Xenia Swings to Loss as Hotel Profit Growth Slows
Same-property Hotel EBITDA edged up 1% to $84.9 million as margins contracted.
Xenia Hotels & Resorts (XHR), a lodging real-estate investment trust, swung to a second-quarter loss as an impairment charge and weaker hotel-level momentum outweighed higher room revenue.
The quarter marked a slowdown from the start of the year. Same-property RevPAR rose 5.6%, down from 7.4% growth in the first quarter, while Adjusted EBITDAre declined after increasing in each of the prior two quarters.
Revenue rose 2.7% to $295.5 million from $287.6 million a year earlier. The company posted a net loss of $19.3 million, or $0.21 a diluted share, compared with income of $55.2 million, or $0.56 a share, a year earlier and income of $19.8 million in the first quarter.
The loss included a $38.8 million noncash impairment charge on the Kimpton RiverPlace Hotel, which Xenia subsequently sold for $11 million. The year-earlier period included a $40 million gain on property sales. Rooms revenue rose 5.2% to $166.7 million, while food-and-beverage revenue was nearly unchanged and other revenue declined.
Hotel demand held steady, leaving pricing to drive the RevPAR gain. Same-property average daily rate increased 5.7% to $285.71, while occupancy was unchanged at 72.3%. Total RevPAR growth slowed to 3.3% from 7.2% in the first quarter, and same-property Hotel EBITDA margin contracted 65 basis points to 28.7%.
Adjusted EBITDAre declined 1.8% to $78.1 million, reversing first-quarter growth of 11.6%. Adjusted funds from operations rose 7% to $0.61 a diluted share, though that growth slowed from 23.5% in the prior quarter. First-half results remained stronger, with Adjusted EBITDAre up 4.6% and Adjusted FFO per share up 14.8%.
Xenia raised its full-year Adjusted EBITDAre outlook to $267 million to $279 million and its Adjusted FFO forecast to $187 million to $199 million. Adjusted FFO per diluted share guidance is now $1.96 to $2.08, while same-property RevPAR growth is expected at 4.75% to 6.25%.
The company projected July same-property RevPAR growth of about 10%, an acceleration from the second quarter. Xenia repurchased no shares during the quarter and retained $97.5 million under its authorization, leaving the stronger summer revenue outlook to carry the raised forecast.