Pebblebrook Hotel Trust NYSE: PEB reported first-quarter 2026 results that management described as “exceptional,” driven by broad-based revenue growth and tight expense control across its portfolio. On the company’s April 29 earnings call, Co-President and CFO Raymond Martz said results came in “well above the high end of our outlook across key earnings metrics,” while Chairman and CEO Jon Bortz characterized the quarter as a “blowout” on both the top and bottom line.
First-quarter results beat expectations as margins expanded
Martz said same-property hotel EBITDA increased 27.6% year-over-year to $82.2 million, which he noted was $8.2 million above the high end of the company’s outlook. Adjusted EBITDA rose 29.5% to $73.3 million, also exceeding the high end of guidance by $9.3 million. Adjusted funds from operations (FFO) per diluted share doubled from the prior year to $0.32, which Martz said was $0.09 above the high end of expectations.
At the property level, Martz reported same-property occupancy increased 550 basis points, ADR rose 2.8%, and RevPAR climbed 11.8%. Total revenue increased 10.1% while same-property total expenses rose 5.6%, contributing to 327 basis points of hotel EBITDA margin expansion. Martz said more than half of incremental same-property revenue flowed through to hotel EBITDA, reflecting operating initiatives and investments in “revenue-generating amenities and venues.”
Martz added that performance was widespread across the portfolio, with 32 hotels exceeding revenue forecasts and 34 exceeding GOP forecasts during the quarter.
San Francisco and Los Angeles led urban recovery; D.C. and Boston lagged
San Francisco was a standout market, supported by the Super Bowl and a large citywide convention that shifted into the first quarter. Martz said all segments were “incredibly strong,” with RevPAR up 44.5% and hotel EBITDA more than tripling year-over-year, increasing by $11.6 million.
Los Angeles also rebounded from “last year’s fire-related disruptions,” Martz said, with RevPAR rising 31.5% and occupancy increasing more than 16 points to 74.6%. He said the improvement was broad-based and helped by stronger leisure demand, improving entertainment-related activity, and the ramp-up of the renovated and rebranded Hyatt Centric Delfina in Santa Monica. Martz said the quarter’s L.A. same-property EBITDA increase “recaptured all of the EBITDA loss” experienced a year earlier due to the fires.
Across Pebblebrook’s urban portfolio, Martz reported RevPAR growth of 14.3%, Total RevPAR growth of 12.9%, and EBITDA growth of 55.1%. He cited San Diego urban hotels for 8.7% RevPAR growth, driven by a 900 basis point occupancy increase, and Chicago for RevPAR growth of 5.6%.
Management said Washington, D.C. was the company’s most challenged market in the quarter, with RevPAR down 24.1% due to a “very difficult inauguration comparison” and continued weakness in government-related travel, though Martz said there were “some recent improvements.” Boston was also softer, with RevPAR down 3% due to a lighter citywide calendar, two major winter storms, and a rooms renovation at Revere Hotel Boston Common.
Martz said the company expects both Washington, D.C. and Boston to improve in the second quarter given better event calendars.
Resorts delivered solid gains; out-of-room spending remained healthy
Pebblebrook’s resorts also posted a strong quarter. Martz said resort RevPAR increased 7.5%, Total RevPAR rose 6.7%, and EBITDA climbed 13.9%. He attributed results to resilient leisure demand, healthy on-property spending, favorable holiday timing, and the continued ramp-up of redeveloped assets, with some benefit from an earlier spring break that pulled demand into March.
Martz cited several resorts with double-digit RevPAR gains, including Newport Harbor Island Resort, LaPlaya Beach Resort & Club, Skamania Lodge, Paradise Point Resort & Spa, San Diego Mission Bay Resort, and Estancia La Jolla Hotel & Spa.
On revenue mix, Martz said out-of-room revenues increased 7.6% overall, with food and beverage revenue up 7.4%. Outlet revenues rose 10.2%, and banquets and catering increased 4.8%. CEO Jon Bortz later said the company has not seen any pullback in out-of-room spending, including in April, despite weak consumer confidence surveys, adding that guests “spend” when on property and want a strong experience.
Expense discipline, capital updates, and balance sheet
Martz emphasized expense control, noting total expenses rose 5.6% versus total revenue growth of 10.2%. He highlighted that food and beverage expenses increased 3.7% compared to 7.4% growth in food and beverage revenues, sales and marketing expenses (excluding franchise fees) grew 3.9%, and energy costs declined 2.8%. On a per occupied room basis, total expenses declined 2.8% and total expenses before fixed costs declined 3.2%.
Addressing one-time impacts, Martz said the Super Bowl contributed about 215 basis points to same-property RevPAR and the Los Angeles recovery contributed another 285 basis points. Offsetting factors included winter storms, which reduced RevPAR by about 115 basis points, and the difficult inauguration comparison in Washington, D.C., which reduced RevPAR by another 105 basis points. Martz said that even after adjusting for those items, same-property RevPAR grew by roughly 9%.
On capital, Martz said the company invested $11.9 million in the quarter, including guest room renovations at Chaminade Resort & Spa and Revere Hotel Boston Common, which are now “substantially complete.” For the full year, the company maintained expectations for capital investments of $65 million to $75 million.
Martz also discussed the April 1 rebranding of Mondrian Los Angeles into The Valorian Los Angeles, Curio Collection by Hilton, saying franchise-related key money funded the changeover at no cost. In response to analyst questions, Bortz said the prior system “was just not delivering to the property at the level that one of the domestic major brands could deliver,” and that the combined operator and franchise cost under Curio is lower than the prior arrangement. Martz said Hilton had been “fantastic to work with” and the transition has been smooth so far.
On the balance sheet, Martz said net debt to EBITDA declined to 5.5x from 5.9x at year-end. Pebblebrook ended the quarter with $204.6 million of cash and restricted cash and about $641 million of capacity on its revolver. The weighted average interest rate was 4.1%, with about 98% of debt effectively fixed and 98% unsecured. Martz said the company repurchased more than 400,000 common shares year-to-date at an average price of $12.11 per share.
Outlook: raised full-year growth ranges, but maintained caution
Management repeatedly pointed to geopolitical and macro uncertainty, including the ongoing conflict in the Middle East and potential implications for airline pricing, capacity, and inbound international travel. Martz said visibility has shortened somewhat since late March, but the company has not seen a material change in booking trends. Bortz said the company is “not seeing any negative impact on pace or bookings at this time,” but reiterated a “month at a time” approach given how quickly trends can shift.
Bortz said Pebblebrook increased its full-year outlook for RevPAR and Total RevPAR growth by 75 basis points each, to:
- RevPAR growth of 2.75% to 4.75%
- Total RevPAR growth of 3% to 5%
He said the company reflected the Q1 performance beat in its hotel performance assumptions while leaving the second quarter and the rest of the year unchanged from the prior outlook. Bortz added that the $10 million first-quarter hotel EBITDA beat was “fully passed along” into the company’s same-property EBITDA outlook at the year’s midpoint, resulting in a new forecast for same-property EBITDA growth of 5.2% to 8.6%.
Management also discussed its early view of World Cup-related demand, with Bortz describing bookings as likely to be short-term and saying the company is currently contracted for about $1.9 million of group room revenue tied to teams, sponsors, and FIFA, with more than half in Boston. He said the company expects the event to be positive overall, mainly through higher average rates and increased non-room revenues, while keeping forecasts conservative.
About Pebblebrook Hotel Trust NYSE: PEB
Pebblebrook Hotel Trust NYSE: PEB is a real estate investment trust specializing in premium, high-barrier-to-entry hotel properties in gateway markets across the United States. Established in 2009, PEB focuses on lifestyle-oriented lodging assets that cater to business and leisure travelers seeking elevated experiences. The company's investment strategy emphasizes select-service and full-service hotels with established brands and prime urban or resort locations.
PEB's portfolio comprises more than 30 properties in major metropolitan areas including New York City, Los Angeles, Chicago, Miami and San Francisco.
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