Xenia Hotels & Resorts Q1 2025: Navigating Contradictions in Group Bookings, Leisure Demand, and CapEx Strategies

Group booking trends and uncertainty, leisure segment performance and expectations, CapEx reduction and Fairmont Dallas impact, and group booking activity trends are the key contradictions discussed in Xenia Hotels & Resorts' latest 2025Q1 earnings call.



Strong First Quarter Performance:
- Xenia Hotels & Resorts reported net income of $15.6 million and adjusted EBITDAre of $72.9 million for Q1 2025, with a 6.3% increase in RevPAR compared to Q1 2024.
- The growth was driven by strong group business, recovering demand from large corporate accounts, and the impact of transformative renovations like at the Grand Hyatt Scottsdale.

Group Business and Demand Recovery:
- Group room nights grew by 6.6% with an ADR increase of 4.1%, and over 80% of expected group room revenue for the remainder of the year was definite.
- This was attributed to the realization of strong group revenue pace and recovering demand from significant corporate accounts.

Portfolio and Asset Transactions:
- The company completed two transactions: acquiring the fee simple interest in the land underlying the Hyatt Regency for $25 million and selling Fairmont Dallas for $111 million.
- These transactions were intended to mitigate risk from potential ground rent escalation and avoid significant capital expenditures required for renovation.

Guidance Adjustments and Economic Uncertainty:
- Xenia adjusted their full-year RevPAR growth guidance downward by approximately 50 basis points due to macroeconomic uncertainty.
- The adjustments reflect potential impacts from consumer spending concerns and tariffs on internationally sourced goods, leading to a reduction in capital expenditures.