Summary of Pebblebrook Hotel Trust Q4 2025 Earnings Call

1Key Financial Results and Metrics

Q4 Results:

Same-property total RevPAR increased by 2.9%.

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

Adjusted EBITDA rose 11.1% year-over-year to $69.7 million, surpassing the midpoint forecast by approximately $6 million.

Adjusted FFO per share increased to $0.27, $0.05 above expectations, 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 overall RevPAR growth.

Full Year 2025:

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

Notable challenges in Los Angeles and Washington, D.C. due to external disruptions.

2Strategic Updates and Business Highlights

Continued strength in leisure demand, particularly in San Francisco, with a 32% increase in total RevPAR in Q4.

Successful execution of a revenue management strategy focused on increasing occupancy, which supports ancillary revenue growth.

Completion of a multiyear strategic reinvestment program, particularly benefiting resort properties.

Significant capital investments of $74.6 million in 2025, with expectations for a lower capital run rate of $65 million to $75 million in 2026.

Proactive balance sheet management, including refinancing a $450 million term loan and reducing corporate G&A costs by 10%.

3Forward Guidance and Outlook

2026 Outlook:

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 trends in Q1 2026, with January RevPAR growth of 4.6% and February projected to exceed 15%.

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

4Challenges and Points of Concern

Headwinds:

Ongoing uncertainties from geopolitical risks and potential macroeconomic disruptions.

Mixed performance in urban markets, particularly in D.C. and L.A., which have faced specific local challenges.

Group demand remains soft, particularly from government-related sectors, impacting overall group occupancy.

Market Risks:

The company is cautious in its outlook due to the unpredictable nature of external factors that could affect travel demand.

5Notable Q&A Insights

Group Demand: Group room nights are down slightly, while transient demand is strong, indicating a shift in customer preferences.

Resort Portfolio Performance: High returns on recent capital investments (22% to 26% annual cash yield) are expected as properties stabilize.

Transaction Market: The market is becoming more constructive, with potential for further asset sales to capitalize on improved buyer sentiment.

Balance Sheet Strategy: The company plans to balance organic growth with asset sales to manage leverage effectively, focusing on shareholder value. Overall, Pebblebrook Hotel Trust demonstrated solid financial performance in Q4 2025, with a positive outlook for 2026, although caution remains due to external uncertainties and mixed urban market conditions.