PEB-PG — Pebblebrook Hotel Trust

Summary of Pebblebrook Hotel Trust Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Same Property Hotel EBITDA: Increased 27.6% to $82.2 million, exceeding expectations by $8.2 million.
• Adjusted EBITDA: Rose 29.5% to $73.3 million, $9.3 million above guidance.
• Adjusted FFO per Diluted Share: Doubled year-over-year to $0.32, surpassing estimates by $0.09.
• Same Property Occupancy: Increased by 550 basis points.
• Average Daily Rate (ADR): Up 2.8%.
• Revenue Per Available Room (RevPAR): Increased 11.8%.
• Total Revenue: Grew by 10.1%, while total expenses rose only 5.6%, leading to a 327 basis point expansion in hotel EBITDA margin.

2. Strategic Updates and Business Highlights:

• Strong performance attributed to broad portfolio strength, effective expense control, and strategic operating initiatives.
• 32 properties exceeded revenue forecasts, and 34 surpassed gross operating profit (GOP) forecasts.
• Notable recovery in Los Angeles, with RevPAR up 44.5% due to events like the Super Bowl and conventions.
• Continued recovery in business and leisure transient segments.
• Successful rebranding of Mondrian Los Angeles to Valor Los Angeles, expected to enhance property performance.
• Capital investments of $11.9 million in Q1, with a full-year target of $65-$75 million for renovations and improvements.

3. Forward Guidance and Outlook:

• Q2 Expectations: Cautious outlook due to geopolitical risks and economic uncertainties, but overall demand remains strong.
• RevPAR Growth Forecast: Increased by 75 basis points to a range of 2.75% to 4.75% for the year.
• Total RevPAR Growth Forecast: Also raised to a range of 3% to 5%.
• Same Property EBITDA Growth: Projected at 5.2% to 8.6%, with a midpoint of nearly 7%.
• Room Revenue Pace: Currently $33.5 million ahead of last year, indicating a positive trend for the remainder of the year.

4. Bad News, Challenges, or Points of Concern:

• Geopolitical Risks: Ongoing conflict in the Middle East could impact travel demand and airline ticket pricing.
• Washington, D.C. Market: Experienced a 24.1% decline in RevPAR, attributed to a tough comparison with inauguration events and ongoing government-related travel weakness.
• Visibility on Bookings: Shortened visibility on booking trends, raising concerns about potential volatility in demand.
• Economic Uncertainty: Potential economic slowdown could affect travel demand, particularly for international visitors.

5. Notable Q&A Insights:

• Impact of Oil Prices: Higher oil prices could affect travel demand, particularly for middle-income travelers, but the company is monitoring the situation closely.
• Expense Management: Full-year expense growth is projected at 2.4% to 3.8%, with labor costs expected to remain low due to improved efficiencies.
• World Cup Outlook: While the World Cup could provide a boost, concerns remain about its potential to disrupt normal business due to competing events.
• San Francisco Recovery: Strong recovery expected, with RevPAR growth projected at 12% to 15% for the year, driven by a resurgence in business and leisure demand.
• AI and Booking Trends: The company is actively leveraging AI to enhance visibility and bookings for independent hotels, showing promise in improving direct bookings.

Overall, Pebblebrook Hotel Trust reported a strong Q1 2026 performance, with positive financial metrics and strategic initiatives in place, while remaining cautious about external risks and market uncertainties.