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XENIA HOTELS & RESORTS REPORTS THIRD QUARTER 2022 RESULTS

XENIA HOTELS & RESORTS UPSIZES AND EXTENDS CREDIT FACILITY WITH $675 MILLION REFINANCING
Logo

ORLANDO, Fla., Nov. 2, 2022 /PRNewswire/ -- Xenia Hotels & Resorts, Inc. (NYSE: XHR) ("Xenia" or the "Company") today announced results for the quarter ended September 30, 2022.

Third Quarter 2022 Highlights

  • Net Loss: Net loss attributable to common stockholders was $1.7 million, or $0.01 per share

  • Adjusted EBITDAre: $53.8 million, increased 52.1% compared to the third quarter of 2021

  • Adjusted FFO per Diluted Share: $0.31, increased $0.18 compared to the third quarter of 2021

  • Same-Property Occupancy: 64.2%, increased 880 basis points compared to the third quarter of 2021 and decreased 1,200 basis points compared to the third quarter of 2019

  • Same-Property ADR: $247.74, increased 8.7% and 15.6% compared to the third quarter of 2021 and 2019, respectively

  • Same-Property RevPAR: $159.06, increased 25.9% and decreased 2.6% compared to the third quarter of 2021 and 2019, respectively

  • Same-Property Hotel EBITDA: $52.2 million, increased 31.9% and 1.4% compared to the third quarter of 2021 and 2019, respectively

  • Same-Property Hotel EBITDA Margin: 24.0%, decreased 17 basis points and increased 48 basis points compared to the third quarter of 2021 and 2019, respectively

  • Dividends: The Company reinstated a quarterly dividend of $0.10 per share to common stockholders of record on September 30, 2022.

"We are encouraged by recent operating trends as we experienced significant improvement in business transient and group demand in the second half of September and throughout October," said Marcel Verbaas, Chairman and Chief Executive Officer of Xenia. "While August demand was slightly below our forecast, third quarter RevPAR was in-line with our expectations, despite a modest impact from Hurricane Ian. Average rate remained a particular bright spot, with Same-Property ADR increasing 15.6% over 2019 levels. Though our third quarter Same-Property Hotel EBITDA Margin increased by 48 basis points relative to 2019, higher property-level labor expenses caused margin growth to fall short of our expectations. However, we remain optimistic about recent demand trends and have confidence in our operators' ability to continue to manage expense growth, as they have historically, and now that staffing has returned to more normalized levels."

"Despite the overall uncertain economic climate, we are pleased with the transition from a recovery primarily driven by leisure demand to a more traditional mix of leisure, business transient and group demand within our portfolio," continued Mr. Verbaas. "September results were particularly encouraging with Same-Property RevPAR increasing 2.7% over the same month in 2019 and the occupancy gap to 2019 decreasing significantly compared to prior months. This reflected the seasonal shift in our business to more business transient and group which supported healthy mid-week occupancy gains particularly after Labor Day. We estimate that October Same-Property RevPAR was in-line with 2019 results at approximately $196, with occupancy of approximately 71% and ADR of approximately $276, representing an estimated 13% increase to 2019."

Operating Results

The Company's results include the following:


Three Months Ended September 30,


Change From


2022


2021


2019


2021


2019


($ amounts in thousands, except hotel statistics and per share amounts)

Net income (loss) attributable to common stockholders

$ (1,663)


$ (22,193)


$ 10,315


92.5 %


(116.1) %

Net income (loss) per share available to common
stockholders - basic and diluted

$ (0.01)


$ (0.20)


$ 0.09


95.0 %


(111.1) %











Same-Property Number of Hotels(1)

32


32


32



Same-Property Number of Rooms(1)(5)

8,866


8,868


8,869


(2)


(3)

Same-Property Occupancy(1)

64.2 %


55.4 %


76.2 %


880 bps


(1,200) bps

Same-Property Average Daily Rate(1)

$ 247.74


$ 227.97


$ 214.29


8.7 %


15.6 %

Same-Property RevPAR(1)

$ 159.06


$ 126.35


$ 163.28


25.9 %


(2.6) %

Same-Property Hotel EBITDA(1)(2)

$ 52,179


$ 39,569


$ 51,483


31.9 %


1.4 %

Same-Property Hotel EBITDA Margin(1)(2)

24.0 %


24.1 %


23.5 %


(17) bps


48 bps











Total Portfolio Number of Hotels(3)

34


35


40


(1)


(6)

Total Portfolio Number of Rooms(3)(5)

9,812


10,011


11,167


(199)


(1,355)

Total Portfolio RevPAR(4)

$ 157.91


$ 119.17


$ 164.25


32.5 %


(3.9) %











Adjusted EBITDAre(2)

$ 53,836


$ 35,391


$ 62,579


52.1 %


(14.0) %

Adjusted FFO(2)

$ 35,590


$ 15,281


$ 53,330


132.9 %


(33.3) %

Adjusted FFO per diluted share(2)

$ 0.31


$ 0.13


$ 0.47


138.5 %


(34.0) %



1.

"Same-Property" includes all hotels owned as of September 30, 2022, except for Hyatt Regency Portland at the Oregon Convention Center and W Nashville. "Same-Property" also includes disruption from the COVID-19 pandemic and renovation disruption for multiple capital projects during the periods presented.

2.

See tables later in this press release for reconciliations from net income (loss) to Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA for Real Estate ("EBITDAre"), Adjusted EBITDAre, Funds From Operations ("FFO"), Adjusted FFO, Same-Property Hotel EBITDA and Hotel EBITDA Margin. EBITDA, EBITDAre, Adjusted EBITDAre, FFO, Adjusted FFO, and Same-Property Hotel EBITDA and Hotel EBITDA Margin are non-GAAP financial measures.

3.

As of end of periods presented.

4.

Results of all hotels as owned during the periods presented, including the results of hotels sold or acquired for the actual period of ownership by the Company.

5.

Two rooms at Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch were removed from inventory in 2022 and one room at Grand Bohemian Hotel Mountain Brook, Autograph Collection was removed in 2020.


Nine Months Ended September 30,


Change From


2022


2021


2019


2021


2019


($ amounts in thousands, except hotel statistics and per share amounts)

Net income (loss) attributable to common stockholders

$ 20,661


$ (120,582)


$ 39,791


117.1 %


(48.1) %

Net income (loss) per share available to common
stockholders - basic and diluted

$ 0.18


$ (1.06)


$ 0.35


117.0 %


(48.6) %











Same-Property Number of Hotels(1)

32


32


32



Same-Property Number of Rooms(1)(5)

8,866


8,868


8,869


(2)


(3)

Same-Property Occupancy(1)

64.0 %


47.6 %


77.7 %


1,640 bps


(1,370) bps

Same-Property Average Daily Rate(1)

$ 258.10


$ 216.23


$ 228.13


19.4 %


13.1 %

Same-Property RevPAR(1)

$ 165.17


$ 102.91


$ 177.32


60.5 %


(6.9) %

Same-Property Hotel EBITDA(1)(2)

$ 195,713


$ 76,926


$ 205,855


154.4 %


(4.9) %

Same-Property Hotel EBITDA Margin(1)(2)

28.7 %


19.3 %


28.2 %


939 bps


55 bps











Total Portfolio Number of Hotels(3)

34


35


40


(1)


(6)

Total Portfolio Number of Rooms(3)(5)

9,812


10,011


11,167


(199)


(1,355)

Total Portfolio RevPAR(4)

$ 162.69


$ 95.35


$ 171.85


70.6 %


(5.3) %











Adjusted EBITDAre(2)

$ 192,405


$ 59,131


$ 230,123


225.4 %


(16.4) %

Adjusted FFO(2)

$ 130,708


$ 3,570


$ 184,848


3,561.3 %


(29.3) %

Adjusted FFO per diluted share(2)

$ 1.13


$ 0.03


$ 1.62


3,666.7 %


(30.2) %



1.

"Same-Property" includes all hotels owned as of September 30, 2022, except for Hyatt Regency Portland at the Oregon Convention Center and W Nashville. Includes hotels that had temporarily suspended operations for a portion of the nine months ended September 30, 2021 as if all hotel rooms were available for sale. "Same-Property" also includes disruption from the COVID-19 pandemic and renovation disruption for multiple capital projects during the periods presented.

2.

See tables later in this press release for reconciliations from net income (loss) to Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA for Real Estate ("EBITDAre"), Adjusted EBITDAre, Funds From Operations ("FFO"), Adjusted FFO, Same-Property Hotel EBITDA and Hotel EBITDA Margin. EBITDA, EBITDAre, Adjusted EBITDAre, FFO, Adjusted FFO, and Same-Property Hotel EBITDA and Hotel EBITDA Margin are non-GAAP financial measures.

3.

As of end of periods presented.

4.

Results of all hotels as owned during the periods presented, including the results of hotels sold or acquired for the actual period of ownership by the Company. Includes hotels that had temporarily suspended operations for a portion of the nine months ended September 30, 2021 as if all hotel rooms were available for sale.

5.

Two rooms at Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch were removed from inventory in 2022 and one room at Grand Bohemian Hotel Mountain Brook, Autograph Collection was removed in 2020.



Transactions

During the third quarter, the Company entered into an agreement to sell the 115-room Bohemian Hotel Celebration, Autograph Collection in Celebration, FL for $27.75 million, or approximately $241,000 per key. The sale price represents a 15.3x multiple on 2019 Hotel EBITDA or a 12.0x multiple on Hotel EBITDA for the twelve months ended September 30, 2022. The transaction closed in October.

Also, during the third quarter, the Company entered into an agreement to sell the 189-room Kimpton Hotel Monaco Denver for $69.75 million, or approximately $369,000 per key. The sale price represents a 14.9x multiple on 2019 Hotel EBITDA or a 20.6x multiple on Hotel EBITDA for the twelve months ended September 30, 2022. The Company expects the transaction to close in the fourth quarter, subject to customary closing conditions.

"The completed disposition of Bohemian Hotel Celebration and the expected sale of Kimpton Hotel Monaco Denver are further evidence of our ability to enhance our liquidity and balance sheet strength by monetizing non-strategic assets at attractive valuation multiples while continually enhancing the quality and growth profile of our portfolio," commented Mr. Verbaas. "We initiated the potential disposition process earlier in the year and are pleased with the execution and pricing on both transactions, despite the recent uncertainty in overall economic conditions in general and financing markets in particular."

"We believe that the timing of the sale of Bohemian Hotel Celebration is appropriate and opportunistic, as the strength in leisure demand and desirability of the greater Orlando market created an opportunity to dispose of a small non-strategic asset with substantial near-term capital needs at attractive pricing," continued Mr. Verbaas. "We maintain a very meaningful presence in the Orlando market which continues to benefit from a diverse set of demand drivers, including continued strong leisure demand and improving group and corporate demand."

"Meanwhile, the disposition of Kimpton Hotel Monaco Denver, if completed as anticipated, will provide the Company with enhanced financial and investment flexibility. We remain bullish on the Denver market, as evidenced by our continued ownership of and capital investments into The Ritz-Carlton, Denver. The sale of Kimpton Hotel Monaco Denver will also enhance our ability to pursue future investment opportunities in the Denver market that could be better long-term strategic fits for the Company," concluded Mr. Verbaas.

Proceeds from both transactions are expected to be used for general corporate purposes, which may include share repurchases, debt repayment, capital expenditures and acquisitions consistent with the Company's long-term strategy.

Balance Sheet and Liquidity

As of September 30, 2022, the Company had total outstanding debt of approximately $1.4 billion with a weighted-average interest rate of 5.28%. The Company had approximately $260 million of cash and cash equivalents, including hotel working capital, and full availability on its revolving credit facility, resulting in total liquidity of approximately $710 million as of September 30, 2022. In addition, the Company held approximately $51 million of restricted cash and escrows at the end of the third quarter.

Capital Markets

Upon exiting the covenant waiver period, restrictions on share repurchases were lifted. Since then and through October 28, 2022, the Company repurchased 536,412 shares of common stock at a weighted-average price of $15.26 per share for total consideration of approximately $8.2 million. The Company has $86.5 million in capacity remaining under its repurchase authorization.

Capital Expenditures

During the three and nine months ended September 30, 2022, the Company invested $18.8 million and $40.7 million in portfolio improvements, respectively.

At Park Hyatt Aviara Resort, Golf Club & Spa, a comprehensive renovation of the golf course began in the second quarter and is now substantially complete. The Company continued planning work on a significant upgrade to the resort's spa and wellness amenities which will be branded as a Miraval Life in Balance Spa upon completion early in the second quarter of 2023.

At Kimpton Canary Hotel Santa Barbara, the Company finalized planning of the guest room renovation which is expected to begin in the fourth quarter of 2022 and be completed in the first quarter of 2023. The Company continued the comprehensive renovation of Grand Bohemian Hotel Orlando with renovation of all public spaces scheduled for completion in the fourth quarter of 2022 and the commencement of guest room renovations in the second quarter of 2023.

During the quarter the Company substantially completed the renovation of bathrooms at Marriott Woodlands Waterway Hotel & Convention Center including the conversion of bathtubs to walk-in showers in approximately 75% of the guest rooms, as well as the renovation of meeting space at Fairmont Pittsburgh and meeting space at Royal Palms Resort & Spa. The Company plans to renovate and reconfigure suites at The Ritz-Carlton, Denver which will result in three additional keys at the hotel in the fourth quarter.

The Company continued planning work on a comprehensive renovation of Kimpton Hotel Monaco Salt Lake City that is expected to commence in the second quarter of 2023.

The Company continues to focus on several building infrastructure projects with a particular emphasis on environmentally sustainable projects to enhance the useful life of its physical structures, including six chiller replacements or upgrades in 2022.

Hurricane Ian Update

In late September, Hurricane Ian caused limited property damage and disruption at the Company's Key West, Orlando, Savannah, and Charleston, SC hotels. All hotels remained open during and after the storm. The Company anticipates the total impact of Hurricane Ian, inclusive of revenue disruption and repair and cleanup costs, to be less than $2.0 million.

Business Interruption Insurance Proceeds

In the third quarter, the Company recognized approximately $2.5 million in business interruption insurance proceeds for lost revenues at Loews New Orleans Hotel due to the impact of Hurricane Ida in August 2021 and lost revenues at certain properties due to the impact of Texas winter storms in early 2021.

Full Year 2022 Outlook and Guidance

The Company is revising its full year outlook based on the current economic environment. This outlook assumes no additional acquisitions, dispositions, equity offerings, or share repurchases. This outlook includes Kimpton Hotel Monaco Denver as owned through year-end. Same-Property (31 Hotel) RevPAR change includes all hotels owned as of November 2, 2022 except Hyatt Regency Portland at the Oregon Convention Center and W Nashville.


Full Year 2022 Guidance


Low End

High End


($ in millions, except stats and
per share data)

Net Income

$35

$43

Same-Property (31 Hotel) RevPAR Change (vs. 2019)

(5.50) %

(4.50) %

Adjusted EBITDAre

$250

$258

Adjusted FFO

$171

$179

Adjusted FFO per Diluted Share

$1.48

$1.55

Additional guidance assumptions:

  • General and administrative expenses are projected to be approximately $24 million, excluding non-cash share-based compensation.

  • Interest expense is projected to be approximately $77 million, excluding non-cash loan related costs.

  • Capital expenditures are projected to be approximately $85 million.

  • 115.7 million weighted average diluted shares/units

Third Quarter 2022 Earnings Call

The Company will conduct its quarterly conference call on Wednesday, November 2, 2022 at 1:00 PM Eastern Time. To participate in the conference call, please dial (844) 200-6205, access code 949442. Additionally, a live webcast of the conference call will be available through the Company's website, www.xeniareit.com. A replay of the conference call will be archived and available online through the Investor Relations section of the Company's website for 90 days.

About Xenia Hotels & Resorts, Inc.

Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests in uniquely positioned luxury and upper upscale hotels and resorts with a focus on the top 25 lodging markets as well as key leisure destinations in the United States. The Company owns 33 hotels and resorts comprising 9,697 rooms across 14 states. Xenia's hotels are in the luxury and upper upscale segments, and are operated and/or licensed by industry leaders such as Marriott, Hyatt, Kimpton, Fairmont, Loews, Hilton, The Kessler Collection, and Davidson. For more information on Xenia's business, refer to the Company website at www.xeniareit.com.

This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe the Company's future plans, strategies and expectations. Forward-looking statements are generally identifiable by use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "illustrative," references to "outlook" and "guidance," and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Forward-looking statements in this press release include, among others, statements about our plans, strategies, or other future events, the outlook related to the continued effects of the COVID-19 pandemic and other macroeconomic factors, including on the demand for travel, transient and group business, capital expenditures, timing of renovations, financial performance, prospects or future events. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, which are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, (i) the ongoing impact of the COVID-19 recovery and other macroeconomic factors, including inflation, rising interest rates and increased concerns over a near-term recession, on our business, including on the demand for travel, transient and group business, and levels of consumer confidence; (ii) actions that governments, businesses, and individuals take in response to any resurgence of COVID-19 including variants of the virus, including limiting or banning travel; (iii) the ability of hotel managers to successfully navigate the continued impacts of the COVID-19 pandemic; (iv) the pace of recovery following the COVID-19 pandemic or any resurgence; (v) factors such as the availability and effectiveness of COVID-19 vaccines and therapeutics, the level of acceptance of the vaccine by the general population; (vi) the Company's dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly; (vii) risks associated with the hotel industry, including competition, increases in wages and benefits, energy costs and other operating costs, actual or threatened terrorist attacks, cyber incidents, information technology failures, downturns in general and local economic conditions, prolonged periods of civil unrest in our markets, and cancellation of or delays in the completion of anticipated demand generators; (viii) the availability and terms of financing and capital and the general volatility of securities markets; (ix) risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act and similar laws; (x) interest rate increases; (xi) ability to successfully negotiate amendments and covenant waivers with its unsecured and secured indebtedness; (xii) ability to comply with covenants, restrictions, and limitations in any existing or revised loan agreements with our unsecured and secured lenders; (xiii) the possible failure of the Company to qualify as a REIT and the risk of changes in laws affecting REITs; (xiv) the possibility of uninsured or underinsured losses, including those relating to natural disasters, terrorism, government shutdowns and closures, civil unrest, or cyber incidents; (xv) risks associated with redevelopment and repositioning projects, including delays and cost overruns; (xvi) levels of spending in business and leisure segments as well as consumer confidence; (xvii) declines in occupancy and average daily rate, (xviii) the seasonal and cyclical nature of the real estate and hospitality businesses, (xix) changes in distribution arrangements, such as through Internet travel intermediaries; (xx) relationships with labor unions and changes in labor laws, including increases to minimum wages; (xxi) the impact of changes in the tax code and uncertainty as to how some of those changes may be applied; (xxii) monthly cash expenditures and the uncertainty around predictions; (xxiii) inflationary caution and pressures; (xxiv) labor shortages; (xxv) disruptions in supply chains resulting in delays or inability to procure required products; and (xxvi) the risk factors discussed in the Company's Annual Report on Form 10-K, as updated in its Quarterly Reports. Accordingly, there is no assurance that the Company's expectations will be realized. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company's website at www.xeniareit.com.

All information in this press release is as of the date of its release. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company's expectations.

Availability of Information on Xenia's Website

Investors and others should note that Xenia routinely announces material information to investors and the marketplace using U.S. Securities and Exchange Commission (SEC) filings, press releases, public conference calls, webcasts, and the Investor Relations section of Xenia's website. While not all the information that the Company posts to the Xenia website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Xenia to review the information that it shares at the Investor Relations link located on www.xeniareit.com. Users may automatically receive email alerts and other information about the Company when enrolling an email address by visiting "Email Alerts / Investor Information" in the "Corporate Overview" section of Xenia's Investor Relations website at www.xeniareit.com.

For additional information or to receive press releases via email, please visit our website at www.xeniareit.com.

Xenia Hotels & Resorts, Inc.

Condensed Consolidated Balance Sheets

As of September 30, 2022 and December 31, 2021

($ amounts in thousands, except per share data)



September 30, 2022


December 31, 2021

Assets

(Unaudited)


(Audited)

Investment properties:




Land

$ 460,615


$ 431,427

Buildings and other improvements

3,091,556


2,856,671

Total

$ 3,552,171


$ 3,288,098

Less: accumulated depreciation

(945,659)


(888,717)

Net investment properties

$ 2,606,512


$ 2,399,381

Cash and cash equivalents

259,885


517,377

Restricted cash and escrows

50,788


36,854

Accounts and rents receivable, net of allowance for doubtful accounts

38,709


28,528

Intangible assets, net of accumulated amortization

5,162


5,446

Other assets

62,371


65,109

Assets held for sale

68,939


34,621

Total assets

$ 3,092,366


$ 3,087,316

Liabilities




Debt, net of loan premiums, discounts and unamortized deferred financing costs

$ 1,429,518


$ 1,494,231

Accounts payable and accrued expenses

107,823


84,051

Distributions payable

11,660


89

Other liabilities

80,864


68,559

Liabilities associated with assets held for sale

3,532