8-K: Xenia Hotels & Resorts Reports Mixed Fourth Quarter and Full Year 2024 Results Amidst Strategic Renovations

Xenia Hotels & Resorts reported a net loss for Q4 2024 but saw RevPAR growth, while full-year results showed a decrease in net income but an increase in Adjusted FFO per Diluted Share.

Summary

• Xenia Hotels & Resorts reported a net loss attributable to common stockholders of $0.6 million, or $0.01 per share, for the fourth quarter of 2024.
• Adjusted EBITDAre decreased by 0.5% to $59.2 million compared to the fourth quarter of 2023.
• Adjusted FFO per Diluted Share decreased by 4.9% to $0.39 compared to the fourth quarter of 2023.
• Same-Property RevPAR increased by 5.1% to $165.92 compared to the fourth quarter of 2023; excluding the Grand Hyatt Scottsdale Resort, the increase was 3.4% to $168.34.
• For the full year 2024, net income attributable to common stockholders was $16.1 million, or $0.15 per share.
• Adjusted EBITDAre decreased by 5.8% to $237.1 million for the full year 2024.
• Adjusted FFO per Diluted Share increased by 3.2% to $1.59 for the full year 2024.
• Same-Property RevPAR increased by 1.6% to $172.47 for the full year 2024; excluding the Grand Hyatt Scottsdale Resort, the increase was 3.4% to $176.62.
• The company repurchased 515,876 shares of common stock in Q4 at an average price of $14.83 per share, totaling $7.6 million.
• For the full year, the company repurchased 1,130,846 shares at an average price of $14.02 per share, totaling $15.8 million.
• The company issued $400 million of 6.625% Senior Notes maturing in May 2030 and used the proceeds to repay 6.375% Senior Notes due August 2025.
• The company declared a fourth-quarter dividend of $0.12 per share and increased the first quarter 2025 dividend to $0.14 per share.
• Full year 2025 guidance includes a net income between $9 million and $29 million, Same-Property RevPAR change between 3.5% and 6.5%, Adjusted EBITDAre between $244 million and $264 million, Adjusted FFO between $161 million and $181 million, and capital expenditures between $100 million and $110 million.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While there are some negative aspects like the net loss in Q4 and decreases in Adjusted EBITDAre, there are also positive developments such as the RevPAR growth, strategic renovations, and increased dividend. The company's outlook for 2025 is cautiously optimistic.

Positives

• Same-Property Occupancy increased by 250 basis points in Q4 2024 compared to Q4 2023.
• The company successfully addressed near-term debt maturities and strengthened its balance sheet.
• The completion of the Grand Hyatt Scottsdale Resort renovation is expected to drive strong cash flow.
• The company increased its quarterly cash dividend by approximately 17% to $0.14 per share for Q1 2025.
• The company repurchased 1,130,846 shares of common stock for a total consideration of approximately $15.8 million for the full year 2024.
• The company estimates that Same-Property RevPAR for the first quarter through February 20th grew 7.3% versus the comparable period in 2024.

Negatives

• Net loss attributable to common stockholders was $0.6 million for Q4 2024.
• Adjusted EBITDAre decreased by 0.5% in Q4 2024.
• Adjusted FFO per Diluted Share decreased by 4.9% in Q4 2024.
• Same-Property Hotel EBITDA Margin decreased by 120 basis points in Q4 2024.
• Net income attributable to common stockholders decreased by 15.7% for the full year 2024.
• Adjusted EBITDAre decreased by 5.8% for the full year 2024.

Risks

• The company acknowledges continued uncertainty in the overall economic climate.
• The company's 2025 outlook is based on limited visibility in forecasting due to macroeconomic uncertainty.
• The company's dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly.
• Risks associated with redevelopment and repositioning projects, including disruption, delays and cost overruns.

Future Outlook

The company anticipates Same-Property RevPAR growth in 2025 and provides full-year guidance with a range for net income, RevPAR change, Adjusted EBITDAre, Adjusted FFO, and capital expenditures.

Management Comments

• Marcel Verbaas, Chair and Chief Executive Officer of Xenia, stated that the company finished a challenging 2024 with positive momentum in the fourth quarter.
• Mr. Verbaas noted that Same-Property RevPAR came in 5.1% higher than the prior year in the fourth quarter.
• Mr. Verbaas mentioned that Adjusted FFO exceeded the midpoint of the guidance range provided last quarter.
• Mr. Verbaas stated that the company addressed all near-term debt maturities and further strengthened its balance sheet.
• Mr. Verbaas stated that the company is optimistic about its growth prospects as it begins 2025.

Industry Context

The announcement reflects the ongoing recovery and strategic repositioning efforts within the hospitality sector, with a focus on luxury and upper upscale segments. The company's focus on renovations and capital improvements aligns with industry trends aimed at enhancing guest experiences and driving RevPAR growth.

Comparison to Industry Standards

• Comparing Xenia's performance to peers like Host Hotels & Resorts (HST) and Park Hotels & Resorts (PK) would provide a broader context.
• Host Hotels & Resorts (HST) focuses on large, upscale hotels, while Park Hotels & Resorts (PK) has a diverse portfolio of luxury and upper-upscale hotels and resorts.
• Xenia's Same-Property RevPAR growth of 5.1% in Q4 2024 is a key metric to compare against these peers to assess relative performance.
• The successful completion and upbranding of the Grand Hyatt Scottsdale Resort is a strategic move similar to other REITs investing in property improvements to drive higher returns.
• Xenia's focus on top 25 lodging markets and key leisure destinations aligns with the strategies of other major hotel REITs.

Stakeholder Impact

• Shareholders will benefit from the increased dividend and share repurchase program.
• Employees may see improved working conditions and opportunities due to property renovations.
• Customers can expect enhanced experiences at the renovated and upgraded hotels.
• Creditors benefit from the company's strengthened balance sheet and addressed debt maturities.

Next Steps

• The company plans to continue renovations and upgrades at various properties in 2025.
• The company will monitor macroeconomic conditions and adjust its strategies accordingly.
• The company will focus on driving cash flow from the newly renovated Grand Hyatt Scottsdale Resort.

Key Dates

Keywords

RevPAR, EBITDA, FFO, Hotels, Resorts, Xenia, Renovation, Dividends, Occupancy, ADR