Hello, and welcome to the Xenia Hotels & Resorts, Inc. Q4 2025 Earnings Conference Call. My name is Carl and I will be on you to your call today. [Operator Instructions] I will now hand you over to your host, Aldo Martinez, Manager Finance, to begin. Please go ahead when you're ready.

Thank you, Carla, and welcome to Xenia Hotels & Resorts Fourth Quarter 2025 Earnings Call and Webcast. I'm here with Marcel Verbaas, 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 up 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, February 24, 2026, 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 fourth 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 afternoon, everyone. As we reflect back on 2025, we are proud of the performance that our portfolio of high-quality hotels and resorts achieved during the year. Adjusted EBITDAre exceeded our expectations set at the beginning of the year as well as our more recent outlook. Significant growth in food and beverage and other revenues contributed to total RevPAR growth of 8% for the year. This was driven by strong group demand throughout the portfolio. and bolstered by encouraging results at the recently transformed and up-branded Grand Hyatt Scottsdale, which ramped up in line with our underwriting expectations in 2025. Our operating results for the year together with over $120 million in share repurchases at meaningful discounts to NAV and our current share price allowed us to deliver double-digit percentage growth in adjusted FFO per share as compared to 2024. In 2025, we continue to build on our track record of continuous portfolio improvement. We sold Fairmont Dallas at an attractive price, resulting in a strong unlevered IRR during our ownership period and allowing us to avoid an estimated $80 million of required capital expenditures over the next several years. We also acquired the land under Hyeredency Santa Clara, removing future uncertainty regarding lease renewal and rent escalations. Additionally, we invested approximately $87 million in our portfolio during 2025 to further improve our assets. These capital expenditures consisted of both gas-facing enhancements as well as substantial investments in property infrastructure that have enhanced the resiliency and efficiency of many of our hotels and resorts. Now turning to our fourth quarter results. This morning, we reported net income of $6.1 million for the quarter. Adjusted EBITDA was $63.6 million and adjusted FFO per share was $0.45. With both results, either meeting or exceeding the top end of the…

Thank you, Marcel, and good afternoon, everyone. For the fourth quarter, our 30-hotel same-property portfolio RevPAR was $176.45, an increase of 4.5% compared to the fourth quarter of 2024, based on occupancy of 66.1% at an average daily rate of $266.88. Strength in non-room spend, notably banquet revenues, which were up 17.2% and resulted in total RevPAR of $325.52 for the quarter, an increase of 6.7% when compared to the fourth quarter of 2024. For full year 2025, our same-property portfolio RevPAR was $181.97, an increase of 3.9% compared to 2024 based on occupancy of 68.6% at an average daily rate of $265.3 he Full year total RevPAR of $328.57 increased 8% when compared to 2024. Our properties achieving the strongest RevPAR growth as compared to 2024 for the full year for Grand Hyatt Scottsdale, with RevPAR up over 104% as we lap the transform of renovation, Kimpton Canary Hotel Santa Barbara up approximately 10%; Gronboemin, Orlando, up 8%; among Pittsburgh of nearly 8% and High Regency Santa Clara and the Ritz-Carlton Pentagon City, each up 7.5%. Strengthen group business and continued improvement in corporate demand was a driver behind success in most of these properties. Conversely, hotels have experienced RevPAR weakness compared to full year 2024 included both Portland hotels, Royal Palms Resort and Spa, and San Diego and all 4 Texas hotels. The Portland, San Diego and Dallas markets had significantly softer citywide convention calendars in 2025 and in 2024 as did Houston, where in addition to a softer citywide convention calendar, our hotels faced a tough comparison to 2024 and a result of the positive impact from Hurricane Beryl last year. Looking at each month of the quarter compared to 2024, October RevPAR was $21.36, up 5.9% and November RevPAR was $176.8 up 5.1%, and December RevPAR…

Thanks, Barry. I will provide an update on our balance sheet and discuss our initial 2026 guidance. At year-end, we had approximately $1.4 billion of outstanding debt just over 3/4 of our debt was fixed or hedged to fixed. Our weighted average interest rate at quarter end was 5.51%. Additionally, at quarter end, our leverage ratio as calculated for our credit facility was approximately 5.2x trailing 12-month net debt to EBITDA. We expect our leverage ratio to decline over the next few years and have a long-term leverage target in the low 3 to low 4x range. As a reminder, we have no preferred equity or senior capital. Last week, we fully paid off the $52 million mortgage loan at Grand Bohemian Orlando that was due to mature in March with cash on hand. At present, 28 of our 30 hotels are free of property level debt, representing a source of balance sheet strength. Our debt maturities are well laddered with a weighted average duration of 3.2 years. As to current liquidity, after the Grand Bohemian Orlando loan payoff, our available cash is $75 million, excluding restricted cash. our $500 million line of credit remains undrawn. Therefore, total liquidity is approximately $575 million. I want to now turn to our return of capital. During the fourth quarter, we repurchased approximately 2.7 million shares of common stock at an average price of $13.56 per share. In 2025, over the full year, we repurchased a total of about 9.4 million shares at an average price of $12.87 per share, representing about 9.2% of our outstanding shares at the start of 2025. Over the last 4 years, we repurchased a significant portion of our outstanding shares with our share count declining by 20% from year-end 2020 to year-end 2025. Our current Board authorization…

[Operator Instructions] Our first question comes from the line of Ari Klein with BMO Capital Markets.

I was hoping maybe you can provide a little bit more color or context around kind of the RevPAR guide ranges, particularly at the low end, high end. I think you mentioned about 1/4 of the guide is from the special events, but any additional color would be helpful.

Yes, sure. Why don't I start on that 1 and then Marcelo or Barry, you can join in. But certainly, the couple of things bolstering the RevPAR outlook One is the special events, as you mentioned, and second would be Grand Hyatt Scottsdale, where we have a lot of visibility based on the pace. And then more broadly, the group revenue pace that we talked about continues to be a source of strength for us. So really, those are some of the main components that give us confidence. The markets where we expect the strongest levels of RevPAR growth our markets like Houston, like Northern California, obviously, Scottsdale, Orlando as well. So markets that are quite meaningful to us and have a significant group component. So I would say that's really what gives us confidence overall in the RevPAR outlook. In terms of the high end and low end, as you know, I mean, we're very early in the year, and much of our business primarily on the transient side has yet to book. So really, the range that we're reflecting is pretty consistent with what we've done in the last couple of years and just reflects kind of the natural volatility in the business and the fact that our visibility particularly to the second half of the year outside of food business is much more limited either of you. Okay. It seems -- are there any other follow-ons on that one?

Not on that one, but I had a different question just around -- Barry, you mentioned some of the positive trends in large corporate account growth. Just curious if you can unpack more recent trends there. And just the incremental opportunity, just I think that segment has kind of lagged from a recovery standpoint. So just the incremental opportunity there.

Yes. I mean it's definitely lagged. We're certainly still below 2019 levels in that segment. But I think the growth we saw quarter-by-quarter last year really gives us a much more positive feeling about it, and particularly the growth we saw in Q4. Really, the it was very consistent growth throughout the year with the exception of Q3, which obviously always feels a little bit different. But we just feel like things are getting better. Our hotels are able to better capture more business from more of the large accounts. And some of that is intentionally really going after them, I think, more aggressively but we're also seeing more project work from the big 4 accounting firms and the big 4 consulting firms that just speaks volumes to what's going on as well as some of the very key in our case, Fortune 100 accounts that have just, I mean, really grown remarkably, I think I mentioned mid-teens growth in those accounts in the largest accounts in the portfolio in Q4, we think gives us a good setup for this year. And certainly, we've -- part of what we've seen that's contributed to the strong quarter-to-date performance thus far.

And our next question comes from David Katz with Jeffries.

I wanted to just talk about the asset trading market, and we've spent a lot of time talking about that $50 million in sweet spot. We have seen some deals and/or been hearing from some of the peers about deals that are in some state of process. One, are you seeing a little more activity? And two, should we -- is it fair of us to expect a little more activity from you as we progress through the year?

Yes. Thanks for the question, David. I think the way you described it is accurate. I think there is some more product out there than what we've seen over the last few years. Certainly, the broker community seems to be a little bit more optimistic going into this year. Now brokers are hugely optimistic. But so far, it does seem like there's a bit more product out there, and there could be some more opportunities out there. S&P's obviously pointed out in his comments, we for active on the share repurchase side. I just felt like there has been over the last few years, a pretty big gap between where we could essentially acquire our own assets versus what external growth opportunities were out there. So to the extent that to dig a little bit deeper and harder into that are out there. So Clearly, over the next few years, we'd like to see some external growth opportunities come to fruition, and that's going to be really driven by the opportunity set for pricing and certainly our own shares are valued.

Understood. And I think you started down the road of answering the next part of the question, which is how do we think about setting boundaries for you in terms of what would interest you? I know that obviously, you look at everything, it's what -- it's what's usual and required but what kinds of things would you like to add as you start looking and seeing more stock?

Yes, sure. I mean we -- I think kind of the numbers you were talking about. I mean, clearly, the kind of $50 million to $200 million range is kind of the sweet spot for a company like ours with the size of our company. I think we've done a very good job of increasing the quality level of our portfolio and just kind of over what a portfolio is positioned currently from both a quality and a location standpoint. So as I've said many times in the past, when we've talked about these questions, we don't necessarily say, hey, the next acquisition needs to be in market A, B or C. We want to make sure that we look at the opportunity set that's out there. Clearly, there are 3 markets where we have a pretty good concentration at this point, really between Orlando, Houston, Phoenix, those are obviously some of the big drivers for our portfolio. So with the percentage that we're already in those markets, I don't necessarily see us looking in those markets unless there's some great opportunity that kind of force us to look at do we replace an asset in 1 of those markets? So it's really about some of the other markets that we are still somewhat under concentrated in and maybe some markets that we're not in. So we really want to be opportunistic. We want to make sure it's an asset that fits well with our overall strategy of being able to pivot between different demand segments. Clearly, the group segment has been something that's been very beneficial to us over the last few years. So we'd be very interested in potentially adding a little bit there. But -- it's not to say that if there is just a great opportunity for an asset that's a little bit more focused on corporate transient or leisure that we wouldn't take a look at that. zlz

And the next question comes from Michael Bellisario with Baird.

To First question is on Nashville. Just first on Nashville, just 4Q, how did that market perform? And then looking out to 26, what are you guys seeing on both the leisure and BT fronts, just relative to the market having been relative underperformed recently. .

Yes, Q4 was really tough for the market. We certainly participated in that toughness, unfortunately, where we continue to see opportunity to improve our focus, both pre and post the restaurant food and beverage transformations is really on the midweek corporate customer and on the midweek group customer is really a sweet spot for the hotel where we've continued to experience growth despite some of the challenges and softening we've seen in leisure there over time. We think the 2026 setup is certainly expect to be improved over 2025 but not significantly, quite frankly. But with our -- where we do think we're going to see growth is, again, is that is in midweek corporate and midweek group as we really kind of continue our efforts in that area. We do think -- longer term, we think that we're going to have the opportunity to, as I mentioned, really enhance the profile of the property in a way that appeals to -- that we gather a little more appeal to the leisure guests as a destination hotel because of the food and beverage platform. which we've seen in some of our other hotels, and we've certainly seen an experience with -- in other hotels operated or licensed by Josiane Group.

Got it. That's helpful. And then just maybe more conceptual here, just on sort of the RevPAR versus total RevPAR split, I guess, how long could that positive spread persist? And then within the F&B and other lines, are you actually raising prices? Or are you just seeing volume pick up? Just sort of any thoughts on that spread there, the performance in the non-range lines would be helpful.

Yes, sure. I mean it's -- obviously, there've been significant beneficiaries across the industry, but I think we have a couple of unique pieces that we think are going to give us continued growth there. A lot of it is related to our continued growth and success in group business, a lot of which is still being driven by the new ballroom at brand site, which although it's not that new, we're really seeing the benefits of that come to fruition now as the hotel continues to be able to stack more group in the property. The property is also similar story, certainly in in Scottsdale as well. And while we're seeing some growth in restaurant business, it's really been the growth in banquet and catering, food and members. It's really been the star performer in those hotels and across the portfolio. I think some of it is driven by our conscious decision to group up across the portfolio. Some of it is related to kind of as that business has grouped up. It's been largely in corporate business as opposed to association business, which has shown a great willingness right now to spend on food and beverage and continue to spend on food and beverage for programs. Our hotels are capturing a lot more group meals on site than than off-site. That's because certainly a trend we've seen in the largest sorts, whereas historically, some groups might have gone off property for a night or 2. They're choosing to say on property for more evening functions in particular, which is driving revenues significantly in the larger resorts. So think about Hysan Cypress, hives Scottsdale and Park Hyan Aviara have been the most significant beneficiaries of that trend. And then finally, the -- absolutely, the hotels are taking advantage of pricing and are finding more opportunities to get groups both to spend more but there's also been incremental pricing increases across all of those. So across all of our group-focused hotels as it relates to break catering prices.

[Operator Instructions] The next question comes from Cooper Clark with Wells Fargo.

I appreciate some of the earlier comments on the RevPAR complexion. So thinking about group PACE ex Scottsdale up about 8% from March to December but RevPAR ex Scottsdale only up about 1.75%. Just curious about some of the puts and takes there and any kind of drivers we should be thinking about?

Yes, that's a great question. So thanks, Cooper. So I would say a few things. I mean, first, as the year goes on, we expect that group number to come down given that we're pretty booked up for group and there's less space and dates available for groups. So that's 1 thing to keep in mind. Secondly, I would say, we expect obviously, some growth out of business transient and leisure but much lower levels. So when you mix it all together and blend it, that's where you get to the full year forecast being significantly lower than the current pace number. And if you think about the evolution of our business last year and where we started in terms of group pace, how group performed for the full year, how business transient and leisure came in, we expect sort of a similar prioritization where group would likely be the strongest performer, followed by business transient and then leisure I will say though that for this year, the outlook for leisure does appear better, as I mentioned in the prepared remarks, given both the special events and hopefully our properties that were normalizing a bit last year have now finished really the normalization process. So that's really kind of how we think about both the segments and some of the inputs and where you get to the total number that we referenced.

Great. That's very helpful. And then curious if you could talk about the time line around the Nashville F&B ramp towards stabilization.

Sure. I mean I talked about the timing of each outlets opening. We're seeing a pretty quick ramp-up on Zatenia, which has now been open, I think, for days or so, a little less than 2 weeks. What we've seen in other Jose Andres operations is they tend to ramp up quite quickly. But I think it's hard given where we are today to really think about when we kind of hit stabilization, but we've certainly underwritten some pretty fair performance in the asset for this year in terms of the growth in ramp-up.

Yes, I'll just add to that, that obviously, we'll get the initial bump of kind of the excitement and the marketing of it being added to the property. But the real benefit is going to be in the next several years as the property just gained some more momentum as far as being kind of the destination hotel like Barry was talking about. So we love the incremental revenues that we're looking to achieve at the property is not necessarily a massive improvement in food and beverage profitability. It's really coming from how it all plays together with the hotel operation and how the hotel just becomes a more attractive destination for every segment. So it's a great selling point for the group segment. Obviously, it's going to be very attractive for corporate transient. And for leisure, it also will become a much more interesting destination. So we think what it's going to do for the overall performance of the hotel is going to be something that's going to play out over the next several years.

And the next question comes from Austin Wurschmidt with KeyBanc Capital Markets.

I was just wondering on the operating expense growth outlook of 4.5% I mean, how much of an impact is the Grand Hyatt Scottsdale having on that? And I guess, what's kind of the expectation on that sort of moderating more towards inflationary levels -- just wondering what some of the other -- some of those moving pieces are.

Yes, sure. Why don't I start that and then maybe Barry and Marcel could add to it. So Certainly, the numbers that I provided on the expense outlook include Grand Hyatt Scottsville, and I referenced a slight margin contraction expected for the full year. If you factor in Grand Hyatt Scottsdale or look at that separately, it's a little bit more margin contraction expected. So we've really seen most of the expenses come in on the Grand Hyatt Scottsdale. I don't think that's having as outsized an impact as it had over the course of the last year. Obviously, business is continuing to pick up from an occupancy perspective. And that's why you have more of an impact on overall expenses coming from Grand Hyatt Scottsdale and the rest of the portfolio because we're still adding to the occupancy of the asset.

Yes. I think this also mentioned in his remarks that if you look at it were occupied room basis, we're essentially kind of at that inflationary number right were at above that 3% increase on a per occupied room basis. So a lot of the -- a lot of the increased expenditures to get to that 4.5% number is more just because of occupancy building. And some of that clearly is related to Grand Hyatt costs.

That's all helpful. And then I'm just wondering, it sounds like the group pace at the Grand Hyatt continues to ramp on par with what you had underwritten. The outlook seems really positive in the 27%. I'm just curious on the transient side for that hotel, how the ramp; has been and then just how that's factoring into the ADR pickup that was underwritten in the initial outlook prior to the renovation.

Yes, sure. Obviously, this really is our first season at the property, given kind of an came online last year and where we were in terms of, although we were completed we're not really ahead of the curve on marketing during the peak season that we're seeing fantastic results this year. This year-to-date so far and really good pace for March and April and the hotel has been able to I think, step up its game as it relates to being able to charge the premium rates at the property and facility deserve. So we feel really good about it. Are we going to get all the way to where we want to get this year in terms of transient positioning in season? Probably not. But I think that also gives us the opportunity. We've always looked at for further growth as we head into its second half season in the first 4 months of 2027.

I think what we saw in in '26 coming this first year, really pose renovation is we essentially got to our number that we had underwritten for the first year but we did get there a little bit differently. Clearly, the the leisure demand in Phoenix cost sale was a little bit softer last year than in prior years. But we definitely made up for that on the group side and really got to the numbers that we were able to deliver. So I think that's kind of the backdrop that we're still dealing with as we go forward. That's clearly to get to that stabilized number it'd be nice to see if the leisure demands come back a little bit more strongly here over the next 12, 24 months but we feel good about the forecast of where we are for this year based on that very strong group base and just all the recent trends we've been seeing there. zlz

[Operator Instructions] And as we have no further questions in the queue, I will hand back over to the Chair and CEO, Marcel Verbaas for any final comments.

Thank you, Carla. Thanks, everyone, for joining us today. We're obviously a solid to start this year. I appreciate all the questions today, and we look forward to connecting with everyone else here moves along.

Thank you, everyone, for joining today's call. You may now disconnect. Have a great rest of your day.