Pebblebrook Hotel Trust (PEB) Q2 2025 earnings summary

Executive summary

• Second quarter and Q2 2025 results exceeded outlook, driven by strong San Francisco demand, robust performance at redeveloped properties like Newport Harbor Island Resort, and portfolio efficiencies, while Los Angeles faced challenges from wildfires and local disruptions.

• Portfolio realignment over six years increased leisure and group exposure, with $802M in resort acquisitions and $1.2B in urban property sales since 2019.

• Cautious approach maintained due to macroeconomic and policy uncertainties, with a focus on proactive revenue generation and expense management.

• No hotel acquisitions or dispositions occurred during the first half of 2025.

• Trading at an estimated 55% discount to private market NAV, presenting a potential value opportunity.

Financial highlights

• Q2 2025 revenues were $407.5 million, up $10.4 million year-over-year; net income was $19.3 million, down 40.2% year-over-year; six-month net loss was $12.9 million.

• Adjusted EBITDAre for Q2 2025 was $117.0 million, $6.5 million above outlook midpoint; Adjusted FFO per diluted share was $0.65.

• Same-property RevPAR for Q2 2025 was $236.56, nearly flat year-over-year; excluding LA, same-property total RevPAR rose 2.7%.

• LaPlaya Beach Resort generated $19M in hotel EBITDA and $23.8M in business interruption insurance proceeds in 2024; $7.5M in BI income recognized in Q2 2025.

• Out-of-room revenues at resorts rose 3.3%, with food and beverage up 2.5%.

Outlook and guidance

• Full-year 2025 Adjusted EBITDAre guidance raised to $332.5–$347.5 million; Adjusted FFO per diluted share guidance: $1.47–$1.59.

• Q3 2025 same-property RevPAR expected to decline 1%-4%, with total RevPAR down 0.5%-3.2%.

• 2026 outlook is optimistic, with group room nights up nearly 9%, ADR up almost 4%, and group revenues up 13.1%.

• Urban hotel occupancy projected to rise to 80% (below 2019’s 83%), with $45M+ EBITDA upside anticipated.

• Limited new hotel supply expected in key markets due to restricted construction financing, supporting favorable operating conditions.