Xavi made a great team in this season for Barcelona and when they were in a bad situation he survived whole the team while other teams like Real Madrid were in better situations and they could even hire better players and they even had a coach with the better situation and more experience like Anceloti, but still Barcelona win the last La Liga title.
I think if Xavi continue this magic for the next season they can even have the chance to even win the champions league title.
Barcelona are not competitive enough in Champions League and Xavi is not experienced enough as a coach for tough tournaments like Champions League. They must improve together to play better in Champions League. It is irrelevant to compare Xavi and Ancelotti at coach positions as well as compare Barcelona and Real Madrid in terms of their ability to compete in Champions League. Ancelotti and Real Madrid are more experienced and successful than Barcelona and recent years, they have been stronger and playing better there too.
lets take something simple from this case. like Real Madrid have that finance. fine while Barcelona has a little bad finances and this problem prevents Barcelona from recruiting more qualified and talented players to always perform well in the UCL. and from the lineup Real Madrid still has the top players and has talented young players and all of them are mixed into one squad to strengthen on every front, while Barcelona are only senior players and the rest are free players. then Xavi and Ancelotti are both very different in terms of experience and for me experience is not everything that matters the teamwork and coaches are strong to try together to achieve what they want and Barcelona is more focused on La Liga competition and Real Madrid is more focused on the champions league.
I hereby conclude that these two teams have the same dream of winning the Champions League title, its just that their current conditions are very different and what is most visible is that the finances of the two teams are different.