Xenia Hotels & Resorts Reports Second Quarter 2020 Results

ORLANDO, Fla., July 30, 2020 /PRNewswire/ -- Xenia Hotels & Resorts, Inc. (NYSE: XHR) ("Xenia" or the "Company") today announced results for the quarter ended June 30, 2020.

Second Quarter and Year to Date 2020 Highlights

• Hotel Status: The Company had 8 hotels open and operating for the entire month of April.  Having temporarily suspended operations at 31 hotels between late March and early April, the Company recommenced operations at 5 hotels in May and 13 hotels in June.  Therefore, at the end of the second quarter, 26 hotels were open and operating.  By July 31, 2020, the Company will have recommenced operations at 9 additional hotels, resulting in 35 of the Company's 39 hotels open and operating, representing 83% of the Company's hotel rooms.
• Net Loss: Net loss attributable to common stockholders for the three months ended June 30, 2020 was $99.1 million, or $0.88 per share. Net loss attributable to common stockholders for the six months ended June 30, 2020 was $135.3 million, or $1.20 per share.
• Adjusted EBITDAre: Adjusted EBITDAre for the three and six months ended June 30, 2020 was $(43.0) million and $(18.5) million, respectively.
• Adjusted FFO per Diluted Share: Adjusted FFO per diluted share was $(0.46) and $(0.29) for the three and six months ended June 30, 2020, respectively.
• Financing Activity: In the second quarter, the Company completed amendments to each of its corporate credit facility agreements and modifications to seven of its eight secured mortgage loans. The modification to the eighth secured mortgage loan was completed subsequent to quarter end.
• Liquidity: As of June 30, 2020, the Company had approximately $306 million of unrestricted cash and cash equivalents. The Company has reduced its estimate of average monthly recurring cash expenses assuming all operations are temporarily suspended to $22 million. Additionally, the Company suspended its second quarter dividend and does not expect to pay a dividend for the balance of the year unless required to maintain REIT status.

"The operating environment in the second quarter was unlike anything we have ever experienced in the lodging industry," commented Marcel Verbaas, Chairman and Chief Executive Officer of Xenia.  "I would like to thank our hotel operating teams and corporate employees for their agility and resilience during this unprecedented time.  While we are in the early stages of what is likely to be a very choppy and uneven recovery, early indications reinforce our view that travel is an integral part of life and that lodging demand will return.

"Over the last few months, we have been reminded of some of our company's key advantages.  Owning hotels that attract diverse types of demand, including high-end leisure business, has helped us reopen hotels at a strong pace.  By tomorrow, 35 of our 39 hotels will be open and operating, representing over 80% of our total rooms.  Our hotels and resorts located in key leisure and drive-to markets were the first to reopen and affirmed our long-standing strategic focus of owning a diverse group of properties.  Having a broad geographic presence, without heavy concentration in a handful of urban gateway markets, has proven to be beneficial.  Being affiliated with the strongest brands, at a time when trusted brands matter the most, is also a major strength.  Having a high-quality and recently renovated portfolio gives us confidence that our properties are well suited for a sustained recovery.  Finally, our solid balance sheet and liquidity position have been critical this year and we expect each to help us weather this storm."

"We have taken the last few months to work with our operators to re-shape on-property operations, and we commend our operating companies for moving aggressively to control expenses, helping us reduce our average monthly recurring expenses relative to our previous estimate.  We intend to maintain these leaner operating models as demand returns to prior peak levels in the years ahead," continued Mr. Verbaas. "Our consistent strategic focus on having a significant investment in assets in key leisure destinations is expected to provide us with a competitive edge in the months and quarters ahead. We experienced the benefit of this strategy as we reopened our assets in locations such as Savannah, Charleston, Key West, Napa, Phoenix and Orlando with encouraging short-term results, including six properties that had positive Hotel EBITDA for the month of June."

"While several states have experienced an uptick of COVID-19 cases in recent weeks, we currently have no plans to resuspend operations at any hotels or resorts.  Month-to-date, through July 25^th, our open properties averaged nearly 25% occupancy, consistent with levels we saw at our hotels that were open in June.  With most of our properties now open and operating, we are positioned to capture demand in the quarters ahead. Though near-term demand is difficult to predict, we do know that having a desirable, diversified portfolio matters. Not all hotel portfolios will recover the same. Once business does recover, the renewed industry focus on streamlined operations will allow hotel owners to better deliver margin gains in future years. In addition, we anticipate a lengthy period in which competitive supply growth will be muted. In the meantime, we continue to be focused on conserving liquidity, preserving value for our shareholders, keeping our high-quality portfolio in great condition, and positioning the company for the future up cycle," concluded Mr. Verbaas.

Operating Results

The Company's results include the following:

Operations Update

The impact of the COVID-19 pandemic on the global economy, lodging industry, and the Company's operations was extreme during the second quarter, with performance beginning to gradually improve in June.  In response to the rapidly deteriorating fundamentals in March, the Company worked with its hotel operators to reduce property expenses and manage working capital requirements.  In March and April, the Company temporarily suspended operations at 31 of its 39 hotels, and only eight hotels remained open and operating for the full quarter.  The Company began recommencing operations at its temporarily shuttered properties during the month of May beginning with five smaller, leisure-oriented hotels and resorts, with a focus on attracting local and drive-to business. In June, the Company recommenced operations at 13 additional properties. As of June 30, 2020, 26 of the Company's 39 hotels and resorts were open, representing 61% of the Company's hotel rooms.

Upon recommencement of operations, several of the Company's properties initially operated with limited room inventory and the majority had reduced food and beverage operations due to local and state ordinances, social distancing requirements, and lower anticipated demand.

The following table provides operating information for the Company's portfolio during the second quarter.  These results include days the hotels and resorts were open and operating following the temporary suspension of operations during the periods presented:

Hotel Status

The following table identifies the hotels and resorts that were open and operating as of July 30, 2020, as well as one hotel expected to open by July 31, 2020: