Xenia Hotels & Resorts, Inc.

During the presentation, you can register a question by pressing Start followed by 1 on your keypad. If you change your mind, please press Start followed by 2. I will now hand over to your host, Aldo Martinez, Manager of Finance, to begin. Please go ahead.

Thank you, Becky. And welcome to Zinnia Hotels and Resorts' third quarter 2025 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 on our balance sheet and outlook. 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, October 31st, 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 third quarter earnings release, which is available on the investor relations section of our website. The property level information we'll be speaking about today is on a same property basis for all 30 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 Marcel to get started.

Thanks Aldo, and good morning everyone. As we reported this morning, our third quarter performance generally met the expectations we outlined during our second quarter earnings call. The lodging industry continues to experience a challenging operating environment particularly as it relates to leisure demand that generally is a significant driver in the third quarter for our portfolio and the industry overall. However, despite these macro challenges, we continue to benefit from the high-end positioning of our portfolio, as well as unique internal growth drivers, such as the continued ramp of Grand Hyatt Scottsdale Resort. We also continue to benefit from strong group demand throughout the portfolio, which was evident again in September and thus far in the fourth quarter. We expect group demand to remain strong as we look ahead to next year, which is supported by robust group room revenues already on the books for our portfolio for 2026. Turning to our third quarter financial results, for the third quarter of 2025, we reported a net loss of $13.7 million, adjusted EBIT IRA of $42.2 million, and adjusted FFO per share of 23 cents. which was a decrease of 8% compared to the same quarter last year. Our same property, Redfar, for the third quarter was essentially flat for our 30 hotel portfolio compared to the same period in 2024, with an occupancy decrease of 100 basis points, offset by a 1.6% increase in average daily rate. The Houston market in particular was a drag on portfolio performance, as the market and our hotels faced tough comparisons due to a short-term demand lift from the aftermath of Hurricane Beryl in the third quarter of last year. Additionally, given the seasonality of the various demand segments in our portfolio, group demand, which has been the strongest segment this year, was not as big of a driver for our portfolio in the third quarter as it was in the first half of the year and as we expect to see again in the fourth quarter. Despite these challenges, when excluding our Houston assets, same-property REF PAR increased by 2.9%, which was largely driven by significant year-over-year growth at Grand Hyatt Scottsdale, as the resort continues its track toward post-renovation stabilization. In addition to the strong growth in Scottsdale during the third quarter, we experienced double-digit percentage REF PAR growth in Atlanta, Santa Clara, Birmingham, and Savannah. Despite the relatively muted performance in the third quarter, We are pleased that for the first nine months of the year, our same property portfolio achieved a 3.7% increase in REFBAR, driven by 80 basis point higher occupancy and a 2.4% increase in average daily rate when compared to the same period in 2024. This outperformance was again mostly fueled by the recently renovated and up-branded Grand Hyatt Scottsdale Resort during the early phase of its path towards stabilization, as it continues to perform in line with our underwriting expectations. We continue to be excited about the impact of our stronger group positioning this year, and particularly the associated increase in banquet and catering revenues. As a result of a significant increase in food and beverage revenues, our third quarter same property total ref bar increased by 3.7% in the third quarter as compared to last year, despite our ref bar being flat year over year. The third quarter increase was again mainly driven by Grand Hyatt Scottsdale. For the first nine months of the year, the impact of increased food and beverage revenues was even greater. That same property total REF part increased by 8.5%. Our strong group base for the fourth quarter and for 2026 give us optimism that we will be able to continue to experience outsized total REF part gains in the quarters ahead. Third quarter same property hotel EBITDA of $47 million was 0.7% above 2024 levels. and hotel EBITDA margin decreased 60 basis points. Excluding Grand Hyatt Scottsdale, third quarter hotel EBITDA decreased 7.8% and hotel EBITDA margin decreased 160 basis points. For the first nine months of the year, same property hotel EBITDA of $205.4 million increased by 12.6% above 2024 levels and hotel EBITDA margin increased 101 basis points. excluding Grand Hyatt Scottsdale. Year-to-date hotel EBITDA increased 3.9%, and hotel EBITDA margin was essentially flat. We remain pleased with our operator's efforts to control expenses in a continued inflationary environment. Turning to our capital expenditure projects, we now project that we will spend approximately $90 million on property improvements during the year, which is a $10 million increase compared to the midpoints from our prior CapEx guidance. This increase is due to two factors. First, the anticipated completion of some additional capital projects that were originally planned at various properties, as we have been able to mitigate the impact of any potential tariff-related cost increases. And second, the cost we will be incurring in 2025 for a comprehensive reconcepting of the food and beverage operations at WNashville. Even with this increase, we still anticipate spending approximately $15 million less on capital expenditures in 2025 than we projected at the beginning of the year. We are extremely excited about the upcoming relaunch of the food and beverage venues at W Nashville that we announced in our release this morning. We extensively evaluated several options to increase the appeal to food and beverage outlets in the hotel, which could drive incremental F&B revenues and further enhance the desirability of the hotel for all demand segments. After completing this thorough process, we are pleased to have reached an agreement with Jose Andres Group, under which Jose Andres Group will operate and or license essentially all of the food and beverage venues at the hotel. We believe strongly that the combination of the operational and marketing expertise of Marriott and Jose Andres Group will drive incremental revenues in hotel EBITDA and make the hotel an even more exciting destination. We will be making an additional capital investment of approximately $9 million to effectuate this change. However, given the already outstanding physical condition and quality of the hotel's existing venues, this capital will be largely spent on FF&E and branding elements, as well as kitchen equipment and back of the house improvements. We are projecting that the relaunch of the FMB outlets will add between $3 and $5 million to Hotel EBITDA upon stabilization through increases in food and beverage and rooms revenues, which we believe should result in the hotel generating an excess of $20 million of Hotel EBITDA in the next few years. Barry will provide additional details on this exciting WNashville FMB relaunch during his remarks. As we look ahead to the remainder of the year, we remain cautious in our near-term outlook, which is reflected by slightly reduced expectations for the fourth quarter. For the full year, we now expect the same property RFPR increase of 4% and adjusted EBIT IRA of $254 million at the midpoint of our updated full year guidance. Atisha will provide additional details on these modest adjustments to guidance during his remarks. As has been the case for most of the year, Group business continues to be a driver of our RFR growth, with leisure softening a bit this year, as we had anticipated, while business transient continues to improve gradually. We saw a continuation of this trend again in October. We are encouraged by the approximately 5.8% RFR growth that we project our same property portfolio will achieve in October, which represents a meaningful improvement over our portfolio's third quarter performance. With strong overall group base for the fourth quarter, We again anticipate significant growth in food and beverage revenues during the quarter as well. Looking ahead to 2026, we believe that Grand Hyatt Scottsdale will continue to ramp consistent with our underwriting, and we expect group demand across the portfolio to be robust and drive outsized non-rooms revenue growth. We continue to believe strongly in the long-term growth prospects for our well-located, diversified, and high-quality portfolio in 2026 and beyond. Barry will now provide more details on our third quarter operating results, the WN Nashville food and beverage relaunch, and our other capital projects.