PEB — 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 guidance by $8.2 million.
• Adjusted EBITDA: Rose 29.5% year-over-year to $73.3 million, surpassing expectations by $9.3 million.
• Adjusted FFO per Diluted Share: Doubled to $0.32, $0.09 above guidance.
• Occupancy: Increased 550 basis points to 74.6%.
• Average Daily Rate (ADR): Up 2.8%.
• Revenue per Available Room (RevPAR): Increased 11.8%.
• Total Revenue: Grew 10.1%, while same-property expenses rose only 5.6%, leading to a 327 basis point increase in hotel EBITDA margin.

2. Strategic Updates and Business Highlights

• Strong performance attributed to broad portfolio strength and effective expense control.
• 32 properties exceeded revenue forecasts; 34 exceeded gross operating profit forecasts.
• Notable recovery in Los Angeles, with RevPAR up 44.5% due to events like the Super Bowl.
• Rebranding of Mondrian Los Angeles to Valor Los Angeles, expected to enhance property value.
• Continued investment in capital improvements, with $11.9 million spent in Q1 and a full-year capital investment forecast of $65-$75 million.

3. Forward Guidance and Outlook

• RevPAR Growth Outlook: Increased to a range of 2.75% to 4.75% for the year.
• Total RevPAR Growth: Adjusted to 3% to 5%.
• Same-Property EBITDA Growth: Forecasted at 5.2% to 8.6%.
• Caution expressed regarding macroeconomic uncertainties, particularly geopolitical risks and their potential impact on travel demand.

4. Bad News, Challenges, or Points of Concern

• Washington D.C. Market: Most challenged with a 24.1% decline in RevPAR due to difficult comparisons and ongoing weakness in government-related travel.
• Geopolitical Risks: Ongoing conflict in the Middle East could impact travel demand and airline pricing.
• Visibility Concerns: Shortened visibility in booking trends noted, particularly for April and May, with potential headwinds from rising oil prices affecting travel behavior.
• April Performance: Expected to show a year-over-year decline in RevPAR, influenced by prior strong performance.

5. Notable Q&A Insights

• Impact of Oil Prices: Historically, higher gas prices can affect travel demand, particularly for resorts in drive-to markets.
• Expense Management: Full-year expense growth expected to be 2.4% to 3.8%, with labor costs in the low single digits due to efficiency gains.
• World Cup Considerations: Anticipated positive impact on revenue, but cautious about potential disruptions from geopolitical events.
• San Francisco Recovery: Strong demand recovery noted, with expectations for double-digit RevPAR growth in the coming years, supported by a favorable event calendar and improving business conditions.

Overall, Pebblebrook Hotel Trust reported a robust first quarter with strong financial metrics and strategic initiatives, while maintaining a cautious outlook due to external economic uncertainties.