Summary of Pebblebrook Hotel Trust Q3 2025 Earnings Call

1Key Financial Results and Metrics

Same-Property Hotel EBITDA: $105.4 million (in line with expectations).

Adjusted EBITDA: $99.2 million (exceeded midpoint by $2.2 million).

Adjusted FFO per Share: $0.51 (exceeded midpoint by $0.03).

Occupancy Rate: Increased by nearly 190 basis points.

Average Daily Rate (ADR): Declined by 5.4%.

Revenue Per Available Room (RevPAR): Declined by 3.1%, with total RevPAR down 1.5%. Excluding Los Angeles and Washington, D.C., total RevPAR increased by 0.6%.

Operating Expenses: Same-property hotel expenses rose just 0.4% year-over-year, with expenses per occupied room declining by about 2%.

2Strategic Updates and Business Highlights

Strong performance in San Francisco and Chicago, with San Francisco's RevPAR increasing by 8.3% due to a robust convention calendar and recovery in business and leisure travel.

Successful redevelopment of properties like Newport Harbor Island Resort, which saw a 29% increase in RevPAR.

Continued focus on cost management and operational efficiencies, including AI-enabled tools for productivity.

Capital investments of $14.2 million in Q3, with plans to invest $65 million to $75 million for the year.

Agreement to sell one hotel for $72 million, classified as held for sale.

3Forward Guidance and Outlook

Q4 Outlook: Same-property RevPAR expected to range from -1.25% to +2%, with total RevPAR between -1.25% and +2.7%. Anticipated growth in hotel expenses at 0.8% at the midpoint.

2026 Outlook: Cautiously optimistic with expectations for improved demand growth correlating with GDP growth. Anticipated benefits from a favorable holiday calendar and major events, including the World Cup.

Group room nights for 2026 are up 4.1%, with total revenue pace increasing by 6.1% compared to last year.

4Bad News, Challenges, or Points of Concern

Declines in ADR and RevPAR primarily due to competitive pricing pressures in Los Angeles and Washington, D.C., exacerbated by geopolitical factors and a federal government shutdown.

Ongoing weakness in government-related travel and group attendance, particularly impacting D.C. and San Diego markets.

Potential for continued challenges in Q4 due to the government shutdown affecting overall travel sentiment.

Mixed performance across urban markets, with some experiencing declines in RevPAR.

5Notable Q&A Insights

San Francisco Market: Increased confidence in pushing room rates due to rising demand, with a notable uptick in corporate bookings.

Labor Costs: Anticipated moderation in labor cost growth due to improved efficiency and productivity measures.

Los Angeles Outlook: Expected to perform better in 2026 due to easier comps and a potential recovery in entertainment production.

Government Shutdown Impact: Significant reduction in government travel affecting overall demand; recovery expected once the shutdown ends.

Leisure Demand: Resilient but more price-sensitive; urban properties benefit from leisure customers, particularly in tourist-heavy cities. Overall, Pebblebrook Hotel Trust demonstrated resilience in a challenging environment, with a strategic focus on operational efficiencies and redevelopment efforts positioning the company for potential growth in 2026. However, headwinds from government-related travel disruptions and competitive pricing pressures in key markets remain concerns.