Elevating Hospitality: Xenia's Q1 Triumph and Future Vision

Unveiling Stellar Financial Performance: Xenia's Exceeding Expectations in Q1 2026

Xenia Hotels & Resorts announced its financial results for the first quarter of 2026, revealing an impressive performance that surpassed internal forecasts. The company recorded a net income of $19.8 million and an Adjusted EBITDA of $81.4 million, marking a nearly 12% increase year-over-year. Adjusted FFO per share also saw a substantial rise of 23.5% to $0.63 compared to the previous year's first quarter. This strong showing is attributed to robust demand across both group and transient segments, with a notable boost in March, and the successful stabilization of the Grand Hyatt Scottsdale Resort post-renovation. The Chairman and CEO, Marcel Verbaas, highlighted these results as indicative of the company's effective strategies and market resilience.

Driving Revenue and Profitability: Key Indicators of Xenia's Q1 Success

The company's Same-Property RevPAR experienced a 7.4% year-over-year growth, underpinned by a 180-basis-point increase in occupancy and a 4.8% rise in Average Daily Rate (ADR). Overall Same-Property total RevPAR climbed by 7.2% to $370.13, reflecting healthy growth in non-room revenues. Specifically, food and beverage revenues on a Same-Property basis increased by 6.2%, while other revenues surged by nearly 11%. Furthermore, Same-Property hotel EBITDA improved by 17.9% to $87.8 million, with the hotel EBITDA margin expanding by 270 basis points to 29.7%, a testament to strong room revenue growth and prudent expense management.

Thriving Market Dynamics: Strong Demand Across Segments and March's Exceptional Performance

President and COO Barry Bloom reported that the 30-hotel portfolio achieved a Same-Property RevPAR of $205.93, supported by 71.4% occupancy and an ADR of $288.62. March stood out as the quarter's strongest month, with RevPAR soaring by 14.3% year-over-year, occupancy increasing by 540 basis points, and ADR rising by 6.5%. Both group and transient segments demonstrated robust growth, with group room revenues climbing over 7% and transient room revenues increasing approximately 7%, largely driven by strong performance in March, influenced by Easter timing and early April demand. The company observed balanced improvements in occupancy across weekdays and weekends, indicating a healthy mix of business and leisure travelers.

Showcasing Property Excellence: Stellar Performance Across Xenia's Diverse Portfolio

Several properties within Xenia's portfolio achieved double-digit RevPAR growth, led by the Grand Hyatt Scottsdale, which saw an impressive 46.2% increase after its renovation. Other strong performers included Kimpton Hotel Monaco Salt Lake City (up 27.2%), Andaz Savannah (up 16.4%), Hyatt Regency Santa Clara (up 14.7%), Grand Bohemian Hotel Mountain Brook (up 13.9%), and Kimpton Canary Hotel Santa Barbara (up 12%). The company's performance was broad-based, with RevPAR and total RevPAR increases observed in 15 of its 22 markets, including significant double-digit percentage total RevPAR growth in Salt Lake City, Birmingham, Portland, Santa Clara, Santa Barbara, and Houston. Management also acknowledged anticipated weaker year-over-year comparisons for certain properties due to one-time events or capital projects in the prior year.

Strategic Capital Investments: Enhancing Properties and Guest Experiences

Xenia is on track to invest $70 million to $80 million in property improvements throughout 2026, with $15.2 million already deployed in the first quarter. Key projects completed include the M Club renovation at Marriott Dallas Downtown and guest room renovations at Fairmont Pittsburgh, both executed within budget and with minimal disruption. A major undertaking involved the reconceptualization of food and beverage outlets at W Nashville through a partnership with José Andrés Group. These new establishments, including Zaytinya, Bar Mar, Butterfly, and Glowbird, were opened on schedule and within budget, receiving overwhelmingly positive customer feedback. The company anticipates these outlet changes will generate an incremental EBITDA of $3 million to $5 million over time, with a longer-term goal of reaching over $20 million in EBITDA at the property. Ongoing projects include guest room and corridor renovations at Andaz Napa and The Ritz-Carlton, Denver, alongside infrastructure upgrades across ten hotels.

Fortified Financial Position: Prudent Management and a Positive Outlook for 2026

The company concluded the quarter with approximately $1.4 billion in outstanding debt, with roughly three-quarters at a fixed rate, and a weighted average interest rate of 5.5%. The leverage ratio stood at approximately 4.8x trailing 12-month net debt to EBITDA, with management expecting this to decline to below 4x as Grand Hyatt Scottsdale stabilizes. Xenia demonstrated robust liquidity, with over $600 million available at quarter-end, comprising more than $100 million in cash and an undrawn $500 million line of credit. Due to the strong first-quarter performance, Xenia has revised its full-year guidance upwards. Full-year RevPAR is now projected to increase by 2.75% to 5.25%, and total RevPAR by 3.75% to 6.25%. The midpoint for full-year adjusted EBITDAre guidance increased by $6 million to $266 million, and the AFFO per share forecast rose by $0.06 to $1.94 at the midpoint, representing approximately 10% growth over 2025. While expectations for special event RevPAR lift were slightly adjusted, other business trends are anticipated to compensate for this, pointing to more sustainable, demand-driven growth. Early indications for April show continued positive momentum, with Same-Property RevPAR estimated to increase by nearly 6% year-over-year.