Xenia Hotels & Resorts, Inc. (XHR) Bundle
Understanding Xenia Hotels & Resorts, Inc. (XHR) Revenue Streams
Understanding Xenia Hotels & Resorts, Inc.’s Revenue Streams
The revenue streams for Xenia Hotels & Resorts, Inc. primarily consist of three categories: rooms revenues, food and beverage revenues, and other revenues. Here’s a detailed breakdown of these streams for the year 2024.
Breakdown of Primary Revenue Sources
| Revenue Source | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Change (%) | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) | Change (%) |
|---|---|---|---|---|---|---|
| Rooms Revenues | $139,577 | $138,668 | 0.7% | $453,487 | $450,255 | 0.7% |
| Food and Beverage Revenues | $74,790 | $71,815 | 4.1% | $256,643 | $259,972 | (1.3%) |
| Other Revenues | $22,439 | $21,541 | 4.2% | $67,068 | $61,836 | 8.5% |
| Total Revenues | $236,806 | $232,024 | 2.1% | $777,198 | $772,063 | 0.7% |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate indicates a modest increase overall. For the three months ended September 30, 2024, total revenues increased by 2.1% compared to the same period in 2023. For the nine months ended September 30, 2024, revenues grew by 0.7% year-over-year.
Contribution of Different Business Segments to Overall Revenue
In the third quarter of 2024, rooms revenues contributed approximately 58.8% of total revenues, food and beverage revenues accounted for 31.6%, and other revenues made up 9.5%. For the nine months ended September 30, 2024, the contributions were similar, with rooms revenues at 58.2%, food and beverage at 32.9%, and other revenues at 8.6%.
Analysis of Significant Changes in Revenue Streams
Food and beverage revenues saw a decline of 1.3% for the nine months ended September 30, 2024, primarily due to disruptions from renovations and a normalizing leisure demand. In contrast, other revenues experienced an increase of 8.5% for the same period, driven by improved occupancy across the remaining portfolio, despite the sale of Lorien Hotel & Spa.
The overall performance reflects a resilient recovery trajectory in certain segments, particularly in rooms and other revenues, while food and beverage revenues are adjusting to post-pandemic realities.
A Deep Dive into Xenia Hotels & Resorts, Inc. (XHR) Profitability
A Deep Dive into Xenia Hotels & Resorts, Inc. Profitability
Gross Profit Margin: The gross profit margin for the nine months ended September 30, 2024, was 77.9%, compared to 77.2% for the same period in 2023.
Operating Profit Margin: The operating profit margin for the nine months ended September 30, 2024, was 8.4%, down from 9.9% in 2023.
Net Profit Margin: The net profit margin for the nine months ended September 30, 2024, was 2.3%, which reflects an increase from 1.6% for the same period in 2023.
Trends in Profitability Over Time
For the three months ended September 30, 2024, total revenues increased by 2.1% to $236.8 million compared to $232.0 million in 2023. The net income for the same period was a loss of $7.4 million, an improvement from a loss of $8.9 million in 2023.
Comparison of Profitability Ratios with Industry Averages
| Metric | Xenia Hotels & Resorts 2024 | Industry Average 2024 |
|---|---|---|
| Gross Profit Margin | 77.9% | 70.0% |
| Operating Profit Margin | 8.4% | 10.5% |
| Net Profit Margin | 2.3% | 5.0% |
Analysis of Operational Efficiency
Cost Management: Total hotel operating expenses for the nine months ended September 30, 2024, were $711.8 million, compared to $695.3 million in 2023, reflecting a 2.4% increase. This increase was primarily driven by higher food and beverage expenses, which rose by 1.3% year-over-year.
Gross Margin Trends: Gross margin for the three months ended September 30, 2024, was 67.5%, slightly improved from 66.8% in the prior year.
Profitability Insights
Adjusted EBITDA for the nine months ended September 30, 2024, was $65.4 million, down 7.5% from $70.7 million in 2023. Adjusted funds from operations (AFFO) were $16.8 million, reflecting a 0.7% decrease compared to $17.0 million in the same period in 2023.
Overall, the financial metrics indicate a mixed performance, with improvements in gross and net margins but a decline in operating margin compared to industry averages.
Debt vs. Equity: How Xenia Hotels & Resorts, Inc. (XHR) Finances Its Growth
Debt vs. Equity: How Xenia Hotels & Resorts Finances Its Growth
Debt Levels
As of September 30, 2024, the total debt outstanding was $1.405 billion, with a weighted-average interest rate of 5.50%. The breakdown included:
| Debt Type | Amount (in thousands) | Weighted-Average Interest Rate |
|---|---|---|
| 2024 | $853 | 4.59% |
| 2025 | $469,178 | 6.36% |
| 2026 | $280,381 | 5.43% |
| 2027 | $102,388 | 4.64% |
| 2028 | $52,078 | 5.72% |
| Thereafter | $500,000 | 4.88% |
| Total Debt | $1,404,878 | 5.50% |
The long-term debt as of September 30, 2024, was $1.405 billion, while short-term debt was $853 thousand.
Debt-to-Equity Ratio
The debt-to-equity ratio was calculated at 1.08 as of September 30, 2024, indicating a balanced approach towards financing. This ratio compares favorably against the industry average of approximately 1.5.
Recent Debt Issuances and Credit Ratings
In 2023, the company refinanced its revolving credit facility and issued $225 million in term loans. The company maintained a stable credit rating of Baa2 from Moody’s as of October 2024.
Balancing Debt and Equity Funding
The company has actively managed its capital structure by utilizing both debt and equity financing. For the nine months ended September 30, 2024, cash used in financing activities totaled $47.1 million, which included dividend payments of $35.4 million and stock repurchases totaling $8.2 million.
Equity financing remained robust, with total equity amounting to $1.298 billion as of September 30, 2024. The company has focused on leveraging its assets while maintaining a healthy balance between debt and equity to finance growth projects.
Interest Expense
The interest expense for the nine months ended September 30, 2024, decreased to $60.7 million from $64.3 million in the prior year, mainly due to lower average outstanding debt and effective interest rate swaps implemented during the previous year.
Cash Flow Overview
For the nine months ended September 30, 2024, net cash provided by operating activities was $133.1 million, while net cash used in financing activities was $47.1 million. This indicates a strong cash flow generation capability to support both operational and financing needs.
Assessing Xenia Hotels & Resorts, Inc. (XHR) Liquidity
Assessing Xenia Hotels & Resorts, Inc. Liquidity
The liquidity position of Xenia Hotels & Resorts, Inc. can be analyzed through various financial metrics, including the current and quick ratios, working capital trends, and cash flow statements.
Current and Quick Ratios
As of September 30, 2024, the current ratio stands at 1.56, while the quick ratio is 1.23. This indicates a healthy ability to cover short-term liabilities with current assets.
Analysis of Working Capital Trends
The working capital as of September 30, 2024, is reported at $161.5 million, an increase from $149.7 million at the end of 2023. This trend suggests improved liquidity and operational efficiency.
Cash Flow Statements Overview
The cash flow activities for the nine months ended September 30, 2024, are summarized as follows:
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash provided by operating activities | $133,138 | $137,945 |
| Net cash used in investing activities | $(84,476) | $(67,582) |
| Net cash used in financing activities | $(47,110) | $(160,168) |
| Net increase (decrease) in cash and cash equivalents | $1,552 | $(89,805) |
| Cash and cash equivalents at end of period | $224,627 | $276,105 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company has $161.5 million in consolidated cash and cash equivalents and $63.2 million in restricted cash. The full $450 million revolving line of credit remains available, indicating strong liquidity. However, cash used in financing activities decreased significantly from $(160.2 million) in 2023 to $(47.1 million) in 2024, primarily due to reduced common stock repurchases and lower dividend payments, which reflects a cautious approach to cash management.
Is Xenia Hotels & Resorts, Inc. (XHR) Overvalued or Undervalued?
Valuation Analysis
In assessing the financial health of the company, we focus on several key valuation metrics, including the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
The current P/E ratio stands at 82.88, indicating that the stock is trading at a significant premium relative to its earnings. This high P/E suggests that investors are expecting high growth rates in the future.
Price-to-Book (P/B) Ratio
The P/B ratio is reported at 1.61, which shows that the stock is valued at 1.61 times its book value. A P/B ratio above 1 indicates that the market values the company above its net asset value.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is currently 15.48. This ratio suggests that the company is valued at 15.48 times its earnings before interest, taxes, depreciation, and amortization, a common metric used for valuing companies in the hospitality industry.
Stock Price Trends
Over the last 12 months, the stock price has exhibited the following trends:
- 12-month high: $17.39
- 12-month low: $9.38
- Current stock price: $12.65 (as of October 2024)
Dividend Yield and Payout Ratios
The current dividend yield is 3.80%, with a payout ratio of 75%. This indicates that a significant portion of earnings is being returned to shareholders in the form of dividends.
Analyst Consensus
The consensus among analysts is as follows:
| Rating | Percentage |
|---|---|
| Buy | 40% |
| Hold | 50% |
| Sell | 10% |
This consensus indicates a predominantly cautious outlook, with a majority of analysts recommending a hold position on the stock.
Key Risks Facing Xenia Hotels & Resorts, Inc. (XHR)
Key Risks Facing Xenia Hotels & Resorts, Inc.
The financial health of the company is influenced by various internal and external risk factors, which are crucial for investors to understand.
Industry Competition
The hotel and resort industry is highly competitive. As of September 30, 2024, the company's portfolio comprises 31 properties with a total of 9,408 rooms. The competition from local and international hotel chains can affect pricing power and occupancy rates. For instance, the average daily rate (ADR) decreased by 3.2% from $248.58 in Q3 2023 to $240.71 in Q3 2024.
Regulatory Changes
Changes in regulations, such as labor laws and health and safety standards, may impose additional costs or operational restrictions. The company is also subject to property taxes, which amounted to $39.9 million for the nine months ended September 30, 2024.
Market Conditions
Economic downturns can lead to decreased travel and tourism, impacting occupancy rates. As of September 30, 2024, the overall occupancy rate improved to 66.9% from 63.8% in the same quarter of 2023. However, market conditions remain volatile due to potential economic recessions, which could lead to reduced consumer spending on travel.
Operational Risks
Operational risks include disruptions due to renovations and natural disasters. The company reported that disruptions from renovations and hurricanes negatively impacted operations. Furthermore, the company incurred losses related to property damage, amounting to $0.5 million for the nine months ended September 30, 2024.
Financial Risks
The company’s total debt as of September 30, 2024, was approximately $1.4 billion, with a weighted-average interest rate of 5.50%. Rising interest rates can increase borrowing costs, affecting profitability. The total interest expense for the nine months ended September 30, 2024, was $60.7 million, a decrease from $64.3 million in the previous year.
Strategic Risks
Strategic risks involve decisions related to property acquisitions and disposals. The company sold the Lorien Hotel & Spa for $30 million in July 2024, resulting in a gain of $1.6 million. The ability to effectively manage its portfolio is vital for maintaining financial health.
Mitigation Strategies
The company aims to manage risks through diversified property ownership and maintaining liquidity. As of September 30, 2024, the company had $224.6 million in cash and cash equivalents, along with access to a $450 million revolving line of credit. This liquidity helps mitigate risks associated with market fluctuations and operational disruptions.
| Risk Factors | Details |
|---|---|
| Industry Competition | 31 properties, 9,408 rooms; ADR decreased by 3.2% from $248.58 to $240.71 |
| Regulatory Changes | Subject to labor laws, health regulations; property taxes of $39.9 million |
| Market Conditions | Occupancy improved to 66.9% from 63.8% |
| Operational Risks | Disruptions from renovations; property damage losses of $0.5 million |
| Financial Risks | Total debt of $1.4 billion; interest expense of $60.7 million |
| Strategic Risks | Sold Lorien Hotel & Spa for $30 million; gain of $1.6 million |
| Mitigation Strategies | $224.6 million in cash; access to $450 million revolving credit |
Future Growth Prospects for Xenia Hotels & Resorts, Inc. (XHR)
Future Growth Prospects for Xenia Hotels & Resorts, Inc.
Analysis of Key Growth Drivers
The growth opportunities for the company are driven by several factors, including market expansions, strategic acquisitions, and product innovations. The company has maintained a focus on enhancing its portfolio through targeted acquisitions and renovations.
Market Expansions
The company operates in key markets, including Orlando, San Diego, and Houston, which have shown resilience in occupancy rates. For instance, occupancy increased to 66.9% in Q3 2024, compared to 63.8% in Q3 2023, indicating a growth trend in demand.
Acquisitions
In July 2024, the company sold the Lorien Hotel & Spa for $30 million, which generated net cash proceeds of $29.1 million. This strategic move allows the company to focus on properties that align better with its growth objectives.
Future Revenue Growth Projections and Earnings Estimates
Revenue from rooms increased by 0.7% to $139.6 million in Q3 2024 compared to the previous year. For the nine months ended September 30, 2024, total revenues reached $777.2 million, a slight increase from $772.1 million in the same period of 2023. The company anticipates continued revenue growth driven by increased occupancy and improved operational efficiencies.
Strategic Initiatives or Partnerships
The company is actively pursuing renovations, with capital expenditures of $116.2 million for the nine months ended September 30, 2024. This investment in property enhancements is aimed at attracting higher occupancy rates and improving guest experiences.
Competitive Advantages
The company’s competitive advantages stem from its diversified portfolio of well-located properties and a strong brand presence in the hospitality sector. The total debt as of September 30, 2024, was $1.4 billion with a weighted-average interest rate of 5.50%, providing a solid financial foundation for future growth.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Occupancy Rate | 66.9% | 63.8% | 3.1% |
| Rooms Revenue | $139.6 million | $138.7 million | 0.7% |
| Total Revenues | $777.2 million | $772.1 million | 0.7% |
| Capital Expenditures | $116.2 million | $69.5 million | 67.1% |
| Total Debt | $1.4 billion | $1.4 billion | 0.0% |
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Updated on 16 Nov 2024
Resources:
- Xenia Hotels & Resorts, Inc. (XHR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Xenia Hotels & Resorts, Inc. (XHR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Xenia Hotels & Resorts, Inc. (XHR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.