Analysis XHR
Xenia's hotel earnings outpaced sales. How broad is the recovery?
Higher rates and occupancy lifted property earnings faster than revenue. Our market-by-market count shows how widely the improvement spread behind the higher annual outlook.
Xenia Hotels & Resorts raised its annual room-revenue forecast after stronger demand spread across nearly its entire portfolio. Both higher room rates and more occupied rooms helped the hotel owner turn revenue growth into faster earnings growth.
Research by Ticker Byline shows that revenue per available room increased in 21 of Xenia's 22 markets during the third quarter. Philadelphia, New Orleans and San Diego posted gains above 20%. Savannah was the only market to decline, falling 3.2%.
Xenia owns 29 luxury and upper-upscale hotels and resorts. Across the comparable portfolio, room revenue per available room, or RevPAR, rose 12.5% to $184.75. The measure captures both pricing and occupancy: average daily rates increased 6.4% to $264, while occupancy rose to 70% from 66.2%.
More revenue reached hotel earnings
Comparable hotel EBITDA, a property earnings measure before interest, income taxes, depreciation, amortization and selected other costs, increased 29.3% to $60.2 million. Its margin rose to 22.9% from 19.9%.
The same hotels generated $29.6 million of additional total revenue and $13.6 million of additional hotel EBITDA. That works out to about 46 cents of extra hotel earnings for each additional revenue dollar, before corporate costs.
Chairman and Chief Executive Officer Marcel Verbaas attributed the improvement to group and corporate demand, with leisure travel also benefiting from large events. The company estimated that October RevPAR increased approximately 8%.
The higher forecast keeps renovation assumptions intact
| Measure | July | November |
|---|---|---|
| Comparable RevPAR growth | 4.75%–6.25% | 7.75%–8.25% |
| Adjusted EBITDAre | $267–$279 | $278–$284 |
| Adjusted FFO per diluted share | $1.96–$2.08 | $2.08–$2.14 |
| Capital expenditures | $70–$80 | $70–$75 |
Both annual RevPAR forecasts cover the same 29 hotels, excluding the RiverPlace property sold in July. The company had already disclosed strong July and August growth in September; the latest report adds the full quarter and a higher annual outlook.
Adjusted EBITDAre and funds from operations add back real-estate depreciation and make selected other adjustments. Xenia still recorded a $2.7 million quarterly loss attributable to common shareholders, improved from a $13.7 million loss.
The lower investment ceiling comes as Xenia completed the Royal Palms guest-room and restaurant work planned for the quarter. Renovations at Andaz Napa and The Ritz-Carlton, Denver remain scheduled to begin in early December. The forecast still includes approximately $1 million of earnings disruption from renovations.
The Xenia company profile follows these projects, cash generation and the debt position supporting the higher outlook.