XHR - Earnings call transcript Q3 2021 | Xenia Hotels & Resorts, Inc.

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Operator

Hello and welcome to the Xenia Hotels & Resorts Third Quarter Earnings Conference Call. My name is Quan and I will be coordinating your call today. [Operator Instructions]. I will now turn over to your host, Danielle Burgoon, Vice President of Finance to begin. Danielle, please go ahead.

Danielle Burgoon

Operator. you, Thank welcome XXXX and Hotels Resorts & Good call to and quarter earnings webcast. third afternoon Xenia I'm here Officer; with Officer; Marcel and Verbaas, our Chairman Officer. our our Vice and Chief Shah, Financial Barry and President Chief Atish Operating and Executive President Bloom, Chief Executive with of will and fundamentals, performance, our our begin Marcel update on industry quarterly an our a discussion portfolio strategy. status follow operating results, trends and our more projects. recent expenditure about of details with capital Barry will our operating on our our conclude remarks update with will sheet. Atish balance an And

We Q&A. will call for then open the

we cause Annual on started, differ other in statements to and considered subject XX-K in described are facts Before get materially everyone are let from that risks our are as made not those uncertainties me implied Report certain actual and forward-looking comments. our by expressed remind statements our numerous results which Form could call or statements. These on and this to SEC filings historical

with this the and today earnings statements any along unfold. undertake as XXXX, only are November statements Forward-looking on no we Xnd, of publicly forward-looking actual and as release issued this of to update made we events call morning the obligation that these comments

to excludes started. hotels will call reported I reconciliation income website Hyatt is it remarks certain XX a will speaking non-GAAP will find can our information executive earnings basis get on level which of our this to Portland. items turn about net team release. the be available for our You morning's measures and referred An now to financial same-property XX in for of to of today our the definitions over in be on Regency The archive this property a Marcel days.

Marcel Verbaas

decreased the XXXX path call the continued the for all COVID recovery U.S. pandemic. of since and decrease through levels The by good to beginning approximately and of vaccinations increased experienced backlog recovery and has continued and XXXX have XX in and lower strong its quarter today. of compared on industry afternoon XXXX. terms our points the point third the occupancy of drove in highest leisure Danielle, Thanks, occupancy occupancy third of in the ADR. declines segments the upper X.X% lagged as upscale scales only XXXX lodging quarter the to tier six U.S. luxury third industry of XX.X X.X% chain quarter The occupancy and compared comprised experienced in joining of respectively you to demand increase to points

Jewish our impressive where increase lodging our upscale due portfolio segments cause transient ADR business decline due the recovery is for resurgent demand, positioned. However progress, cases September comparison luxury luxury in in and tougher of rest XXXX seasonal it Similar as rate segment optimism the give the a certainly leisure of robust we're group a and The faced increased to have of positive portfolios to XX.X% ADR in a to signs to some the upper X.X%. relates the to holidays. a industry, in headwinds increased as the Delta referring been and to variants, see and quarter timing the for demand, in COVID third us a

same-property due happy also has historically RevPAR thus increase Given to the quarter strengthen. quarter, the progress. that demand linked and despite that's continued and moderate our weekday in backdrop, fourth pleased markets. This of quarter quarter as XX% demand were early we We third to to quarter. group to the softest RevPAR into the of in compared see transient to top the improvement cancellations the Especially the our XXXX, were trend seasonality this continuing to sequential were the within variant, Delta emergence with to with the our since same over been declines second portfolio's continued likely business appear part the

net During third million. $XX.X quarter, a loss of we recorded the

adjusted FFO remains $XX.X EBITDAre each adjusted However, per positive $X.XX share and at respectively. million and

Our third performance. hotels encouraged of hotel particularly quarter. result and were our year-to-date resorts achieved quarter also positive that XX turned of We during as adjusted a positive EBITDA third our FFO

quarter. Our generated portfolio of XX.X% for a EBITDA margin same-property hotel the

contribution during at As as a revenue fees historical flow result our revenue averages. which as from on well and from in properties, focus through of cost controls, cancellation the than mix the shift team's aided reflects by recognized quarter, a higher rooms the

from XXXX. quarter same-property and for which in XX.X% $XXX.XX, Our decline third substantial first and represents improvement the XX.X% RevPAR third declines quarter. XX.X% A of was the the the quarter a for second

an did during of third a maintaining the hotels X.X% integrity, quarter increase $XXX.XX excellent for in managers quarter which impressive of ADR ADRs to reached the the XXXX. great of resulted An and XX those job compared achieves XXXX. Our quarter that our in surpass resorts same-property same

of somewhat half where While second the variant levels cases, demand through driving hotels By number in in the the region mid-August quarter in our mid-September. of Sunbelt resorts was an and off the increase moderate located. significant started tends Delta August, to COVID strong particularly are

the this to occupancy demand surpassing approximately and $XXX the levels weekday these month preliminary transient continuing months occupancies However, beginning resulting and in the average third ADR RevPAR at further side. group The highest as since and quarter leisure portfolio, exceeds watermark our business impacting a October substantially evidenced the every XX.X% Business for month for cancellations the both our quarter our demands for data, improving we the this October. month, in the same accelerate September in during continued demand print and have July of was despite the pandemic. finished that of year, the highlighting rates approximately ADR estimated occupancy of transient began to XXXX. high achieved on teams' Based approximately on group improve $XXX. to improving RevPAR our and the was transient was XX%

transient the demand group levels. quarter, approach to fourth accelerate will start we promising and believe the corporate recovery a normalized portfolio provided has October our While business truly

seen months The weaker but winter, the COVID enter we that While be we behind particularly segments, resurgence be colder will ahead. of we during about have believe, process, as at cautious remain moment, in the appears resurgence climates future us in particularly potential these the lie gradual seasonally this improvement a to we recent best.

However does the exceeded leisure demand remain has months. and our over expectations consistently strong several past

in high continue owning upscale and focus expect trend in various of as of is and to quarter-over-quarter enter We our hotels and luxury, performance pointing of portfolio of on season. upper the value. believe and leisure locations desirability quality, strategy show resorts to We geographically this Sunbelt hotels drive-to and the segments. demand holiday improvement investing we is a of resorts reflective This benefits our diverse the portfolio's our to longstanding continues our its to

increased concentration RevPAR higher assets be properties of with these also over to quarter. of approximately their proven the portfolio has helpful, Our second second as luxury XX% XX% comprising of by our

Our Is the of FFO from it managers result at to we portfolio been quick have generate brands fluctuating able operations March the month, positive response our are and of do our have able margin our with as and adjusted that our last growth flex of over do and The since is say business the was managers. able it months lessons to best-in-class this and maintain learned hotels of with levels. a portfolio. ground-up. strategy as And the to can the We opportunities rebuild the testament with each partnering XX healthy teams management demand align were within operations, nimble year. believes quarter success to meaningful this

EBITDA hotels this we XXXX While measure our approximately time. primarily expired of portfolio recovery where based performance, properties at comparison in half for at

As XX of EBITDA Houston properties a years ahead and producing the our as as smaller top markets. some incrementally anticipate in result, opportunities of markets greater such we a in Orlando, well for number our in our growth as

three about see Portland. significant still you Hyatt and properties over Aviara, Regency hotel Grand previously Hyatt Regency highlighted that Additionally, Cypress, incremental create can and Park of her be XXXX, EBITDA Hyatt optimistic

business achieved XXXX Park results double in way. metrics in increase some until build returned was While the third to driving the quarter for period in several in almost remarkable $XXX.XX Aviara not the what a was an it in and RevPAR. continues ADR occupancy stabilize will meaningful XX% at Hyatt resort The quarter. same at more group during has nearing

ahead. margin results and gave more be These Additionally, the resort of at than the Hyatt and we that us the basis this renovated will Grand long-term hotel XXX EBITDA the resorts we additional optimistic be in points or see third ballroom expectations Regency great XXXX. quarter can was we confidence about the we higher benefits the the exceeded Cypress, of acquired created than met years when resort. At have

demand drag of end revenue Cypress are the for we to one building at the for decision gradually, relates it portfolio, not continue nights XXXX dependent XXXX team a leisure recovering which also pleased Regency the to business number state the While limited highest over business, as recovery group it's room far truly to the property group At looking Hyatt business our group room hotel meantime, group our on been to third days overall we're remains room our ranked encouraged And to years challenged. Portland same this our of focused, as as for we the attracting projected and it's the group of hotel Oregon ballroom has group we Regency before early stabilization. environment rest only recovering the in is be transient XXXX, in the incremental levels. the the With XXXX, having and We business Portland represents confident lagged will reopen in business recover the support quarters and the state the nights hotel May. in time this books the in promising. on the we In and pace of open is at region that XXXX. group nights the that additional that are booking for second behind successful XXXX. of at at opposed continues to levels portfolio, revenue in to approach Grand quarter, XX,XXX in group were ahead. as number in business will prior portfolio. end remains it books remain the with With [Indiscernible] management is been the Hyatt period We on and

about will escalading, demonstrate does the these some to to now continues appeal to has groups obviously planners uncertainty alike. these turn there property and the meeting rates group that transaction groups landscape. be the briefly While I

to seen to surface and to acquisition remain potential as likely months, in relates quality patient acquisitions. not and spoke quarter few opportunities better a shift of past opportunities quantity progresses. about and have our recovery more ability over the And to relates believe that We the willingness thus it last the the significant as I as market. it we are

within our portfolio. We various still quarter internal existing in operating our Meanwhile, their will many of continue remain we cases of Barry optimization projects recent our remain details pipeline disciplined will could potential and and but growth relatively to transactions evaluating additions the ROI as our growth performance, we analyze focused on current portfolio prospects. on resorts to third to are the additions status potential trends enhance additional be through and hotels opportunities projects. asset recent and which provide management capital pursue that

Barry Bloom

you, everyone. to and Thank Marcel afternoon good

XX.X% For resulting $XXX.XX RevPAR portfolio average and of in was the rate $XXX.XX. quarter, occupancy of our daily

leisure the recovery. optimism The reminder, sequential ADR to and of of $XXX.XX, focused Santa us XX.X%, during for was markets which increase in in July, from Barbara third strong a quarter a quarter third July leisure our faced and Birmingham, improvement XXXX the Charleston, West, to Xth as for high which achieved hotels occupancy of of drive-to X.X% was Napa amongst substantial $XX.XX hotels portfolios to over about months hotels We which given all and $XXX.XX. XXXX them XX.X% holiday that July the five additional had reaching allowed and XXXX, seven demand. Savannah, with represented XXXX, of RevPAR show such our Key benefited the last quarter-over-quarter primarily few particularly new averaged gives occupancy in and the XX% was headwinds an month strength. trajectory continue a a our As weekends, of Carolina, capture South

school due Delta In their also the XX moderation see that year hotels decline seasonal began during XX%. had occupancies variant spread beginning XXXX to month of we ADR the some for the across over new We exceeded by the Sunbelt the in August, to and region. the the July of

with Hurricane maximum occupancy Ida As damage from X Louisiana a $XXX.XX. $X loss, July we deductible for the as XX.X% storm, this from an seven will result, August believe August rooms made XXth, storm in dropped exceed ADR a On our approximately [indiscernible] world incurred landfall of and to points million. property hotel, Category

insurance and In addition to recover, settle expect damage would currently property direct in for ability to they're which to policies, evaluating XXXX. proceeds our claim, we loss profits

Day Moving in over where saw following boosts pickup business to Labor in the slightly Heading Memorial day anticipated had weekend we weekend. the reached over corporate and we was demand September, transient below demand occupancy's transient a holiday. into leisure quarter,

XX.X% million in XXXX Jewish in While we and cancellation experienced comparison to employers. somewhat well, group as resurgence of quarter third saw attrition quarter in days many up of the has third XX.X%, Houston now and muted rates. XX.X%, holidays. terms XXXX our quarter, markets the fees the August by for to occupancy large third increasing weekday and is to approximately an of of many up $X.X mid-month quarter. XX.X% books a in contributing the Compared over average timeline The COVID up across on two return been for including portfolio million because up had to and an daily will XX XXXX, also Orlando Atlanta detail increase occupancy fourth $X.X month in I experienced XXXX. and recognized the mentioned, XXXX, of further We in up tougher due Marcel more cases of to from X.X%. was the our ADR to rooms office timing several quarter cancellations Room revenue $X.X the X% growth rebounded ADR Diego improved discuss strong of We EBITDA which shortly. growth of billion during in percentage which for markets of points the September additional we top of Phoenix $XXX.XX. San August pushback XX.X%, the and

ADRs During record impressive we individual in Aviara Andaz, achieved quarter, including Park the and an surpassed third XXXX, Spa. had hotels and all-time and at Hyatt XX Napa Resort resorts that highs

exceeded real cancellation of generated positive and XXXX. compared and the third achieved of In achieved declined greater expenses compared our XX.X% be expenses properties undistributed by declined EBITDA the margins results estate EBITDA XXXX, terms considered in the exceeding benefits revenues, attrition XXXX in nature, XX to led and and for expenses. quarter decline Total income. than XX.X% significant and than in hotels, the quarter, profit, to for of XX expenses Nine often declined in taxes employee while Departmental largely quarter expected XX% margins third as in sales and by hotels XX loads and costs administrative by EBITDA XX.X%. of hotels which to marketing quarter general handily payroll greater and XX fixed labor by XX.X%, declines

In saw terms shortage hotel open positions the of labor, market. our the to applicants many in of

continue to positions. made past operators level our I most second of quarter approximately headway occupancy in operating recent Weekday property the of Some quarter want few to those achieved line and minutes witnessed sharing Tuesday and points. quarter. gains corporate on demand. operating were X.X in we've by quarter, the significant the significant over third spend accuracies the transient trend indicative trends achieved filling management the this nights exceeding in The key increase upward in next

gains experience We continue weekday October. in additional in occupancy to

booking XXX increase see we've companies. trends, transient meaningful corporate of terms volumes in in Fortune In yet to

leisure business heading of in volume lengthening approximately However, corporate there well national it smaller continues portfolio continue by season. trends remains than to rate the XX% even five up of is year tail month. from our to We're transient shaping to fall. had accounts now two booking be stronger from year; stronger whose the corporate last we the lengthened nights October, few This some, the over to Friday as last upcoming into our earnings improving now from occupancies, end healthy the QX summer months of drive demand had we is and hotels highest window accounts as volume our occupancy similar shared to windows large our days this anticipated saw call, grew the accounts, experienced seeing Saturday the and we holiday further growth each increases the achieving booking months. including leisure that Corporate as local QX. of allow On in

increased from Group down significant group pace to up As rooms a rate XXXX from and cases At the for reminder, of revenue was group end end position revenue. a was at of steadily the XX% represented on of approximately COVID June, third of for approximately rooms historical end with of in driven the In business, September, revenue third at social corporate, end revenue third we a spent X%. the cancellations comparison with of the the with end remainder by on XX% XX% which our Group increase capital year. XXXX my quarter, of in quarters and impacted of up for falling XXXX stood group updates into I to the of today to million. negatively projects September the the compared encompasses was and the resurgence the in second books where In most September of XX% quarter, the XXXX. progress at continues groups. pace association $X.X to will remarks approximate August. few of number approximately XXXX XXXX we was for

We how the the full-year. lobby meeting million continue and Court, was restaurant has Regency will Pentagon market. to has expected was It nearly comprehensive meeting the was the renovation feel success. and are renovations properties integrates and Hyatt hotel be our issues. venue luxury look mid-November. approximately for hotel and year. quarter, delayed comprehensive & be Hotel The interest at announced continued on due renovation hotels, well for bar, in we This the Waldorf Bohemian for of hotel in with Carlton incremental area, Buckhead Spa corporate October. The both Restaurant We capital we generated in Buckhead the believe the Atlanta to space the pool social outdoor of at guest lobby, believe development a rooftop restaurant, the This Scottsdale expected restaurant at significant with will position the and rooms, spending the to We first and are a renovated space Santa Last completed completed which been in restaurant quarter Canary events. of plans in City Orlando of $XX Barbara, preeminent we're of these for and lobby for expenditures Ritz last new to the outdoor meeting considerable lobby XXXX. already this position increase each encompass estimate Resort underway as renovations renovations Regency pleased social received and Grand improvements and will secure and Astoria weather-related Hotel Kimpton the guestroom primarily space. completed

efforts are completed quarter We to completion will in design these of these early the estimated in impact. lighter projects quarter a which phases the and the to dates for that, Work With look on each Atish. turn but call disruption I XXXX, first are over financial guest and expected two of experience being These to create minimize XXXX. in will projects first in and the property. projects, the is pleased that begin feel contemporary more

Atish Shah

Thank you, sheet. an provide will I update balance on Barry. our

relationships. with strong to in maturities balance $X over strong XXXX, debt Our sheet until billion banking liquidity be and continues no

in of take good opportunities. are advantage a position We to

business going a cash that is we believe with capture positive to properties we expenses. on FFO pivot as will demand present will or to ahead, forward. to And continue controlling expect what focus our continue be We our look flow

look we see rate and competitive as new believe farther markets to as levels new As are decline. Orlando, expected Atlanta supply lower well-positioned in we Properties Houston, out, supply of of our assets growth. the are growth such

back with to Our expect portfolio higher particularly Q&A session. demand well, over a turn to that will that, we call the And transient well-located we properties to Quan consists corporate recovers. of and as end for continue group recover

Operator

[Operator Instructions].

Katz Our David question is line Please comes Jefferies. first from David, from open. your now

David Katz

be all Hi everyone, Earlier elaborate far been taking area that helpful just the there to has Marcel, information. you of a this my on, and and so is or might what out love and question bit. you in have environment? good for or any afternoon fortuitous, the there on that pipeline degree for to you pretty can, focus and size rates The cap a on little opportunities the thanks geographic would I'd indicated Sunbelt work on productive perspectives

Marcel Verbaas

Like is today as Good Yes. our situation probably we saw I well. different it said, last remarks it as in too I to afternoon, relates whatever from pipeline David. as not mentioned our my quarter

But at number looking and a of like we where compared underwritten of opportunities think still underwriting we're last in or is the it quarters certainly we've feel years good the relatively ahead. the here quarter limited opportunities number really So to will a -- be in so. and pipeline

didn't quarter last assets with stretching sellers opportunities had that some deals we still seller given assets internal in portfolio mentioned really our felt of into -- a and to were where particularly of we that that this. far, that have these still some little were that the on bought we comfortable beyond bit need go feel we I had done, the get coming to So expectations the that

time to it of we us see relates price we're transacting. to your get we far pretty color aren't can we'd work into over well bit. in really at look a some right not say right has to but And type be of the does Obviously, our in fit there give us. or very where still but at think have to time we underwrite are comfortable time, can that that those yes yet, So what strategic deal you Sunbelt at can on haven't sure presence focus. have that We little found I we what point, lot on a that, that to upgrading our wouldn't market we and like markets. for be I'm for over significant see for mind get but great where to a kind markets and And whole than presence footprint where our has except as certain more -- either asset presence to we as we're asset there a assets, is increasing the a

that any So going play our as us past that seen new few to over that it we we're largely, you've strategy opportunities relates to fits years, from the will pursue.

David Katz

All right. up, And might little if now, I consider on board lightening be them I forum. can the you up where I could a areas imagine in are appreciate you follow that, guess, if heavier? may where that can't I name would areas somewhere there you But this

Marcel Verbaas

not particularly. Not,

balance out again that in. Historically, type in we've somewhere dispositions some or you we will -- apart know, higher the top into our years. certain in We're has market, of markets a philosophy of little went some pretty our not in a few a certainly a comfortable the we the of been because But at markets last past pretty over more of heavily the little the where kind about a we've our gone years always where peers that over us any really We've market which with markets. in range. to few overexposed kind level in bit the is time. As been that were careful bit from diverse particular just that we always being set getting XX% -- think couple where were little peers over be play

business stands like particular pretty no like comfortable market we there's lighten say, at this the that. where right We're with we'd So or where to point, anything portfolio where now. load

about talked the always you look opportunities to and we'll the to we've continue upgrade As portfolio know, time. strengthen for over a lot, this portfolio

sense do CapEx asset particularly makes wholesale somebody coming some So two. well. analysis see on the bear in-depth when we'll ask to potentially assets, to fine or a an if we portfolio very up But sell tune decisions we it

focus expect here a you acquisition stand. to the term. the short we like some in where bit the time. medium on more could us little with happy we're sell -- be But And side on to assets certainly we'd margin, over and So to

David Katz

I And additional and labor about one thereof. may cost ask if the perfect. which That's question, is

little issue. think disagreement that I it is an there's

how more think, is I where on that opinion long there's welcome lasts. your I it as debate And would well.

Barry Bloom

Barry. Hey it's David,

quality we it's long really put own gauge programs to and they're make that encourage think in hard they lasts. continue I to hiring to have place our Certainly, managers how it their really sure a) where labor. a And right really think ahead so hiring of of are. not they're competitive ensure they're that it to amounts c) try the market levels b), wage. business I paying that they're

employees. of think, near mid-term require how looking hard think really And think still to I changes which a), is it. generating the knowing we're if in on more that b), will when in course, or because I determine, to still certainly occupancies, forward higher

Operator

much. so you Thank

Our Bill go ahead. from Crow Financial. comes James Please Raymond next from question Bill,

Bill Crow

leisure February guys. business I going if about upcoming to fair, we are Good afternoon today. stand thinking was trends, you're Yes. comments read to as Thanks. to kind you earlier, of January, calendar? next we've it that And kind think in and about transient we consider as historical Is of Marcel weak where trying are be roll through Is and of the pretty the is your it through way kind fair few the about quarters?

Marcel Verbaas

Bill, because we say our us that do a quarter necessarily some helps that in I seasonality portfolio, in little too. bit first wouldn't have

historically perspective especially a know, particularly. you the seasonal from side, are markets some stronger in months those on Orlando, leisure Phoenix, like As

will strong, matter the and to that's a situation little fourth in of particularly first at is on more off a improve talk more you're letdown that some where that starting you to certainly kind bit bit. we're of get in cancellations in quarter, up. was think And normal us which some is months the starting I think a into starts year little trends it's months its some And now travel. generally a as that's the perspective the of kind see the some What trends always about only is where than to spur of a more a post-Thanksgiving, hoping half those we're group that for to some group saying, head remains from continue weaker that bit based seasonally November very some strong. side, season hopefully was kind the next people see looking of these and into of a side. for getting And of we're next still a of and couple the I then weaker bumps business through a like that tail about little after going very bit, also holiday where this business with October But on back-to-office the back the little base I Barry then obviously on that travel business the COVID first year. of little travel looking us quarter the hopeful going on we're seeing strength hopeful rest that again. we're bit talked I'll office, more, will leisure certainly through of coming will provide impact from of the more some some that rearing also

Bill Crow

million curious the the group of say -- of collected just maybe for I looks I'm Got fees cancellations, term cancellation Barry, or mentioned you that And $X.X should speaking fees collected. I it. quarter? like what fourth think,

Barry Bloom

And accounts program. is they actualize there could too a attend are the think don't actually to that, the not. a early about because versus that still way there when some recorded little out It's is still -- revenue

any early kind a So put really too to magnitude number of point. at it's this of a

Bill Crow

be well. not in So as the majority be necessarily in October, could would it December November,

Barry Bloom

Yes, that's correct.

Operator

Bill. you, Thank

open. Our is Riley Securities. Please from next Bryan your line question now Maher Bryan, comes from B.

Bryan Maher

Thank getting a interested in about other what labor and so secondarily we've problems, as food impact meaningful that pretty with to for margins. like much. if you're hearing finding experiencing about labor been chain and and we And beverage you're supplies, food on shortage, much. revenue. much on very you other stuff And keep supplies through so the then supply on any cost, the uptick towels talked Yes, and Barry. I'm costs has beverage curious but a I'm noticed Maybe question your

Barry Bloom

Yes.

at me of of often than point. bit challenge the are question, We've has good point banquet been we seem in kind a ramp a over other to markets time. order be I up culinary call -- as this hotels about on because and extended beverage been certainly they not of properties and quite business, Bryan. available taking given most in an multiple servers in here period work and food generating on part amount actually at guess little are Let staffing, the talking

been Food actually few although basis each by are past portfolio They've pretty in quarter. So one that's hundred through a might than higher they we've points. month stable kind costs have been of item. costs this our

where hotels had couple that's relationships I that a for of line again, in changed. longer but acquire physical getting cases gotten about or get biggest of to their we think where the bigger one sure as need as to hotels the supplies, very of in need. helpful a smarter, for kind whether seeing really vendor kind affiliation orders example, their operating QX we've about kind seen think been helpful had the some supplies. for other sheets, it educated is they're inability the supplies, going third earlier they of a challenges away two or making in that kind have in -- think back could of went We I kinds of relative quarter. And more to the when line supplies, guest from and of and those of with towels of a thinking little relates those, of There's the on in think has the a the that's I but at hanging brand to get has supplies couple whatever they with months that the front week success order success hotels been of hotels or really lead with we are I used this that relative and had to be the kind time kind branch many out front they're

Bryan Maher

question hotel bit and still it. Bohemian, And that Okay, on of has for that. has quite character one thank the you just probably Grand to a

and your a I to lighter so more it. look was contemporary, on feel in interested comment having And

how roughly money better kind you lack you're you to are can word? renovation going how spending all, much much on to of that it be and a for de-characterize of First going quantify of

Barry Bloom

Yes.

probably a to about of perspective. we'd working we'll cost, the components lot a head year, handle adding like of kind now, from on better engineering have so and into working a subtracting and and have next that talk for value that on we On of as the QX through hold as off design particularly we're

some So appreciate that. in flexible

some doing of market. I is property -- over steaming perhaps the of -- is with perceived hotels part it's hotel we're that of effort colors ago. of that's There of look. those There's creating character make culturally Grand that evolution really the the of some in frankly, quite our the detractors by to design any the a to sure solve people actually hotel of create certainly as written while think than fresher in the hearted trying that has team Bohemian hotel that keeping over with the years some been environment. lighter major an the a And with time the design. are in the we're had that nature XX some feedback retained different you've And and team to dark in part everything the that's some current has is things look And design opinion, been to been related. it's deep were

Operator

BMO Markets. will question Thank Ari, your Please is next you, Klein Capital Bryan. come open. Ari from The line from now

Ari Klein

you prices off any are of parking along higher you menu those Thank you. pass started other like the the in ancillary to to items cost, form holding on that? still on Maybe customers, or have that, following-up

Barry Bloom

have. tell management taking initiatives hotels. been teams that been in do Yes, inflationary we side team, And the months our been out portfolio it of think margins, the that not paying market we're in stations no, in that's and y, absolutely, sure think we off our this the advantage going the the while And U.S. the improve And increase hotels, but some through our profit because don't of and they're which weeks while that's people's only seeing gas if few to that of are and up x at we the I had maintain moment time team the through a make we the management that as looking to probably the we've reverse asset spent major is view of as them. more needs as of costs inflation And most hotel the last have revenue all costs that few can the we're it's is it revenues we become up the how has where are we really by need efforts opportunity auto biggest I grocery stores part single for last of the asset and go XXXX pay costs dialogue, part a real I'll in [ph] us on in we tongues. you, people retail expecting unique taking well. inflation for that budget as common to is move pricing. And -- hasn't in to as season a we things. and adjusted gone vernacular

Ari Klein

midweek. then large a on here? us a maybe which and are business slower are improvement ones much recover little corporate then Got give sense starting doing trends, transient to lagging? transient are of bit of you're a typically standpoint, business to which how see it. And ones those you market best that Can accounts the from And

Barry Bloom

first So consistent to are few lagging. it's the hotels across been the portfolio. part the really very are that pretty we There can to answer point

view In fact, more little the as that a might hotels you corporate.

in think had seeing those Bay in actually they longest in we're with in. And right other the now. of as you the successful most of the room. San because to markets and our Houston been they room if Area, course, the about Dallas weekday we're had leisure hotels some They the run, that So and filling Francisco nights biggest hadn't increase businesses,

that part would? of So the long And piece. question Ari, addresses if that how I you then think that other the

Ari Klein

Just maybe been how transient much slower to business little large a a is that have typically of accounts corporate those recover? on bit

Barry Bloom

Yes.

a And particular, an basis, on firms and accounting XXX consulting over And So look firms we've been. different kind the names. little and little look four a time. where large they big back We over and looking how from to way it's and down the significant what on to time, going that portfolio the that they're difficult has accumulated across they're account-by-account the kind see data of more of Fortune in the were.

about in account-by-account you the say think thinking on probably an but than less than XX% certainly I XX%, but I'm more basis. that

translate the those aggregate to may to on that an not So -- basis.

Operator

from question Austin, Thank now you, KeyBanc your line from next open. Austin Wurschmidt Please comes Ari. The is Capital.

Austin Wurschmidt

some I I Yes. this historical have Thanks. at I'm leisure is is if not historically guess what detail? levels? was group, missed but today BT it, You sure XX% mix the versus Ari mentioned and of getting just what's versus sort put can may you XX%

Barry Bloom

don't swing are been real -- We've better has the it's and of has kind there's good hard doubt a really no relative it's historically it a certain or business than of portfolio. have different and hard as leisure really a always this no Yes, obviously night Thursday -- in historically been concept nights seen Monday leisure as front, they're little we nights looking because that to Tuesday, substantially for than almost one to to states nights whether where become Sunday basis on Wednesday. that up

making really really we what fact, and stays leisure, data, is do. and that much think them to and like think and of having question extending precisely a know or -- as something so we that it's spending into thing break who to are now of increased I I average families seen really weekends that the down So and corporate it I meeting lot meet in their But in customers is corporate but significantly. length on we've have business market. but extra a between are in combined to a difficult increase segment the time guests stays, stay And right

Austin Wurschmidt

leisure the is that’s that to the versus Got of look AGR July. Or since bit ADR month-to-month trending help And some us trailing is there rate can here, -- that under just the we detail? moderated mean trends assume And some going it. I No, us additional component that's you can but provide hood? think XXXX off portion better certainly anything pre-pandemic sense the a and a forward what then else that, on understand helpful. is what could like? you of trends versus give sort going as where maybe corporate from I

Barry Bloom

Yes.

first corporate certainly leisure the quarter, industry they stay seeing across that hotel, where through the data rates to I the it. have demand when think they pretty as way do may I mix. generally in as where to think not in I corporate flat what your really XXXX. have had look would we've way we has there not the pay they into that accustom throughout were our your is their portfolio, you're if is in way at portfolio And are and good work discounting gotten to kind choice a you hotels then suggest you October, cycles. prior they that the our to of in work resorted particularly need fortune change lowering more think in guest to rate trained with and want demand and and guests the to significant I and significantly a great Where price

from day-to-day bottom And I of -- a helpful, think of percent So discounts on again race pre in corporate is have a obviously to also basis. and accounts fact, bar, in think lot individual a week-to-week hotel more moved a that reflective some we've not seen, the each bar which again also to static controls that's off and I rates. rates because

you in as well. leisure the beverage increasing. add lower I because add do, they business mention group hotels trend the would food business the travel achieve. of months particularly but are frankly, because what group didn't volume that mix of certain some and rates really directly often quite negotiated I the rates seeing And So -- actual is it's through into that I business of year, would that versus of just you're that it, think of is that

it's also this mixed you're well. that recovering to well. at So again, as And blended in a seeing rate case as

Austin Wurschmidt

sort and the sustainability power just amongst leisure side, that's detail the always customers Got of months? the to pricing as piggybacking view XX last XX one, of on helpful Barry it. of the just your leisure next No, up on what house kind over

Barry Bloom

bookings the don't pretty months. way view certainly which feel house about holiday obviously the XX what on the us forward leisure, that. through I it good over feel XX Yes. We take to know good we're about and XX-day on months in season the seeing

view some a we've the be there's said and I higher to but the amount of this hotel that consumer ground there's you expected think the cases only than retraining for we of a lot type of frankly higher would've think costs in certainly you're money, that naturally seeing or I know this through probably as in and quite many not it broken would've new ground, to gotten to, forward. of don't this And inflationary that think it you're more. going kind I environment, with I in And reason as select any upscale seeing think I and that to luxury but to in that materially leisure. and stay necessarily think segments, change where as people newfound the as, we think if service pricing expecting are see gotten pay power well, really they've upper properties

Operator

Thank ahead. next Michael, The comes Please Bellisario you, Michael from from go Austin. question Baird.

Michael Bellisario

of revenues two-year looks points on It have you I still that you some the how about I Barry, focus XX How question another think everyone. more over of of afternoon, than aside like months? F&B down want closed room your basis. do group of but the much Good are Thanks. revenues. revenues about restaurants versus group F&B, from XX outlets they to were to ramp up a next and due to think XX for and revenues kind also on on is F&B the lagging because

Barry Bloom

-- to open we made our beverage the In our portfolio, all we've in talked -- We I sure before, interesting. outlets great almost Yes, our resorts. it's operating have food in of that banquets hotels and think decline we about that is say I make efforts related. as and would

Our terms a the week, summer captive being favorable beverage lot not of outlet day, certainly a resort every at food that and having the and of very pool, guest beverage leisure week through It's on revenues have really in month more in but set maybe buying been all-time the property. records. every Literally months meals trend. every

buying buying the property, now or mean, telling come than tells And quality are doing is -- more it our we to when really events, cost same people us, to as that is capturing gap are property which and and also side banquets showing and catering on type real been business properties a in pre-pandemic. smurfy our even group we're more business. actually and the the recovers, they better group had us right as that numbers banquets And they're of room group job I opposed the as are off more doing So events menus the great for us we're hotels. higher business saying gotten better basis. has They're has on groups banquet adding shifted the good that think, from occupied corporate that that seeing and good more that they more results business a per and traditional on really data caliber and group

Michael Bellisario

Got helpful. then -- That it. that's And

Barry Bloom

I'd I asked thought That anyone. but more give be you for, it to may

Michael Bellisario

standards the into, chime has when think outlook No, longer-term helpful. you is margins brands and no, on brand Atish that all? question at XXXX that's formalize changed could part then And the second And your the for beyond? their what of

Atish Shah

we're still been Mike, happens to certainly that, see want to in waiting ensure Yes. I terms what of see to really housekeeping. brands it's interesting the think and

our and within our beta of looks and of of light like. the is can terms how housekeeping, given imagine, that a -- portfolio piece touch We and how hotels, experimenting lot are trying is -- continue they're for as things brands, the you a lot as serve in housekeeping our in do serving the effective many with of profile what

overall, to it's early stabilization. about get really as what margins think we too to just I think look like

guests. to necessarily year will can bodies run, can on the the both are the the this we're to staff were to really see we low to understaffed. well. are providing and much But hotels, where directly stabilized in in I business fewer to of we to services trends going think have see the QX satisfaction obviously labor additional but costs certainly place the run the now, over think particularly downward with labor where and are to those it's what we've lower which going cost not amount and get scores, reversing to significantly operate the we're got relative hotels -- a when labor, it And And we've that of the proven seeing, revenue. point are time, know some labor shakes at that tradeoffs hotels we much, I makes think hard amount hotels related we've I out to everyone's of although do in get

Michael Bellisario

deal? on, ones the because because terms just that you've or it. you location certain other on you've Got the to aspects can't that like transaction or last maybe get of versus deals the at, you seller you And done, passed it then turned level more for the simply the particular one me is it haven't wants a just front for Marcel, in factors you're pricing by is resort off or of qualitative looked urban

Marcel Verbaas

Yes. from do think that a because out for It's additive is for work else of something in obviously and makeup portfolio something our currently and start think we you a and we of seeing, there the isn’t kind what right. going is a us, growth perspective of work with to that just looking combination, that something helps I off the someone portfolio mean, might portfolio the to what really is market already. what's

quality in that's So first the fit portfolio our this. there's with kind haven't that out And our matches that we and where the there when not And to a fit relatively potential we end out rises to outlook our that there. drill you just that like question And really our plays in to and have the where where component with well that a -- of grow location you that assets it kind short-term well really obviously we portfolio there, it small pool can hotels that that not. of want you up into for there's and so no lot that's felt certainly, both flow us. found There's can that of do the product the but out want cash pricing level down or product we growth. deal, then of of of and

and So we to on get -- a bid because things aggressive wanted a did. obviously than we've we're out more few we've just certainly someone deal on there

back that willing be in us So patient looking disciplined being about to deals. really to my that goes we're and at the comments stay way

-- We as significant any have a comes know, history to of we record when and it cycle. of plenty part it very you track the as comes not deals doing have and --

find and us. where remaining current worry over portfolio we of we But our things said, able So hopeful here. with comfortable quarters, if we're we're of, that for be to find remaining sense next we'll I as with progress makes that we're to and, we're pretty kind like that patient, I some couple don't not going things the here are kind disciplined

Operator

your comes question open. Allen from from next Thomas line The Please Morgan now Stanley. Thomas, Michael. you, Thank is

Thomas Allen

Thanks.

next you more lower and a the for think Can that the talked about So of just taxes. questions cost few just years help us side, you real quarters? trajectory the couple estate on than expected about line

Atish Shah

for Thomas. sure, Thanks Yes, question. the

property they same-property taxes So than a are lighter for the yes, portfolio. bit did in coming little

the go year, they're year XX%. to you last If roughly back before, down

that's thumb use. to So good I think a of rule

insurance line Now our also And insurance is on costs costs. up XX%. are statement within income to that XX%

that's offset get that but looks to going to there, little pretty has trying and expect like We're we've of that tax next know a this what and down that too continue expenses assessments for forward. but we a the year, bit early line us there's to been year. lower bit little So aggressive why come obviously

Thomas Allen

kind what's real is like that so historically. waiting sounds line or like it larger of taxes the are usually line Atish, property And and the -- that estate is two-thirds

Atish Shah

than Yes. right. little They bit are that's two-thirds or even a more that

Thomas Allen

XX%. think that Perfect. levels? normalized sense think I And versus right payroll in where of can we're mean, keep down you down a any then I expenses environment we we payroll if I XXXX more expenses heard are

Atish Shah

Yes.

confluence today. a put kind of staffing and knowing number a not the of kind again late got you've if levels rates because actual because out. hard And the really of flatten, hard it's to that to shake it's ultimately where think I both really when wage

Operator

Thank you, Thomas.

Tyler, ahead. from Batory Scott. Please Tyler go Montgomery from comes Janney question next Our

Jonathan Jenkins

Thanks This Tyler. afternoon. Jonathan taking for Good for our is questions. on

me for in one guest today, to hearing need feedback environment? do guests Can services or current First or labor you'll this and margin occupancy some you're the near-term, meet amenities I wanted color you are in or you to the add providing still you follow-up to the labor on and additional on discussion. needs ample provide think

Barry Bloom

companies right management been, Well, the it's I of with something think attuned management that our making we're to asset service. levels are have in I'm keenly on and portfolio, our working the sure providing that

still out with what of kind when room dissatisfaction industry guest people service hotels summer right I type services housekeeping environment. saw in were when in a got higher across resort four certainly sorting the a or the of levels think level over three of you you've was, the

I So that's certainly a think challenge.

have the people a up markets I guest I hotel been think into bit; touch labor opened bringing in little positions. as always the the back successful think more

about than culinary the desk, that, positions. restaurant little easier front to have that and servers, think housekeeping So a fill think about been like things

Jonathan Jenkins

international the you to Okay. the could much reopening Very international of us can under then be how portfolio of travel any how talent has the additional portfolio? an travel U.S. to helpful. and much remind the And exposure

Barry Bloom

for last, looked XX% the sure it sub were we Yes. at portfolio. When we across

some international major market today, in have We some that is but a and of know, exposure. you we significant our hotels, lot of in As that to some place well. don't do expect crew we have of business, grow gateway as

of forward strategies and as reopening opens and up. capture to that Cypress We that European from the times in place successful also in look information to particular, UK South the go that particularly has where to Orlando in of the business market American some Hyatt at Regency markets Grand business been after

Operator

no We Please Verbaas further any to Marcel Thank comments. have over you, questions. I ahead. to like currently Tyler. would closing hand go for Marcel,

Marcel Verbaas

the and forward few weeks of questions. great Thanks talking joining all today talking you. look seeing everyone for to Thanks. conferences the many next to various over Thank everyone We and look forward at you again thanks for us to the and you to next quarter.

Operator

This call. concludes for Thank today's you joining.

now lines. disconnect your You may

Xenia Hotels & Resorts (XHR) 2 Nov 212021 Q3 Earnings call transcript