• Full Year Same Property Total RevPAR Increase: 2.1%
• Adjusted EBITDA: $359.2 million, a 0.8% increase, exceeding the midpoint of the outlook by $11.2 million
• Adjusted FFO per Diluted Share: $1.68, a 5% increase, surpassing the outlook midpoint by $0.09
• Fourth Quarter Same Property Total RevPAR Increase: 1.8%
• Fourth Quarter Adjusted EBITDA: $62.7 million
• Business Interruption Proceeds from Hurricane Ian: $5.4 million
• Same Property Resort Occupancy Increase: 3.7% to 65%
• California Resorts Occupancy Gain: 6.6 percentage points
• California Resorts RevPAR Increase: 8.8%
• Food and Beverage Revenue Growth in Q4: 7%
• Urban Properties Occupancy Increase in Q4: 2.9 percentage points to 68.1%
• Full Year Resort Occupancy Gain: 2.9 percentage points to 69.9%
• Full Year Urban Occupancy Increase: 2.6 points to 71.3%
• Same Property Resort Revenue Growth in Q4: 4.3%
• Same Property Urban RevPAR Growth Excluding Certain Markets: 6.9% in Q4
• Same Property Non-Room Revenues Increase in Q4: 3.4%
• Food and Beverage Revenues Growth for Full Year: 3.5%
• Redeveloped Properties Q4 Occupancy Increase: 4.7 percentage points
• Redeveloped Properties Full Year RevPAR Surge: 11.3%
• Group Room Nights Increase in Q4: 2.8%
• Transient Room Nights Growth in Q4: 5.6%
• Same Property Hotel Expense Increase Before Fixed Costs in Q4: 3.1%
• Same Property Hotel EBITDA for Full Year: Exceeded 2023 by $3 million
• Capital Investment in 2024: $91 million
• Projected Capital Investments for 2025: $65 million to $75 million
• Cash at End of 2024: $217.6 million
• Net Debt Reduction: Reduced to 5.8 times from 6.5 times in 2023

• Warning! GuruFocus has detected 2 Warning Sign with PEB.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Pebblebrook Hotel Trust (NYSE:PEB) reported that their fourth-quarter and full-year 2024 results significantly outperformed their outlook, driven by strong performance from their resort portfolio and recently redeveloped properties.
• Same property total RevPAR increased by 2.1% for the full year, with gains across both urban and resort properties, and stronger out-of-room spending.
• Adjusted FFO per diluted share grew 5% to $1.68, surpassing the outlook midpoint by $0.09.
• The company's California resorts led with occupancy gaining 6.6 percentage points and RevPAR climbing 8.8%, showing strong momentum into 2025.
• Pebblebrook Hotel Trust (NYSE:PEB) made significant strides in strengthening their balance sheet, reducing leverage, and executing $1.6 billion in debt financing and extensions.

Negative Points

• The fourth quarter results included a 190 basis point negative impact from two named storms in Florida and the brand conversion and renovation at the Hyatt Centric in Santa Monica.
• Urban performance remained constrained by ongoing headwinds in San Francisco, Los Angeles, and Portland, affecting overall results.
• The LA wildfires have created a tough start to 2025, with significant group and transient cancellations impacting bookings.
• Challenges in key markets like San Francisco, Los Angeles, and Portland muted overall performance, with San Francisco suffering from a weak convention calendar.
• The absence of $10 million in real estate tax credits received in 2024 creates a roughly 100 basis point headwind to 2025 expense growth rate.

Q & A Highlights

Q: Can you discuss your expectations for out-of-room spend growth in 2025 and how it differs between urban and resort properties? A: Jonathan Bortz, CEO, explained that they expect out-of-room spend to grow at a rate higher than RevPAR growth, driven by increases in food and beverage, parking, resort fees, and other amenities. Clients are spending more, often exceeding initial bookings, indicating healthy out-of-room spending trends.

Q: What is the current demand outlook for the Washington DC market, especially with the change in administration? A: Jonathan Bortz noted that the mood in DC is anxious due to government changes, but demand drivers are positive. The inauguration and congressional changes boost hotel demand as associations and businesses visit to meet new leaders. The return to office mandates also increase downtown activity, benefiting hotels.

Q: Can you elaborate on your confidence in leisure rates not declining further in 2025? A: Jonathan Bortz stated that they expect meaningful occupancy gains at resorts with flat to slight rate growth. Confidence comes from strong bookings and rates on the books, particularly at redeveloped resorts with added amenities attracting both group and leisure travelers.

Q: How are you addressing the impact of the LA wildfires on your portfolio, and is there potential for recovery? A: Jonathan Bortz acknowledged the lack of experience with fire impacts but estimated a $9-12 million revenue impact. Recovery is expected as travel normalizes, with increased demand from rebuilding efforts and major upcoming events like the NBA All-Star Game and World Cup.

Q: What are your plans for potential asset dispositions in 2025, and how will proceeds be used? A: Thomas Fisher, CIO, mentioned they will remain opportunistic with dispositions. Proceeds will likely be used for stock buybacks and debt reduction. The transaction market shows increased investor interest, and they will announce any developments when appropriate.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.