Xenia Hotels & Resorts Inc ((XHR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Xenia Hotels & Resorts Inc. painted a picture of a challenging operating environment. While there were some positive developments, such as strong group demand and individual property performance, these were overshadowed by a net loss, weak market performance in Houston, and reduced expectations for the fourth quarter. The overall sentiment was cautious, reflecting the difficulties the company faces in the current market landscape.
Strong Group Demand
Group demand remained robust throughout the third quarter and is expected to continue into 2026. The company reported strong group room revenues already on the books, indicating a positive outlook for this segment of their business.
Grand Hyatt Scottsdale Performance
The Grand Hyatt Scottsdale has shown significant year-over-year growth, contributing to a 0.9% increase in same-property RevPAR when excluding Houston assets. This property continues to be a bright spot in Xenia’s portfolio.
RevPAR Growth
For the first nine months of 2025, Xenia’s same-property portfolio achieved a 3.7% increase in RevPAR. This growth was driven by an 80 basis points higher occupancy and a 2.4% increase in the average daily rate, showcasing the company’s ability to optimize its pricing strategy.
Food & Beverage Revenue Increase
The third quarter saw a 3.7% increase in same-property total RevPAR, largely due to a significant increase in food and beverage revenue. This highlights the importance of ancillary revenue streams in boosting overall performance.
W Nashville F&B Relaunch
Xenia has entered into an agreement with the Jose Andres Group to operate food and beverage outlets at W Nashville. This relaunch is expected to add $3 million to $5 million to the hotel’s EBITDA, marking a strategic move to enhance profitability.
Net Loss Reported
The company reported a net loss of $13.7 million for Q3 2025, underscoring the financial challenges it faces. This loss reflects the broader difficulties in the market and specific underperforming segments.
Houston Market Challenges
The Houston market has been a drag on portfolio performance due to tough comparisons from last year’s hurricane-related demand lift. This has negatively impacted Xenia’s overall results.
Overall EBITDA Margin Decline
Xenia’s hotel EBITDA margin decreased by 60 basis points. Excluding the Grand Hyatt Scottsdale, EBITDA decreased by 7.8% with a 160 basis points margin decline, indicating pressure on profitability.
Reduced Fourth Quarter Expectations
The company has slightly reduced its expectations for the fourth quarter, with lower RevPAR guidance. This adjustment reflects the anticipated challenges in the market.
Leisure Demand Softness
As anticipated, leisure demand softened, impacting overall performance. This trend highlights the ongoing volatility in consumer travel behavior.
Forward-Looking Guidance
During the earnings call, Xenia Hotels & Resorts provided a detailed outlook for the remainder of the year and beyond. Despite the net loss, the company achieved an Adjusted EBITDAre of $42.2 million and an adjusted FFO per share of 23¢, an 8% decrease from the previous year. The company anticipates a full-year same-property RevPAR increase of 4% and projects adjusted EBITDAre at $254 million. Looking ahead to 2026, Xenia expects robust group demand, supported by 35% of group room nights already booked, and strong citywide convention demand in several markets. Additionally, the company plans to invest approximately $90 million in property improvements, including a significant renovation of the food and beverage operations at W Nashville.
In conclusion, Xenia Hotels & Resorts Inc. faces a challenging environment, with mixed results across its portfolio. While there are positive signs in group demand and specific property performances, the overall sentiment remains cautious due to financial losses and market challenges. The company’s forward-looking guidance reflects a strategic focus on leveraging group demand and enhancing property offerings to drive future growth.