Xenia Hotels & Resorts, Inc.

hotels and resorts fourth quarter 2024 earnings conference call my name is lydia and i'll be your operator today after the prepared remarks there'll be an opportunity to ask questions if you'd like to participate in the q a you can do so by pressing star followed by one on your telephone keypad we kindly ask that you limit yourself to one question and a follow-up and then return to the queue for any additional follow-ups i'll now hand you over to aldo martinez manager finance to begin

Thank you, Lydia. And welcome to Xenia Hotels and Resorts fourth quarter 2024 earnings call and webcast. I'm here with Marcel Verbas, our chair and chief executive officer, Barry Bloom, our president and chief operating officer, and Atish Shah, our executive vice president and chief financial officer. Marcel will begin with a discussion on our performance. Barry will follow with more details on operating trends and capital expenditure projects. And Atish will conclude today's remarks with commentary on our balance sheet and outlook. We will then open up 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, February 25th, 2025. And we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find the reconciliation of non-GAAP financial measures to net income and definitions of certain items referred to in our remarks in our fourth quarter earnings release, which is available on our investor relations section of our website. The property level information we'll be speaking about today is on the same property basis for all 31 hotels, unless specified otherwise. An archive of this call will be available on our website for 90 days. I will now turn it over to Marcelo to get started.

Thanks, Aldo, and good morning to everyone joining our call today. We are pleased with our accomplishments during a challenging 2024, and particularly the positive momentum that was generated in the fourth quarter as portfolio operating performance improved and the significant capital improvement projects that weighed in our portfolio results during the year were largely completed. Most importantly, we substantially completed the transformational renovation and up-branding of Grand High in Scottsdale, with just some minor components remaining to be finished in 2025. The expanded Arizona ballroom was completed on schedule in early January, representing a significant achievement in the overall project. The timely completion of the ballroom allowed us to capture some lucrative last minute group business during the month of January. This outstanding new facility has been extremely well received by groups that have been able to experience the new space already and by meeting planners who are considering the resort for future business. With the now fully renovated and relaunched Grand Hyatt Scottsdale ramping up operations, we expect this strategic investment to begin delivering meaningful returns over the quarters and years ahead. We remain confident that the resort will be able to drive significantly higher cash flow than it did during its prior peak performance years through stabilization and into the future. Now turning specifically to our fourth quarter operating results, this morning we reported a net loss of $638,000. Adjusted EBITRE was $59.2 million, and adjusted FFO per share was 39 cents for the quarter. which modestly exceeded the midpoint of the guidance range we provided when we announced our third quarter results. Same property, Refbar, came in 5.1% higher than the prior year in the fourth quarter of 2024. As performance at Grand Heights, Scottsdale became a tailwind for our overall portfolio Refbar gains. Encouragingly, we experienced double-digit Refbar growth in a number of our markets in the fourth quarter. These outperforming markets included Nashville, Santa Barbara, Pittsburgh, Birmingham, Salt Lake City, New Orleans, Charleston, and Phoenix, driven by Grand Hyatt Scottsdale, indicating strong demand generated by various segments in these diverse markets. On the same property basis, fourth quarter hotel EBITDA of $62.9 million was 0.6% below 2023 levels, and hotel EBITDA margin decreased by 120 basis points. Excluding Grand Hyatt Scottsdale, fourth-quarter same-property hotel EBITDA was flat compared to last year, and hotel EBITDA margin decreased by 68 basis points. We continue to appreciate our operators' efforts to control costs in a difficult expense environment. For the full year 2024, net income was $16.1 million, adjusted EBITDA RE was $237.1 million, and adjusted FFO per share was $1.59. Our same property portfolio achieves a reference increase of 1.6% in 2024, which was significantly impacted by the Scottsdale renovation. Excluding Grand Hyatt Scottsdale, Ref Bar increased by 3.4% driven by solid occupancy gains throughout the year. As we discussed throughout the year, the group and business transient segments drove these Ref Bar and occupancy gains as leisure demand moderated a bit. In 2024, 18 out of the 31 hotels in our same property portfolio achieved Ref Bar growth as compared to 2023. In addition to significant Ref Bar growth at our recently renovated properties in Salt Lake City, Santa Barbara, and Orlando, our hotels in Houston, Dallas, Santa Clara, Pittsburgh, and Washington, D.C. were relative outperformers during the year. On a same property basis, 2024 hotel EBITDA of $255.4 million was 5.5% below 2023 levels and margins were 189 basis points lower as compared to 2023. Excluding Grant Hyatt Scottsdale in both years, same property hotel EBITDA increased 1.3% and margins decreased just 64 basis points in 2024 as compared to 2023. As I mentioned earlier, The group segment has continued to be a relatively strong driver for our portfolio. For the full year, same property group room revenues, excluding Grant High at Scottsdale, increased by 5% as compared to 2023. We continue to be particularly encouraged by our strong group booking pays for 2025, which, while enhanced by returning group demand at Scottsdale, is evident throughout the portfolio. Atish will further discuss our group pays and his remarks. We also saw strengthening in corporate transient demand over the year, as evidenced by continued improvement in midweek occupancy. Looking ahead, we continue to believe that there is still substantial growth for, room for growth in revenues generated by this segment, as corporate transient demand throughout our portfolio still lags significantly behind the 2019 levels, particularly on Monday and Thursday nights. And while leisure demand moderated in 2024, we did see signs of stabilization in the fourth quarter, with most of our leisure-driven markets experiencing rough part growth during the quarter, with Savannah being the notable exception. We are particularly pleased with the CapEx projects that we have completed in recent years and expect to see meaningful returns from these projects in 2025 and beyond. While we experienced good results at the recently renovated Grand Bohemia in Orlando, Hotel Monaco Salt Lake City, and Canary Hotel Santa Barbara in 2024, we believe there is further room for revenue and EBITDA growth at these hotels. Additionally, relatively recent larger projects such as the additional ballroom at high-agency Grand Cypress are expected to reach their full revenue potential in the coming years. And while most of our focus in 2024 was on the Scottsdale project, there were a number of other projects completed that improved the competitive positioning of several of our hotels and resorts. As we turn to 2025, our total capital expenditures are projected to remain slightly higher than where we expect these to stabilize in the years ahead. This is partially as a result of closing out the expenditures related to the Scottsdale project. However, we anticipate only minor revenue and EBITDA displacement in 2025, as the projects we intend to undertake will cause very limited disruption to guests, given the scope and timing of these projects. Barry will provide details on both our recently completed as well as our planned capital expenditures in his remarks. Our initial 2025 guidance is based on a range of 3.5% to 6.5% same property REFAR growth, or 5% at the midpoint. And better than this outlook is an expectation for further occupancy gains. Although we saw solid occupancy gains in 2024, Occupancy for our portfolio, excluding W National, Hyatt Regency Portland, and Grand Hyatt Scottsdale, was still approximately seven points behind 2019 levels. We clearly also expect Grand Hyatt Scottsdale to be a significant driver of our projected occupancy and REFAR growth in 2025. As we are now past the significant revenue and EBITDA disruption we experienced during the transformative renovation that took place in 2023 and 2024. As we begin 2025, we are optimistic about our growth prospects, despite continued uncertainty in the overall economic climate, and we are off to an encouraging start to the year. We estimate that our same-property RFR increased by 7.3% year-to-date through February 20th, compared to the same period last year. While these strong results were aided by the Super Bowl taking place in New Orleans in February, we also experienced some offsetting negative impact from the winter storms in January, in a number of our Sunbelt locations. These early results, coupled with the completion of the transformational renovation at Grand Heights Scottsdale, give us confidence in our outlook for 2025 and in our portfolio's ability to drive significant revenue and earnings growth in 2025 and beyond. We are proud of all the hard work that was done in the last year, not only as it relates to our asset management and project management initiatives, but also on our financing and capital markets activities. We address all near-term debt maturities and have further strengthened our balance sheet, positioning us to capitalize on potential strategic opportunities in the years ahead. While it appears that the pipeline of potential acquisitions may be improving somewhat compared to the last few years, we remain patient as we prudently evaluate and balance all potential capital allocation alternatives. We will continue to focus on improving our portfolio over time. as we have done through our capital expenditures that are focused on driving strong ROIs, as well as through selective dispositions of properties with significant upcoming capital needs that may not meet our investment requirements. And if market conditions allow, this could also include taking advantage of external growth opportunities, as we have done in the past. I will now turn the call over to Barry to provide more details on our operating results and our capital projects.