On Friday, Xenia Hotels & Resorts (NYSE:XHR) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Access the full call at https://events.q4inc.com/attendee/934224251
Summary
Xenia Hotels & Resorts reported strong Q1 2026 results, with net income of $19.8 million and adjusted EBITDA RE of $81.4 million, marking a 12% increase from last year.
Same property RevPAR grew by 7.4%, with significant contributions from the Grand Hyatt Scottsdale Resort and broad-based strength across the portfolio.
The company raised its full-year 2026 adjusted EBITDA RE guidance by $6 million to $266 million at the midpoint, reflecting confidence in continued performance.
Capital expenditures for the year are expected between $70 and $80 million, with significant projects completed, including the W Nashville food and beverage reconcepting.
Management highlighted a robust transaction market and potential for acquisitions, while maintaining a balanced approach to capital allocation, including debt reduction and share repurchases.
Full Transcript
Reagan (Moderator)
Good afternoon everyone and thank you for joining the Xenia Hotels & Resorts, Inc. Q1 2026 earnings conference call. My name is Reagan and I’ll be your moderator today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. And if you like to ask a question, you may do so by pressing Star one on your telephone keypad. I would now like to pass the conference over to our host, Abdul Martinez, Director of Finance. Please proceed.
Abdul Martinez (Director of Finance)
Thank you Reagan and welcome to Xenia Hotels & Resorts First Quarter 2026 Earnings Call and webcast. I’m here with Marcel Verbas, our Chair and Chief Executive Officer, Barry Bloom, our President and Chief Operating Officer and Atish Shah, our Executive Vice President and Chief Financial Officer. Marcel will begin with a discussion on our performance, Barry will follow with more details on operating trends and capital expenditure projects and Atish will conclude today’s remarks on our balance sheet and outlook. We will then open up the call for Q and A. Before we get started, let me remind everyone that certain statements made on this call are not historical facts and are considered forward looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10K and other SEC filings which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward looking statements in the earnings release that we issued this morning along with the comments on this call are made only as of today May 1, 2026 and we undertake no obligation to publicly update any of these forward looking statements as actual events unfold. You can find the reconciliation of non GAAP financial measures to net income and definitions of certain items referred to in our remarks in our first quarter earnings release which is available on the Investor Relations section of our website. The property level information we’ll be speaking about today is on a same property basis for all 30 hotels unless specified otherwise. An archive of this call will be available on our website for 90 days. I will now turn it over to Marcel to get started.
Marcel Verbas (Chair and Chief Executive Officer)
Thanks hello and good afternoon everyone. We are pleased to report strong first quarter 2026 results that exceeded our expectations across all key metrics. Our portfolio delivered exceptional first quarter performance driven by strength in both the group and transient demand segments, especially in the month of March. We also saw highly encouraging results at Grand Hyatt’s Scottsdale Resort as it continues on its path towards stabilization following the completion of its transformative renovation. For the first quarter of 2026 we reported net income of $19.8 million, adjusted EBITDAre of $81.4 million, an increase of nearly 12% to last year, and adjusted FFO per share of $0.63 which was 23.5% higher than the first quarter of 2025. For the first quarter, our same property RevPAR grew 7.4% with occupancy increasing 180 basis points, an average daily rate increasing 4.8% compared to the first quarter of 2025. Additionally, we continue to benefit from strong growth in non rooms revenues as evidenced by our same property total RevPAR for the quarter growing to $370.13 reflecting an increase of 7.2% as compared to the same quarter last year. Food and beverage revenues increased 6.2% on a same property basis reflecting continued growth in banquet and catering revenues as well as our ongoing focus on outlet optimization efforts, while other revenues were up nearly 11% for the quarter. Same property hotel EBITDA for The quarter was $87.8 million, an increase of almost 18% compared to the same period last year. Significant growth in rooms revenues, a large portion of which consisted of rate growth combined with disciplined expense management drove an improvement in same property hotel EBITDA margin from 27% in the first quarter of 2025 to 29.7% this year, an expansion of 270 basis points. At Grand Hyatt Scottsdale Resort, record revenues and hotel EBITDA were achieved for the first quarter as the ramp up of the overall resort continues. The resort has seen successful execution of occupancy driven ramp up plans that have produced significant transient business volumes to supplement the growing base of group demand. These improvements have translated throughout the operation into record food and beverage outlet, spa, recreation, parking and miscellaneous revenues. Expenses have grown at a slower pace as much of the occupancy gains have required relatively limited incremental cost. As a result, the resorts hotel EBITDA margin improved significantly during the first quarter. While Grand Hyatt Scottsdale was a significant driver of our first quarter outperformance, we experienced broad based strength across our portfolio of luxury and upper upscale hotels and resorts. Increased group and transient demand contributed to revar and total RevPAR increases in 15 of our 22 markets. In addition to the Phoenix Scottsdale market, we experienced double digit percentage total revpar growth in Salt Lake City, Birmingham, Portland, Santa Clara, Santa Barbara and Houston which is indicative of the range of markets and demand segments that contributed to our strong performance for the quarter. Our weakest performance for the quarter on a year over year basis were as anticipated as these properties either benefited from one time events last year such as the super bowl in New Orleans and the Presidential inauguration in Washington D.C. or experienced some disruption due to capital projects, specifically Fairmont Pittsburgh and W Nashville. W Nashville also was impacted by several weather events that negatively impacted performance for the quarter. We continue to benefit from our portfolio’s favorable positioning and diversification as it relates to the various demand segments. Group rooms revenues increased in excess of 7% for the quarter as compared to the same period last year, bolstering our performance. Transient rooms revenues also grew approximately 7% for the quarter, primarily driven by extremely strong performance in March as the timing of Easter in early April appeared to compress high levels of corporate transient leisure demand into the month of March. Now turning to capital expenditures, we continue to expect to spend between 70 and 80 million dollars on property improvements during the year. During the first quarter we completed the renovation of the M Club at Marriott Dallas Downtown and the guest room renovation at Fairmont Pittsburgh which was completed as planned with limited disruption on budget and in advance of the NFL draft that took place in Pittsburgh last week. With record attendance on our last couple of earnings calls, we expressed our excitement about the reconcepting of the food and beverage outlets at W Nashville. We are pleased to report that all outlets have opened for business and were completed on time and within budget. The new outlets are tremendous, new amenities for the hotel and initial feedback from customers has been extremely positive. Barry will provide additional details on our capital projects including the Nashville food and beverage reconcepting during his remarks. Looking ahead to the second quarter, we are encouraged by the continuation of the positive momentum our operators are reporting for April. While calendar shifts related to Easter timing and spring breaks contributed to our outstanding results in the month of March, we estimate that April same property RevPAR increased nearly 6% as compared to April 2025. The estimated RevPAR growth of over 10% that our portfolio experienced during the combined months of March and April is a reflection of strong demand in our markets when eliminating the impact of the timing of Easter compared to last year, with our largest resorts benefiting a bit due to safety concerns in Mexico and weather conditions in Hawaii. Turning to our outlook for the remainder of the year, given the Stronger than projected first quarter results, we have raised our full year 2026 adjusted EBITDA RE guidance by $6 million to $266 million at the midpoint. Our guidance for adjusted FFO per share for full year 2026 is now $1.94 at the midpoint this would represent an increase of approximately 10% over 2025. While we are encouraged by our first quarter performance as well as demand trends in April, a significant amount of overall market and geopolitical uncertainty continues to exist as we look ahead to the remainder of the year. As such, we have not changed our outlook for the balance of the year when compared to our previously issued guidance. Atish will walk through all of our current 2026 guidance items in more detail, including our updated views of the anticipated demand lift from one time events such as the FIFA World cup and America 250. Although we have not completed any transactions since the sale of Fairmont Dallas last year, we have significantly improved our portfolio through robust acquisition and disposition activities since our listing in 2015. We continue to evaluate potential transactions with an eye toward further portfolio improvement and sustainable earnings growth in the years ahead. The transaction market and opportunity set appear to be a bit more robust than they have been in the last couple of years and we will continue to evaluate these opportunities while being mindful of our balance sheet and other capital allocation priorities. While the macroeconomic environment remains fluid and uncertain, we continue to believe our portfolio is very well positioned for continued earnings growth. The quality of our luxury and upper upscale hotels and resorts in top 25 and key leisure markets, combined with our experienced operating partners and a favorable supply backdrop for the next several years provide a solid platform for continued outperformance in 2026 and in the years ahead. I will now turn the call over to Barry to provide more details on our first quarter operating results and our capital projects.
Barry Bloom (President and Chief Operating Officer)
Thank you Marcel Good afternoon everyone. For the first quarter our 30 same property portfolio RevPAR was $205.93, an increase of 7.4% as compared to the first quarter in 2025 based on occupancy of 71.4% at an average daily rate of $288.62. Properties achieving double digit Revpar growth as compared to the first quarter of 2025 included Grand Hyatt Scottsdale RevPAR up 46.2% Kimpton Hotel Monaco Salt Lake City 27.2% Andaz Savannah up 16.4% Hyatt Regency Santa Clara up 14.7% Grand Bohemian Hotel Mountain Brook up 13.9% and Kimpton Canary Hotel Santa Barbara up 12%. Growth at these properties was due to a variety of factors including increased citywide demand, stronger leisure demand in drive two markets and one off major events. Properties with softer performance in Q1 this year included Lowe’s New Orleans which hosted the Super bowl in Q1 of 2025 Ritz Carlton Pentagon City, which lapped last year’s presidential inauguration and W Nashville due to poor weather and anticipated disruption. The Jose Andres Food and Beverage Relaunch Looking at each month of the quarter, January RevPAR was $163.59 of 1.4% to January 2025 with occupancy flat and ADR of 1.4%. February RevPAR was $216.11, up 4.8% compared to February 2025 with occupancy down 40 basis points and ADR up 5.4%. March was the strongest month of the quarter across all three metrics with RevPAR of $239.08 up 14.3% compared to March 2025 with occupancy up 540 basis points and ADR up 6.5%. Group business continued to maintain its recent strength during the quarter with group rooms revenue up over 7%, reflecting strength in group business that is expected to continue to improve throughout the rest of the year. Overall for the quarter, group nights were up 2.5% with ADR up 4.4%. Business levels grew for each night of the week during the quarter compared to the first quarter of 2025. Occupancies grew by 210 basis points on weekdays and 110 basis points on weekends with ADR growth of 4.5% on weekdays and 5.3% on weekends. RevPAR on Wednesday nights was up a notable 11% for the quarter. Leisure business during the quarter was consistent across the large resorts in the portfolio with significant increase in leisure business at Grand Hot Scottsdale and Henry C Grand Cypress as well as Strength the Park Hot Aviarra, which lapped a difficult comparison to the first quarter of 2025 at our smaller leisure focused hotels. Leisure business grew significantly at Andaz, Savannah, Royal Palms and Kimpton Canary Hotel Santa Barbara now turning to expenses and profit first quarter same property hotel EBITDA was $87.8 million, an increase of 17.9% driven by a total revenue increase of 7.3% compared to the first quarter of 2025, resulting in 270 basis points of margin improvement. Our operators are now able to better control expenses in a more stable occupancy and a growing rate environment for the 30 same property portfolio. Food and beverage revenues increased 6.2% in the quarter as a result of nearly 11% growth in banquets, while outlet growth declined slightly primarily as a result of outlet closures at W Nashville during the quarter. Other operating department income including parking, spa and golf revenues grew by approximately 13%. Rooms expenses were well controlled, increasing 2.3% on a per occupied room basis while FMB profit margin improved by approximately 150 basis points. Ang grew by approximately 4.5% while sales and marketing expenses remained flat during the quarter. In line with recent trends, the strategies have been refined and focused across the portfolio. Property operations and maintenance expenses grew by just 1.3% due primarily to lower general expenses, while energy expenses across the portfolio grew at over 9% due to significant winter storms which drove higher costs, especially for gas turning to CapEx during the first quarter we invested $15.2 million in portfolio improvements. We completed two projects during the first quarter including the completion of a Guest Stream renovation at Fairmont Pittsburgh and a renovation of the M Club at Marriott Dallas Downtown. More significantly, we reconcepted the food and beverage facilities at W Nashville pursuant to our previously announced agreements with Jose Andres Group, which JAGDO operates, and our licenses to potentially all of the hotel’s food and …
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