Xenia Hotels & Resorts Inc (XHR) Reports Mixed Q4 and Full Year 2023 Results Amid Renovations
Net Income: $7.6 million in Q4, down 78.4% YOY; $19.1 million for full year, down 65.8% YOY.
Adjusted EBITDAre: $59.4 million in Q4, a decrease of 8.0%; $251.7 million for full year, a decrease of 2.0%.
Adjusted FFO per Diluted Share: Remained flat at $0.41 for Q4; $1.54 for full year, consistent with 2022.
Same-Property RevPAR: Decreased by 3.4% in Q4; increased by 3.9% for full year, excluding Hyatt Regency Scottsdale.
Dividends: Declared Q4 dividend of $0.10 per share; increased Q1 2024 dividend by 20% to $0.12 per share.
Capital Expenditures: Invested $51.4 million in Q4 and $120.9 million for full year in portfolio improvements.
Liquidity: Approximately $615 million in total liquidity as of December 31, 2023.
On February 27, 2024, Xenia Hotels & Resorts Inc (NYSE:XHR) released its 8-K filing, detailing its financial performance for the fourth quarter and full year of 2023. Xenia, a real estate investment trust specializing in premium full-service and lifestyle hotels, faced a challenging year marked by significant renovations and a mixed financial performance.
Company Overview
Xenia Hotels & Resorts Inc is a REIT that focuses on owning and operating upscale, full-service, and lifestyle hotels across the United States. The company's portfolio includes properties operated by renowned brands such as Marriott, Hilton, and Hyatt. Xenia's revenue streams are primarily derived from room sales, which contribute to the majority of the firm's total revenue, complemented by food and beverage services.
Financial Performance and Challenges
The fourth quarter saw a net income of $7.6 million, a significant decrease from the previous year, primarily due to ongoing renovations at key properties like the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch. Adjusted EBITDAre and Adjusted FFO per diluted share met expectations despite these challenges, reflecting effective cost control measures. For the full year, net income was $19.1 million, with a slight decrease in Adjusted EBITDAre compared to 2022.
Same-Property RevPAR declined by 3.4% in the fourth quarter, influenced by renovation activities. However, excluding the Hyatt Regency Scottsdale, RevPAR actually increased, indicating underlying growth in the portfolio. Full-year Same-Property RevPAR showed a 3.9% increase, further demonstrating resilience in Xenia's operations.
Capital Allocation and Dividends
Xenia continued its shareholder return strategy through share repurchases and dividends. The company repurchased over 10 million shares for approximately $132.7 million and declared a total of $0.40 of dividends per share for 2023. Looking ahead, the first quarter 2024 dividend has been increased by 20% to $0.12 per share.
Liquidity and Capital Expenditures
As of December 31, 2023, Xenia maintained strong liquidity with approximately $615 million available, including full availability on its revolving line of credit. The company invested heavily in its properties, with significant capital projects completed or underway, such as the comprehensive renovations at the Grand Bohemian Hotel Orlando and the transformation of Hyatt Regency Scottsdale into a Grand Hyatt luxury resort.
Outlook and Guidance
CEO Marcel Verbaas expressed optimism for 2024, anticipating benefits from the recovery across the portfolio and recent capital projects. The company provided full-year 2024 guidance, projecting a Net Income of $15 to $35 million and an Adjusted FFO per diluted share of $1.59 to $1.78.
Xenia's performance in 2023 reflects a strategic focus on asset management and capital improvements, positioning the company for future growth. Despite short-term impacts from renovation activities, the company's underlying operations remain strong, supported by effective cost controls and a commitment to enhancing shareholder value.
For additional details on Xenia's financial performance, including reconciliations of non-GAAP financial measures, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Xenia Hotels & Resorts Inc for further details.
This article first appeared on GuruFocus.
