Pebblebrook Hotel Trust Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jay Kornreich - Wedbush Securities - Analyst : Hi, thanks. Good morning. I was just starting off as you commented that the first half of the year outlook largely stayed intact after a strong first quarter with the downward revision coming mostly in the second half. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 1:00PM, PEB.N - Q1 2025 Pebblebrook Hotel Trust Earnings Call So I know you made some comments on this, but can you just further dive into the second half impact something you're already seeing in the bookings, that slowed down as you commented in the group demand, or is it mostly really just related to the potential impact should a mild recession occur?

Question: Jay Kornreich - Wedbush Securities - Analyst : All right, thank you, and then just maybe as one follow up just, looking at the business trends and customer which in the first quarter you had some, positive upside. Are you already seeing corporates being more hesitant in spending and travel and that's, potentially a big leg that could come down or so far, is that segment so far trending positively and could hold up maybe better than what you're already seeing in some of the government and international pullback.

Question: Jay Kornreich - Wedbush Securities - Analyst : Okay, understood. Thank you.

Question: Smedes Rose - Citibank - Analyst : Hi, thanks. I just wanted to ask you on the tariff stuff besides just sort of the broader weakening of the macro economy, is there anything kind of hotel specific that you would expect to see costs go up either on the food side or kind of hard goods? I'm just not really familiar with kind of where all that stuff comes from. And would you expect that to have some sort of negative impact?

Question: Smedes Rose - Citibank - Analyst : Okay, and then I just wanted to ask you mentioned government or government adjacent demand at kind of 3% to 5%. For your portfolio, is that concentrated in any particular market or is that pretty sort of spread evenly across your hotels?

Question: Floris van Dijkum - Compass Research & Trading, LLC. - Analyst : Hey, good morning, guys. Jon, maybe if you could comment on the transaction markets and also your ability to given that the share price weakness, you bought back a little bit of stock, can investors expect more of these share repurchases going forward?

Question: Floris van Dijkum - Compass Research & Trading, LLC. - Analyst : Thanks, Ray.

Question: Shaun Kelley - Bank of America - Analyst : Hi, good morning, everyone. Thanks for taking my question. Two for me first of all, you kind of already talked about some of the DC exposure, I think, to Speed's question, but Jon, could you just give us a little bit of thought of sort of the Washington DC submarket? Obviously the hotel industry kind of revolves around this and so far in just pure reported RevPAR terms we haven't seen the step function that correlates with the sort of types of numbers we've heard and again you're not the only one to call out a step function of government demand as it relates to. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 1:00PM, PEB.N - Q1 2025 Pebblebrook Hotel Trust Earnings Call The broader travel industry, I know a couple of the airlines have the same, so you have a square that just like what's supporting DC right now and is this sort of just a delayed thing and, just a little bit more color on kind of how that market's doing all right, but we are, seeing this kind of big step function down and in government demand.

Question: Shaun Kelley - Bank of America - Analyst : Yeah, that's super helpful. And then just as a short follow up, kind of curious on the and I'm not meaning to split hairs here, but just since we're all living by every sort of incremental data point right now, the April commentary sounded great. You said May and June a little bit. After Easter's thrown a wrench into like a lot of the way that I think we are trying to look at, comps and modeling and everything and so it's been really hard to read the underlying trend. So what do you kind of chalk that that change up to maybe if you could, a sense of the magnitude of deceleration that you're seeing, that'd be helpful. Thanks.

Question: Shaun Kelley - Bank of America - Analyst : Thanks so much. Great call today.

Question: Duane Pfennigwerth - Evercore ISI - Analyst : Hey, thanks. Sorry we're juggling multiple calls today, but how do you think about the recovery curve in LA and what will be the leading indicators for that market to fix itself?

Question: Duane Pfennigwerth - Evercore ISI - Analyst : Thank thanks for that and then just I don't know if there's any good way to measure this, but you know what is drive to demand in your portfolio and how and how might that be changing, just, how do you think about it, what percent of your mix is drive to and how might that be changing? Thank you.

Question: Duane Pfennigwerth - Evercore ISI - Analyst : Thank you.

Question: Dori Kesten - Wells Fargo Securities - Analyst : Great, thank you. I appreciate all the details focused on expenses. Can you just talk more about where you think there's still the most used, where you're, just in case you do get to pull back on the top line and the back half and expenses can be even more helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 1:00PM, PEB.N - Q1 2025 Pebblebrook Hotel Trust Earnings Call

Question: Dori Kesten - Wells Fargo Securities - Analyst : Okay, thank you for that. And then, as you think about the potential tariff impacts on CapEx, how do you think about maybe changing some of your strategies in terms of areas you want to invest or maybe even more importantly, as you think about the competition or assets you've had your eyes on, do you think this is going to change, competitors' appetite to invest and open up more opportunities for you on the investment side, or are we just not there yet?

Question: Dori Kesten - Wells Fargo Securities - Analyst : Okay, because what you say, you never know, could change.

Question: Dori Kesten - Wells Fargo Securities - Analyst : That's right. All right, thank you very much.

Question: Gregory Miller - Truist Securities - Analyst : Thanks. Good morning, everyone. I'd like to ask a question in a similar context to [Dwayne's] question. And speaking about your drive to resorts, what are your current expectations for summer performance and maybe specifically for the resorts that have stabilized operations or pretty close to that stabilization, do you expect that you're going to have positive rooms around par year every year this summer? Thanks.

Question: Gregory Miller - Truist Securities - Analyst : Okay, understood. Maybe just switching to a different topic. You're speaking about potential labor reductions and operating efficiency efforts. If for anything that's guest facing and playing a little bit of a devil's advocate here, how are you preventing guest satisfaction scores or your rate positioning not being negatively impacted by your efforts?

Question: Gregory Miller - Truist Securities - Analyst : Thank you, Jon.

Question: Ari Klein - BMO Capital Markets - Analyst : Thanks and good morning. Jon, I think we previously talked a little bit about seeing some price consciousness on the part of higher-end consumers curious, if you're seeing that now and how you'd expect that to play out, particularly as it relates to maybe rates moving through the rest of the year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 1:00PM, PEB.N - Q1 2025 Pebblebrook Hotel Trust Earnings Call

Question: Ari Klein - BMO Capital Markets - Analyst : Thanks, and then maybe just going back to the and the impact curious how you think about that market longer term and if you've used there have changed in it anyway.

Question: Ari Klein - BMO Capital Markets - Analyst : On DC, does what's happening with those change your longer term views on that market and how much exposure you'd want to have that?

Question: Ari Klein - BMO Capital Markets - Analyst : Thank you.

Question: Chris Darling - Green Street - Analyst : Thanks. Good morning. Jon, your framing of government and government adjacent exposure earlier in the call was helpful. Can you do the same for international travel, and then what are you seeing in the bookings data for international? How does that kind of compare with sort of the tough outcome in March and where do you think the portfolio might be more or less at risk going forward?

Question: Chris Darling - Green Street - Analyst : Got it. Yeah, that's all helpful commentary. Appreciate it. Maybe on just a more positive note real quick, I think I heard you say that Key West enjoyed positive RevPAR growth in the quarter. One of your peers, I think, reported a decline in Key West. Curious, how your performance compared to the market there and maybe, perhaps what you did right or what went right for you.

Question: Chris Darling - Green Street - Analyst : Got it. Thank you for the time.