Xenia Hotels & Resorts, Inc. (XHR) stock intrinsic value fair value estimate & owner earnings analysis

Xenia Hotels & Resorts is a real estate investment trust that owns 30 upper-upscale hotels and resorts (8,868 rooms) in 14 U.S. states, mostly under Marriott and Hyatt brands (23 of 30 hotels), including Grand Hyatt Scottsdale Resort. Revenue comes from rooms, food and beverage and other hotel services, so earnings move with travel demand, and the company carries about $1.4 billion of debt. How we measure earnings. We start from operating cash flow, remove working-capital swings, subtract stock compensation as a real cost, and subtract the capital spending needed to keep the hotels competitive (only a small growth-related slice of capex is excluded). Per share this gives roughly $1.58 (2016), $1.11, $1.30, $1.37 (2019), then pandemic losses of about -$1.03 (2020) and -$0.07 (2021), then $1.07 (2022), $0.40 (2023), $0.14 (2024) and $0.79 (2025). The 2023-2024 dip reflects heavy renovation spending (capital improvements of $121 million and $141 million, including the transformative Grand Hyatt Scottsdale renovation), which fell to $87 million in 2025. We excluded 2020-2021 as pandemic years and used 2018-2019 plus 2022-2025 as a full-cycle window, whose median is about $0.93. We set the normal level a little lower, at about $0.85 per share, because the company has sold hotels (Lorien Hotel & Spa in 2024, Fairmont Dallas in 2025) even though buybacks cut the share count from about 114 million to 97 million. Growth check. Owner earnings rose from $0.14 to $0.79 in 2025 as renovation disruption faded and capex fell. In the first half of 2026 owner earnings were about $0.70 per share versus about $0.43 in the first half of 2025, with capex down to $31 million from $51 million, which supports the level but is only half a year of a seasonal business. We credit no growth in any case: rate increases, market recovery and further ramp-up are not secured, and hotel earnings are cyclical. Hotels are real assets and maintenance capex is already deducted, so we treat the earnings level as lasting rather than fading. Base case (about $13 per share): about $0.80 per share a year, flat, indefinitely. That is the normal level less a modest allowance for refinancing: $500 million of term loans at 4.88% mature in 2029 and $400 million of 6.63% senior notes in 2030, with $377 million due in 2028. Bear case (about $3.50 per share): a downturn like 2020, when owner earnings were negative (-$1.03) and 2021 (-$0.07), costs roughly two years of losses funded by borrowing, and about $1.3 billion of debt maturing 2028-2030 is refinanced at roughly 7%, adding about $0.20 per share of annual interest. Earnings then settle near $0.30 per share, near the depressed 2023-2024 levels. Bull case (about $19 per share): renovation spending stays near the lower 2025-2026 pace, and earnings return to the $1.10 to $1.30 per share range the company earned in 2017-2019 and 2022, after allowing for refinancing costs. What would make this wrong: a deeper or longer downturn than 2020, higher refinancing costs, or renovation capex that proves to be a permanent cost rather than a temporary spike. Sales of hotels would also shrink earnings. We compared the implied value with the company's history and did not lean on management guidance or adjusted figures. Owner earnings by our definition are well below the funds from operations that REITs usually report, because capital improvements and stock compensation are treated as real costs. The margin-of-safety price is about $7 per share, roughly a 45% discount to the base case, reflecting the company's cyclicality and leverage.