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Xenia Hotels & Resorts Reports Third Quarter 2021 Results

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ORLANDO, Fla., Nov. 2, 2021 /PRNewswire/ -- Xenia Hotels & Resorts, Inc. (NYSE: XHR) ("Xenia" or the "Company") today announced results for the quarter ended September 30, 2021.

Third Quarter 2021 Highlights

  • Net Loss: Net loss attributable to common stockholders was $22.2 million, or $0.20 per share.

  • Adjusted EBITDAre: $35.4 million

  • Adjusted FFO per Diluted Share: $0.13

  • Liquidity: Over $1 billion consisting of $517 million of cash and cash equivalents, and full availability on the revolving credit facility.

  • Same-Property RevPAR: $123.70, a decline of 23.1% versus the third quarter of 2019, as a result of occupancy of 55.1% and ADR of $224.54.

  • Same-Property Hotel EBITDA: $40.3 million

  • Same-Property Hotel EBITDA Margin: 23.8%, a 44 bps improvement over the third quarter of 2019.

"The third quarter started with strong operating performance in July, with Same-Property occupancy, ADR and RevPAR reaching the highest levels since the beginning of the pandemic," commented Marcel Verbaas, Chairman and Chief Executive Officer of Xenia. "Similar to the overall US lodging industry, we faced slight headwinds in August and September driven by the emergence of the Delta variant, a seasonal decline in leisure demand and a tougher comparison due to the timing of the Jewish holidays. However, the desirable positioning of our portfolio allowed us to benefit from the strength in leisure transient demand throughout the quarter, which drove sequential improvement in our Same-Property RevPAR over the second quarter of 2021, continuing the overall trend our portfolio has experienced throughout the year. We were particularly pleased that our Same-Property portfolio achieved ADR growth of 6.5% over the third quarter of 2019 and generated a Hotel EBITDA margin of 23.8% during the quarter. Our positive Adjusted FFO of $0.13 per diluted share resulted in this metric now also turning positive year-to-date, further highlighting how our high-quality portfolio positions us well for growth during the recovery."

Operating Results

The Company's results include the following:


Three Months Ended September 30,


Change From


2021


2020


2019


2020


2019


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

Net (loss) income attributable to common stockholders

$

(22,193)



$

(52,344)



$

10,315



57.6

%


(315.2)

%

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

$

(0.20)



$

(0.46)



$

0.09



56.5

%


(322.2)

%











Same-Property Number of Hotels(1)

34



34



34






Same-Property Number of Rooms(1)

9,411



9,412



9,412



(1)



(1)


Same-Property Occupancy(1)

55.1

%


24.4

%


76.2

%


3,070

bps


(2,110)

bps

Same-Property Average Daily Rate(1)

$

224.54



$

172.25



$

210.91



30.4

%


6.5

%

Same-Property RevPAR(1)

$

123.70



$

42.09



$

160.79



193.9

%


(23.1)

%

Same-Property Hotel EBITDA(1)(2)

$

40,272



$

(14,595)



$

53,099



375.9

%


(24.2)

%

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

23.8

%


(25.3)

%


23.3

%


4,907

bps


44

bps











Total Portfolio Number of Hotels(3)

35



39



40



(4)



(5)


Total Portfolio Number of Rooms(3)

10,011



11,245



11,167



(1,234)



(1,156)


Total Portfolio RevPAR(4)

$

119.17



$

39.71



$

164.25



200.1

%


(27.4)

%











Adjusted EBITDAre(2)

$

35,391



$

(21,121)



$

62,579



267.6

%


(43.4)

%

Adjusted FFO(2)

$

15,281



$

(30,557)



$

53,330



150.0

%


(71.3)

%

Adjusted FFO per diluted share(2)

$

0.13



$

(0.27)



$

0.47



148.1

%


(72.3)

%







Nine Months Ended September 30,


Change From


2021


2020


2019


2020


2019





Net (loss) income attributable to common stockholders

$

(120,582)



$

(187,608)



$

39,791



35.7

%


(403.0)

%

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

$

(1.06)



$

(1.66)



$

0.35



36.1

%


(402.9)

%











Same-Property Number of Hotels(1)

34



34



34






Same-Property Number of Rooms(1)

9,411



9,412



9,412



(1)



(1)


Same-Property Occupancy(1)

47.2

%


28.5

%


77.4

%


1,870

bps


(3,020)

bps

Same-Property Average Daily Rate(1)

$

212.35



$

209.69



$

223.85



1.3

%


(5.1)

%

Same-Property RevPAR(1)

$

100.16



$

59.67



$

173.30



67.9

%


(42.2)

%

Same-Property Hotel EBITDA(1)(2)

$

76,697



$

(18,889)



$

209,503



506.0

%


(63.4)

%

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

18.8

%


(7.1)

%


27.8

%


2,587

bps


(905)

bps











Total Portfolio Number of Hotels(3)

35



39



40



(4)



(5)


Total Portfolio Number of Rooms(3)

10,011



11,245



11,167



(1,234)



(1,156)


Total Portfolio RevPAR(4)

$

95.35



$

56.00



$

171.85



70.3

%


(44.5)

%











Adjusted EBITDAre(2)

$

59,131



$

(41,637)



$

230,123



242.0

%


(74.3)

%

Adjusted FFO(2)

$

3,570



$

(66,184)



$

184,848



105.4

%


(98.1)

%

Adjusted FFO per diluted share(2)

$

0.03



$

(0.58)



$

1.62



105.2

%


(98.1)

%



1.

"Same-Property" includes all hotels owned as of September 30, 2021, except for Hyatt Regency Portland at the Oregon Convention Center. Includes hotels that had temporarily suspended operations for a portion of the three and nine months ended September 30, 2020, as if all hotel rooms were available for sale. "Same-Property" also includes disruption from the COVID-19 pandemic in 2021 and 2020, and renovation disruption for multiple capital projects during the periods presented.



2.

See tables later in this press release for reconciliations from net 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 or all of the three and nine months ended September 30, 2021 and 2020, as if all hotel rooms were available for sale.

Operations Update

The following table provides operating information for the nine months ended September 30, 2021 and preliminary information for the month of October 2021:



Same-Property Portfolio

(34 Hotels / 9,411 Rooms)


2021 vs 2019

2021


Occupancy
(%)

Average

Daily Rate
($)

RevPAR
($)


Occupancy

change in

bps

Average Daily
Rate %
change

RevPAR

% change

January


24.5



170.41



41.83



(4,505)


(24.4)


(73.3)


February


34.5


183.58


63.35



(4,384)


(23.1)


(66.1)


March


45.4


202.07


91.69



(3,564)


(16.0)


(52.9)


1st Quarter


34.8



188.68



65.70



(4,150)


(19.7)


(63.4)


April


48.9


216.03


105.67



(3,238)


(7.0)


(44.0)


May


49.7


216.18


107.46



(2,856)


(6.4)


(40.5)


June


55.5


213.03


118.32



(2,427)


(0.3)


(30.6)


2nd Quarter


51.4



215.01



110.45



(2,840)


(4.7)


(38.7)


July


59.1


224.23


132.53



(1,936)


9.3


(17.7)


August


52.1


218.12


113.56



(2,412)


6.8


(27.0)


September


54.1


231.26


125.06



(1,991)


3.1


(24.7)


3rd Quarter


55.1



224.54



123.70



(2,114)


6.5


(23.1)


October (preliminary)


58.2


245.56


142.83



(2,242)


2.8


(25.8)


"July proved to be the strongest month of the quarter, driven by strong leisure demand, while RevPAR declines compared to 2019 continued to trend downward in August and September," said Mr. Verbaas. "As a result, our third quarter Same-Property RevPAR decline compared to 2019 was significantly reduced from the decline during the first and second quarters of this year. With 24 of our hotels achieving higher average daily rates than those in the third quarter of 2019 and occupancy improving to 55.1% for the quarter, this top-line performance flowed through to our bottom line, which resulted in 22 of our hotels exceeding Hotel EBITDA margins generated in the third quarter of 2019. Most encouragingly, 33 of our hotels and resorts achieved positive Hotel EBITDA during the quarter and our Same-Property RevPAR increased 12% over the second quarter of this year, despite the third quarter historically being our seasonally weakest. Following Labor Day, we began to see a meaningful increase in our weekday occupancy driven by business transient and group demand, a trend which has further accelerated in October. Our preliminary operating results for October are better than anticipated, which gives us cause for optimism for the fourth quarter and 2022."

Balance Sheet and Liquidity

As of September 30, 2021, the Company had total outstanding debt of approximately $1.5 billion with a weighted-average interest rate of 5.18%. The Company had approximately $517 million of cash and cash equivalents, including hotel working capital, and full availability on its $523 million revolving credit facility, resulting in total liquidity of over $1.0 billion as of September 30, 2021. In addition, the Company held approximately $35 million of restricted cash and escrows at the end of the third quarter.

Capital Expenditures

During the quarter, the Company invested $7.3 million and $19.2 million year-to-date in portfolio improvements.

Significant projects recently completed and currently in process include:

  • A restaurant and lobby renovation at The Ritz-Carlton, Pentagon City, which was completed in mid-October

  • The development of the Regency Court, a new outdoor social venue at Hyatt Regency Scottsdale Resort & Spa, expected to be completed in mid-November

  • Renovation of the restaurant, lobby, and guest rooms at Waldorf Astoria Atlanta Buckhead with a targeted completion date early in the first quarter of 2022

Additionally, the Company has continued planning work on two projects which have been accelerated to take advantage of current business conditions. These include:

  • A comprehensive renovation of Grand Bohemian Hotel Orlando, including guest rooms with substantial tub-to-shower conversions, restaurant and bar, lobby, rooftop pool area, and meeting space.

  • A comprehensive renovation of Kimpton Canary Hotel Santa Barbara, including guest rooms, restaurant and bar, rooftop, lobby, and meeting space.

Impact from Hurricane Ida

On August 29, Hurricane Ida impacted Loews New Orleans Hotel, causing damage to the exterior signage and roof as well as water infiltration. The Company is working with its insurers to settle the property damage and related business interruption claim and fully restore the property. The Company expects its out-of-pocket costs to repair property damage to be approximately $4 million, reflecting its insurance deductible, and that the restoration work will continue into 2022.

2021 Outlook and Guidance

The Company does not expect to issue earnings guidance until it has more certainty on trends within the industry. The Company is providing the following guidance for full year 2021 on certain corporate expenses and metrics:

  • General and administrative expenses are projected to be approximately $19 million, excluding non-cash share-based compensation.

  • Interest expense is projected to be approximately $75 million excluding non-cash loan related costs.

  • Capital expenditures are projected to be approximately $40 million.

  • 114.5 million weighted average diluted shares/units

Third Quarter 2021 Earnings Call

The Company will conduct its quarterly conference call on Tuesday, November 2, 2021 at 1:00 PM Eastern Time. To participate in the conference call, please dial (855) 656-0921. 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 U.S. lodging markets as well as key leisure destinations in the United States. The Company owns 35 hotels and resorts comprising 10,011 rooms across 15 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, and The Kessler Collection. 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, the outlook related to the effects of the COVID-19 pandemic, 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 impact of the COVID-19 pandemic, 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 the COVID-19 pandemic or any resurgence of COVID-19 including variants of the virus, including limiting or banning travel; (iii) the impact of the COVID-19 pandemic and actions taken in response to the pandemic or any resurgence on global, national, or regional economies, travel and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; (iv) the ability of hotel managers to successfully navigate the impacts of the COVID-19 pandemic; (v) the pace of recovery following the COVID-19 pandemic or any resurgence; (vi) factors such as public health (including a significant increase in new and variant strains of COVID-19 cases), availability and effectiveness of COVID-19 vaccines and therapeutics, the level of acceptance of the vaccine by the general population and the economic and geopolitical environments may impact the timing, extent and pace of such recovery; (vii) the Company's dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly; (viii) risks associated with the hotel industry, including competition, increases in wages and benefits, energy costs and other operating costs, actual or threatened terrorist attacks, 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; (ix) the availability and terms of financing and capital and the general volatility of securities markets; (x) risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act and similar laws; (xi) interest rate increases; (xii) ability to successfully negotiate amendments and covenant waivers with its unsecured and secured indebtedness; (xiii) ability to comply with covenants, restrictions, and limitations in any existing or revised loan agreements with our unsecured and secured lenders; (xiv) the possible failure of the Company to qualify as a REIT and the risk of changes in laws affecting REITs; (xv) the possibility of uninsured or underinsured losses, including those relating to natural disasters, terrorism, government shutdowns and closures, civil unrest, or cyber incidents; (xvi) risks associated with redevelopment and repositioning projects, including delays and cost overruns; (xvii) levels of spending in business and leisure segments as well as consumer confidence; (xviii) declines in occupancy and average daily rate, (xix) the seasonal and cyclical nature of the real estate and hospitality businesses, (xx) changes in distribution arrangements, such as through Internet travel intermediaries; (xxi) relationships with labor unions and changes in labor laws, including increases to minimum wages; (xxii) the impact of changes in the tax code and uncertainty as to how some of those changes may be applied; (xxiii) monthly cash expenditures and the uncertainty around predictions; (xxiv) vaccination hesitancy and/or effectiveness; (xxv) inflationary caution; (xxvi) labor shortages; (xxvii) disruptions in supply chains resulting in delays or inability to procure required products; and (xxviii) 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, 2021 and December 31, 2020

($ amounts in thousands)



September 30, 2021


December 31, 2020

Assets

(Unaudited)


(Audited)

Investment properties:




Land

$

446,510



$

446,855


Buildings and other improvements

2,925,556



2,949,114


Total

$

3,372,066



$

3,395,969


Less: accumulated depreciation

(905,463)



(827,501)


Net investment properties

$

2,466,603



$

2,568,468


Cash and cash equivalents

517,464



389,823


Restricted cash and escrows

34,500



38,963


Accounts and rents receivable, net of allowance for doubtful accounts

23,833



8,966


Intangible assets, net of accumulated amortization

5,699



6,456


Other assets

61,119



66,927


Assets held for sale

7,695




Total assets

$

3,116,913



$

3,079,603


Liabilities




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

$

1,494,287



$

1,374,480


Accounts payable and accrued expenses

89,634



62,676


Other liabilities

73,400



75,584


Liabilities associated with assets held for sale

2,829




Total liabilities

$

1,660,150



$

1,512,740


Commitments and Contingencies




Stockholders' equity




Common stock, $0.01 par value, 500,000,000 shares authorized, 114,209,134 and
113,755,513 shares issued and outstanding as of September 30, 2021 and
December 31, 2020, respectively

$

1,142



$

1,138


Additional paid in capital

2,090,329



2,080,364


Accumulated other comprehensive loss

(6,243)



(14,425)


Accumulated distributions in excess of net earnings

(633,584)



(513,002)


Total Company stockholders' equity

$

1,451,644



$

1,554,075


Non-controlling interests

5,119



12,788


Total equity

$

1,456,763



$

1,566,863


Total liabilities and equity

$

3,116,913



$

3,079,603



Xenia Hotels & Resorts, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three and Nine Months Ended September 30, 2021 and 2020

(Unaudited)

($ amounts in thousands, except per share data)



Three Months Ended
September 30,


Nine Months Ended
September 30,


2021


2020


2021


2020

Revenues:








Rooms revenues

$

109,753



$

41,081



$

260,594



$

172,550


Food and beverage revenues

44,004



11,762



105,739



87,587


Other revenues

19,027



11,111



46,277



33,992


Total revenues

$

172,784



$

63,954



$

412,610



$

294,129


Expenses:








Rooms expenses

$

27,099



$

14,267



$

65,024



$

56,458


Food and beverage expenses

33,764



14,730



80,534



75,451


Other direct expenses

5,059



2,863



12,993



9,763


Other indirect expenses

50,902



33,490



132,276



130,297


Management and franchise fees

6,025



2,043



15,009



9,212


Total hotel operating expenses

$

...