Xenia Hotels & Resorts(XHR)2024-11-09 15:58Financial Data and Key Metrics Changes - For Q3 2024, the company reported a net loss of 44.3 million and adjusted FFO per share at 48.1 million, a decrease of 6.3% compared to 2023 levels, with hotel EBITDA margin declining by 200 basis points [15][39]. Business Line Data and Key Metrics Changes - The Grand Bohemian Hotel Orlando, Canary Hotel Santa Barbara, and Hotel Monaco Salt Lake City showed strong RevPAR growth, while the Grand Hyatt Scottsdale experienced a 64% increase compared to the previous year [13][31]. - Group room revenues, excluding Scottsdale, increased by 3.8% compared to the same quarter last year, indicating a positive trend in group demand [17][37]. Market Data and Key Metrics Changes - The company faced challenges due to hurricanes impacting demand in the Southeast, particularly in August and September [11][32]. - RevPAR growth was notably strong in Houston, with an 18.4% increase, and luxury hotels like Ritz-Carlton Denver and Waldorf Astoria Buckhead also showed positive growth [33]. Company Strategy and Development Direction - The company plans to spend between 140 million on property improvements in 2024, with a focus on the Scottsdale renovation [18]. - The completion of the Grand Hyatt Scottsdale renovation is expected to significantly enhance guest experience and drive earnings growth over the next few years [21][49]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the portfolio's performance despite current economic uncertainties, highlighting the expected benefits from the Scottsdale project [28]. - The company has reduced its full-year adjusted EBITDARe guidance by 11 million, reflecting various factors including hurricane impacts and softer leisure demand [25][54]. Other Important Information - The company sold the Lorien Hotel & Spa for 30 million, achieving a 21.3x multiple on hotel EBITDA [22]. - The corporate credit facility was upsized and extended, increasing flexibility and resources for future opportunities [50][52]. Q&A Session Summary Question: Can you provide more detail on the ramp-up expectations for Scottsdale? - Management indicated that it will take a few years to stabilize at the low $40 million EBITDA range, with optimism about future group revenue growth [60][64]. Question: What is the EBITDA contribution from Scottsdale this year? - The contribution is minimal due to disruption, but management expects to recover this disruption and see growth in the coming years [79][81]. Question: What surprised you regarding expenses this quarter? - The unexpected shift in occupancy and ADR led to a strategy adjustment to drive revenue through occupancy growth [82][84]. Question: How are you thinking about potential acquisitions with the expanded credit facility? - The company aims to evaluate portfolio opportunities for growth and upgrade earnings potential, balancing acquisitions with internal ROI opportunities [91][96].