Q4 2025 Xenia Hotels & Resorts Inc Earnings Call

February 24, 2026

Operator: Hello, and welcome to the Xenia Hotels & Resorts Inc. Q4 2025 Earnings Conference Call. My name is Carla. I will be coordinating your call today. During the presentation, you can register to ask questions by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I will now hand you over to your host, Aldo Martinez, Manager of Finance, to begin. Please go ahead when you're ready.

Speaker #1: My name is Carla, and I will be coordinating your call today. During the presentation, you can register to ask questions by pressing star followed by 1 on your telephone keypad.

Speaker #1: If you change your mind, please press star followed by 2. I will now hand you over to your host, Aldo Martinez, Manager, Finance, to begin.

Speaker #1: Please go ahead when you're ready.

Speaker #2: 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.

Aldo Martinez: Thank you, Carla. Welcome to Xenia Hotels & Resorts Q4 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. Atish will conclude today's remarks on our balance sheet and outlook. We will 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Aldo Martinez: 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, 24 February 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 Q4 earnings release, which is available on the investor relations section of our website. The property-level information we will be speaking about today is on a same property basis for all 30 hotels, unless specified otherwise.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: This information 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.

Speaker #2: 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.

Aldo Martinez: 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.

Speaker #3: 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.

Marcel Verbaas: 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 upbranded Grand Hyatt Scottsdale, which ramped up in line with our underwriting expectations in 2025.

Speaker #3: Adjusted EBITRE 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.

Speaker #3: This was driven by strong group demand throughout the portfolio, and bolstered by encouraging results at the recently transformed and upbranded Grand Hyatt Scottsdale, which ramped up in line with our underwriting expectations in 2025.

Speaker #3: 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.

Marcel Verbaas: 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 a double-digit percentage growth in Adjusted FFO per share as compared to 2024. In 2025, we continued to build on our track record of continuous portfolio improvements. We sold Fairmont Dallas in 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 Hyatt Regency 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.

Speaker #3: In 2025, we continued 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.

Speaker #3: And allowing us to avoid an estimated $80 million of required capital expenditures over the next several years. We also acquired the land under Hyatt Regency and Embassy Suites Santa Clara.

Speaker #3: 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.

Speaker #3: These capital expenditures consisted of both guest-facing enhancements as well as substantial investments in property infrastructure that have enhanced the resiliency and efficiency of many of our hotels and resorts.

Marcel Verbaas: These capital expenditures consisted of both guest-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 Q4 results. This morning, we reported net income of $6.1 million for the quarter. Adjusted EBITDAre was $63.6 million, and Adjusted FFO per share was $0.45, with both results either meeting or exceeding the top end of the implied Q4 guidance range we provided when we announced our Q3 results. Strong group and transient demand drove a same-property RevPAR increase of 4.5%, building on the 5.6% growth our same-property portfolio achieved in Q4 2024. Continued substantial growth in non-room revenues contributed to a 6.7% increase in same-property Total RevPAR for the quarter.

Speaker #3: Now turning to our fourth quarter results. This morning, we reported net income of $6.1 million for the quarter. Adjusted EBITDAre was $63.6 million.

Speaker #3: And adjusted FFO per share was $0.45. With both results, either meeting or exceeding the top end of the implied fourth quarter guidance range we provided.

Speaker #3: When we announced our third quarter results, strong group and transient demand drove a same property RevPAR increase of 4.5%. Building on the 5.6% growth our same property portfolio achieved in the fourth quarter of 2024.

Speaker #3: Continued substantial growth in non-roomed revenues contributed to a $6.7% increase in same property total ref bar for the quarter. The continued successful ramp at Grand Hyatt Scottsdale as well as strong performance by our properties in Santa Barbara, Orlando, San Diego, and Santa Clara were the most significant components of our same property ref bar and total ref bar growth for the quarter.

Marcel Verbaas: The continued successful ramp at Grand Hyatt Scottsdale, as well as strong performance by our properties in Santa Barbara, Orlando, San Diego, and Santa Clara, were the most significant components of our same-property RevPAR and total RevPAR growth for Q4. Encouragingly, our hotels in the Houston market also experienced growth in RevPAR and total RevPAR, as market performance improves after facing difficult year-over-year comparisons in Q3. On a same-property basis, Q4 Hotel EBITDA of $68.8 million was 16.3% above 2024 levels, and Hotel EBITDA margin was 214 basis points higher as compared to 2024, as revenue growth meaningfully outpaced increases in hotel operating expenses. For the full year of 2025, net income was $63.1 million.

Speaker #3: Encouragingly, our hotels in the Houston market also experienced growth in RefPAR and Total RefPAR, as market performance improved after facing difficult year-over-year comparisons in the third quarter.

Speaker #3: On a same-property basis, fourth quarter hotel EBITDA of $68.8 million was 16.3% above 2024 levels, and hotel EBITDA margin was 214 basis points higher compared to 2024.

Speaker #3: As revenue growth meaningfully outpaced increases in hotel operating expenses. For the full year 2025, net income was $63.1 million. Adjusted EBITDA was $258.3 million.

Marcel Verbaas: Adjusted EBITDAre was $258.3 million, and Adjusted FFO per share was $1.76. With both measures meeting or exceeding the top end of the guidance ranges we provided after our Q3 results, as well as the midpoint of the initial guidance we provided at the beginning of the year. Our same-property portfolio achieved a RevPAR increase of 3.9% in 2025, which was just shy of the midpoint of our last issued guidance. Strong growth in food and beverage and other revenues contributed to Total RevPAR growth of 8% for the year. Food and beverage revenue for the full year was up a considerable 13.4% when compared to 2024, driven by significant increases in banquet and catering revenues, while all other revenues were also up 13.8%.

Speaker #3: And adjusted FFO per share was $1.76, with both measures meeting or exceeding the top end of the guidance ranges we provided after our third quarter results.

Speaker #3: As well as the midpoint of the initial guidance we provided at the beginning of the year. Our same property portfolio achieved a RevPAR increase of 3.9% in 2025.

Speaker #3: This was just shy of the midpoint of our last issued guidance. Strong growth in food and beverage and other revenues contributed to total RevPAR growth of 8% for the year.

Speaker #3: Food and beverage revenue for the full year was up a considerable 13.4% when compared to 2024, driven by significant increases in banquet and catering revenues, while all other revenues were also up 13.8%.

Speaker #3: In 2025, about half of our 30 hotels and resorts achieved RevPAR growth as compared to 2024. Our properties in Scottsdale, Denver, Santa Clara, Orlando, San Diego, Santa Barbara, and San Francisco delivered the most substantial increases in total RevPAR during the year.

Marcel Verbaas: In 2025, about half of our 30 hotels or resorts achieved RevPAR growth as compared to 2024. Our properties in Scottsdale, Denver, Santa Clara, Orlando, San Diego, Santa Barbara, and San Francisco delivered the most substantial increases in total RevPAR during the year, and we believe that these markets remain poised for continued growth in the years ahead. On a same-property basis, 2025 Hotel EBITDA of $274.3 million was 13.5% above 2024 levels, and Hotel EBITDA margin was 129 basis points higher as compared to 2024. Our operators continue to do a good job controlling expenses in a continued inflationary environment. Additionally, our corporate initiatives related to real estate taxes, property insurance, and infrastructure ROI projects contributed to our margin improvement in 2025.

Speaker #3: And we believe that these markets remain poised for continued growth in the years ahead. On the same-property basis, 2025 hotel EBITDA of $274.3 million was 13.5% above 2024 levels.

Speaker #3: And hotel EBITDA margin was 129 basis points higher as compared to 2024. Our operators continue to do a good job controlling expenses in a continued inflationary environment.

Speaker #3: Additionally, our corporate initiatives related to real estate taxes, property insurance, and infrastructure ROI projects contributed to our margin improvement in 2025. From a demand segment perspective, 2025 largely played out as we had anticipated at the beginning of the year.

Marcel Verbaas: From a demand segment perspective, 2025 largely played out as we had anticipated at the beginning of the year, with group being the leading growth segment, corporate transient showing steady improvements and leisure demand stabilizing. Group demand was a bright spot for us in 2025, as same-property group room revenues increased by 12.8% as compared to 2024. While Grand Hyatt Scottsdale was a significant driver of this increase, we saw strength in group demand throughout the portfolio. Strong group demand is particularly positive for our high-end portfolio, as significant ancillary revenues generally accompany room revenues. As a result, our banquet and catering revenues increased by 17.2% in 2025 as compared to the prior year. This increase was a significant contributor to our impressive total RevPAR increase for the year.

Speaker #3: With group bringing the leading growth segment, corporate transients showing steady improvement, and leisure demand stabilizing, group demand was a bright spot for us in 2025.

Speaker #3: As same-property group room revenues increased by 12.8% as compared to 2024. While Grand Hyatt Scottsdale was a significant driver of this increase, we saw strengthened group demand throughout the portfolio.

Speaker #3: Strong group demand is particularly positive for our high-end portfolio, as significant ancillary revenues generally accompany room revenues. As a result, our banquet and catering revenues increased by 17.2% in 2025.

Speaker #3: As compared to the prior year, this increase was a significant contributor to our impressive total RevPAR increase for the year. We continue to reap the benefits from our investments into upgrades and expansions of the meeting spaces in our portfolio in recent years.

Marcel Verbaas: We continue to reap the benefits from our investments into upgrades and expansions of the meeting spaces in our portfolio in recent years, most notably the additional ballroom at Hyatt Regency Grand Cypress and the meeting space expansion and upgrades at Grand Hyatt Scottsdale. After a stellar group year in 2025, we are expecting to build on this in 2026, as our group room revenue pace continues to be a positive data point for the year. Atish will provide details on our forward group pace during his remarks. In 2025, we invested approximately $87 million in capital projects, which included expenditures related to the completion of the final components of the Grand Hyatt Scottsdale renovation. We completed a number of meaningful infrastructure projects throughout the portfolio, as well as minor guest room renovations at seven of our properties, with minimal disruptions to operations.

Speaker #3: Most notably, the additional ballroom at High Grede and Sea Grand Cypress, and the meeting space expansion and upgrades at Grand Hyatt Scottsdale. After a stellar group year in 2025, we are expecting to build on this in 2026 as our group room revenue pace continues to be a positive data point for the year.

Speaker #3: Atish will provide details on our forward group pace during his remarks. In 2025, we invested approximately $87 million in capital projects, which include expenditures related to the completion of the final components of the Grand Hyatt Scottsdale renovation.

Speaker #3: We completed a number of meaningful infrastructure projects throughout the portfolio, as well as minor guest room renovations at seven of our properties with minimal disruptions to operations.

Speaker #3: While these renovations were limited in scope, we expect the refreshed rooms product at these seven hotels will positively impact the guest experience and the competitive positioning of these properties.

Marcel Verbaas: While these renovations were limited in scope, we expect that the refreshed rooms product at these 7 hotels will positively impact the guest experience and the competitive positioning of these properties. We are currently completing a limited guest room and corridor renovation at Fairmont Pittsburgh, which, after renovating the meeting space and lobby and adding a Starbucks in recent years, will further cement the hotel's status as the preeminent luxury hotel in the market. This renovation will be completed in the next few weeks, well in advance of the NFL Draft taking place in Pittsburgh in April. We are also nearing completion of the construction of the enhanced food and beverage outlets at W Nashville.

Speaker #3: We are currently completing a limited guest room and corridor renovation at Fairmont, Pittsburgh, which, after renovating the meeting space and lobby and adding a Starbucks in recent years, will further cement the hotel's status as the preeminent luxury hotel in the market.

Speaker #3: This renovation will be completed in the next few weeks, well in advance of the NFL Draft taking place in Pittsburgh in April. We are also nearing completion of the construction of the enhanced food and beverage outlets at W Nashville.

Speaker #3: We are extremely excited about the quality and appeal of the new spaces, and believe the collaboration with Jose and Grace Group will be highly beneficial for the hotel.

Marcel Verbaas: We are extremely excited about the quality and appeal of the new spaces, and believe the collaboration with José Andrés Group will be highly beneficial for the hotel, as Barry will discuss in more detail during his remarks. As we turn to 2026, we project that we will invest between $70 and $80 million in total capital expenditures this year. We anticipate that we will incur approximately $1 million of Adjusted EBITDAre and Adjusted FFO displacement in 2026, as our renovation projects are expected to cause limited disruption to guests, given their scope and timing. In addition to the completion of the Nashville and Pittsburgh projects, the most significant projects will be the commencement of the guest room renovations at Andaz Napa and the Ritz-Carlton Denver that we postponed last year.

Speaker #3: As Barry will discuss in more detail during his remarks, as we turn to 2026, we project that we will invest between $70 and $80 million in total capital expenditures this year.

Speaker #3: We anticipate that we will incur approximately $1 million of adjusted EBIT RE and adjusted FFO displacement in 2026, as our renovation projects are expected to cause limited disruption to guests given their scope and timing.

Speaker #3: In addition to the completion of the Nashville and Pittsburgh projects, the most significant projects will be the commencement of the guest room renovations at Condos Napa and the Ritz-Carlton Denver, which we postponed last year.

Speaker #3: These renovations are scheduled to commence late in the year, during a time when disruption is expected to be minimal. Turning to our outlook for 2026, our initial 4.5% same property RevPAR growth, or 3% at the midpoint.

Marcel Verbaas: These renovations are scheduled to commence late in the year during a time when disruption is expected to be minimal. Turning to our outlook for 2026, our initial guidance is based on a range of 1.5% to 4.5% same-property RevPAR growth, or 3% at the midpoint, and 2.75% to 5.75% total RevPAR growth, or 4.25% at the midpoint. Most importantly, our guidance on Adjusted FFO per share reflects a 7% increase over 2025 at the midpoint, building on the almost 11% growth we delivered last year. Embedded in this outlook is the expectation of a continued ramp-up in revenues at Grand Hyatt Scottsdale, and an expectation of modest RevPAR growth for the remainder of the portfolio.

Speaker #3: And 2.75% to 5.75% total RevPAR growth, or 4.25% at the midpoint. Most importantly, our guidance on adjusted FFO per share reflects a 7% increase over 2025 at the midpoint.

Speaker #3: Building on the almost 11% growth we delivered last year, embedded in this outlook is the expectation of a Hyatt Scottsdale and an expectation of modest RevPAR growth for the remainder of the portfolio.

Speaker #3: Atish will provide more detailed information on our guidance assumptions during his remarks. Looking ahead, we are optimistic about our future growth prospects, as lodging demand remains resilient despite continued uncertainty in the broader overall economic and political climate.

Marcel Verbaas: Satish will provide more detailed information on our guidance assumptions during his remarks. Looking ahead, we are optimistic about our future growth prospects as lodging demand remains resilient, despite continued uncertainty in the broader overall economic and political climate. We believe that the continued strength in group business, the ongoing recovery in corporate transient demands, and the potential incremental leisure demands from large events such as the FIFA World Cup, the NFL Draft, and America 250, will be positive for our high quality and well-located portfolio in 2026. We estimate the same property RevPAR for the Q1 through February 19th, grew approximately 4.6% versus the comparable period in 2025, which is a positive start to the year.

Speaker #3: We believe that the continued strength in group business, the ongoing recovery in corporate transient demand, and the potential incremental leisure demand from large events such as the FIFA World Cup, the NFL Draft, and America 250 will be positive for our high-quality and well-located portfolio in 2026.

Speaker #3: We estimate that same property RevPAR for the first quarter through February 19th grew approximately 4.6% versus the comparable period in 2023, which is a positive start to the year.

Speaker #3: We continue to believe that Xenia is primed for meaningful revenue growth in the future, and that we will be able to continue to deliver FFO growth in the years ahead as we build on the positive momentum we experienced in 2025.

Marcel Verbaas: We continue to believe that Xenia is primed for meaningful revenue growth in the future, and that we will be able to continue to deliver FFO growth in the years ahead as we build on the positive momentum we experienced in 2025. Barry will now provide more details on our Q4 and full year operating results, the W Nashville food and beverage relaunch, and our recently completed and upcoming capital projects.

Speaker #3: Barry will now provide more details on our fourth quarter and full-year operating results, the W Nashville food and beverage relaunch, and our recently completed and upcoming capital projects.

Speaker #3: 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.

Barry Bloom: Thank you, Marcel, and good afternoon, everyone. For the Q4, our 30 hotel same-property portfolio RevPAR was $176.45, an increase of 4.5% compared to Q4 2024, based on occupancy of 66.1% and an average daily rate of $266.88. Strength in non-room spend, notably banquet revenues, which were up 17.2%, resulted in total RevPAR of $325.52 for the quarter, an increase of 6.7% when compared to Q4 2024.

Speaker #3: Based on occupancy of 66.1% and an average daily rate of $266.88, strength in non-room spend—most notably banquet revenues, which were up 17.2%—resulted in total RevPAR of $325.52 for the quarter.

Speaker #3: An increase of 6.7% when compared to the fourth quarter of 2024. For the full year 2025, our same property portfolio RevPAR was $181.97, an increase of 3.9% compared to 2024.

Barry Bloom: 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 $265.38. 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, were Grand Hyatt Scottsdale, with RevPAR up over 104% as we lap the transformative renovation, Kimpton Canary Hotel, Santa Barbara, up approximately 10%, Grand Bohemian Orlando, up 8%, Fairmont Pittsburgh, up nearly 8%, and Hyatt Regency Santa Clara and The Ritz-Carlton, Pentagon City, each up 7.5%.

Speaker #3: Based on occupancy of 68.6% and an average daily rate of $265.38. Full-year total RevPAR of $328.57, increased 8% when compared to 2024.

Speaker #3: Our properties achieving the strongest RevPAR growth as compared to 2024 for the full year were Grand Hyatt Scottsdale, with RevPAR up over 104% as we lapped the transformative renovation; Kimpton Canary Hotel Santa Barbara, up approximately 10%; Grand Bohemian Orlando, up 8%; Fairmont Pittsburgh, up nearly 8%; and Hyatt Regency Santa Clara and the Ritz-Carlton Pentagon City, each up 7.5%.

Speaker #3: Strength in group business and continued improvement in corporate demand was the driver behind success at most of these properties. Conversely, hotels that experienced RevPAR weakness compared to full year 2024 included both Portland hotels, Royal Palms Resort and Spa, Andaz San Diego, and all four Texas hotels.

Barry Bloom: Strengthening group business and continued improvement in corporate demand was the driver behind success at most of these properties. Conversely, hotels that experienced RevPAR weakness compared to full year 2024 included both Portland hotels, Royal Palms Resort and Spa, Andaz San Diego, and all four Texas hotels. The Portland, San Diego, and Dallas markets had significantly softer citywide convention calendars in 2025 than in 2024, as did Houston, where in addition to a softer citywide convention calendar, our hotels faced a tough comparison to 2024 as a result of the positive impact from Hurricane Beryl last year. Looking at each month of the quarter compared to 2024, October RevPAR was $212.36, up 5.9%. November RevPAR was $176.08, up 5.1%.

Speaker #3: The Portland, San Diego, and Dallas markets had significantly softer citywide commission calendars in 2025 than in 2024, as did Houston, where, in addition to a softer citywide commission calendar, our hotels faced a tough comparison to 2024 as a result of the positive impact from Hurricane Beryl last year.

Speaker #3: Looking at each month of the quarter compared to 2024, October RevPAR was $212.36, up 5.9%. November RevPAR was $176.08, up 5.1%. And December RevPAR was $140.90, up 1.9%.

Barry Bloom: In December, RevPAR was $140.90, up 1.9%. October and November benefited from significant strength in group business, which was up approximately 20% in each month, while December group business was virtually flat to 2024, with the increase coming from improved leisure demand over the holiday period. Business from large corporate accounts continued to recover throughout the year and improved significantly compared to 2024 in the latter half of the year. Combined, Tuesday and Wednesday night RevPAR for the year was up 6% compared to 2024. Across the portfolio, room night demand from our hotel's largest accounts grew at a mid-teens percentage rate in Q4 as compared to Q4 of 2024, giving us confidence about the ongoing recovery in this segment.

Speaker #3: October and November benefited from significant strength in group business, which was up approximately 20% in each month, while December group business was virtually flat to 2024, with the increase coming from improved leisure demand over the holiday period.

Speaker #3: Business from large corporate accounts continued to recover throughout the year and improved significantly compared to 2024 in the latter half of the year. Combined, Tuesday and Wednesday night RevPAR for the year was up 6% compared to 2024.

Speaker #3: Across the portfolio, room night demand from our hotels' largest accounts, who had a mid-teens percentage rate in the fourth quarter as compared to the fourth quarter of 2024, is giving us confidence about the ongoing recovery in the segment.

Speaker #3: Overall, leisure business was mixed throughout the year, with primarily leisure-driven markets including Napa, Charleston, Savannah, and Key West being generally flat in RevPAR growth for the year, while we experienced significant growth in Santa Barbara.

Barry Bloom: Overall, leisure business was mixed throughout the year, with primarily leisure-driven markets, including Napa, Charleston, Savannah, and Key West, being generally flat in RevPAR growth for the year, while we experienced significant growth in Santa Barbara. The Phoenix market exhibited weakness in leisure business throughout the year. Weekend business throughout the portfolio was roughly flat to prior year, with occupancy declines largely offset by rates, with combined RevPAR for Friday and Saturday nights up 1.5% compared to 2024, where we noted significant strength in weekend business in the last two months of 2025 as compared to 2024. Turning to group. For the year, our same-property group rooms revenue exceeded 2024 levels by nearly 13%, or just over 6%, excluding Grand Hyatt Scottsdale. This increase in group business drove significant ancillary spend in banquets, meeting room rental, and audiovisual commissions.

Speaker #3: The Phoenix market exhibited weakness in leisure business throughout the year. Weekend business throughout the portfolio was roughly flat to the prior year, with occupancy declines largely offset by rates, with combined RevPAR for Friday and Saturday nights up 1.5% compared to 2024.

Speaker #3: But we noted significant strength in weekend business in the last two months of 2025 as compared to 2024. Turning to group, for the year, our same-property group rooms revenue exceeded 2024 levels by nearly 13%, or just over 6%, excluding Grand Hyatt Scottsdale.

Speaker #3: This increase in group business drove significant ancillary spend in banquets, meeting rental, and audio-visual commissions. Now, turning to expenses and profit, fourth quarter same property total revenue increased 6.7% compared to the fourth quarter of 2024.

Barry Bloom: Now, turning to expenses and profit. Q4 same-property total revenue increased 6.7% compared to Q4 2024. Hotel EBITDA margin increased by 214 basis points, resulting in Hotel EBITDA of $68.8 million, an increase of 16.3%. For the full year, Hotel EBITDA increased 13.5%, with margin improvement of 129 basis points compared to the same period in 2024. For Q4, rooms department expenses increased by 5.5% on a 4.5% increase in RevPAR. Food and beverage revenue growth increased by 9.4%, with expense growth of 5.7%.

Speaker #3: Hotel EBITDA margin increased by 214 basis points, resulting in hotel EBITDA of $68.8 million, an increase of 16.3%. For the full year, hotel EBITDA increased 13.5%, with margin improvement of 129 basis points compared to the same period in 2024.

Speaker #3: For the fourth quarter, rooms department expenses increased by 5.5% on a 4.5% increase in RevPAR. Food and beverage revenue growth increased by 9.4%, with expense growth of 5.7%.

Speaker #3: Other operating department income, including spa, parking, and golf revenues, was up 6%. Miscellaneous income was up 12.4%, resulting in a total RevPAR increase of 6.7%.

Barry Bloom: Other operating department income, including spa, parking, and golf revenues, was up 6%, and miscellaneous income was up 12.4%, resulting in a total RevPAR increase of 6.7%. In the undistributed departments, expenses in A&G and sales and marketing were well controlled. A&G increased by 2.7% compared to last year, while sales and marketing expenses grew by just 1.6%, continuing the moderating trend we've experienced over the past several quarters. Property operations expenses were flat for the quarter, while utilities expenses decreased by 2.7%. Turning to CapEx, during the quarter and year ended 31 December 2025, we invested $15.9 million and $86.6 million in portfolio improvements, respectively.

Speaker #3: In the undistributed departments, expenses in A&G and sales and marketing were well controlled. A&G increased by 2.7% compared to last year, while sales and marketing expenses grew by just 1.6%, continuing the moderating trend we've experienced over the past several quarters.

Speaker #3: Property operations expenses were flat for the quarter, while utilities expenses decreased by 2.7%. Turning to CapEx, during the quarter and year ended December 31, 2025, we invested $15.9 million and $86.6 million in portfolio improvements, respectively.

Speaker #3: The full-year 2025 amount is inclusive of capital expenditures related to the completion of the transformative renovation of Grand Hyatt Scottsdale Resort earlier in the year.

Barry Bloom: The full year 2025 amount is inclusive of capital expenditures related to the completion of the transformative renovation of Grand Hyatt Scottsdale Resort earlier in the year. In addition to the completion of the Grand Hyatt Scottsdale's transformative renovation, for the full year 2025, we completed significant select upgrades to guest rooms at several important properties, including Renaissance Atlanta Waverly, Marriott San Francisco Airport, Hyatt Centric Key West, Hyatt Regency Santa Clara, Grand Bohemian Mountain Brook, Grand Bohemian Charleston, and Kimpton Riverplace, all of which were substantially completed during Q4. Over the course of the year, we performed significant infrastructure upgrades to 10 hotels, including facade waterproofing, chiller replacements, elevator and escalator modernization projects, and fire alarm system upgrades.

Speaker #3: In addition to the completion of the Grand Hyatt Scottsdale transformative renovation for the full year 2025, we completed significant select upgrades to guest rooms at several important properties, including Renaissance Atlanta Waverly, Marriott San Francisco Airport, Hyatt Centric Key West, Hyatt Regency Santa Clara, Grand Bohemian Mountain Brook, Grand Bohemian Charleston, and Kimpton River Place, all of which were substantially completed during the fourth quarter.

Speaker #3: Over the course of the year, we performed significant infrastructure upgrades to 10 hotels, including facade waterproofing, chiller replacements, elevator and escalator modernization projects, and fire alarm system upgrades.

Speaker #3: We commenced a limited guest room renovation at Fairmont Pittsburgh, which we expect to complete in the first quarter of 2026, as well as a renovation of the M Club at Marriott Dallas Downtown, which was completed in early 2026.

Barry Bloom: We commenced a limited guest room renovation at Fairmont Pittsburgh, which we expect to complete in Q1 2026, as well as a renovation of the M Club at Dallas Marriott Downtown, which was completed in early 2026. Most significantly, we commenced work we announced last quarter related to a major re-concepting of the food and beverage facilities at W Nashville, pursuant to agreements with José Andrés Group, in which they will operate and/or license substantially all of the hotel's food and beverage outlets. This includes Zaytinya, an Eastern Mediterranean concept serving lunch and dinner, which will open in mid-February. Bar Mar, a coastal seafood and premium meat dinner concept, which will open in late March. Butterfly, a high-energy rooftop bar with a Mexican-inspired menu, which will also open in late March.

Speaker #3: Most significantly, we commenced work we announced last quarter related to a major reconcepting of the food and beverage facilities at W Nashville, pursuant to agreements with Jose Andres Group, in which they will operate and/or license substantially all of the hotel's food and beverage outlets.

Speaker #3: This includes Zatania, an Eastern Mediterranean concept serving lunch and dinner, which opened in mid-February; Barmar, a coastal seafood and premium meat dinner concept, which will open in late March; Butterfly, a high-energy rooftop bar with a Mexican-inspired menu, which will also open in late March; and Glober, a new pool deck concept with an expanded bar and upgraded food and beverage offerings, which is expected to open by the end of April.

Barry Bloom: Glover, a new pool deck concept with an expanded bar and upgraded food and beverage offerings, which is expected to open by the end of April. By partnering with this world-class operator, we believe the refined food and beverage platform will create an attractive destination for hotel guests, Nashville visitors, and locals, as well as strengthen transient and group demand. We are projecting the relaunch of the F&B outlets will add between $3 million and $5 million to Hotel EBITDA upon stabilization, through increases in food and beverage and rooms revenues, which we believe should result in the hotel generating in excess of $20 million of Hotel EBITDA in the next few years. We are excited about our planned renovations for 2026, which include the first phase of a comprehensive rooms and corridor renovation at Andaz Napa, expected to begin in Q4.

Speaker #3: By partnering with this world-class operator, we believe the refined food and beverage platform will create an attractive destination for hotel guests, Nashville visitors, and locals, as well as strengthen transient and group demand.

Speaker #3: We are projecting that the relaunch of the F&B outlets will add between $3 million and $5 million to hotel EBITDA upon stabilization, through increases in food and beverage and rooms revenues, which we believe should result in the hotel generating in excess of $20 million of hotel EBITDA in the next few years.

Speaker #3: We are excited about our planned renovations for 2026, which include the first phase of a comprehensive rooms and quarters renovation at Andaz Napa, expected to begin in the fourth quarter, and the renovation of guest rooms, corridors, and meeting space at The Ritz-Carlton Denver, which is also expected to begin in the fourth quarter.

Barry Bloom: renovation of guest rooms, corridors, and meeting space at The Ritz-Carlton, Denver, which is also expected to begin in Q4. At Royal Palms, we expect to perform a limited renovation of 70 guest rooms and the corridors in the Montevista Building, as well as a T. Cook's restaurant during Q2 and Q3. Continuing our comprehensive maintenance and upgrading of our hotel's physical plants, we expect to perform infrastructure and facade upgrades at 10 hotels this year. With that, I will turn the call over to Atish.

Speaker #3: At Royal Palms, we expect to perform a limited renovation of 70 guest rooms and the corridors in the Monovista building, as well as a tea cooks' restaurant, during the second and third quarters.

Speaker #3: Continuing our comprehensive maintenance and upgrading of our hotel's physical plants, we expect to perform infrastructure and facade upgrades at 10 hotels this year. With that, I will turn the call over to Atish.

Barry Bloom: With that, I will turn the call over to Atish.

Speaker #2: 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; three-quarters of our debt was fixed or hedged to fixed.

Atish Shah: 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 quarters 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 per our credit facility, was approximately 5.2x trailing 12 months 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 3x 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.

Speaker #2: Our weighted average interest rate at quarter-end was 5.51%. Additionally, at quarter-end, our leverage ratio, as calculated per our credit facility, was approximately 5.2 times trailing 12 months' net debt to EBITDA.

Speaker #2: 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 4 times range.

Speaker #2: 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.

Speaker #2: 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.

Atish Shah: 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 Q4, we repurchased approximately 2.7 million shares of common stock at an average price of $13.56 per share.

Speaker #2: 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.

Speaker #2: 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.

Atish Shah: 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 four years, we've 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 permits the repurchase of an additional $97.5 million of common stock. We continue to believe that we trade at a discount to NAV. Given our favorable outlook and strong balance sheet, share buybacks continue to be a good tool to drive value relative to other uses of capital. Turning to our other approach to returning capital, our dividend.

Speaker #2: 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.

Speaker #2: Over the last four 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.

Speaker #2: Our current board authorization permits the repurchase of an additional $97.5 million of common stock. We continue to believe that we trade at a discount to NAV.

Speaker #2: Given our favorable outlook and strong balance sheet, share buybacks continue to be a good tool to drive value relative to other uses of capital.

Speaker #2: Turning to our other approach to returning capital, our dividend, this morning we announced a quarterly dividend of $0.14 per share for the first quarter of 2026.

Atish Shah: This morning, we announced a quarterly dividend of $0.14 per share for Q1 2026. If annualized, this reflects a yield of approximately 3.5%. Now to my second topic, our full year 2026 guidance as issued this morning. I'll start with the punchline, which is that we expect Adjusted FFO per share to increase nearly 7% from 2025 to $1.89 at the midpoint. Driving this level of strong Adjusted FFO per share growth is the ramp on Grand Hyatt Scottsdale, a healthy level of share repurchases last year, as well as some favorability on interest expense. Moving ahead to Adjusted EBITDAre, we expect to generate approximately $260 million of Adjusted EBITDAre at the midpoint of the guidance range in 2026. This reflects approximately 1% growth relative to 2025.

Speaker #2: If annualized, this reflects a yield of approximately 3.5%. Now, to my second topic: our full-year 2026 guidance, as issued this morning. I'll start with the punchline, which is that we expect adjusted FFO per share to increase nearly 7% from 2025 to $1.89 at the midpoint.

Speaker #2: Driving this level of strong adjusted FFO per share growth is the ramp-on Grand Hyatt Scottsdale, a healthy level of share repurchases last year, as well as some favorability on interest expense.

Speaker #2: Moving ahead to adjusted EBITDA RE, we expect to generate approximately $260 million of adjusted EBITDA RE at the midpoint of the guidance range. In 2026, this reflects approximately 1% growth relative to 2025.

Speaker #2: A few points to keep in mind as we walk from 2025 to 2026 as it relates to growth and adjusted EBITDA RE.

Atish Shah: A few points to keep in mind as we walk from 2025 to 2026 as it relates to growth in Adjusted EBITDAre. First, Fairmont Dallas earned nearly $6 million in EBITDA in 2025, prior to our disposition in April. Second, we had approximately $1 million of non-recurring property tax refunds in Q4 of 2025. Third, we generated about $3 million more in interest income in 2025 than we expect to generate in 2026. Fourth, we had no renovation disruption in 2025, but we expect about $1 million in renovation disruption in 2026. In total, these four items represent an $11 million Adjusted EBITDAre headwind.

Speaker #2: First, Fairmont Dallas earned nearly $6 million in EBITDA in 2025 prior to our disposition in April. Second, we had approximately $1 million of non-recurring property tax refunds in the fourth quarter of 2025.

Speaker #2: Third, we generated about $3 million more in interest income in 2025 than we expect to generate in 2026. And fourth, we had no renovation, disruption, in 2026, but we expect about $1 million in renovation, disruption, during the course of 2020 sorry, we had no renovation, disruption in 2025, but we expect about $1 million in renovation, disruption in 2026.

Speaker #2: In total, these four items represent an $11 million adjusted EBITDA RE headwind. This is offset by about $8 million of year-over-year EBITDA growth coming from Grand Hyatt Scottsdale.

Atish Shah: This is offset by about $8 million of year-over-year EBITDA growth coming from Grand Hyatt Scottsdale. If we exclude the four items as well as Grand Hyatt Scottsdale, the implied EBITDA growth is about 2% or $5 million on a normalized basis. As to our expense outlook, we expect cost per occupied room to increase approximately 3% in 2026. Given that we expect occupancy to increase during 2026, our same property hotel expense is expected to increase about 4.5%, resulting in a slight margin contraction for 2026. The pressure on the expense side continues to be from wages and benefits, which represent approximately 50% of our hotel level cost base and are expected to grow approximately 6%.

Speaker #2: If we exclude the four items, as well as Grand Hyatt Scottsdale, the implied EBITDA growth is about 2%, or $5 million, on a normalized basis.

Speaker #2: As to our expense outlook, we expect cost per occupied room to increase approximately 3% in 2026. Given that we expect occupancy to increase during 2026, our same-property hotel expense is expected to increase about 4.5%, resulting in a slight margin contraction for 2026.

Speaker #2: The pressure on the expense side continues to be from wages and benefits, which represent approximately 50% of our hotel-level cost base. Our wages and benefits are expected to grow approximately 6%.

Speaker #2: Other costs, which represent the other half of hotel-level costs and include a broad range of items such as inventory, utilities, property taxes, etc., are expected to grow in the approximately 3% range.

Atish Shah: Other costs, which represent the other half of hotel level costs and include a broad range of items such as inventory, utilities, property taxes, et cetera, are expected to grow in the approximately 3% range. While some expense areas were a tailwind for 2025, including property insurance and real estate taxes, in Q4, we saw an overall decrease in undistributed hotel operating expenses reflected in the decline in other indirect expenses. As we look forward, we expect this indirect expense growth to further moderate. As I wrap up the Adjusted EBITDAre guidance, I want to provide some weighting to help for modeling purposes. I will provide this by quarter.

Speaker #2: While some expense areas were a tailwind for 2025, including property insurance and real estate taxes, in the fourth quarter we saw an overall decrease in undistributed hotel operating expenses, reflected in the decline in other indirect expenses.

Speaker #2: As we look forward, we expect this indirect expense growth to further moderate. As I wrap up the adjusted EBITDA RE guidance, I want to provide some weighting to help for modeling purposes.

Speaker #2: I will provide this by quarter. Our weighting for adjusted EBITDA RE is nearly 30% for the first quarter, about 30% for the second quarter, in the high teens percentage range for the third quarter, and nearly 25% for the fourth quarter.

Atish Shah: Our weighting for Adjusted EBITDAre is nearly 30% for Q1, about 30% for Q2, in the high teens percentage range for Q3, and nearly 25% for Q4. As to Total RevPAR, which we are now guiding to for the first time, the midpoint of our guidance is an increase of 4.25% versus 2025. Excluding Grand Hyatt Scottsdale, the midpoint of our Total RevPAR growth guidance is 2.75%. F&B and other revenues are expected to grow at a faster pace than rooms revenues, as they did in 2025. As to RevPAR, the midpoint of our guidance is an increase of 3% versus 2025. Excluding Grand Hyatt Scottsdale, the midpoint of our RevPAR growth guidance is 1.75%.

Speaker #2: As to total RevPAR, which we are now guiding to for the first time, the midpoint of our guidance is an increase of 4.25% versus 2025.

Speaker #2: Excluding Grand Hyatt Scottsdale, the midpoint of our total RevPAR growth guidance is 2.75%. F&B and other revenues are expected to grow at a faster pace than rooms revenues, as they did in 2025.

Speaker #2: As to RevPAR, the midpoint of our guidance is an increase of 3% versus 2025. Excluding Grand Hyatt Scottsdale, the midpoint of our RevPAR growth guidance is 1.75%.

Speaker #2: Now, I would like to discuss our thoughts on the demand segments, as they underpin our revenue guidance. Starting with group, last year group demand represented 37% of our rooms revenue, and we expect a similar mix again in 2026.

Atish Shah: Now I would like to discuss our thoughts on the demand segments as they underpin our revenue guidance. Starting with group. Last year, group demand represented 37% of our rooms revenue, and we expect a similar mix again in 2026. As of the end of January 2026, nearly 70% of our group for the year was definite. For the March through December 2026 period, group revenue pace is up about 10% versus the same time last year for those 10 months of 2025. Excluding Grand Hyatt Scottsdale, group room revenue pace was up 8% again for the balance of the year from March onwards. Looking across our larger group markets, the largest increases in group pace are in some of our most significant markets, namely Orlando, Northern California, Nashville, and of course, Scottsdale.

Speaker #2: As of the end of January 2026, nearly 70% of our group for the year was definite. For the March through December 2026 period, group revenue pace is up about 10% versus the same time last year.

Speaker #2: For those 10 months of 2025, excluding Grand Hyatt Scottsdale, group room revenue pace was up 8%, again for the balance of the year from March onwards.

Speaker #2: Working across our larger group markets, the largest increases in group pace are in some of our most significant markets—namely, Orlando, Northern California, Nashville, and, of course, Scottsdale.

Speaker #2: At Grand Hyatt Scottsdale, we continue to see strong ramp, which is bolstering our confidence in our full-year guidance. Groups are really enjoying the resort, reflected in revenue pace up about 50%, with good early indications for 2027 as well.

Atish Shah: At Grand Hyatt Scottsdale, we continue to see strong ramp, which is bolstering our confidence in our full-year guidance. Groups are really enjoying the resort, reflected in revenue pace up about 50%, with good early indications for 2027 as well. Next, turning to leisure, which we estimate at roughly 25% of our demand mix. We expect this year to be a better leisure year than last year. Events such as the FIFA World Cup and America 250 are expected to drive strong demand in many of our markets. Our preliminary estimate is that these unique events are anticipated to drive about 75 basis points or approximately one quarter of our expected 2026 RevPAR growth. These estimates are preliminary, as much of the demand is likely to be transient and has yet to book.

Speaker #2: Next, turning to leisure, which we estimate at roughly 25% of our demand mix, we expect this year to be a better leisure year than last year.

Speaker #2: Events such as the FIFA World Cup and America 250 are expected to drive strong demand in many of our markets. Our preliminary estimate is that these unique events are anticipated to drive about 75 basis points, or approximately one quarter, of our expected 2026 RevPAR growth.

Speaker #2: These estimates are preliminary, as much of the demand is likely to be transient and has yet to book. We expect varying degrees of benefit across the portfolio, depending on distance from the venues and other factors.

Atish Shah: We expect varying degrees of benefit across the portfolio, depending on distance from the venues and other factors. Lastly, on the business transient side, we expect demand to steadily improve as occupancy is still below 2019 levels every night of the week. We are seeing good momentum in Northern California and some of our other urban locations. We continue to be focused on recovery of business transient occupancy relative to prior levels. As we look farther ahead, we are encouraged by the supply side, which continues to be quite benign relative to levels just a few years ago.

Speaker #2: Lastly, on the business transient side, we expect demand to steadily improve as occupancy is still below 2019 levels every night of the week. We are seeing good momentum in Northern California and some of our other urban locations.

Speaker #2: Our hotel operators are expecting corporate negotiated rates to be up in the low single-digit percentage range. And we continue to be focused on the recovery of business transient occupancy relative to prior levels.

Speaker #2: As we look farther ahead, we are encouraged by the supply side, which continues to be quite benign relative to levels just a few years ago.

Speaker #2: As to our outlook on the supply side of the equation, our market tracks look very well positioned. With expected weighted supply growth of about 1% in 2026, and even less in 2027.

Atish Shah: As to our outlook on the supply side of the equation, our market tracks look very well positioned, with expected weighted supply growth of about 1% in 2026 and even less in 2027. Many of our hotels are located in market tracks with no new supply growth. Specifically, in each of 2026 and 2027, approximately half of our rooms are in market tracks with zero expected new hotel supply. By every measure, the supply outlook is better now than at any other time in our decade-plus history as a public company. With that, we will turn the call back over to Carla to begin our question and answer session.

Speaker #2: Many of our hotels are located in market tracks with no new supply growth. Specifically, in each of 2026 and 2027, approximately half of our rooms are in market tracks with zero expected new hotel supply.

Speaker #2: By every measure, the supply outlook is better now than at any other time in our decade-plus history as a public company. And with that, we will turn the call back over to Carla to begin our question-and-answer session.

Atish Shah: With that, we will turn the call back over to Carla to begin our question and answer session.

Speaker #1: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone keypad.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. That is star one on your telephone keypad to ask a question. Our first question comes from the line of Ari Klein with BMO Capital Markets.

Speaker #1: If you change your mind, please press star followed by two. When we bring you to ask your question, please ensure your device is unmuted locally.

Speaker #1: So, that is star one on your telephone keypad to ask a question. Our first question comes from the line of Ari Klein with BMO Capital Markets.

Ari Klein: Thanks. Good afternoon. 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 and high end. I think you mentioned about a quarter of the guide is from the special events, yeah, any additional color would be helpful. Thanks.

Speaker #2: Thanks, and good afternoon. I was hoping that we can provide a little bit more color or context around the RevPAR guide ranges, particularly at the low and high end.

Speaker #2: Atish, I think you mentioned about a quarter of the guide is from the special events, but yeah, any additional color would be helpful. Thanks.

Speaker #3: Yeah, sure. Why don't I start on that one, and then Marcel Verbaas, you can join in. But certainly, there are a couple of things bolstering the RevPAR outlook.

Atish Shah: Yeah, sure. Why don't I start on that one, then Marcel or Barry, you can join in. You know, certainly, there are a couple 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. Then more broadly, the group revenue pace that we talked about continues to be, you know, a source of strength for us. Really, those are some of the main components that give us confidence. You know, the markets where we expect the strongest levels of RevPAR growth are markets like Houston, like Northern California, obviously Scottsdale, Orlando as well. Markets that are quite meaningful to us and have a significant group component.

Speaker #3: One is the special events, as you mentioned, and the second would be Grand Hyatt Scottsdale, where we have a lot of visibility based on the pace.

Speaker #3: 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.

Speaker #3: The markets where we expect the strongest levels of RevPAR growth are markets like Houston, like Northern California, obviously Scottsdale, and Orlando as well. So, markets that are quite meaningful to us and have a significant group component.

Atish Shah: I would say that's really, you know, what gives us, you know, confidence overall in the RevPAR outlook. In terms of the high end and low end, you know, 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. Really, the range that we're reflecting is pretty consistent with what we've done the last couple of years, and just reflects kind of the natural volatility in the business and the fact that, you know, our visibility, particularly to the second half of the year, outside of group business, is much more limited. Either of you? Are there any other follow-ons on that one?

Speaker #3: 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.

Speaker #3: So, really, the range that we're reflecting is pretty consistent with what we've done 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 group business, is much more limited.

Speaker #3: Either of you? Okay. Are there any other follow-ons on that one?

Ari Klein: Not, not on that one. You know, I had a different question just around Barry, you mentioned some of the positive trends in large corporate account growth. I was just curious if you can unpack more recent trends there and just the incremental opportunity. Just, you know, I think that segment is kind of lagged from a recovery standpoint. You know, just the incremental opportunity there.

Speaker #2: 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.

Speaker #2: I was just curious if you can unpack more recent trends there, and just the incremental opportunity, since I think that segment has kind of lagged from a recovery standpoint.

Speaker #2: So just the incremental opportunity there.

Speaker #3: Yeah, 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.

Barry Bloom: Yeah, I mean, it's definitely lagged. We're certainly still below 2019 levels in that segment, 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, it was very consistent growth throughout the year, with the exception of Q3, which obviously always feels a little bit different. We just feel like things are getting better. Our hotels are able to better capture more business from more of the large accounts. Some of that is intentionally really going after them, I think, more aggressively. We're also seeing more project work from the Big Four accounting firms and the Big Four consulting firms that just...

Speaker #3: Really, 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.

Speaker #3: 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.

Speaker #3: But we're also seeing more project work from the Big Four accounting firms and the Big Four 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.

Barry Bloom: speaks volumes to what's going on, as well as some of the very key, in our case, you know, 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. Certainly, we've part of what we've seen that's contributed to the strong quarter-to-date performance thus far.

Speaker #3: In Q4, we think it gives us a good setup, based on what we've seen that's contributed to the strong quarter-to-date performance thus far.

Speaker #2: Thanks. Appreciate all the color.

Michael Bellisario: Thanks. Appreciate all the color.

Ari Klein: Thanks. Appreciate all the color.

Speaker #1: Thank you. And our next question comes from David Katz with Jefferies.

Operator: Thank you. Our next question comes from David Katz with Jefferies.

David Katz: Hey, afternoon, everyone. Thanks for taking my question. I wanted to just talk about the, you know, the asset trading market, and we've spent a lot of time talking about that 50 to $200 million sweet spot. We have seen, you know, some deals and/or been hearing, you know, from some of the peers about, you know, deals that are in some state of process. You know, one, are you know, seeing a little more activity? Two, you know, is it fair of us to expect a little more activity from you as we progress through the year? Thanks.

Speaker #4: Hey, afternoon, everyone. Thanks for taking my question. I wanted to just talk about the asset trading market. And we've spent a lot of time talking about that $50 to $200 million sweet spot.

Speaker #4: 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?

Speaker #4: And two, should we—is it fair of us to expect a little more activity from you as we progress through the year? Thanks.

Speaker #3: Yeah, thanks for the question, David. I think the way you described this is accurate. I think there is some more product out there than what we've seen over the last few years.

Marcel Verbaas: Yeah, thanks for your question, David. I think the way you described it is accurate. I think there's 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 usually optimistic. So far it does seem like there's a bit more product out there, and there could be some more opportunities out there. As Pete has obviously pointed out in his comments, we've been very active on the share repurchase side. 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.

Speaker #3: Certainly, the broker community seems to be a little bit more optimistic going into this year. Now, brokers are usually optimistic, but so far, it does seem like there is a bit more product out there.

Speaker #3: And there could be some more opportunities out there. S&P is obviously pointed out in his comments. We've been very active on the share repurchase side.

Speaker #3: 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.

Speaker #3: So, to the extent that that starts narrowing, then it becomes clearly more interesting for us to dig a little bit deeper and harder into those opportunities that are out there.

Marcel Verbaas: To the extent that that starts narrowing, it becomes clearly more interesting for us to dig a little bit deeper and harder into those opportunities that are out there. 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, pricing, and certainly where our own shares are valued.

Speaker #3: 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, pricing, and certainly where our own shares are valued.

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

Speaker #4: I 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?

Speaker #4: I know that, obviously, you look at everything. 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?

Marcel Verbaas: Yeah, sure. I mean, I think kind of the numbers you were talking about, I mean, clearly, the kind of $50 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, you know, kind of overall, where the portfolio is positioned currently from both a quality and location standpoint. You know, as I've said many times in the past, when we've talked about these questions, you know, 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.

Speaker #3: Yeah, sure. I mean, I think, kind of, the numbers you were talking about—I mean, clearly, they're kind of in the $50 to $200 million range.

Speaker #3: It's 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 overall where the portfolio is positioned currently from both a quality and location standpoint.

Speaker #3: 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.

Marcel Verbaas: Clearly, there are three markets where we have a, you know, pretty good concentration at this point. Really between Orlando, Houston, and Phoenix, you know, those are obviously some of the big drivers for our portfolio. 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 would kind of force us to look at, you know, do we replace an asset in one of those markets? 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. 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.

Speaker #3: There are three markets where we have a pretty good concentration at this point. I believe between Orlando, Houston, and Phoenix, those are obviously some of the big drivers for our portfolio.

Speaker #3: 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's kind of forced us to look at, do we replace an asset in one of those markets?

Speaker #3: 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.

Speaker #3: 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.

Marcel Verbaas: Clearly, the group segment has been something that's been very beneficial to us over the last 2 years. We'd be very interested in potentially adding a little bit there. That'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.

Speaker #3: 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.

Speaker #3: But that's not to say that if there is just a great opportunity for an asset that's a little bit more focused on corporate transients or leisure, that we wouldn't take a look at that.

Speaker #4: Understood. Thanks.

David Katz: Understood. Thanks.

Speaker #1: Thank you. And the next question comes from Michael Belisario with Baird.

Operator: Thank you. The next question comes from Michael Bellisario with Baird.

Speaker #4: Thanks. Good afternoon, everyone. First question is on Nashville. Just first on Nashville—just Q4—how did that market perform? And then looking out to '26, what do you guys see on both the leisure and BT fronts?

Michael Bellisario: Thanks. Good afternoon, everyone.

Barry Bloom: Afternoon.

Michael Bellisario: First question's on Nashville. Just first on Nashville, 4Q, how did that market perform? Looking out to 2026, what are you guys seeing on both the leisure and BT fronts, just relative to the market having been a relative underperform recently?

Speaker #4: Just relative to the market, having been a relative underperformer recently.

Speaker #3: Yeah, Q4 was really tough for the market. We certainly participated in that toughness, unfortunately. Where we continued to see opportunity is to improve our focus both pre- and post- the restaurant and food and beverage transformations.

Barry Bloom: Yeah, 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 and 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. Where we do think we're going to see growth is again in midweek corporate and midweek group, as we really kind of continue our efforts in that area.

Speaker #3: It's really on the midweek corporate customer and on the midweek group customer—it 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.

Speaker #3: We think that the 2026 setup is certainly expected to be improved over 2025, but not significantly, quite frankly. But where we do think we're going to see growth, again, is in midweek corporate and midweek group as we really kind of continue our efforts in that area.

Barry Bloom: 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 it appeals to, that we gather a little more appeal to the leisure guest 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 and experienced with, in other hotels, operated or licensed by José Andrés Group

Speaker #3: 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 it appeals to that we gather a little more appeal to the leisure guest as a destination hotel because of the food and beverage platform, which we've seen in some of our other hotels.

Speaker #3: And we've certainly seen, and hotels operated or licensed by Jose Andres Group.

Speaker #5: Got it, that's helpful. And then, just maybe more conceptually here—just on the sort of RevPAR versus total RevPAR split—I guess, how long can that positive spread persist?

Michael Bellisario: Got it. That's helpful. Just maybe more conceptual here, just on sort of the RevPAR versus Total RevPAR split, I guess, you know, how long can that positive spread persist? 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-rooms lines would be helpful. Thank you.

Speaker #5: And then, within the S&P 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-rooms lines would be helpful.

Speaker #5: Thank you.

Speaker #3: Yeah, sure. I mean, it's obvious we'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.

Barry Bloom: Yeah, sure. I mean, it's obviously, we'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's related to our continued growth and success in group business, a lot of which is still being driven by the new ballroom at Hyatt Regency Grand Cypress, 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 a similar story, certainly in Scottsdale, as well.

Speaker #3: A lot of it's related to our continued growth and success in group business, a lot of which is still being driven by the new ballroom at Grand Cypress, 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.

Speaker #3: The property is also a similar story, certainly 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 beverage.

Barry Bloom: While we're seeing some growth in restaurant business, it's really been the growth in banquet and catering, food and beverage that'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's related to 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 off-site. That's because certainly a trend we've seen in the larger resorts, whereas historically, some groups might have gone off property for a night or two.

Speaker #3: 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.

Speaker #3: Some of it's 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 continues to spend on food and beverage for programs.

Speaker #3: Our hotels are capturing a lot more group meals on-site than off-site. That's certainly a trend we've seen in the larger resorts. Whereas historically, some groups might have gone off-property for a night or two.

Speaker #3: They're choosing to stay on property for more evening functions in particular, which is driving revenues significantly in the larger resorts. So think about high risk to Grand Cypress, high risk to Scottsdale, and Park Hyatt Alvear have been the most significant beneficiaries of that trend.

Barry Bloom: They're choosing to stay on property for more evening functions in particular, which is driving revenues significantly in the larger resorts. Think about Hyatt Regency Grand Cypress, Grand Hyatt Scottsdale, and Park Hyatt Aviara have been the most significant beneficiaries of that trend. Finally, 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 banquet and catering prices.

Speaker #3: And then finally, 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—across all of our group-focused hotels—as it relates to banquet and catering prices.

Speaker #5: Helpful. Thank you.

Michael Bellisario: Helpful. Thank you.

Speaker #1: Thank you. So just as a reminder to all of the attendees, if you'd like to ask a question, please press *1 on your telephone keypad.

Operator: Thank you. Just as a reminder to all of the attendees, that if you'd like to ask a question, hit star one on your telephone keypad. The next question comes from Cooper Clark with Wells Fargo.

Speaker #1: The next question comes from Cooper Clark with Wells Fargo.

Speaker #3: Great, thanks for taking the question and appreciate some of the earlier comments on the RevPAR complexion. So, thinking about group pace at Scottsdale—up about 8% from March to December—but RevPAR at Scottsdale only up about 1.75%. Just curious about some of the puts and takes there.

Cooper Clark: Great, thanks for taking the question, and appreciate some of the earlier comments on the RevPAR complexion. Thinking about group pace at Scottsdale, up about 8% from March to December, but RevPAR at 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.

Speaker #3: And any kind of drivers we should be thinking about?

Speaker #4: Yeah, that's a great question, so thanks, Cooper. I would say a few things. First, as the year goes on, we expect that group number to come down.

Atish Shah: Yeah, that's a great question. Thanks, Cooper. I would say a few things. I mean, first, you know, as the year goes on, we expect that group number to come down, given that, you know, we're pretty booked up for group and there's less space and dates available for groups. That's one thing to keep in mind. Secondly, I would say, you know, we expect obviously some growth out of business, transient, and leisure, but much lower levels. When you mix it all together and blend it, that's where you get to, you know, the full year forecast being significantly lower than the current pace number.

Speaker #4: Given that we were pretty booked up for group, and there's less space and dates available for groups, that's one thing to keep in mind.

Speaker #4: Secondly, I would say we expect, obviously, some growth out of business transient and leisure, but at 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.

Atish Shah: If you think about the evolution of our business, you know, last year, you know, 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, you know, our properties that were normalizing a bit last year have now, you know, finished really the normalization process.

Speaker #4: 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.

Speaker #4: 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.

Speaker #4: 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.

Atish Shah: 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.

Speaker #3: Great, thanks. That's very helpful. And then, curious if you could talk about the timeline around the Nashville F&B ramp towards stabilization.

Cooper Clark: Great, thanks. That's very helpful. Curious if you could talk about the timeline around the Nashville F&B ramp towards stabilization?

Barry Bloom: Sure. I mean, I talked about the timing of each outlets opening. We're seeing a pretty quick ramp-up on Zaytinya, which has now been open, I think, for 10 days or so, a little less than 2 weeks.

Speaker #4: Sure. I mean, I talked about the timing of each outlet's opening. We're seeing a pretty quick ramp-up on Zatenia, which has now been open, I think, for 10 days or so.

Speaker #4: A little less than two weeks. What we've seen in other José Andrés 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.

Atish Shah: What we've seen in other José Andrés operations is they tend to ramp up quite quickly. I think it's hard, given where we are today, to really think about when we kind of hit stabilization. We've certainly underwritten some pretty fair performance in the asset for this year in terms of the growth and ramp-up.

Speaker #4: But we've certainly underwritten some pretty fair performance in the asset for this year, in terms of the growth and ramp-up.

Speaker #5: Yeah, I'll just add to that. Obviously, we'll get the initial bump from the excitement and the marketing of it being added to the property.

Marcel Verbaas: Yeah, I'll just add to that. That's, you know, obviously, we'll get the initial bump of, you know, kind of the excitement and the marketing of it being added to the property. The real benefit is gonna be, you know, in the next several years as the property just gains some more momentum as far as being kind of the destination hotel, like Barry was talking about. A lot of the incremental revenues that we're looking to achieve at the property is not necessarily, you know, 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. It's a great selling point for the group segments.

Speaker #5: But the real benefit is going to be over the next several years as the property does gain some more momentum as far as being kind of the destination hotel, like Barry was talking about.

Speaker #5: So, a lot of the incremental revenues that we're looking to achieve at the property are not necessarily a massive improvement in food and beverage profitability.

Speaker #5: 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.

Speaker #5: So, it's a great selling point for the group segment, obviously. It's going to be very attractive for corporate transients. And for leisure, it'll also be what will become a much more interesting destination.

Marcel Verbaas: Obviously, it's gonna be very attractive for corporate transients. For leisure, it will become a much more interesting destination. We think what it's gonna do for the overall performance of the hotel is gonna be something that's gonna play out over the next several years.

Speaker #5: 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.

Speaker #3: Thank you. Appreciate the color.

Barry Bloom: Thank you. Appreciate the color.

Cooper Clark: Thank you. Appreciate the color.

Speaker #1: Thank you. And the next question comes from Austin Roosevelt with KeyBanc Capital Markets.

Operator: Thank you. The next question comes from Austin Witter with KeyBanc Capital Markets.

Speaker #5: Yeah, thanks. Good afternoon. I was just wondering on the operating expense growth outlook of four and a half percent. I mean, how much of an impact is the grand Hyatt Scottsdale having on that?

Austin Witter: Yeah, thanks. Good afternoon. 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? I guess what's kind of the expectation on that sort of, you know, moderating more towards inflationary levels? I'm just wondering what some of the other, you know, some of those moving pieces are. Thanks.

Austin Wurschmidt: Yeah, thanks. Good afternoon. 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? I guess what's kind of the expectation on that sort of, you know, moderating more towards inflationary levels? I'm just wondering what some of the other, you know, some of those moving pieces are. Thanks.

Speaker #5: 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.

Speaker #5: Thanks.

Atish Shah: Yeah, sure. Why don't I start that and then maybe Barry or Marcelo could add to it. Certainly, you know, the numbers that I provided on the expense outlook, you know, include Grand Hyatt Scottsdale, 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. We've really seen most of the expenses come in on Grand Hyatt Scottsdale. I don't think that's having, you know, as outsized an impact as it had over the course of the last year.

Speaker #4: Yeah, sure. Why don't I start that? And then maybe Barry or Marcel could add to it. So, certainly, the numbers that I provided on the expense outlook include Grand Hyatt Scottsdale.

Speaker #4: 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.

Speaker #4: So we've really seen most of the expenses come in on Grand Hyatt Scottsdale. I don't think that's having as outsized an impact as it had over the course of the last year.

Atish Shah: Obviously, you know, business is continuing to pick up from an occupancy perspective. That's why you have more of an impact on overall expenses coming from Grand Hyatt Scottsdale than the rest of the portfolio. We're still, you know, adding to the occupancy of the asset.

Speaker #4: Obviously, businesses continue 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 than the rest of the portfolio, because we're still adding to the occupancy of the asset.

Speaker #5: Yeah, I think it's also mentioned in his remarks that, if you look at it, we're on an occupied room basis. We're essentially kind of at that inflationary number, right?

Marcel Verbaas: Yeah, I think, you know, as he's also mentioned in his remarks, that if you look at it per occupied room basis, you know, we're essentially kind of at that inflationary number, right? We're at about that 3% increase on a per occupied room basis. 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 Scottsdale.

Speaker #5: We're at about that 3% increase on a per-occupied room basis. So, a lot of the increased expenditures to get to that 4.5% number is more just because of occupancy building.

Speaker #5: And some of that clearly is related to Grand Hyatt Scottsdale.

Speaker #6: Yeah, no, 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.

Austin Witter: That's all helpful. Then I'm just wondering, you know, 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 2027. 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, you know, initial outlook prior to the renovation. Thanks.

Austin Wurschmidt: That's all helpful. Then I'm just wondering, you know, 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 2027. 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, you know, initial outlook prior to the renovation. Thanks.

Speaker #6: The outlook seems really positive in '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.

Speaker #6: Thanks.

Speaker #4: Yeah, sure. Obviously, this really is our first season at the property given kind of how things came online last year and where we were in terms of—although we were completed—we were not really ahead of the curve on marketing during the peak season there.

Barry Bloom: Yeah, sure. You know, obviously, this really is our first season at the property, given kind of how things 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 there. We're seeing fantastic results this year to date so far, and really good pace for March and April. The hotel has been able to, I think, step up its game as it relates to being able to charge the premium rates that the property and facility deserves. We feel really good about it. Are we gonna get all the way to where we wanna get this year in terms of transient positioning in season? Probably not.

Speaker #4: We're seeing fantastic results. This year—this year to date so far—and really good pace from March and April on, the hotel has been able to, I think, step up its game as it relates to being able to charge the premium rates that the property and facility deserve.

Speaker #4: 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?

Speaker #4: Probably not. But I think that also gives us the opportunity that we've always looked at for further growth as we head into its second and a half season in the first four months of 2027.

Barry Bloom: I think that also gives us the opportunity we've always looked at for further growth as we head into its second and a half season in the first, four months of 2027.

Speaker #5: Yeah, I think what we saw in '26 coming this first year, really post-renovation, is we essentially got to our number that we had underwritten for the first year.

Marcel Verbaas: Yeah, I think what we saw in 2026, coming to, you know, this first year, really post-renovation, is we essentially got to our number that we had underwritten for the first year. We did get there a little bit differently. Clearly, the leisure demand in Phoenix, Scottsdale, was a little bit softer last year than in prior years. We definitely made up for that on the group side and really got to the numbers that we were able to deliver in 2026. I think that's kind of the backdrop that we're still dealing with as we go forward.

Speaker #5: But we did get there a little bit differently. Clearly, the leisure demand in Phoenix/Scottsdale was a little bit softer last year than in prior years.

Speaker #5: But we definitely made up for that on the group side, and really got to the numbers that we were able to deliver in '26.

Speaker #5: 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.

Marcel Verbaas: That's clearly, you know, to get to that stabilized number, it'd be nice to see the leisure demands come back a little bit more strongly over the year, over the next, you know, 12, 24 months. 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.

Speaker #5: It'd be nice to see the leisure demands come back a little bit more strongly here over the next 12 to 24 months. But we feel good about the forecast of where we are for this year.

Speaker #5: Based on that very strong group pace and just all the recent trends we've been seeing there.

Speaker #6: Very helpful. Thanks for the time.

Austin Witter: Very helpful. Thanks for the time.

Austin Wurschmidt: Very helpful. Thanks for the time.

Speaker #1: As a reminder, if you'd like to ask a question, please press star followed by 1 on your telephone keypad. Just as a final reminder, that's star 1 on your telephone keypad to ask a question.

Operator: As a reminder, if you'd like to ask a question, please press star followed by 1 on your telephone keypad. Just as a final reminder, that is star 1 on your telephone keypad to ask a question. 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.

Speaker #1: 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.

Speaker #3: Thank you, Carla.

Marcel Verbaas: Thank you, Carla. Thanks, everyone, for joining us today. We're off to a solid start this year. Appreciate all the questions today, and I look forward to connecting with everyone as the year moves along.

Speaker #5: Thanks, everyone, for joining us today. We’re obviously off to a solid start this year. I appreciate all the questions today, and I look forward to connecting with everyone as the year moves along.

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

Q4 2025 Xenia Hotels & Resorts Inc Earnings Call

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