expectations, we continue to be optimistic about our portfolio’s growth potential in 2025 and beyond due to the unique growth drivers embedded in our portfolio and strong group revenue pace at many of our hotels and resorts,” added Mr. Verbaas.
Conclusion
Xenia Hotels & Resorts Inc's third-quarter results reflect the challenges faced by the hospitality industry, including renovation disruptions and external factors like hurricanes. However, the company's strategic initiatives and strong liquidity position provide a foundation for future growth. Investors and stakeholders will be keen to see how Xenia navigates these challenges and capitalizes on its growth opportunities in the coming quarters.
Explore the complete 8-K earnings release (here) from Xenia Hotels & Resorts Inc for further details.
