Yahoo Finance Pebblebrook Hotel Trust (PEB) Q1 2024 Earnings Call Transcript Highlights: Surpassing ...
Same-Property Hotel EBITDA: $59.8 million, exceeding Q1 outlook by $2.8 million.
Adjusted EBITDA: $5.3 million above the top end of outlook.
Adjusted FFO Per Share: $0.05 better than expected.
RevPAR Growth: Urban properties up by 5%, resort portfolio down by 4.4%.
Hotel Occupancy: DC up 8 points to 61%, San Diego up 8 points to nearly 75%.
EBITDA Margin: 20.3% in Q1.
Hotel Operating Expenses: Declined by 0.7%.
Capital Investments: $33.9 million invested in Q1, with a plan to invest $85 to $90 million throughout the year.
Debt Metrics: No significant maturities until October 2025, weighted average cost of debt at 4.6%.
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: On scoring, as you note that short term group bookings has slowed, can you provide a bit more context around? And have you seen anything else that is giving you pause such as meeting planners pushing for lower F&B minimums are pushing harder on room rates? A: Jonathan Bortz, CEO of Pebblebrook Hotel Trust, explained that the slowdown in short-term group bookings is primarily due to the normalization of booking patterns, with businesses and meeting planners booking further out than before. He noted that there has been no change in attrition or cancellation rates, nor reductions in spending outside of room bookings, indicating no significant shift in business confidence due to economic conditions.
Q: I was just wondering if you could talk about a little bit more about any kind of visibility you're seeing into summer leisure trends across your resorts? A: Jonathan Bortz, CEO, mentioned that it's too early to make definitive judgments on summer leisure trends. However, he highlighted that group pace is up significantly for the third quarter, which includes the summer months, indicating a solid base of bookings. He also noted strong airline bookings for the summer, suggesting a potentially positive outlook for leisure travel.
Q: Somebody wanted to ask you, if I look at your your deck, the the upside potential on your own urban portfolio appears larger than some of the returns that you are penciling in for mostly your largely your resort assets that have been renovated. As you think about capital allocation, John, where would you put incremental capital today? A: Jonathan Bortz, CEO, stated that any incremental capital would likely be invested in buying back Pebblebrook's own stock, reflecting confidence in the value of their existing assets. He mentioned that while they might sell some urban assets in slower-recovering markets, the focus would remain on enhancing the value of their diversified portfolio of urban and resort properties.
Q: Just on the group pacing and the giveback kind of in the quarter. I wonder if there's any trend of predictability to it kind of emerging. A: Jonathan Bortz, CEO, discussed the challenges in predicting group booking trends due to their variability. He explained that while there is a natural decline in the percentage of bookings as more business is secured, the actual impact of booking window normalization on revenue realization is difficult to forecast.
Q: Please, but good morning. John, I'm hoping you could dig into the ADR decline at Leisure Properties, not just in the fourth quarter, but kind of what you're expecting going forward. A: Jonathan Bortz, CEO, addressed the ADR decline at leisure properties, attributing it to a mix of factors including mix shift, with group rates generally being lower than transient rates. He noted that the decline is part of a normalization process, with rates expected to stabilize and potentially improve in the second half of the year.
Q: Hi, good morning, everyone. On Ray or John, I think one thing that's come up on some of the other travel calls, this earnings season has been a bit of a rebound on the technology side. A: Jonathan Bortz, CEO, confirmed a noticeable recovery in business transient travel, particularly from technology firms, which is reflected in stronger weekday occupancy rates across their portfolio. He highlighted increased activity from technology and consulting firms, indicating a broader recovery in business travel.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
