Group Demand Dilemma: Contradictions in Booking Trends and Leisure Expectations from 2025 Q2 Earnings Call

Revenue Growth and Operational Performance:
- Xenia Hotels & Resorts reported net income of $55.2 million and adjusted EBITDAre of $79.5 million for the second quarter of 2025, with second quarter same-property hotel EBITDA increasing by 22.2% compared to the previous year.
- The growth was driven by a 4% increase in same-property RevPAR, supported by a 140 basis point increase in occupancy and a 2% increase in average daily rate, along with strong group business demand and higher catering revenues.

Capital Expenditure Reduction and Strategic Investments:
- The company reduced its projected capital expenditures for the year to between $75 million and $85 million, a significant decrease from the initial projection at the beginning of the year.
- This was due to the company's prudent approach in the face of uncertain tariffs on imported goods and identifying alternative sources for goods and materials.

Scottsdale Resort Performance and Investment Strategy:
- The newly up-branded Grand Hyatt Scottsdale Resort exceeded 2019 group room nights and revenue during the second quarter, achieving above fair share in its competitive set for the first time post-renovation in June.
- The success was attributed to the investment thesis in the property, with revenues and bottom-line performance tracking in line with underwriting expectations, as well as improvements in group market share and banquet revenues.

Group Business Demand and Outlook:
- Group room revenues increased by 7.6% compared to the second quarter of 2024, excluding Grand Hyatt Scottsdale, driven by a rise in room nights by 6.5% and an average rate increase of 1%.
- The strong performance is expected to continue, particularly in the fourth quarter, with group room revenue pace for the second half of 2025 up 16%, supported by high-quality corporate group business and growth in higher-end catered events.