Xenia Hotels & Resorts (XHR) Q3 2026 earnings review
Xenia raises its profit plan as group travel rebounds
Corporate groups and event travelers filled Xenia's luxury hotels this summer while banquet catering bounced back from a spring dip. Same-property revenue rose 13% from a year ago, lifting hotel profit margins by 3 percentage points and beating what the company's own plan pointed to. Chief executive Marcel Verbaas raised the full-year outlook again, though by our math the plan has room revenue growth slowing to 7% in the fourth quarter.
| Same-property revenue | $263.2M +12.7% from a year ago |
|---|---|
| Same-property RevPAR | $184.75 +12.5% from a year ago |
| Adjusted FFO per share, excluding one-offs | $0.36 +56.5% from a year ago |
| Full-year Adjusted EBITDAre outlook | Raised $8M middle of the range: $281M (+8.8%) |
⚖️ Verdict: 🟢 Bullish
The story got better because corporate groups started spending on food and catering again, driving a third straight increase to the full-year plan. Preliminary October room revenue per available room rose 8% against a tougher autumn comparison, proving the third-quarter rebound was not just an easy summer base effect. One caution: the updated outlook implies non-room spending will trail room growth in the fourth quarter, and Xenia excluded $7 million of one-off hotel transition costs from nine-month profit.
The question now is whether corporate group bookings will keep lifting banquet and catering sales faster than room revenue once the easy summer comparison is behind Xenia. Either strong convention demand carries into year-end and beats a cautious fourth-quarter plan, or tighter corporate catering budgets cap food and beverage sales just as renovation work begins in Napa and Denver. Fourth-quarter food and beverage revenue will tell.
🐂 Bull Case
Group Demand Restored Food and Beverage Growth
Xenia owns 29 luxury and upper-upscale hotels across the United States. Corporate groups book rooms and pay for banquets and catering, which separates total revenue per available room (Total RevPAR) from room-only revenue per available room (RevPAR). Last quarter, food and beverage sales stalled and Total RevPAR lagged room growth by 2.3 percentage points.
That gap turned positive in the third quarter. Chief executive Marcel Verbaas credited "strong broad-based group and corporate transient demand coupled with an incremental increase in leisure demand from several large events" for the rebound across the properties Xenia owned a year ago.
- Same-property food and beverage revenue: $88.3 million, up 15.0% from a year ago
- Same-property room revenue: $149.3 million, up 12.5% from a year ago
- Same-property Total RevPAR: $325.71, up 12.7%, beating the 12.5% RevPAR gain
The recovery in catering proves that booked group rooms are turning into food and beverage spending again. Still, the 0.2 percentage point lead of Total RevPAR over room growth sits well below the 2-point second-half lead management targeted three months ago.
What to watch: fourth-quarter food and beverage revenue growth. A double-digit gain would confirm that corporate banquet budgets are holding up beyond the easy summer comparison.
Broad Market Gains Led Third Straight Raise
The real estate investment trust raised its full-year profit outlook for a third consecutive quarter. Adjusted EBITDAre, a measure of property cash profit before interest, taxes, depreciation and one-offs, reached $53.2 million, up 26.0% from a year ago. By our math, that beat the $46.4 million to $51.9 million range that management's prior full-year weighting pointed to.
Twenty-one of Xenia's 22 markets grew room revenue per available room in the quarter, led by Philadelphia (+34.5%), New Orleans (+29.0%) and San Diego (+21.6%), while only Savannah declined (-3.2%). "The revenue growth we saw in the first three quarters of the year has continued into October, as we estimate Same-Property RevPAR was up approximately 8% compared to October 2025," Verbaas said.
Beating the third-quarter range shows the prior plan was cautious, and the 8% October reading against a harder autumn comparison gave Xenia the confidence to lift its full-year Adjusted EBITDAre midpoint by $8 million.
What to watch: fourth-quarter RevPAR in Orlando, Houston and Phoenix. Because those three markets generate 42% of hotel profit, their performance will decide whether Xenia beats its raised year-end target.
Higher Occupancy and Lower Taxes Lifted Margins
Rising utility, insurance and staffing bills squeezed hotel profitability in the second quarter, when operating costs grew faster than sales. In the third quarter, Verbaas said that 6.4% higher daily room rates and a 3.8 percentage point rise in occupancy, combined with "disciplined expense management, resulted in margin growth of 295 basis points".
Same-property hotel EBITDA margin — property profit before interest, taxes and depreciation as a share of hotel sales — rose to 22.9% from 19.9% a year ago as hotel operating costs grew 8.5% against 12.7% sales growth. By our math, three cost lines drove the improvement as a share of same-property revenue: overhead and utilities (other indirect expenses) fell 1.2 percentage points to 27.0%, property taxes and insurance dropped 0.9 points to 4.7%, and room-cleaning and front-desk costs (rooms expenses) fell 0.9 points to 15.0%.
One quarter of double-digit sales growth against last year's weak summer eases the cost concern without settling it, because hotel expenses still rose 8.5%.
What to watch: fourth-quarter same-property operating expense growth. If costs keep rising near 8% while revenue slows toward the 7% pace implied by the outlook, hotel margins will shrink again.
🐻 Bear Case
Fourth-Quarter Plan Points to Slower Non-Room Spending
Verbaas pointed to "continued confidence in the strength of demand for the remainder of the year" when raising the full-year outlook, while the release noted "limited visibility in forecasting due to continued macroeconomic uncertainty". Part of the third-quarter surge came from an easy comparison: in the third quarter of 2025, overall room revenue per available room was flat and Houston fell 21.2% after Hurricane Beryl.
The fourth quarter compares against a normal period last year, when same-property RevPAR grew 4.5%. By our math, Xenia's raised full-year outlook leaves fourth-quarter RevPAR growth at 7.0% and Total RevPAR growth at 6.6%.
That arithmetic cuts against management's earlier claim that group banquets would push Total RevPAR growth about 2 percentage points above room growth across the second half. Because the third-quarter spread was only 0.2 percentage points and the fourth-quarter outlook implies a negative 0.4-point spread, the plan assumes non-room spending will lag room growth as the comparison toughens.
What to watch: the gap between fourth-quarter Total RevPAR and room-only RevPAR growth. A negative gap would mean corporate groups are trimming catering budgets even when they fill their booked rooms.
Nashville Lags and Operator Changes Add Costs
Xenia is running two property upgrades to lift earnings: a $9 million food and beverage overhaul at W Nashville with the José Andrés Group that opened in the spring, and a switch of property managers to Davidson Hotel Group across four Autograph Collection hotels.
Neither project is helping net profit yet. In Nashville, which accounts for 5% of portfolio profit, third-quarter Total RevPAR rose 3.7% while room-only RevPAR rose 7.6%, and nine-month Total RevPAR is still down 1.1% from a year ago. Meanwhile, Xenia excluded $1.8 million in the third quarter and $7.3 million over nine months from Adjusted EBITDAre and Adjusted FFO for pre-opening, property damage and "costs associated with operator transitions at, and the renaming of, four hotels".
That matters because excluding $7.3 million of recurring repositioning costs flatters Xenia's headline profit measures while Nashville's new restaurants have yet to outpace room revenue.
What to watch: fourth-quarter non-recurring add-backs and Nashville Total RevPAR. Continued multi-million-dollar exclusions after the four hotels finish renaming would show that repositioning is an ongoing cost of the business.
Risks this quarter didn't answer
Four standing concerns around capital allocation, debt and portfolio mix received no new resolution in the third-quarter release.
- Acquisition plans vs paused buybacks: Xenia bought back zero shares for a third straight quarter ($97.5 million remains authorized) and announced no hotel purchases after selling the 85-room Kimpton RiverPlace Hotel in July for $11 million; any deal announcement or buyback resumption on the call would test its capital discipline.
- Path to lower debt: the release did not update Xenia's credit-facility leverage ratio or give a timetable to reach its long-term target of net debt below 4 times EBITDA.
- Market concentration: Orlando (17%), Houston (14%) and Phoenix (11%) still account for 42% of hotel EBITDA, leaving earnings exposed to local supply or weather shocks in three cities.
- Four-hotel renaming milestone: the release noted transition costs at four hotels but did not confirm whether all four Autograph Collection rebrandings are complete; the conference call and quarterly filing will clarify the status.
👓 Other Themes
Napa and Denver Renovations Stay on Schedule
Xenia invested $16.4 million in hotel upgrades during the third quarter, bringing nine-month capital spending to $47.0 million, and finished room and restaurant work at Royal Palms Resort & Spa. The company remains on track to start major room and corridor renovations at Andaz Napa and The Ritz-Carlton, Denver in early December, while trimming the top end of its full-year capital spending plan by $5 million to $70–75 million.
💲 Other KPIs
Falling steadily this year: by our math, total debt including finance leases ($1,366.6 million) minus unrestricted cash ($161.4 million) dropped 6.6% from $1,290.1 million at the end of 2025. The hotel owner paid off a $52 million mortgage in February and holds $661 million of total liquidity, with a 5.55% weighted-average interest rate.
Up 38.3% from $26.9 million at the end of 2025, outpacing the 5.1% nine-month revenue increase. Accounts and rents receivable — money owed by corporate group clients and hotel operators — typically rises when group banquet and convention billing increases, temporarily absorbing working capital until groups settle their invoices.
Down 2.0% from 97.2 million a year ago because of 2025 share buybacks, but unchanged since the start of 2026 as Xenia bought back no stock for a third straight quarter. The lower share count vs last year still adds about 2 percentage points to per-share cash profit growth.
🔮 Guidance
Raised. The middle of the range moved up 2.5 percentage points to 8.0% growth. By our math, that leaves fourth-quarter room revenue per available room up about 7.0% from a year ago, down from 12.5% in the third quarter as Xenia laps a tougher comparison. It is the third raise this year, and each move has grown larger: +1.0 point, +1.5 points, +2.5 points.
Raised. The real estate trust lifted the middle of the range by 1.5 percentage points to 7.25% growth. By our math, that implies about 6.6% growth in the fourth quarter, down from 12.7% in the third quarter and 0.4 percentage points slower than implied fourth-quarter room growth.
Raised. Management lifted the middle of the range by $8 million to $281 million, or 8.8% growth from 2025. By our math, that leaves $68.3 million for the fourth quarter, up 7.4% from a year ago vs 26.0% growth in the third quarter. It is the third raise in three quarters: +$6M, +$7M, +$8M.
Raised. The middle of the range moved up $9 million to $202 million, or 15.6% growth from 2025, helped by a $1 million lower tax forecast. By our math, the plan leaves $49.2 million for the fourth quarter, up 14.2% from a year ago.
Raised. The middle of the range rose $0.09 to $2.11 per share, up 19.9% from $1.76 in 2025 on an unchanged 95.7 million diluted share count. By our math, that leaves $0.50 per share in the fourth quarter, up 11.1% from $0.45 a year ago against 56.5% growth in the third quarter.
Raised. The middle of the range rose $8 million to $8 million, returning the full-year GAAP bottom line to a profit even after the second quarter's $38.8 million property write-down. By our math, that implies $10.4 million of net income in the fourth quarter.
Trimmed at the top end. Xenia narrowed the range, lowering the middle by $2.5 million to $72.5 million while keeping expected renovation profit disruption at $1 million. With $47.0 million spent through September, the plan leaves $25.5 million for the fourth quarter as work begins in Napa and Denver.
❓ Key Questions
Why does the fourth-quarter plan imply slower non-room growth?
Management previously expected second-half Total RevPAR to grow about 2 percentage points faster than room-only RevPAR. By our math, the updated full-year outlook implies fourth-quarter Total RevPAR (+6.6%) will trail room growth (+7.0%). Is group banquet spending softening in November and December?
When will operator transition add-backs end?
Xenia excluded $1.8 million in the third quarter and $7.3 million year-to-date from Adjusted EBITDAre and Adjusted FFO for non-recurring items, including operator changes and renamings at four hotels. Have all four rebrandings finished, and how much more cost remains?
Why are Nashville food and beverage sales still lagging?
Despite opening four José Andrés Group dining outlets at W Nashville this spring, Nashville's third-quarter Total RevPAR rose only 3.7% against 7.6% room growth, and nine-month Total RevPAR is down 1.1%. What did the new outlets contribute to hotel profit?
What is the current leverage ratio and capital return plan?
Xenia bought back no shares for a third straight quarter while holding $161 million in cash and $97.5 million of buyback capacity. Where does credit-facility leverage stand today against the sub-4x target, and what is the priority for excess cash?