XHR - Earnings call transcript Q2 2024 | Xenia Hotels & Resorts, Inc.

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Operator

Hello all and welcome to Xenia Hotels & Resorts Second Quarter 2024 Earnings Conference Call. My name is Lydia and I will be your operator today. [Operator Instructions]. I'll now hand you over to Aldo Martinez, Manager of Finance, to begin. Please go ahead.

Aldo Martinez

welcome Call Hotels and and Quarter Resorts Lydia Earnings XXXX Webcast. you, to & Xenia Second Thank I'm here Operating with Chief Executive Shah, Officer; Marcel Executive Financial Verbaas, our Bloom, our President Chair Officer. our and President Chief Vice Officer; Atish Barry and and and Chief will a our performance. discussion Marcel on with begin details with Barry trends capital will more follow expenditure and operating on projects. commentary and Atish sheet and balance will conclude on today's outlook. our remarks with

Q&A. for We will the then call open

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

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

be all will website. hotels call unless will information is You of can release, An days. to on items on Investor be for of we reconciliation find our same-property measures for quarter in certain second in Relations XX remarks our this basis XX property-level referred of which on income specified and is non-GAAP The our to speaking earnings financial net a available our section about definitions a the today archive of website otherwise. available

over get it turn to now started. will Marcel I to

Marcel Verbaas

today. morning good to call and Aldo everyone joining Thanks, our

in group the benefit transient improvement from in progressed. as continue weakness of offset leisure portfolio we and meaningful many quarter demand as Our quarter second in markets, the some RevPAR our in by corporate delivered growth demand to

project continues Hyatt completion luxury of the impactful the the Resort. Grand This to to the timing the company, our excitement the track from starting and to of the renovation We transformational of perspective on relaunch also progress of is on property significant Regency project a and the most continue most we in the make of as Scottsdale. the Hyatt of history Scottsdale be major near components build as renovation

by controls Despite strong our and the the adjusted below margin, to slightly our was focus This operators that continued bit below a was quarter on offset Atish $X benefit remarks. lower our positively hotel will lower impacting FFO expense approximately than adjusted projected. management had quarter. caused in was forecast a come estimate by margin internal team, we asset EBITDAre in combined a second in our tax This for million RevPAR with our his growth highlight EBITDA that

favorable the lapping have as renovation progresses, results strong that $XX.X per Adjusted Regency Scottsdale to was of of June. Year-over-year For year-over-year of more will in $XX.X become project company's the net million the and in the of substantial XXXX, comparisons the in particularly share headwind the second quarter million. The start income continued $X.XX. disruption before be comparisons, we delivered year and renovation EBITDAre last adjusted was FFO resort as was the commencement the renovation. at Hyatt started a significantly May April year now

Same-property RevPAR when X% for our increased Hyatt by while excluding XX the by hotel RevPAR portfolio X.X% Scottsdale. for increased quarter, Regency

by Hotel Barbara Salt increased by Grand Canary while and Bohemian driven growth ADR by decreased RevPAR City. strong occupancy newly basis Santa hotels, X.X%. XX XXX Hotel, Hotel Monaco results renovated our at was these lake Orlando, For points

our Dallas, Park Clara. we hotels, Regency Pentagon to our Hyatt Santa X hotels, Additionally, results group-oriented achieve Fairmont at Aviara, Hyatt City as continue encouraging large Ritz-Carlton, number of the a and such [indiscernible]

hotel and $XX.X basis, million same-property XXXX quarter EBITDA margin points. second basis same-property of EBITDA hotel X.X% XXX a decreased On levels was below

Excluding occupancy, contributed decreased in beverage ADR margin comparison year. The decrease by Hyatt quarter margin quarter decline basis and increase in XXX Regency to increased second last the the points. EBITDA and in EBITDA slight revenues food hotel in for hotel and a to X.X% Scottsdale, mix shift

revert to Our portfolio X% evidenced compared and by corporate towards quarter occupancy. pre-pandemic with last Scottsdale, Hyatt corporate increases demand demand demand recovering a levels, segmentation during And and leisure room demand revenues, the excluding quarter. year. second the to in strengthen continues Regency transient as as transient to group continues softening midweek group bit increased Same-property

million add year. year, $XXX the expenditure opted Turning this to to between property expansion This $XX million to We the increase capital our in prior completion an the still and our improvements have end Scottsdale expect project $X we accelerate $XXX exterior on spend some ballroom during by of spend compared we estimate. of by will is anticipate million now an to to space projects. $XX upgrades. increase as project, and including and that Scottsdale driven now We pre-function the of the project We full the XXXX. on million of million renovation

vast we the by of However, the renovation quarter. complete majority the third to expect of the end

XXX. The of increased rooms the nearing are still be guest also to been the quarter, by the tremendous on guestroom the past completed After completing project new end during Phoenix, spectacular Scottsdale pool date. are the exclusive to beverage the completion expected we made having over renovation so progress year, the do and third several room the with seasonally in summer the will earlier to slower our almost continue months XX% the remaining the markets. after guestrooms which amenities of have have months We and complex renovated in now to of count

be indoor and including offerings by lobby, resort complete that we and food outdoor We hotel progressing upgrade remain third the extremely Richard the as beverage lobby bar, of with concepts markets the components as renovation excited well about particularly The and of public will quarter. spaces our believe received as Chef the collaboration these and local restaurant on residents. well resort the the also guests the all menus we dining Blais to is as and at expect of space, also end by planned

expected of completion the be quarter, Resort At will by the the be we October. time, as aforementioned to resort will attractive resort upgrades fully Hyatt higher-rated just the leisure and year. components functional by and highly ballroom in completion expect end with early third the the the Given of the limited for Scottsdale that segments, all amount and relaunched that Grand group of a of anticipated the exterior the of end the follow expansion

in of our renovation and our million. third in adjusted XXXX have estimate disruption increased we quarter by we Given experienced are EBITDAre in the displacement on the the second revenue now quarter, $X expecting

the of displace renovation continue ballroom expansion on is minimum. third to feel the the revenue While and to be fourth quarter, will expected significant this largely in and will disruption operations quarter as of the EBITDA overall amount during the eliminated be of the the a impact resort

and be the and this We growth are excited thrilled to we earnings potential be we about significant expect will that nearing continue the renovation transformative this to through completion upbranding. very project of create

for We quarter, of Hotel to Spa to previously Alexandria, Lorien of a that Virginia sale sold second we activity. subsequent disclosed million. Turning & price $XX the the the in end transaction

months XX.Xx a pleased the XXXX. we the for is pricing and with hotel multiple the the sale hotel May embedded XX small that of use ability of We sale EBITDA in in value is the this a allocation ended relatively a of at execution accretive representing were on with and proceeds believe the capital more the the reflective transaction, successful this XX, While prudent a this company the attractive was portfolio. to for our manner price decision

exercise will quality remain and potential. years and with ahead. We drive Meanwhile, we diversification possible evaluate pleased internal of and portfolio the as continue value the to our in growth shareholder dispositions patience we any overall potential to further the acquisitions

composition are the we will term, meaningful enhance don't the our for our to and portfolio opportunities. potential evaluate We quality to in of near conducive, growth expect as these have earnings done our sheet continue we to While as growth prudently we history to of market our the we shifts conditions opportunities look manage potential balance throughout company. portfolio's intend in continue if

a provide his will adjusted have ahead and up reduced last detail We reflective excluding in same-property the July slightly results stance these in to estimate for to during quarter. estimates cautious XXXX. are as second compared X.X% Scottsdale, Looking approximately market year, same our for our guidance of compared compared our year. This and to the positive second more our When increased the Hyatt greater the in is last taking current RevPAR top to we to expectations uncertainty XXXX half our half results we is on last that EBITDAre period Despite estimate recent regarding RevPAR compared of operating Regency quarter. July of year. approximately slightly as updated the that July, Atish both in portfolio performance we remarks. line additional X.X%

our beyond. and we we short-term optimistic uncertainty, Despite and performance earnings ahead growth XXXX potential look portfolio to remain as regarding

growth that Grand driver as is ramps remain the in supply to the outperformance, be embedded expect up. to for continue anticipated importantly, future growth will We significant portfolio And a Hyatt particularly upper more projects. call operating Resort years. I several and and now capital upscale details our to provide will our luxury the in Barry on in the muted next to over segments the turn over results markets Scottsdale

Barry Bloom

everyone. morning, Thank you, Marcel good and

based our on daily For quarter as of second to XX the portfolio second occupancy the $XXX.XX, XX% rate XXXX. $XXX.XX compared at increase RevPAR of average was an quarter, of X.X% an same-property in

X.X occupancy was decline as gain compared of X.X% in Excluding RevPAR Scottsdale, reflected approximately second Hyatt second the and as increase to Regency XXXX. X% rate of daily average $XXX.XX, increase points quarter a of quarter compared to This of XXXX. an

in his Salt quarter. terms Canary, hotels included in of City. same-property RevPAR remarks, indicated Monaco XX.X% second renovations and up in these that in the hotels Marcel Orlando quarter Santa underwent As in RevPAR our comprehensive Barbara, the Grand leaders was Bohemian the XXXX, growth Collectively, in Lake of

strengthening Regency are relative continues expect we business for properties, XX.X%; evidenced grew be W transient RevPAR New nights a location those Clara, share Buckhead XX% a to to our we're at market weakness Nashville clearly quarter X.X%; Aviara to compared and booking has years. City second of in month Dallas, second softer business Orlando Waldorf RevPAR a perform Despite up group was XX.X%, Portland, quarter, several its up while up Future Hyatt Westin the at of and up XX% nearly business, that markets Additionally, June. average a group to Hyatt production Markets quarter Atlanta new collectively softening above Savannah of portfolio. to significantly Nashville across unique year. In result demand. the our including bookings Pentagon online had luxury of transient last occupancies the experienced Ritz-Carlton, And result production do Astoria announcements our in perform softer hotels these Regency up well experienced in X%. The is Park to Santa seeing second leisure Despite demand in improving Orleans, due the as convention and room XX%; Galleria range. Nashville, Oaks growth as up at as remainder in center the significantly of of a this the absorption, compared group continues in Hyatt in new to not supply. market of to them XX.X%, in by up West Key and group XXXX continued supply record level many result the X and the the upper

up each compared $XXX.XX, $XXX.XX, and and to April quarter up May X% Looking XXXX. XXXX April June X.X% up May Regency at was X.X% to Scottsdale, RevPAR $XXX.XX, of was to Hyatt up June was XXXX. compared excluding RevPAR RevPAR month the

Saturday recovery where We nights, be and XX% about to group we XXXX, night note still portfolio occupancy during second points. of while approximately provide Tuesday trailed which by the Regency in midweek occupancy optimistic as the Hyatt occupancies continue X across higher compression Regency W and occupancies that We by X occupancy particularly Friday trailed achieve compared excludes approximately portfolio, approximately daily occupancies mid-week XXXX Portland points Nashville, quarter, opportunities. and rates to continue to to and on the continue Scottsdale, corporate Hyatt rate meaningful Wednesday

be continues continually improving group While corporate growth and while this have growth small we that still to to and a have medium-sized continues the the a significant in from recent as pre-pandemic us from transient confidence hotels business behind we bright reversion accounts more ahead. significant portfolio, our recovered significantly. close patterns. still us gives we across corporate ahead to has of accounts corporate our somewhat disappointing, significantly largest transient-driven corporate our confidence portfolio our spot hotels that continue gap corporate hotels gap. Business where in performance this be business performance much driven to Group our gives is continue XXXX, see Again, across

group quarter, split second X% nights relatively second up excluding were growth rate, was up at up of the quarter stronger For as Hyatt compared business over and We corporate and association see just our recovering to than years room evenly future X.X% current This Regency a a last in for average with business room X.X%. with mix Scottsdale, the revenues trend now bookings pace more business group year. of group continued group than the year.

expenses Now profit. turning and to

of to decline. on second revenue decrease Second quarter quarter a same-property the in of basis margin a resulting points million, was of X.X% $XX.X XXXX, hotel X.X%, EBITDA of total compared increase XXX

increase on points. margin of revenue million, Scottsdale, XXX of in hotel Excluding decline Hyatt This resulting $XX.X of the an increase quarter for was was in X.X%, X.X% several of a total basis EBITDA factors. margin hotel a Regency a EBITDA result decline

Regency [ rooms Hyatt increased Excluding department X% continued Scottsdale, as over a of year, result last growth. nearly occupancy primarily costs ]

revenues X.X% a during revenue more X% declined margins. occupied growth overall business on and the Cancellation on to beverage also quarter per as to year, increase food banquet declined, levels, impacting pressure room However, beverage association as grew to normalized just just margins. putting equated F&B significantly and while revenues XX% last business attrition revenue this to compared basis. Food returning grew impacting corporate revenue than slowed a

and spa loyalty revenues continue efforts generally digital expenditures controlled hotels was continued to sales in in X.X% each, golf teams while marketing were departments, parking, year, expenses their of last well and XX%. In operations compared and including income, property and approximately up grow A&G, department as sales and on XX% to undistributed expenditures operating over other the utilities However, growth up each were growth programs. see with marketing

Turning to CapEx.

million total During the improvements, portfolio second quarter, year-to-date in bringing our million. $XX.X $XX.X we invested to

& discussed, Marcel Hyatt be to transformative the significant time pleased the continues the on we both of on at and Ranch project on continued Gainey Spa As budget. Resort and Scottsdale work our upbranding are renovation and that Regency

work which this expenditures that in to and increases facade, to year. building's capital related of on Our an budgeted of both are order timing acceleration scope work the includes exterior expansion and accomplish to

guests from affirmed renovation. The expected about to only our leisure the our investment. the both perform confidence continue be to optimistic We incredibly outcome hotel from in post initial substantial response group and has

the We daily over bookings at average being are seeing achieved hotel future the group up business for from has booked with for group meaningfully higher XXXX. rates XXXX rate than historically XX%

the during hotels Planned market lobby at they the underway the In level the its year-to-date dates Heavenly relocation group lounge the this is larger of which to of renovations to customers the new the attract late of of allow that XXXX. production lobby two M Houston. and of at for Arizona from completely concierge Houston. at also as place take of creation will Beds the is summer as being group fitness business Club months, renovations resort. Initial views as Oaks future addition to refined property will the new Ballroom booking our traveling renovation key introduce a spectacular night Comprehensive throughout retain created restaurant customers upgrading component Beds of slow group community, not to the are to could during result the highest the clients. lobby of expansion renovation and at and Woodlands of and the The their direct has channel accommodated plan, Much hotel's room are Westin The experiences since strong restaurant, luxury hotel existing as response resort who of otherwise upgrading been at to and the a very the in and Texas Waterway be summer including Marriott currently well facility, at addition, Scottsdale addition the and excited and the Westin this the And guest Galleria of Heavenly fall. a the feedback seasonally

upgrades several SFO Santa the our guestrooms assets, Hyatt and making Marriott largest Atlanta. In in to addition, select Regency Renaissance at Clara, including Waverly we're of

these We projects. expect minimal disruption from

approximately million year, significant HVAC upgrades Marriott including are SFO, and also infrastructure projects Fairmont Hyatt San $XX Andaz with this and continuing Regency Renaissance Denver. Waverly of Santa We sustainability Dallas, Ritz-Carlton, Diego, at Clara, The

excited turn that, underway about growth are to throughout I call project We it work Atish. in-house the future portfolio. With has our will contribute over will management the to team the as

Atish Shah

Thanks, an update items. I on Okay. Barry. X will provide

guidance. sheet balance our Our XXXX and

We asset of balance for our be company. maintain it ample for As strength continues liquidity. unencumbered to a point a and the significant base sheet,

debt next we over now well expect to year a is in maturity from it advance. and Our address

ratio current forma pro the Our XX-month leverage net X.Xx debt-to-EBITDA. disposition approximately trailing is for Lorien

ratio long-term is range. our Xx Xx reminder, the to a a As low in target leverage low

We expect to ramps renovation. post Grand as XXXX Hyatt move closer to Scottsdale that up range Resort in

by next Turning have RevPAR, XXXX X% the Beginning points guidance. expectation we lowered for at full our XX our basis RevPAR to growth year with to midpoint.

Excluding X.XX% for basis XX expectations at midpoint. the points Scottsdale, are we RevPAR our by growth to lowering

Our a portfolio, expectations quarter lower RevPAR slightly in second expectation more well is muted as the lower-than-expected as Scottsdale. across RevPAR including of combination

G&A the in EBITDAre, higher adjusted $X items our and or is its sale million half These expense. margins. forecast. reduction by about to corresponding driven this X are million. and impact to $X Lorien million $X other million Half $X by lower on have due of $X Scottsdale the items the relates due offset was half million quarter the million $XXX and second in the to lower displacement of as to RevPAR in by second in X we million This midpoint $X follows: renovation-related to Hotel lowered due As July, to

quarter, XX% of adjusted under we EBITDAre. just fourth third EBITDAre the the quarter the high year to adjusted to be quarter As to to of the by in weighting range the mid- EBITDAre and expect of adjusted full XX% year's be

adjusted adjusted share As EBITDAre it being by $X.XXX. per $X.XX. due We expect in now income mostly diluted are change to This tax is favorability share FFO to reducing of FFO offset expected expense. our per guidance, we by and the

income is deferred versus a income we of million state $X tax $X benefit prior of certain release variance expense. $X of on The For positive the guidance year, allowance million million have the due valuation assets. to an a level tax

guidance has our negotiated capital the each to full we our million drive recovery, for this our is in recent forecast formal to in unchanged. color expenditure of and demand Our Dallas, the by is this in of second on from translating provide and and Philadelphia, mode, part business outlook our the much levels guidance, in Apart historically want healthy expense done very corporate year has for Clara, year guidance of segment. hotels increased interest and of Texas still $X and which particularly the also continues transient. half Houston by is Business our to Burlingame transient remainder business recovery markets urban increases California; Santa some

to group were strong is year. of due comparison months, the tough group's excluding to over up primarily is which quite only for strong a half, continues last pace revenue be the while couple This segment Next, second Scottsdale. X% about a

over our hotels Second X% are activity. half group have continue to rates near-term strong booking and up

last quarter group was X% the For than production instance, for higher second year. third in revenue the quarter,

starting ahead, is group XXXX further look we As up shape to for well.

our group XXXX X/X As revenues currently on of this in is advance, about far expected the typical books. is

in ramping fall. which such markets, to much a their the other demand mix markets Barbara. starting of get get is but not range markets and large South are higher. normalize part Charleston, maintain levels Scottsdale excluding in summer is as Scottsdale percentage as Leisure leisure easier Santa there are that as leisure Mountain hotels comparisons our and including the smaller starting properties such is once business Pace, Carolina at and Brook, in mid-teens we up on even continues Whilst demand Alabama and post-renovation to past leisure our are pace, in key

relative expense to last the to year. expense to As moderation pressure experience continue in picture, we

second was impacted margin Our lower-than-expected quarter by ADR.

greatest the quarterly is decline expect this year. we margin quarter decline second The

margins And by points. XX We second of margin we basis decline less Scottsdale, be in excluding positive to driven half, more expect than the Scottsdale. even expect modest

top well up, And the add continue slightly this I line share year, for opportunities that over Before for I'll evolve X% wrap current portfolio adjusted outlook ahead. to for FFO we in reflects XXXX. to our despite positioned years the guidance be per the softer growth

as of favorable we supply, demand, and strengthening We transient further -- expect to our business dynamics look the improved profits. and drive hotel more company's moderating in bulk including earnings transient, rate business growth the expense further increase ahead which growth new limited hotel to of

to to we As remain the longer-term the power in Lydia that, confident our Q&A of we the back earnings we'll with ahead, session. look begin turn company. And call over

Operator

Instructions] first Michael comes question Baird. from [Operator Our with Bellisario today

Michael Bellisario

RevPAR guess, first patterns? Is channels. across any you portfolio? for your affecting loyalty about in you and are you. change does there, what and any question bookings? Booking and And with at is the loyalty the seeing Barry, demand there What that tell hotels I margins historically redemptions? demand maybe change

Barry Bloom

Yes. Good question.

relatively the having don't are because in that redemption one We There's high have hotels. those up year from of we redeemed been premium be high those occupancy had is people continue really our redeemers we've properties -- points had their and conversation are various as not lot drive and getting we the gotten lot spent in to than of significant used to this some insight down. we we've about within redemption are the at a families. that a brand hotels, rates. historically hotels redemptions we're redemptions redeemers, their reasons why make sure to seeing want seen But So prior continued lower of hotels year. In hotels few we to

Michael Bellisario

customers, And question, you like year for think I those half versus dig the the you in of And correctly, business on industries is it bit, are there? and much transient the Houston outlook markets seeing Got types I just what heard it. just Can the a in of rate SFO of then Understood. kind little second what -- others. of there in better second occupancy a how few handful driven? pickup the of we a

Barry Bloom

to growth We look and part markets, see and I to some these forward continue of that's in saw in businesses. what continued But whether we we certainly continue small QX think seeing medium-sized in it's Yes. larger and of year the Santa accounts. is, or in the some that's more we're these more major significant larger historically than well, Dallas, whether more we're we through increase markets, in corporate Houston Francisco, Clara as -- have seeing seeing -- San of

more consulting recovery Fortune the and greater XXX firms thinking have they are in So accounts far than the growth and pandemic. showing accounting thus from the

Michael Bellisario

I mean is that then, just pickup demand that's not primarily rate?

Barry Bloom

primarily Wednesday corporate or again, where in nonlarge and on business. that were hotels compress able pickup noncorporate coming account business is The rate in to Tuesday particular, in, is their demand. nights But

are So got we've as year, we forward with do rate business fill largest are not we that what hotel the negotiated accounts. the able is as we industry last as terribly that account that of to across to know, looking large part an corporate and volume drive non-negotiated you the increases the rely seen more But significant. and from were accounts lets and compress

Operator

Our Katz next from Jefferies. comes with David question

David Katz

inform obviously, and sort or that thinking is moment, Or sort other though least obviously, any ideal wise? I'm just of that make, of an bode and can leisure, can strategies leisure does approach deal you as disposition more you other about the right, in that leisure pursue anything or it well you with may a the for And some of sort slowing. wanted to it context slowing of bit? sort can does of not opening any the commentary, deals do for in Scottsdale. talk I portfolio seem that But to at

Marcel Verbaas

questions, for David. Yes. Thanks the

leisure where on our bit seeing group all our spoken the portfolio balanced extent quite is transient some side really know, we've remarks this coming on side. already is certain you about to very play prepared a that in in being to on and call we able segments. that a As And and are demand strength we're weakness of corporate really the seeing offsetting the obviously

this leisure well you do Atish in think we fairly markets leisure on when markets the you're have where are we some market kind Orlando is markets for few some his even last of a and greater out a you was seeing softening, softer up are year. that in at our I year Now where look kind and a of than it seeing markets have remarks, absolutely a absolutely holding the softening. But some more, pointed of side example, leisure

And transient-driven not what's very have really we that corporate is our impacting Orlando, renovation. that And hotel off of for generally more up in a year Downtown example. do that slowing a Universal next that. year, some drives is us has of really like little market probably going Bohemian bit with in a that demand Grand and to a of coming Orlando doing its opening well new into kind which park into That's of

that And we back. Cypress was down demand some just compared leisure pulling to softness as was that that's really about group in more the from softening of business the saw Grand some there

And historically, being groups do the the there his all in space doing taking. group-oriented more very and take of component what question, Scottsdale, it remarks much has is rest Now hotel we're a second a know, to opposed groups first, of additional highlighted as if you type part ballroom of been having flexibility expansion translate we're the that to your, meeting of big what you of kind portfolio. it Scottsdale as relates the space. to of kind the of very this Barry far as and things to that able where bigger the as a will as your

consistent market. of other side leisure a of of And So a trendy extremely it seasons that. the It's there big very the that the is in does is a is, market not there. particularly leisure group high-end is well, component where strategy a compression Scottsdale lot very

any and real renovation we're as of as into us getting we're give that next concerns year. completing doesn't it So sort

the feel still over overall very do out upgrade don't any way. And we that will always slowing about And portfolio, really, leisure the just quality -- still about feel really a portfolio, continue lot leisure we remarks, balance my I our said, third we of good shift but potential for bulk in So have a rest have impacting to as look how concerns in of have pointed of is our component. the good we at transient business, portfolio. growth which in didn't of time, the -- strategy. that. a focused on very this about really and and only like that I the significant We're And the we as group the the have earnings corporate in leisure to we we

David Katz

perhaps that that understand to that than Understood. a I the international more And fully outbound going I'm was this it? than guess the be. not the what or inbound value Is dollar sort be anything see for summer I to better just I cost to you international travel. decision sure thought as the had little of there of it sort out of it's turned versus

Marcel Verbaas

as that still, direction relates I We Yes. bit. same to this strong it overall, travel kind bit you will was And it do market the maybe shift been a obviously appears. be little everyone overall weaker balance see different that And things outbound little international in see year the a and has think of certainly, expecting data. very a

driven isn't heavily portfolio international by traffic. inbound Our very

component have of very a meaningful assets few where portfolio. that's We our

even not we that. in -- the a strong take see though the very probably in position to have we're market, trends best position overall So kind on of the

Operator

Klein Aryeh today BMO question Markets. comes with from Capital next Our

Aryeh Klein

comments. following the just leisure Maybe on up

seeing Just anywhere beyond you on kind that seeing that -- whether want any or what And else? it's is of leisure, front? or perspective, group BT are elsewhere, even impacts an are you out-of-room

Barry Bloom

Yes.

busy leisure, comparing in on the been, to I capture they seem to was portfolio that certainly in-house they pre-COVID. I seem to are eat be the generally pre-COVID, seem particular, but across surprised and the frequently, -- still and hotel consumers think outlets meaning more better portfolio wouldn't to say than drink general it the that encouraged our in we've -- across is in

even up XX% very that, operating ancillary has good we combined we're and pricing fact, in because I in And well, parking over obviously some QX bar and pretty of price spa have areas some departments, that But departments bar and were that, like held feel and -- that taken year. pretty those versus in well. spend. that what of pricing. the Some retail of in in we've the restaurant in out-of-room the we -- about mentioned of up out of seeing properties is prior increases other

good So about room we feel pretty that spend. of out

Marcel Verbaas

the that a of corporate additional a think at bit shift which business than highlight some his -- just spend I take with Barry little did by mix comments does in the -- well. group group as of bit being the A extent. to impact this point, associations stronger in

Barry Bloom

the sure. spend banquet and in for food beverage, Certainly,

Aryeh Klein

then on Because I expense from And expectations? there does the just side I some it what guess expense side on seem versus look softening for your same-store prior things. changed as to things. what's a do of next seeing we pressure embedded And like that guess year? your perspective the ahead moderates from this year? you expense growth think peers of has are

Barry Bloom

for do think do moderate that remainder we year. it We expect and it Atish the moderates of to the mentioned

think to driven. when to I And of as I per picture of the feel guests. detail well, think room servicing I part much went big some picture, occupied we expense of think remarks in this very I And driving we and we're look -- more like which us proof I kind obviously at raw that the big but that's the means through that lot we're in expense I -- think better growth, the we're occupancy a is growth. occupancy opposed

part I board have salespeople driving at occupancy mentioned think of marketing, where a across more we we're and it, of that our also and particularly utilizing, portfolio. where hotel and strategy higher cost, I is the in the on sales strategy of there's part

hotel doing We through search and more have in marketing we're part expensive the to an search is in expense sure paid even margin. -- the doing paid markets and grow at dollars and doing is support overall operation driving and digital goal those properties certain of it's make the channel. that But that, channels, more the if more which OTA enough into in we're are to the hotel we're line bottom that business filling

Operator

is Fargo. Our with next Jack Wells from question Armstrong

Jackson Armstrong

on spend new continue perspective. that the the there other or of market updates So quarter had drivers? in Did from any are share restaurant to leisure a Nashville there out-of-room And W gain kind environment? concept tough a any

Barry Bloom

working the share concept. ideas We're some the that able restaurant update exciting to hopefully, we be No will in on on -- some be think pretty we'll Yes. future. near

in month the challenging Our but is, I set terms in that July had second the and to as dates -- in in mentioned, the really And a and actually said corporate production the we earlier time our is in that. had well, June in side. for originally Nashville, comp that business back relative held group time in for meaningful very that. than -- leisure were, and experienced group hotel. the QX. and We had talked future into We Having anticipated turnover that the able just underwriting. some from much of we in more the what recover really we've we department about W transient the into mentioned we're sales we've up thing the fairly I I way It's quarter of leading well not first terms in-house on did track on we're before that that driving think, is we first to

Jackson Armstrong

you're stabilization then the pushed on might assuming underwriting? take just group keeping with you Okay. the for the of you your leisure, That's and helpful color. think 'XX track pace out that be based seeing original environment macro you're seeing kind in do And the bit? in Or booking Scottsdale are the on a on slowdown

Marcel Verbaas

point will change this I of this cause this how Really anything to that us, and earlier, will stabilize. not our where at like said stabilize would seeing view

months group we renovation. we an build to the important looking markets, that and leisure the those frothy So And the as obviously of advantage make drive as we're do are component up a essentially year rates of everything is is in because the kind component how increased that really of important take X first the really really most of seasonality the the to again, but sure occupancy result then, of there.

I leisure, So asset the us. how anything -- cause any leisure the global we're point, of softening overall not mean, seeing that on this at not But the us of kind this better. any gives for looks we like stronger certainly, think we're demand,

Operator

comes question from Tyler Batory next Our Instructions] Oppenheimer. with [Operator

Tyler Batory

the wanted group I ask to business. about

second I seeing the little you citywide you said think well? What of second are a of the bookings? you're the talk pacing in calendar then up terms in as year can bit in this for the you about quarter X% And quarter half the for half.

Atish Shah

don't that? Why talk Yes. Barry, Maybe, I start you calendar. about on can the citywide

X% terms of and second referred in quarter year. I quarter to third last to relative I strong in production, being So for think the up the production being

we good. for near-term the to And in for levels the continue of So quarter, see of quarter, to activity similarly, business. healthy sort continues be

the pace excluding X% of up strong Again, while levels not the half is So good our year. Scottsdale, activity. seeing we're number is that for of back

confidence we rate percent. have couple So over of a up be the profile in that to and continues good,

anything, to if that's want really So informing you calendar? then, add citywide Barry, guidance. And our

Barry Bloom

in citywides it relates we've general talked about that heavily on as this overall. reliant citywide, is Yes. the our On portfolio to before portfolio not

where certainly would we're properties the a known, to set are. obviously, where citywide do in-house and big of hard of and of up understanding business. And of next Portland, the business the little those there, knowing one the the second kind enjoy year long gaps business of half offset this be traditionally Some that in to soft try with is but bit hotel center where worked as the citywide that's convention pluses we've to we has

Dallas, they some where a that quite and prior in also well a our to the citywides QX down good QX able markets we it we QX citywides whether well. from But QX then importance we to bit from compression get are as to for do we perform participate and good when So down relates we've a as aren't where done citywides of QX there filling And well setup bit were were other very in we a little in again, Dallas. as which are both participate relatively job that. are years. in fill and/or tend markets through not has other in. Nashville, much citywide little how and business But

Tyler Batory

on discussion follow-up the Quick leisure Okay. here.

your mix, using terms other not impacting the that's too. have channels if to business? discount structure, or In of drive I'm something cost that's more sure you channel OTAs increased

Barry Bloom

drive keep to because is ancillary overall most spend, some where occupancy -- is the building they be In really hotels, busy. the believe going best to driving that going the strategy it's

are higher marketing using that OTA revenue, than We a more have definitely they channel. it historically is have and lower cost hotels

has is one had factors that that So margin. on certainly impact the of some

Tyler Batory

your I one of about just time, got trying I'm moving the Okay. at with perspective. get look of lot some might to what And a some the renovations, you then I a the for of think thing me. acquisitions, to XXXX through with like an there's I last disruption. know from some first. I But think can't question EBITDA with give XXXX portfolio, guidance. pieces guess

run point, year. a for just through to us things, some of EBITDA starting of you to the could if kind next frame if So try you of the blocks will, side potential building on help

Atish Shah

in to Well, investment the slide major refer doesn't to I we decks -- stabilization thing do that it between expect by million some you but $XX obviously, investor disruption. And components, lift of to year prior think bridges have one our it Scottsdale, being is and future. one plus EBITDA now the where

signs have the shown big have getting still Northern -- portfolio, assets are So piece. lot a which And and a certainly that's year. of of then drivers. this Nashville that in potential the finally, in in are assets, big W some those back, strong California, Obviously, recovery outsized newer Portland recovery and particularly growth

how So just into with now a next too those those those It's that the highlight more hotels I we year. can are think bit for shaping early and our year, as the get each the as we little of building of are one to process. budgeting just year And beginning blocks next starting are closer specificity in given there. certainly up

So do. into for to of this detail that is us really a point on at tough getting lot just

Marcel Verbaas

Yes.

question, answer a way So the 'XX. obviously, it's long to

when think months, with year where as And on our positives couple than but booking we what about things very base But base of Atish some last little books seeing And every encouraged group encouraging able get a next the of side. of about is year. And outside you put to some -- what some about Atish the year, speak out books. over the normally ahead. can the is healthy Atish for we about, the even for very did And we're group to -- earlier about kind out probably into and there. next like there we're go of are seen particularly about it's to signs, hotels about some we've only showing piece one very business signs on on time that some your year, pointed this of then there's the highlight shaping the especially So Scottsdale, expect the is that's far. And year. and encouraging very thus the the talked of -- what like is we X/X look pace next at from we of rate we which

the being positive of that -- very and about and we to beyond as setup number 'XX So times talked for at we've way. feel continue we a us for we are look

Operator

Thank you.

no have further We questions.

like closing I'd to So comments. turn call back Verbaas the to now Marcel for any

Marcel Verbaas

our morning. this for a All right. busy us week calls Thanks, it's Lydia space. been earnings of I joining and in thanks, know everyone,

joining we the whatever updating enjoy again with is you few to us thank So speak remaining and you summer Thanks the next future. and in look we'll and you of the hope for we'll forward you over months.

Operator

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

now may your lines. You disconnect

Xenia Hotels & Resorts (XHR) 2 Aug 242024 Q2 Earnings call transcript