Pebblebrook Hotel Trust Q3 FY2025 earnings call

• Operating results: Third quarter performance in line with outlook, resilient operating model, strong cost controls. Same-property hotel EBITDA $105.4M, adjusted EBITDA $99.2M, adjusted FFO per share $0.51. • Portfolio trends: Occupancy up 190 basis points, ADR down 5.4%, RevPAR down 3.1%. Excluding LA and DC, total RevPAR up 0.6%. • Redeveloped properties: Newport Harbor Island Resort EBITDA expected to be ~$17M full year, Jekyll Island Club Resort, Estancia La Jolla performing well. • Cost controls: Same-property total expenses grew 0.7%, per occupied room costs declined. • AI and tech: Piloting AI-enabled tools for hiring, retention, service delivery, etc. • Energy/water: Implementing technologies to reduce usage, investing in solar and HVAC upgrades.

Same-property hotel EBITDA totaled $105.4 million, in line with midpoint, while adjusted EBITDA came in at $99.2 million, exceeding midpoint by $2.2 million. Adjusted FFO per share was $0.51, $0.03 above midpoint. San Francisco was a standout with RevPAR rising 8.3% in Q3 on 690 basis point jump in occupancy, driving EBITDA higher by 10.9%. Chicago had RevPAR up 2.3%. Resort portfolio total RevPAR up 0.7%, with Newport Harbor Island Resort RevPAR up 29%, Jekyll Island Club Resort 8%, Estancia La Jolla 5.7%. Same-property occupancy up nearly 190 basis points, ADR down 5.4%, RevPAR down 3.1%. Out-of-room revenues grew 1.7%, transient demand up 3.8%, group occupancy down 2%. Same-property hotel expenses before fixed costs rose 0.4% year-over-year, per occupied room expenses down ~2%.

• Q4: Cautious due to macroeconomic outlook and government shutdown, etc. Q4 RevPAR range -1.25% to +2%, total RevPAR -1.25% to +2.7%. Total hotel expenses expected to grow 0.8% midpoint. • 2026: Cautiously optimistic, favorable holiday calendar, active major events calendar, redeveloped properties ramping, easy comps in some markets (LA, DC), major events like World Cup, Super Bowl, etc. Expected to outperform industry.

• Geopolitical and macroeconomic uncertainty impacting travel demand. • Government shutdown, tariff policy, etc. affecting travel. • Competition in certain markets (LA, DC) leading to ADR decline. • Weather disruptions in past affecting properties like LaPlaya, though improvements underway. • International travel imbalance and dollar strength impacting demand.

Q: Gregory Miller asked about San Francisco lodging performance, specifically rate confidence and implications to properties.

A: Jon Bortz and Raymond Martz responded that San Francisco is seeing strong demand, regular nights selling out, rate growth to recover from 2019, and benefits from major events like Super Bowl and World Cup.

Q: Cooper Clark asked about expense side, specifically labor costs and moderation into 2026.

A: Jon Bortz said headcount reduced, efficiency tools used, wage growth expected to be less in 2026 though offset by some health care cost growth.

Q: Smedes Rose asked about asset held for sale and transaction market pricing.

A: Tom Fisher and Jon Bortz discussed transaction market gyrations, debt markets improving, pent-up demand, and need for operations to turn positive for better sales.

Q: Duane Pfennigwerth asked about government shutdown impact and 2026 tailwinds.

A: Jon Bortz said government shutdown impacts travel, and L.A. to be a tailwind with TV/movie production ramp in 2026.

Q: Michael Bellisario asked about attrition in group occupancy.

A: Jon Bortz said attrition related to government and government-related events, not highly concerning yet but monitored.

Q: Aryeh Klein asked about disconnect between demand and GDP growth and World Cup tailwind.

A: Jon Bortz discussed policy disruptions, international imbalance, and World Cup tailwind expected to be last minute but significant.

Q: Chris Darling asked about San Francisco strategic exposure.

A: Jon Bortz said properties available for sale, depends on pricing, and belief in strong growth in San Francisco over next 3 years.