Xenia Hotels & Resorts, Inc.

Good afternoon. Thank you for attending today's Xenia Hotels and Resorts Inc. Q4 2022 Earnings Conference Call. My name is Tamia, and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. It is now my pleasure to pass the conference over to your host, Amanda Bryant, VP of Finance. Please proceed.

Thank you, Tamiya. Good afternoon, and welcome to Xenia Hotels and Resorts' fourth quarter 2022 earnings call and webcast. I'm here with Marcel Verbas, our Chairman and Chief Executive Officer, Barry Bloom, our President and Chief Operating Officer, and Atisha, our Executive Vice President and Chief Financial Officer. Marcel will begin with a discussion on our performance and recent investment activity. Barry will follow with more details on operating trends and capital expenditure projects. And Datish will conclude our remarks on our balance sheet and outlook for 2023. We will then open the call for Q&A. Before we get started, let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued this morning, along with the comments on this call, are made only as of today, March 1, 2023, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures to net income and definitions of certain items referred to in our remarks in this morning's earnings release and earnings supplemental, which is available on the investor relations section of our website. The fourth quarter property level portfolio information we will be speaking about today is on the same property basis for 30 hotels. This excludes Hyatt Regency Portland at the Oregon Convention Center and W Nashville. An archive of this call will be made available on our website for 90 days. I will now turn it over to Marcel to get started.

Thank you, Amanda, and good afternoon to all of you joining our call. Following a slow start to 2022, as the Omicron variant significantly impacted all demand segments, industry fundamentals and our portfolio's performance improved meaningfully as the year progressed. Leisure and group demand strengthened significantly in the second quarter, and this was followed by a steady recovery in business strategy and demand during the third and fourth quarters. Our 2022 results substantially exceeded the expectations we had at the beginning of the year. And our fourth quarter results allowed us to finish out the year near the high end of the guidance we provided after the third quarter for net income, adjusted EBITDA RE, and adjusted FFO per share. Same property portfolio RETBAR for full year 2022 declined just 5.1% relative to 2019, driven by a double-digit increase in average daily rate growth. Notably, the ransomware gap to 2019 narrowed as occupancy improved over the course of the year, and ADR growth remained strong. On the same property basis, 2022 hotel EBITDA of $256.4 million was roughly 3% below 2019 levels. Margins were 40 basis points higher as compared to 2019. In 2022, all 30 of our same property hotels achieved positive hotel EBITDA. However, only 12 of our hotels and resorts generated EBITDA in excess of 2019 levels, supporting our belief that we still have considerable recovery potential across the majority of our portfolio. This is particularly evident in six of our larger corporate and group-focused hotels, namely Marriott San Francisco Airport, Hyatt Green Sea Santa Clara, our two Dallas hotels, and our two Westerns in the Houston Galleria market. As these hotels were collectively over $30 million behind in terms of hotel EBITDA in 2022 as compared to 2019. Now, turning to our fourth quarter results, we reported net income of $35.3 million, adjusted EBITDA REIT of $64.6 million, and adjusted FFO per share of 41 cents. Our same property, Ref Bar, for the fourth quarter increased 0.6% as compared to 2019.