Summary of Pebblebrook Hotel Trust Q4 2025 Earnings Call

1Key Financial Results and Metrics

Q4 2025 Performance::

Same-property total RevPAR increased by 2.9%.

Same-property hotel EBITDA rose 3.9% to $64.6 million, exceeding guidance by $2.2 million.

Adjusted EBITDA climbed 11.1% year-over-year to $69.7 million, exceeding guidance by approximately $6 million.

Adjusted FFO per share increased to $0.27, $0.05 above guidance, and up 35% from Q4 2024.

Same-property occupancy improved by 190 basis points, while ADR declined by 1.6%.

Non-room RevPAR grew by 5.5%, contributing to total RevPAR growth.

Full Year 2025 Highlights::

Strong performance from redeveloped resorts and urban recovery markets, particularly San Francisco.

Total revenues grew by 2.9%, with expenses increasing by 2.6%, leading to modest margin expansion.

2Strategic Updates and Business Highlights

Continued strength in leisure demand and recovery in weekday business travel, especially in San Francisco.

Successful execution of a revenue management strategy focused on increasing occupancy, which enhances profitability from ancillary services.

Significant improvements in the resort portfolio, with occupancy rising and EBITDA increasing by 17.4% in Q4.

Strategic reinvestment program yielding positive results, particularly at Newport Harbor Island Resort with a 38.5% increase in total RevPAR.

Completed two strategic asset dispositions in Q4, generating over $116 million, which were used for debt reduction and share repurchases.

3Forward Guidance and Outlook

2026 Expectations::

Anticipated RevPAR growth of 2% to 4% and total RevPAR growth of 2.25% to 4.25%.

Same-property EBITDA expected to increase by 2.1% to 6%.

Positive early indicators for Q1 2026, with RevPAR growth projected at 7.5% to 9%.

Strong events calendar (e.g., World Cup, America250) expected to drive demand.

Continued focus on operational efficiencies and cost control to support margin expansion.

4Bad News, Challenges, or Points of Concern

Mixed performance in urban markets, with Los Angeles and Washington, D.C. negatively impacting overall results due to external disruptions (e.g., government shutdowns, local events).

Group occupancy declined slightly, with ongoing softness in government-related travel.

Caution in guidance reflects potential macroeconomic and geopolitical risks, including uncertainty in government policies and international travel dynamics.

The company is navigating a K-shaped recovery, with affluent consumers performing better while lower-income segments remain constrained.

5Notable Q&A Insights

Group bookings are down slightly, but transient demand (both leisure and business) is showing strong growth.

The company remains conservative in its outlook due to uncertainties, despite positive early trends in 2026.

There is a focus on maintaining capital expenditures to avoid deferred maintenance while balancing free cash flow.

The transaction market is improving, with expectations for continued asset sales to optimize the portfolio and enhance shareholder value.

Management emphasized the importance of transparency in financial reporting, particularly regarding the impact of asset sales on future earnings projections. Overall, Pebblebrook Hotel Trust is positioned for a positive 2026, driven by strong demand recovery in key markets and effective cost management, despite some lingering challenges from previous disruptions.