Xenia Hotels & Resorts (XHR) 7 Nov 24 2024 Q3 Earnings call transcript
Xenia Hotels & Resorts, a leading player in the hospitality industry, recently held its third quarter 2024 earnings call, shedding light on its performance and outlook for the future. The call, led by executives including CEO Marcel Verbaas, President and COO Barry Bloom, and CFO Atish Shah, provided insights into the company's financial health, strategic initiatives, and market positioning.
Performance Highlights and Challenges
The company reported a net loss of $7.1 million for the third quarter, with adjusted EBITDARe at $44.3 million and adjusted FFO per share at $0.25. While the results fell short of expectations, the company attributed the shortfall to a combination of factors, including the normalization of leisure demand and the impact of Hurricanes Debbie, Francine, and Helene on several properties in the Southeast. The company also experienced renovation disruption in Scottsdale, which negatively affected performance in the quarter.
Despite these challenges, the company reported a same-property RevPAR increase of 1.5%, driven by strong results at recently renovated properties in Orlando, Santa Barbara, and Salt Lake City. The 3 Houston hotels, Atlanta properties, and Ritz-Carltons in Pentagon City and Denver also outperformed the rest of the portfolio.
Strategic Initiatives and Capital Expenditures
Xenia Hotels & Resorts is focusing on strategic initiatives to drive future growth. The company has announced the upbranding of the former Hyatt Regency Scottsdale to the Grand Hyatt Scottsdale Resort, marking a significant milestone. The property now features renovated guest rooms, a spa, and new restaurants, positioning it as a premier destination in one of the country's most appealing resort locations.
The company also announced an increase in its capital expenditure projections for the year, with a focus on property improvements. The Scottsdale renovation is expected to cost between $130 million and $140 million, with substantial completion expected by the end of the year. This transformative project is expected to significantly enhance the guest experience and contribute to the company's earnings growth over the next few years.
Outlook and Future Prospects
Looking ahead, Xenia Hotels & Resorts remains optimistic about its portfolio performance, despite the current challenges. The company expects to see significant year-over-year RevPAR gains in Scottsdale in the months ahead, as the renovation disruption subsides. The company's strong group and corporate transient demand, coupled with a focus on capital expenditures and strategic initiatives, position Xenia Hotels & Resorts for continued growth and success in the years ahead.
Investor and Analyst Interactions
During the call, key shareholders and investors expressed concerns about the company's marketing strategy for the new product and competition. These questions indicate that the success of the new product and the company's ability to differentiate itself in the market are important factors for shareholders. By addressing these concerns and outlining its strategic initiatives, Xenia Hotels & Resorts demonstrated a strong understanding of the market dynamics and its position within the industry.
Conclusion
Xenia Hotels & Resorts' third quarter 2024 earnings call highlighted the company's resilience in the face of challenges and its strategic focus on growth and innovation. The company's commitment to capital expenditures, strategic initiatives, and strong operational performance positions it well for future success. As the company looks ahead to the NAREIT Conference and beyond, investors and analysts will be watching closely to see how Xenia Hotels & Resorts continues to navigate the market and capitalize on opportunities for growth.