XENIA HOTELS & RESORTS REPORTS SECOND QUARTER 2023 RESULTS

ORLANDO, Fla., Aug. 2, 2023 /PRNewswire/ -- Xenia Hotels & Resorts, Inc. (NYSE: XHR) ("Xenia" or the "Company") today announced results for the quarter ended June 30, 2023.

Second Quarter 2023 Highlights

• Net Income: Net income attributable to common stockholders was $13.8 million, or $0.12 per share
• Adjusted EBITDAre: $74.7 million, decreased 15.7% compared to the second quarter of 2022
• Adjusted FFO per Diluted Share: $0.47, decreased $0.10 compared to the second quarter of 2022
• Same-Property Occupancy: 68.6%, decreased 10 basis points compared to the second quarter of 2022
• Same-Property ADR: $265.98, decreased 1.8% compared to the second quarter of 2022
• Same-Property RevPAR: $182.49, decreased 2.0% compared to the second quarter of 2022
• Same-Property Hotel Net Income: $43.6 million, decreased 23.3% compared to the second quarter of 2022
• Same-Property Hotel EBITDA: $79.4 million, decreased 14.4% compared to the second quarter of 2022
• Same-Property Hotel EBITDA Margin: 29.3%, decreased 423 basis points compared to the second quarter of 2022
• Balance Sheet Activity: The Company fixed the variable Term SOFR index on all outstanding variable debt and is currently 100% fixed or hedged-to-fixed on all debt obligations.
• Capital Markets Activities & Dividends: The Company repurchased a total of 2,539,888 shares of common stock at a weighted-average price of $12.58 per share for a total consideration of approximately $31.9 million. The Company also completed open market repurchases, and subsequently retired, a total of $30 million in the aggregate principal amount of its 6.375% Senior Notes due August 2025. The Company declared its second quarter dividend of $0.10 per share to common stockholders of record on June 30, 2023.

"Despite softer demand in a small number of our leisure-oriented properties, negative weather impact at our California hotels and resorts, and a greater impact from our on-going renovations, our second quarter results were just slightly below our expectations," said Marcel Verbaas, Chair and Chief Executive Officer of Xenia. "Due to the lapping of extremely strong leisure demand and staffing levels that were still significantly below normalized levels in the second quarter of 2022, both RevPAR and Hotel EBITDA Margin declined relative to the second quarter of last year. However, our portfolio continues to experience the shift to a more traditional mix of the various demand segments, with strong RevPAR growth in our corporate transient and group focused hotels. As a result of this improvement in corporate transient and group demand, our Houston, Portland, Philadelphia, Nashville, Atlanta, Pittsburgh and San Francisco properties all achieved strong RevPAR growth during the second quarter as compared to last year."

"The third quarter is off to an encouraging start with estimated Same-Property RevPAR approximately 1.5% ahead of July 2022, despite substantial renovation disruption at our Scottsdale, Orlando and Salt Lake City hotels," continued Mr. Verbaas. "This modest improvement in RevPAR growth as compared to the second quarter, combined with expected moderation in expense growth, gives us confidence in our near-term outlook. We remain optimistic about the long-term growth prospects across our high-quality and diverse portfolio that will be even more attractively positioned after we complete our current capital expenditure projects."

Operating Results

The Company's results include the following:

Liquidity and Balance Sheet

As of June 30, 2023, the Company had total outstanding debt of approximately $1.4 billion with a weighted-average interest rate of 5.47%. The Company had approximately $255 million of cash and cash equivalents, including hotel working capital, and full availability on its revolving line of credit, resulting in total liquidity of approximately $705 million as of June 30, 2023. In addition, the Company held approximately $61 million of restricted cash and escrows at the end of the second quarter.

In the second quarter, the Company fixed the variable Term SOFR index on its $55 million mortgage loan collateralized by Andaz Napa and on both of its corporate term loans totaling $225 million through January 1, 2027 and mid-February 2025, respectively, and is currently 100% fixed or hedged-to-fixed on all outstanding debt obligations.

The Company has no debt maturities until August 2025 and maintains full availability on its revolving line of credit.

Capital Markets

In the second quarter, the Company repurchased a total of 2,539,888 shares of common stock at a weighted-average price of $12.58 per share for a total consideration of approximately $31.9 million.

In the third quarter-to-date, the Company repurchased an additional 861,002 shares of common stock at a weighted-average price of $12.54 per share for total consideration of approximately $10.8 million. The Company currently has $97.0 million in capacity remaining under its repurchase authorization.

The Company did not issue any shares of its common stock through its At-The-Market ("ATM") program in the quarter and had $200 million of remaining availability as of June 30, 2023.

Also in the second quarter, the Company repurchased in the open market, and subsequently retired, a total of $30 million in the aggregate principal amount of its 6.375% Senior Notes due August 2025 for a total consideration of $29.7 million exclusive of accrued interest.

Capital Expenditures

During the three and six months ended June 30, 2023, the Company invested $22.4 million and $34.0 million in portfolio improvements, respectively. Significant projects in the Company's portfolio include:

• Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch – In June, commenced the comprehensive renovation and upbranding of the 491-room Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch to a Grand Hyatt with completion of all phases expected by the end of 2024. Upon completion, the property will have five additional keys, or 496 rooms.
• Kimpton Canary Hotel Santa Barbara – Completed the comprehensive guest room renovation that began in the fourth quarter of 2022.
• Grand Bohemian Hotel Orlando, Autograph Collection – Completed the comprehensive renovation of public spaces including meeting space, lobby, restaurant, bar, Starbucks, and creation of a rooftop bar. A comprehensive renovation of the guest rooms began in the second quarter and is expected to be completed in the third quarter.
• Park Hyatt Aviara Resort, Golf Club & Spa – Continued work on a significant upgrade to the resort's spa and wellness amenities which will be branded as a Miraval Life in Balance Spa and is now expected to open in the third quarter.
• The Ritz-Carlton, Denver – Completed the renovation and reconfiguration of premium suites resulting in the addition of three keys in the second quarter.
• Kimpton Hotel Monaco Salt Lake City – Began a comprehensive renovation of meeting space, restaurant, bar and guest rooms in the second quarter that is expected to be completed in the third quarter.

Current Full Year 2023 Outlook and Guidance

The Company has updated its full year outlook. The broad range below reflects the Company's limited visibility in forecasting due to macroeconomic uncertainty and is based on the current economic environment and does not take into account any unanticipated impacts to the business or operations. Furthermore, this updated guidance assumes no additional acquisitions, dispositions, equity issuances, or share and/or senior note repurchases. The Same-Property (32 Hotel) RevPAR change shown includes all hotels owned as of June 30, 2023.

Current full year 2023 guidance is inclusive of the following assumptions:

• Renovation disruption is estimated to result in a negative impact of 250 basis points to Same-Property (32 Hotel) RevPAR Change based on the scope and timing of capital improvement projects - 50 basis points higher than prior guidance. In addition, the Company expects disruption to non-room revenues. These renovations are estimated to result in a negative impact of approximately $18 million to Adjusted EBITDAre and Adjusted FFO - $3 million higher than prior guidance.
• General and administrative expense of approximately $25 million, excluding non-cash share-based compensation - no change from prior guidance
• Interest expense of approximately $83 million, excluding non-cash loan related costs - a decrease of approximately $2 million from prior guidance
• Income tax expense of approximately $3 million - a decrease of approximately $1 million from prior guidance
• 111.0 million weighted-average diluted shares/units - a decrease of 1.2 million from prior guidance due to share repurchases during the year

Second Quarter 2023 Earnings Call

The Company will conduct its quarterly conference call on Wednesday, August 2, 2023 at 1:00 PM Eastern Time. To participate in the conference call, please dial (833) 470-1428, access code 159599. Additionally, a live webcast of the conference call will be available through the Company's website, www.xeniareit.com. A replay of the conference call will be archived and available online through the Investor Relations section of the Company's website for 90 days.

About Xenia Hotels & Resorts, Inc.

Xenia Hotels & Resorts, Inc. is a self-advised and self-administered REIT that invests in uniquely positioned luxury and upper upscale hotels and resorts with a focus on the top 25 lodging markets as well as key leisure destinations in the United States. The Company owns 32 hotels and resorts comprising 9,511 rooms across 14 states. Xenia's hotels are in the luxury and upper upscale segments, and are operated and/or licensed by industry leaders such as Marriott, Hyatt, Kimpton, Fairmont, Loews, Hilton, The Kessler Collection, and Davidson. For more information on Xenia's business, refer to the Company website at www.xeniareit.com.

This press release, together with other statements and information publicly disseminated by the Company, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe the Company's future plans, strategies and expectations. Forward-looking statements are generally identifiable by use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "illustrative," references to "outlook" and "guidance," and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Forward-looking statements in this press release include, among others, statements about our plans, strategies, or other future events, the outlook related to macroeconomic factors and general economic uncertainty and a potential contraction in the U.S. or global economy or low levels of economic growth, including such effects on the demand for travel, transient and group business, capital expenditures, timing of renovations, financial performance and potential dividends, prospects or future events. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. As a result, our actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, which are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond the Company's control and which could materially affect actual results, performances or achievements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, (i) general economic uncertainty and a contraction in the U.S. or global economy or low levels of economic growth; (ii) macroeconomic and other factors beyond our control that can adversely affect and reduce demand for hotel rooms, food and beverage services, and/or meeting facilities; (iii) inflation and inflationary pressures which increases our labor and other costs of providing services to guests and meeting hotel brand standards, as well as costs related to construction and other capital expenditures, property and other taxes, and insurance which could result in reduced operating profit margins; (iv) bank failures and concerns over a near-term recession; (v) the pace and evenness of recovery following the COVID-19 pandemic and the long-term effects of the pandemic, COVID-19 variants or any future resurgence, including with respect to global and regional economic activity, travel limitations or bans, the demand for travel, levels of spending in transient or group business and leisure segments, and levels of consumer confidence; (vi) actions that governments, businesses, and individuals take in response to any resurgence of COVID-19 including variants of the virus, including limiting or banning travel; (vii) the Company's dependence on third-party managers of its hotels, including its inability to implement strategic business decisions directly; (viii) risks associated with the hotel industry, including competition, increases in wages and benefits, energy costs and other operating costs, actual or threatened terrorist attacks, cyber incidents, information technology failures, downturns in general and local economic conditions, prolonged periods of civil unrest in our markets, and cancellation of or delays in the completion of anticipated demand generators; (ix) the availability and terms of financing and capital and the general volatility of securities markets; (x) risks associated with the real estate industry, including environmental contamination and costs of complying with the Americans with Disabilities Act and similar laws; (xi) interest rate increases; (xii) ability to successfully negotiate amendments and covenant waivers with its unsecured and secured indebtedness; (xiii) the Company's ability to comply with covenants, restrictions, and limitations in any existing or revised loan agreements with our unsecured and secured lenders; (xiv) the possible failure of the Company to qualify as a REIT and the risk of changes in laws affecting REITs; (xv) the possibility of uninsured or underinsured losses, including those relating to natural disasters, terrorism, government shutdowns and closures, civil unrest, or cyber incidents; (xvi) risks associated with redevelopment and repositioning projects, including delays and cost overruns; (xvii) levels of spending in business and leisure segments as well as consumer confidence; (xviii) declines in occupancy and average daily rate; (xix) the seasonal and cyclical nature of the real estate and hospitality businesses; (xx) changes in distribution arrangements, such as through Internet travel intermediaries; (xxi) relationships with labor unions and changes in labor laws, including increases to minimum wages; (xxii) the impact of changes in the tax code and uncertainty as to how some of those changes may be applied; (xxiii) monthly cash expenditures and the uncertainty around predictions; (xxiv) labor shortages; (xxv) disruptions in supply chains resulting in delays or inability to procure required products; and (xxvi) the risk factors discussed in the Company's Annual Report on Form 10-K, as updated in its Quarterly Reports. Accordingly, there is no assurance that the Company's expectations will be realized. We caution you not to place undue reliance on any forward-looking statements, which are made only as of the date of this press release. We do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company's website at www.xeniareit.com.

All information in this press release is as of the date of its release. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company's expectations.

Availability of Information on Xenia's Website

Investors and others should note that Xenia routinely announces material information to investors and the marketplace using U.S. Securities and Exchange Commission (SEC) filings, press releases, public conference calls, webcasts, and the Investor Relations section of Xenia's website. While not all the information that the Company posts to the Xenia website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in Xenia to review the information that it shares at the Investor Relations link located on www.xeniareit.com. Users may automatically receive email alerts and other information about the Company when enrolling an email address by visiting "Email Alerts / Investor Information" in the "Corporate Overview" section of Xenia's Investor Relations website at www.xeniareit.com.

For additional information or to receive press releases via email, please visit our website at www.xeniareit.com.