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Pebblebrook Hotel Trust (PEB)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 outperformed on profitability metrics despite macro softness: Same-Property Hotel EBITDA was $62.3M, beating the outlook midpoint by $4.3M, Adjusted EBITDAre was $56.6M (+$4.1M vs midpoint), and Adjusted FFO/share was $0.16 (+$0.05 vs midpoint) as disciplined cost control held Same-Property expense growth to 3.7% .
  • Revenue rose to $320.3M (+2.0% YoY), with food & beverage strength, and the company delivered multiple cost-efficiency wins; excluding Los Angeles, Same-Property Total RevPAR grew a strong 6% .
  • Guidance reset lower for FY 2025 to reflect second-half uncertainty: Net loss widened to ($30.2)-($9.7) from ($15.5)-($1.5); Adjusted EBITDAre cut to $327.5-$348.5 from $341.5-$355.5; Adjusted FFO/share reduced to $1.42-$1.59 from $1.50-$1.62; BI income raised to $8.5M from $6.0M .
  • Call catalysts: robust resort/urban recovery in San Francisco, Washington D.C., Portland and Chicago; improved LA wildfire impact versus prior forecasts; second-half macro caution (tariffs, international inbound softness) and ongoing efficiency initiatives that could continue to support margins .

What Went Well and What Went Wrong

What Went Well

  • Outperformance on hotel-level and REIT metrics: Same-Property Hotel EBITDA $62.3M (+$4.3M vs guidance midpoint); Adjusted EBITDAre $56.6M (+$4.1M); Adjusted FFO/share $0.16 (+$0.05), driven by proactive cost reduction and efficiencies; Same-Property expenses held to +3.7% vs outlook low end of +5.0% .
  • Urban market recovery: Washington D.C. +14.7% RevPAR, San Francisco +13.0%, Portland +7.5%, Chicago +7.1% YoY; resorts +5.3% RevPAR, with LaPlaya Total RevPAR +22% and hotel EBITDA +~30% YoY .
  • Management execution and tone: “Relentless” efficiency work across procurement, labor, energy, tax appeals, and resiliency projects underpinned the beat and is ongoing (prepared remarks) .

What Went Wrong

  • Los Angeles drag: LA RevPAR down 23.4%, with occupancy down 18% and rate down 6.5%; LA EBITDA down $5.7M YoY; portfolio Same-Property Hotel EBITDA fell YoY to $62.3M from $68.1M .
  • March softness: Government-related and Canadian travel pullback weakened March RevPAR; inbound international travel fell ~10% YoY in March; group lead flow slowed for the second half .
  • FY 2025 guidance reduced and widened due to macro uncertainty; Same-Property Total RevPAR now (0.5%)-2.3% vs prior 1.8%-3.7%; Adjusted EBITDAre cut by $14.0-$7.0M; Adjusted FFO cut by $12.0-$5.5M .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$404.5 $337.6 $320.3
GAAP Diluted EPS ($USD)$0.24 ($0.37) ($0.37)
Adjusted FFO per Diluted Share ($USD)$0.59 $0.20 $0.16
Same-Property Hotel EBITDA ($USD Millions)$110.8 $62.5 $62.3
Same-Property EBITDA Margin (%)28.2% 19.4% 19.7%
Same-Property Total RevPAR ($USD)$364.36 $304.43 $301.22

Segment/Market breakdown (Q1 2025 RevPAR variance vs 2024):

MarketRevPAR Variance YoY
Washington DC+14.7%
San Francisco+13.0%
Portland+7.5%
Chicago+7.1%
Southern Florida/Georgia+4.2%
Boston+1.8%
San Diego+1.6%
Other Resort Markets(1.8%)
Los Angeles(23.4%)
Resorts (aggregate)+5.3%
Urban (aggregate)(2.8%)

Key Performance Indicators (Q1 2025 vs Q1 2024):

KPIQ1 2024Q1 2025
Same-Property Occupancy (%)61.1% 61.9%
Same-Property ADR ($USD)$305.47 $301.48
Same-Property RevPAR ($USD)$186.58 $186.57
Same-Property Total RevPAR ($USD)$295.04 $301.22
Same-Property Hotel EBITDA ($USD Millions)$68.1 $62.3
Same-Property EBITDA Margin (%)21.7% 19.7%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Loss ($USD Millions)FY 2025($15.5) – ($1.5) ($30.2) – ($9.7) Lowered
Adjusted EBITDAre ($USD Millions)FY 2025$341.5 – $355.5 $327.5 – $348.5 Lowered
Adjusted FFO ($USD Millions)FY 2025$182.0 – $196.0 $170.0 – $190.5 Lowered
Adjusted FFO per Diluted Share ($USD)FY 2025$1.50 – $1.62 $1.42 – $1.59 Lowered
Same-Property Total RevPAR Var. vs 2024 (%)FY 20251.8% – 3.7% (0.5%) – 2.3% Lowered
Same-Property Total Revenue Var. vs 2024 (%)FY 20251.5% – 3.5% (0.8%) – 2.0% Lowered
Same-Property Total Expense Var. vs 2024 (%)FY 20253.5% – 4.8% 1.9% – 3.7% Improved
Same-Property Hotel EBITDA ($USD Millions)FY 2025$354.0 – $368.0 $338.0 – $359.0 Lowered
BI Income ($USD Millions)FY 2025$6.0 $8.5 Raised
LaPlaya (Q4) in Same-PropertyFY 2025$7.5 not included $7.5 not included Maintained
Newport (Q1/Q2) in Same-PropertyFY 2025$1.5 not included $1.7 not included Slightly Raised
Net Income ($USD Millions)Q2 2025N/A$14.4 – $18.4 New
Adjusted EBITDAre ($USD Millions)Q2 2025N/A$108.5 – $112.5 New
Adjusted FFO/share ($USD)Q2 2025N/A$0.57 – $0.61 New
Dividends (Common)Q2 2025$0.01/share declared $0.01/share declared for Q2 Maintained
Dividends (Preferred)Q2 2025Series E/F/G/H declared Series E/F/G/H declared for Q2 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Cost efficienciesContinued focus; Same-Property costs per occupied room flat; Adjusted EBITDAre steady Expense growth +3.7% vs low-end outlook; broad procurement, labor tech, energy savings detailed Improving/ongoing
LA wildfires impactForecasted Q1 impact: Same-Property RevPAR −330–430 bps; EBITDA −$6.5M Actual impact better than prior: Q1 RevPAR −~330 bps (vs −380 bps) and EBITDA −$5.5M (vs −$6.5M) Recovering
International inboundNot a key theme in Q3; hurricanes were focus Inbound travel down ~10% YoY in March; visa delays; Canadian pullback; dollar softness may help inbound later Cautious
Group/business demandGroup revenues +11% in Q3; occupancy gains Group room nights +5.4% YoY; 28.2% of room revenue (+190 bps); second-half leads slower and longer decision cycles Solid near-term; cautious H2
Urban/regional trendsQ3 urban occupancy +3.7%; San Diego/Chicago strength D.C. +14.7% (inauguration), San Francisco +13% with ~10ppt occupancy gain; Portland, Chicago improving Improving
Macro/tariffs2024 outlook trimmed in Q3; financing extensions FY25 outlook lowered/widened; tariff risks to FF&E/lighting; teams nimble on menus/pricing Heightened uncertainty

Management Commentary

  • “Our first-quarter Same-Property Hotel EBITDA beat was primarily driven by a steadfast focus on driving lasting efficiencies... Same-Property Total Expense growth was limited to just 3.7 percent—significantly below the low end of our 5.0 percent outlook.” — Jon E. Bortz, Chairman & CEO .
  • “Working collaboratively with our operators, our teams are rebidding all third-party product and service contracts... investing in energy efficiency and property resiliency projects... leaving no stone unturned.” — Jon Bortz (prepared remarks) .

Q&A Highlights

  • Second-half outlook caution: Management lowered and widened FY25 guidance primarily for H2 given macro policy uncertainty and potential mild recession; Q2 likely near lower end of original guide .
  • Business transient (BT) holding up so far: BT stable across markets; management notes corporates may trim nonessential travel if uncertainty persists .
  • Tariff exposure: Expected to affect FF&E, lighting/electrical, some supplies; mitigations via menu/pricing and procurement agility; longer term may constrain new supply (supportive for owners) .
  • LA recovery indicators: Short booking windows; entertainment, fashion, Silicon Beach corporate travel resuming; EBITDA headwind in Q2 now ~$1.5M (better than prior forecast) .
  • Drive-to demand resilience: Resorts skew drive-to; parking revenue up >10% at resorts in Q1 (indicative of drive-to mix) .

Estimates Context

Metric (Q1 2025)ActualConsensus EstimateBeat/Miss
Revenue ($USD Millions)$320.3 $310.5*Beat (+$9.8M)
GAAP Primary EPS ($USD)(0.37) (0.38)*Beat (+$0.01)
FFO / Share (REIT) ($USD)$0.16 $0.12*Beat (+$0.04)

Values with asterisk retrieved from S&P Global.

Context:

  • Revenue exceeded consensus by ~$9.8M on out-of-room revenue strength and cost discipline despite LA drag .
  • EPS and FFO/share both modestly exceeded consensus; EBITDA (company-reported Adjusted EBITDAre $56.6M vs consensus EBITDA $52.2M*) indicates stronger operating performance on an adjusted basis; definitional differences (EBITDAre vs EBITDA) limit direct comparability . Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Efficiency-led upside: Cost containment and operating efficiencies are a tangible lever; expect continued margin support even with modest revenue pressure .
  • Urban recovery broadening: D.C., San Francisco, Portland, Chicago momentum supports occupancy and ancillary spend; watch convention calendars (SF notably strong) .
  • LA headwind fading: Impact smaller than feared; pace improving month to month; still expect lingering price competition through summer .
  • Guidance prudence: FY25 outlook lowered/widened on second-half macro risks; near-term (Q2) setup helped by April strength, but May/June softer on event timing—model conservatively .
  • BI insurance support: 2025 BI income raised to $8.5M; contributes to Adjusted EBITDAre and AFFO (excluded from Same-Property EBITDA) .
  • Capital allocation: Lower CapEx ($65–$75M) post-redevelopment and ongoing buyback flexibility (>13M shares repurchased since Oct-2022) provide optionality; balance sheet liquidity strong with no major maturities until Dec-2026 .
  • Trading setup: Near-term upside on continued efficiency beats and market recovery (SF/DC), with risk from tariffs/inbound travel; stock likely sensitive to H2 booking trends and macro headlines .
Notes: 
- Company financials and KPIs sourced from Q1 2025 8-K and press release **[1474098_0001474098-25-000072_a050125earningsreleaseex991.htm:10]** **[1474098_0001474098-25-000072_a050125earningsreleaseex991.htm:3]** **[1474098_0001474098-25-000072_a050125earningsreleaseex991.htm:14]** **[1474098_0001474098-25-000072_a050125earningsreleaseex991.htm:15]**; market performance and operational commentary from earnings call **[1474098_PEB_3425083_1]** **[1474098_PEB_3425083_5]** **[1474098_PEB_3425083_14]**. 
- Prior-quarter context from Q3/Q4 2024 8-Ks [13:*] [8:*]. 
- Consensus estimates marked with * are values retrieved from S&P Global.