The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Neil Lawrence Malkin - Capital One Securities, Inc., Research Division - Analyst
: Excellent quarter, well done. Jon, just maybe wanted to start on the resort side. Obviously, it's been a big focus for you guys, at least since COVID.
Obviously putting a lot of capital, or plan to, as well.
Just would like to get your thoughts on what gives you confidence to put in more capital? And be -- and I guess have your position with the resorts,
given where we are in terms of this uber-high historic ADR levels that we're seeing essentially from resorts almost across the country, but definitely
at your properties?
What gives you the confidence that you'll be able to further up-mix at the resorts that are already killing it? And what gives you confidence that
these ADRs won't sort of maybe back up a little bit or kind of maybe just stay flat for a period of time, just given how high they are right now?
Question: Neil Lawrence Malkin - Capital One Securities, Inc., Research Division - Analyst
: Okay. Appreciate that, Jon. And then last one. I think you took an impairment, you mentioned in the Q, on 2 assets you plan to sell. I assume that
those are in San Francisco. And can you just -- maybe just talk about that with respect to your clear capital allocation priority to not -- I guess you
want to call it the Sun Belt or resort, and kind of what that says about your view on San Francisco, longer term.
Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst
: Yes, Jon, I'm here. I'm sorry about that. Since we last talked on the fourth quarter earnings call, I think 2 things have happened. One is we've seen
this fairly dramatic increase in BT and group business. And the other one is the drumbeat of the recession has gotten much louder. And I'm just
wondering whether -- when you look at those 2 opposing forces, how your time line of a recovery to '19 has changed, if at all.
Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst
: Great. My follow-up question, Jon, is really focused on what we've seen in the interest rate environment. I'm wondering if the rapid increase there
and ongoing cost inflation and of course this talk of recession, has there been any change in cap rates in the private market at all? As you -- and
whether there's a greater sense of urgency to sell 2, 3, 4 assets on your part?
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APRIL 27, 2022 / 1:00PM, PEB.N - Q1 2022 Pebblebrook Hotel Trust Earnings Call
Question: Aryeh Klein - BMO Capital Markets Equity Research - Analyst
: Maybe just on the guidance. I think revenue was down 9% in March. And it looks like, in the guidance, your outlook is for down 9%. Yet it also
seems like seasonality -- or the trends is going to continue to improve faster than seasonality. Is that just an element of conservatism on your part?
Or is there something else?
Question: Aryeh Klein - BMO Capital Markets Equity Research - Analyst
: Got it. And then the $55 million of incremental resort EBITDA for 2022 that was outlined in the presentation. Is there -- where does the upside, I
guess, come from beyond 2022? Because I assume you think that -- it sounds like you think that can continue to grow given the resort investments
that you're making. So is that from rate? Operating efficiency improvements? ROI? Something else?
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