Xenia Q3 2026 Earnings: RevPAR Growth Expands Hotel Margins

Xenia Hotels & Resorts (NYSE: XHR) reported Q3 2026 revenue of $263.8 million, up about 11.6% from $236.4 million a year earlier, while its diluted GAAP loss narrowed to $0.03 per share from $0.14. Same-property RevPAR rose 12.5%, and faster revenue growth relative to hotel expenses lifted same-property hotel EBITDA margin by 295 basis points. Xenia also raised its full-year 2026 outlook following the quarterly performance and continued RevPAR growth in October.

Core Financial Results

Revenue growth was supported by higher room rates, increased occupancy and stronger food-and-beverage activity. Operating income more than tripled as total revenue grew faster than expenses, although interest and depreciation kept the company in a GAAP net-loss position.

The REIT’s supplemental operating measures improved more rapidly than consolidated revenue. Adjusted EBITDAre increased 26.0%, while adjusted FFO per diluted share rose 56.5%.

Adjusted EBITDAre, adjusted FFO and same-property hotel EBITDA are non-GAAP measures. The same-property portfolio included 29 hotels and 8,783 rooms and incorporated disruption from multiple renovation projects.

Business and Market Performance

Same-property occupancy increased 380 basis points to 70.0%, while average daily rate rose 6.4% to $264.00. The combination pushed RevPAR up 12.5% to $184.75 and total RevPAR up 12.7% to $325.71.

Management attributed the improvement to broad-based group and corporate transient demand, along with additional leisure demand associated with several large events. On a same-property basis, room revenue increased 12.5%, food-and-beverage revenue rose 15.0%, and other revenue grew 6.0%.

Performance varied by market but was positive across most of the portfolio. Philadelphia posted a 34.5% RevPAR increase, followed by New Orleans at 29.0% and San Diego at 21.6%. Orlando and Houston, which represented 17% and 14% of 2025 hotel EBITDA respectively, recorded RevPAR growth of 16.2% and 11.7%. Savannah was a notable exception, with RevPAR declining 3.2%.

Rate and Occupancy Gains Created Operating Leverage

Same-property revenue increased 12.7%, compared with an 8.5% increase in same-property hotel operating expenses. This spread allowed same-property hotel EBITDA to grow 29.3% and its margin to expand from 19.9% to 22.9%.

Expense performance was mixed beneath the total. Management and franchise fees increased 23.7%, and other indirect expenses rose 7.9%, while real estate taxes, personal property taxes and insurance declined 5.3%. The overall result supports management’s view that revenue growth and expense controls worked together to improve property-level profitability.

At the consolidated level, operating income rose to $16.3 million from $4.7 million. However, quarterly interest expense of $20.3 million and depreciation and amortization of $31.2 million contributed to the remaining GAAP net loss. Adjusted FFO excludes real estate depreciation and certain other items, explaining why that measure showed a substantially stronger result than GAAP earnings.

Liquidity, Debt and Capital Allocation

Xenia ended the quarter with approximately $161 million of cash and cash equivalents, about $85 million of restricted cash and escrows, and total liquidity of approximately $661 million. Outstanding debt was about $1.4 billion with a weighted-average interest rate of 5.55%, while the company had full availability under its $500 million revolving credit facility.

Capital expenditures were $16.4 million in Q3 and $47.0 million for the first nine months of 2026. Xenia completed work at Royal Palms Resort & Spa and continued infrastructure and room upgrades at several properties. Major renovations at Andaz Napa and The Ritz-Carlton, Denver were scheduled to begin in early December.

In July, Xenia sold the 85-room Kimpton RiverPlace Hotel for $11 million. The related $38.8 million non-cash impairment charge had been recorded in the second quarter. The company did not repurchase common shares or issue shares through its at-the-market program during Q3, and it declared a quarterly dividend of $0.14 per share.

Full-Year 2026 Guidance

Xenia raised its full-year outlook after the Q3 results and estimated same-property RevPAR growth of approximately 8% in October. The midpoint of adjusted EBITDAre guidance increased by $8 million, while the midpoint for adjusted FFO per diluted share rose by $0.09.

The guidance includes an estimated $1 million negative effect from renovation disruption, unchanged from the prior outlook. It assumes no additional acquisitions, dispositions, equity issuance, or share and senior-note repurchases. Management also emphasized that macroeconomic uncertainty continues to limit forecasting visibility.

Risks Investors Should Monitor

• Demand may not sustain the Q3 pace: Group, corporate transient and event-related leisure demand drove the quarter’s gains. A slowdown in these categories could pressure occupancy, room rates and RevPAR.
• Renovations may create disruption: Major projects at Andaz Napa and The Ritz-Carlton, Denver were scheduled to begin in December. Guidance assumes about a $1 million earnings impact, but project timing and disruption remain variables.
• Debt and interest costs constrain GAAP earnings: Xenia carried approximately $1.4 billion of debt at a 5.55% weighted-average rate. Quarterly interest expense exceeded operating income despite the improvement in hotel operations.
• Further margin gains require continued cost control: Same-property expenses grew more slowly than revenue in Q3, but management and franchise fees increased 23.7% and indirect expenses rose 7.9%.

Conclusion

Xenia’s Q3 2026 results reflected higher room rates, improved occupancy and stronger group, corporate transient and event-driven leisure demand. Those factors produced double-digit RevPAR growth and meaningful property-level operating leverage, even though financing and depreciation costs left the company with a small GAAP loss. The raised full-year guidance shifts attention to whether demand remains durable and whether upcoming renovations can be completed within the disruption and capital-spending assumptions.