Pebblebrook Hotel Trust

Second-quarter same-property hotel EBITDA increased 7.1% to $123.3 million, $6.6 million above the high end of outlook. Adjusted EBITDA was $116.2 million, $6.2 million above the high end, and adjusted FFO per diluted share was $0.68, $0.06 above the high end. Portfolio same-property occupancy was 79.4%, ADR increased 4.7%, RevPAR increased 6.5%, and total RevPAR increased 4.7%. Same-property total expenses increased 3.8% and margins expanded 67 basis points to 30.6%. For full-year 2026, management raised same-property RevPAR growth guidance to 4.5% to 5.5%, same-property EBITDA growth guidance to 8.2% to 10.5%, and adjusted FFO per diluted share guidance to $1.69 to $1.76. For Q3, the company expects same-property RevPAR growth of 1% to 3%, same-property hotel EBITDA of $100.5 million to $104.5 million, adjusted EBITDA of $92.5 million to $96.5 million, and adjusted FFO per share of $0.48 to $0.52.

Jon Bortz said the quarter reflected a favorable industry setup plus Pebblebrook-specific share gains, especially in resorts and recovering urban markets. He emphasized that demand was broad-based, with better pricing confidence, less price sensitivity among higher-end consumers, and a shift toward more rate-driven growth. He was constructive on 2027, arguing that limited supply, stronger demand, more events, and improving international travel could support another step up in performance, while still acknowledging macro, policy, and geopolitical uncertainty.

Raymond Martz highlighted that the company converted 4.8% total revenue growth into 7.1% same-property hotel EBITDA growth, with expenses up just 3.8% and margins up to 30.6%. He noted rooms expense grew 3.1%, energy costs were up 2.7% and flat year-to-date, and property insurance premiums were about 27% below last year, or $6 million lower. On capital allocation, he said Pebblebrook invested $12.5 million in the portfolio in the quarter, sold Chamberlain West Hollywood for $43.5 million, retired $33.7 million of preferred shares at a 23% discount, ended with $270 million of cash, $641 million of revolver availability and $90 million of delayed draw term capacity, and reduced net debt to trailing 12-month corporate EBITDA to 5.3x.

Analysts focused on what is driving the stronger pickup, the transaction market, international inbound trends, redeveloped resort upside, and how the company is thinking about capital allocation now that the stock has rerated. Management said the pickup was led by transient demand, both corporate and leisure, but was also helped by better group stability and improved pricing discipline. They said the transaction market is becoming more active and remains biased toward luxury and resort assets, and they reiterated that capital allocation will continue to emphasize selling assets at private-market values, repurchasing stock and preferreds, and reducing debt rather than buying new properties.