Pebblebrook Hotel Trust (PEB) Q3 2024 earnings summary

Executive summary

• Third-quarter results showed continued recovery in business, group, transient, and leisure demand, with strong performance in Chicago, San Diego, Boston, and Portland driving increased occupancy for urban hotels; resort hotels also saw higher occupancy from business and leisure travelers.

• Net income for Q3 2024 was $45.1 million, a turnaround from a $56.5 million loss in Q3 2023, aided by a $27 million deferred tax benefit.

• Pebblebrook Hotel Trust has shifted its portfolio toward leisure-focused and group-oriented properties, increasing resort EBITDA contribution from 17% to 45% since 2019.

• The company repurchased 1.1 million common shares for $15.0 million and paid down $110.0 million of term loans, extending maturities on key debt facilities.

• LaPlaya Beach Resort & Club sustained damage from hurricanes, with insurance expected to cover much of the loss.

Financial highlights

• Q3 2024 same-property total revenues increased 2.8% year-over-year to $393.7 million; same-property hotel EBITDA declined 1.0% to $110.8 million.

• Net income per share (diluted) was $0.24, up from $(0.57) in the prior year quarter; FFO available to common share and unit holders was $92.7 million, up from $66.0 million.

• Adjusted EBITDAre was $112.2 million, down 3.3% year-over-year, including $7.1 million in business interruption insurance proceeds.

• Q3 same-property occupancy rose 4.1 percentage points to 78.5%, while ADR declined 1.9% to $306.03.

• Adjusted FFO per diluted share was $0.59, down 3.3% from Q3 2023.

Outlook and guidance

• 2024 same-property RevPAR growth expected at 1.25% to 1.65%, with midpoint down 30 bps from prior outlook.

• Full-year Adjusted EBITDAre guidance is $346–$350 million, midpoint reduced by $7.5 million; Adjusted FFO per diluted share forecast at $1.57–$1.60.

• Management expects continued occupancy growth driven by sustained recovery in both business and leisure travel, despite macroeconomic and political uncertainties.

• Pebblebrook expects significant EBITDA and AFFO upside (~$108M in Hotel EBITDA, $0.60/share AFFO) over the next 3–4 years, driven by urban demand recovery, ROI investments, and the full reopening of LaPlaya Beach Resort & Club.

• Capital investments for 2024 are projected at $90–$95 million, excluding LaPlaya Beach Resort & Club repairs.