On August 1, 2024, Xenia Hotels & Resorts Inc (XHR, Financial) released its 8-K filing for the second 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 owns and pursues hotels in the upscale, upper upscale, and luxury segments that are affiliated with various brands. Its hotels are operated by Marriott, along with Hilton, Hyatt, Starwood, Kimpton, Aston, Fairmont, and Loews. The firm's properties are located in various regions across the U.S.: the South Atlantic, West South Central, Pacific, Mountain, and other. Xenia's revenue is divided between room, food and beverage, and other. The room segment contributes to the vast majority of the firm's total revenue. The firm's customer groups include transient business, group business, and contract business.
Performance Overview
For the second quarter of 2024, Xenia Hotels & Resorts Inc reported net income attributable to common stockholders of $15.3 million, or $0.15 per share, surpassing the analyst estimate of $0.09 per share. However, the company reported revenue of $272.9 million, falling short of the estimated $275.80 million.
Key Financial Metrics
Below are some of the key financial metrics from the earnings report:
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Income | $15.3 million | $13.8 million | 11.2% |
| Adjusted EBITDAre | $68.4 million | $74.7 million | -8.4% |
| Adjusted FFO per Diluted Share | $0.52 | $0.47 | 10.6% |
| Same-Property Occupancy | 71.0% | 68.6% | 240 bps |
| Same-Property ADR | $261.53 | $265.98 | -1.7% |
| Same-Property RevPAR | $185.69 | $182.49 | 1.8% |
Challenges and Achievements
Despite the revenue shortfall, Xenia Hotels & Resorts Inc achieved a notable increase in net income and Adjusted FFO per diluted share. The company faced challenges such as a decrease in Same-Property ADR by 1.7% and a decline in Same-Property Hotel EBITDA by 7.5%. However, the company managed to increase its Same-Property Occupancy by 240 basis points and Same-Property RevPAR by 1.8%.
Commentary from Management
"Our portfolio produced meaningful RevPAR growth in the second quarter, as Same-Property RevPAR, excluding Hyatt Regency Scottsdale, increased by 5% compared to last year, driven by strong results at the newly renovated Grand Bohemian Hotel Orlando, Hotel Monaco Salt Lake City and Canary Hotel Santa Barbara, as well as our hotels located in San Diego, Santa Clara, Houston, Dallas and the Washington D.C. area," said Marcel Verbaas, Chair and Chief Executive Officer of Xenia.
Income Statement Highlights
For the second quarter of 2024, Xenia Hotels & Resorts Inc reported total revenues of $272.9 million, a slight increase from $271.1 million in the same period last year. Rooms revenues were $160.8 million, food and beverage revenues were $89.1 million, and other revenues were $23.0 million. Total hotel operating expenses increased to $185.8 million from $178.6 million in the prior year.
Balance Sheet and Cash Flow
As of June 30, 2024, Xenia Hotels & Resorts Inc had total assets of $2.91 billion and total liabilities of $1.59 billion. The company had cash and cash equivalents of $143.6 million and restricted cash and escrows of $61.5 million. The company’s total outstanding debt was approximately $1.4 billion with a weighted-average interest rate of 5.50%.
Analysis
Xenia Hotels & Resorts Inc's performance in the second quarter of 2024 reflects a mixed bag of achievements and challenges. While the company managed to surpass net income estimates and improve its Adjusted FFO per diluted share, it fell short on revenue expectations. The increase in Same-Property Occupancy and RevPAR indicates a positive trend in hotel performance, although the decline in Same-Property ADR and Hotel EBITDA suggests ongoing challenges in maintaining profitability. The company's focus on renovations and strategic investments, such as the transformative renovation of the Hyatt Regency Scottsdale Resort & Spa, is expected to drive future growth.
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Explore the complete 8-K earnings release (here) from Xenia Hotels & Resorts Inc for further details.
