PEB - Earnings call 3 2022 | Pebblebrook Hotel Trust

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Pebblebrook Hotel Trust Third Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Raymond Martz, Chief Financial Officer. Thank you, sir. Please go ahead.

Raymond Martz

good and Donna, you, morning, everyone. Thank our to third quarter webcast. and call earnings XXXX Welcome

our is those our to SEC that could Jon Executive today These in forward-looking me Joining Bortz, our securities federal and implied we comments are materially comments. laws. a differ uncertainties statements our described under Officer. But are Chairman results start quick risks of filings. reminder subject by Future many statements today from considered numerous before, Chief and as

Forward-looking to that are non-GAAP only later. We'll pebblebrookhotels.com. statements non-GAAP call. make we effective these measures we our of today's financial today, today at and XXXX, on And undertake October reconciliations website we financial discuss update XX, measures during no provide duty them our

stronger urban quarter, experienced the their trends very QX our remained and with customers, expected And road night the So travelers Labor its and in results both and coworkers Day in continued robust, encouraging reported got our portfolio last conventions as in hotels. business leisure urban has our as throughout October. saw which improvement to the group, the we with benefiting properties after consistent by recovery in clearly transient to the improved the continued and travel, over on travel we Leisure cities across along Business throughout returned well. Bookings most. our meet major travel markets, led our with XXXX. premiums quarter. Overall, than strong meetings. solid rate participate We reconnect quarter a throughout metrics operating our

of signs not demand. seen We a slowdown any in have travel

closely travel total and impact of actions, for signs Naples overall policies levels, cancellations, landfall slowdown. QX Hurricane XX. outlook Fed's activity near bookings, on the negative monitor given of made the which Ian, we September our spending any continue exceeded despite revenues to However, corporate

by had Coast, and on Ian's forecast Given in some reduced of our and and approximately impact revenues Georgia the large Hurricane all the its effect Southeast September. it it $X size, Florida on hotel million properties. Overall track changing our

most the EBITDA occurring by impact end at above with in end above funds Naples, on results, QX of from per adjusted half the of adjusted September $X.XX course the Of was our $X.XX of top $X.X top million of significant Hurricane revenue our the was impact our of share was Ian loss LaPlaya. Despite the outlook. roughly and operations outlook

On September quarter's the hotel to we revenue to continues as customers' and recover the by XXXX, grow leisure revenue quarter demand, from at to in recovered non-room above per Non-room the same-property room and we've which experienced trends side, demand still And XX% increases only was from sustainability was demonstrate stronger enough 'XX, per XX.X%, XX% positive XX.X% July XXXX. revenue urban and increased the benefited for room benefited them, hotels. revenues offset finished across at take cost since resorts, X.X%. that September occupied of same the comparable ADR our demand room versus solid results. Both our which maintaining our revenue all XX%, is willing to our a substantial 'XX, total and for our 'XX X.X% pandemic QX which occupied And strong and were portfolio. was by very July RevPAR, occupancy revenues their normalize. rose up QX XXXX. resorts comparable year. These accept months by price XXXX our urban these to encouraging. QX the led helping RevPAR further and X.X%. Both and increases. QX up the QX first even opportunity operating property increases to indicating exceeded total thereby increase of to and exceeded business QX an XX.X% was from surpassed ADR represent EBITDA premiums XX%

Our an which occupancy And XX.X%, just exceeded at pandemic time occupancy strong for the despite our XX.X%. to it resort only our XX% yet discussion occupancy, leisure, all resorts recovered about still the the occupancy about of XX% first XXXX. Urban only recovered resorts finished to since achieved is XXXX, best at And yet is leaving of still the Hurricane to but a upside compared Ian. from it for have of $XXX.X EBITDA quarter the recover. Same X% since would lot marks which XX.X% of property pandemic. XXXX, closer is XXXX QX to recovered been hotel million 'XX, to impact to off our

the $XXX million environment and million $XX models underscores at about we up to the XXXX, had QX also consider CPI million increase with of operating today's operating operating increased basis incurred, result our the the actually growth to efficient was price XX XXXX, since margin so 'XX, in evidences down increases the had in index, means inflationary so XX% expenses would XXXX EBITDA were XX.X% XX.X% in hotel points very about less created this versus increases that the in occupancy have that dollars, we versus in of of follow over as $XXX XXX Our this through encouraging. And expenses. This our you expense in our just points in pandemic. quarter success a so occupancy CPI properties more when mitigating operating in cost the

property. of damage unfortunately LaPlaya, higher resort following an the and by the transformed million we for of to the hotels XX% want on of next sits cash expect the X to $XX redevelopment we X to the provide higher the portfolio into was $XXX industry, million Ian. directly we ROI in an years. Relating number X invest surge Beach, XXXX, to million to with a of margins. Shifting to generate Gulf and program, of reopening projects, on generate restoration LaPlaya, the which remain capital when the storm and update recovery in Mexico track caused it expect X Hurricane foot stabilize re-merchandized these which As that to resorts on hotel over to $XXX and impacted over you to improvement the continues or most returns we profit our targeted will cash

lobby Tower and Gulf Tower the X of does side start the the from floor up property. other beach, as on the restaurant the Bay Fortunately the

As House a the and hardscaping minor and floor significant some infiltration has building impacting most is result, the done the compared the landscaping as was wind, it impact. from to though the to equipment rooms building level property. The the rains water well relatively the Beach ground on and building also suffered damage beach as heavy throughout

XXX to area power hit. And to them power, hurricane inspections, the repairs cleanup, while partner large our get a without crew the continues and large Fortunately after the we Naples the out prepared remediation there start remediation in third-party dry handling positioned remediation buildings, crew arrived who to brought all day be systems were the air and quickly. of and a with Beach had nearby remediation working equipment well and generators

as clean-up, While LaPlaya electricity the to and restored conduct begun remains repair in rebuilding area. make have progress repair even the and closed without we the remediation significant we work, already being to

but of of We public the are striving and to the repaired reopen areas resort much by late renovated. parts November,

that the then scaled the later time have Tower open to completed the to available is We The on in from to right the of repair take more Gulf with in rooms fourth or building Tower time the received this guest rooms quarter. name perhaps the in Bay House, most at beach, the brunt hurricane. expect the as Beach suggests, and the which of guest will damage as

point. obstacle resort and cost property our estimate we up the remediate, BI. business all of to replace building a will half sometime next will property year, Our we experts, deductible and we our will Beach $XX of biggest estimate much interruption not lead million with the in the LaPlaya, long $X.X is The of clean losses we're This at $XX that elevator million for repair this second at time expect with on completed and as House the could remediation estimate our this best the reopen time between through earlier. Based rest building really and estimated comfortable and is repairs forecast increase LaPlaya after insurance program. At adjusters the equipment. that be repair, to for currently but electrical reopening and The cover review the physical the million. any that be progress

million remained resort, damage including be would the Southernmost Inn Beyond to Key the throughout destroyed. along Resort in pretty $X that of to million. At the remediation million on a we're and the to at $X.X LaPlaya, which hurricane, property We Downtown West, between to we open tanning was already that million we Fifth repair Beach and damages Naples, $X.X pier work incurred water-related incur far wind completion. estimate and expect $X

property in LaPlaya impact of million. the As Southernmost, a a $XX.X Hurricane result of we and at reduction accrued Ian approximately of assets

quarter, not do Portland X these sold except However, income for hotels generating this we property in proceeds. And will recover and our to $XXX.X our X X occur we We write-down X side we sales San this resorts. insurance X combined million and this We million. on sometime through now XXXX. Shifting statements. sold in this Philadelphia, deductibles year-to-date, amount business. receive items the loss to our program investment expect the carriers, million proceeds in and $X.X we business other financial our at hotels our the $XXX.X in our of of until We've X the from statement. When property in in Francisco, reflected interruption have impairment we'll believe insurance casualty reflect in generating

has $X increase $XXX debt balance successfully of credit we facilities the This loans. the all Turning extend maturities revolver price of allowed our to and debt pre-pandemic. while unsecured all a and this had We billion our million, same term us to completed our on sheet. of as our to maintaining refinancing size

we result a debt October until As successful the of no maturities refinancing, XXXX. meaningful have

floating convertible fixed rates, have debt. XX% interest also to rates million have limited billion rising at debt about $XXX in or notes leaving We of exposure rate of our $X.X interest

X.X%. the refinancing, cash and As positive without currently $XXX This have proceeds of interest weighted average debt our a floating like cost below sales, approximately From our we whenever penalties. to debt pay is recent we us allowed of debt million prepayment rate down result, cash. operating flow property

Our credit us completely providing with facility and is undrawn, liquidity million $XXX tremendous flexibility.

also quarter. And We that Jon? to positive on end second of debt Jon. of approximately to down over I'd note, the turn call the the million paid since like $XXX

Jon Bortz

Ray. Thanks,

Hurricane high our the the of of above quarter with the performance outlook. at Ian, end Ray despite impact came hotel As top outlook operating slightly in of the our end indicated, the

in streets. so quarter, We the cities. markets, most urban the citywide urban the Many driven quarter compared was lots and its as strong our third program because the also during our as Francisco of Francisco Traveler were the successful hotels one and a September, city of the for markets versus efforts the was redeveloped when the transformation people a elements performance looked much on to compared gains widespread revenues and And very in QX $XXX our by all in And hotels. a with publicity just down Francisco hotel touring except the eco-focused great redevelopment team in QX's from frankly, third it with second the achieved versus San our which a hotel, markets markets higher in next the Miami, highlights extensive our San overflowing. of has you achieved repurposing it clean acquisition. extremely not properties and Francisco, The in that's shortfall. have favorable markets. Every Ferry city. The to appeals sustainability, RevPAR Hotel that large the XXXX. gotten negative to significant were, improvement. Not convention previously one involved into the quarter months much as of on we similar points. We and moved reopened and XXXX, quarter one U.S. I'm in on our the to And great. and were Park's by of XXXX. one XX% that values. The It in by customers days very restaurants recovery spent and problems. one Tripadvisor, surprisingly, impact a active in The industry's not higher been better of $XXX reuse. compares there the XXXX capabilities, which XX.X% by city city's extensive our And D.C. and the calendar year, revenues In in XXXX The one, received performance our outperformance quarter. improved range to recently of Francisco. portfolio RevPAR from the markets than This third in $XXX but XX% ahead property XX.X% leisure and transformed so $XX recovery as few success across the have San due citywide urban Francisco. evidence and be to with the urban in successful was calendar the convention the a properties of In in and helped most exceeded overall markets, total third and rated exceeded XXXX. convention the Clearly the rates ranked continuing performance, with hotels with only month, to even San following group recovery recovery and Seattle, to commitment in that of to it continues values progress effort, than September the and returning room The Harbor second September's make its slower a to was comparable recovery focus that in recovery convention will This calendar Court it's and like XX occupancy including well with almost on customers the was San high million transient But a of to our redevelopment base power customers the addressing and customers with to was property us Vitale clear highlight community recover X Dreamforce averaging XXXX months slowest X very indicated, in improving ahead X between a September spot noticeable. performance rates compared block a strong citywide and very happened of Washington Dreamforce, well-located reopening even we this move to of #X has and XX%, into has $XXX June than luxury robust we've our with and away. Since a most LaSalle quarter. And our the the by strongly our San of Diego filled are also does over Embarcadero more monthly San of talking joined Francisco, in last Hotel was San demand the the just several successful risen This these over lower Building basis. extremely hotel represents X. been EBITDA the along to about one year. I'd a Chicago,

we LaPlaya Jolla a acquisition not Island San But a Solamar the dramatic acquisitions, Diego, Hilton or and Club include Lodge upgrading Grafton LaPlaya I'm our be in at we've previously a investment, an of Resort next continues it better will transformation delivered benefits already we've as into ongoing Diego Harbor recover Hurricane unfortunately, didn't also created before Key quarter unfortunate Ziggy as should also of Hurricane cash as up, that dramatic of at transformations and after the obtained on led of and renamed plus minimum Jekyll upcoming currently Irma. LaPlaya our Margaritaville have a what and through drive higher Naples return Sunset between be Bay, factors, our and mention completed Monica, track in properties upgrading example to Strip, is several on a a previous made Mar investments able only in as into and many Rook a in add has will because Resort Hotel conversion. going and Georgia, Mission to post Isles result property, Diego the San Columbia Hurricane to which improvement upgraded Bay fantastic been Santa L'Auberge we saying would San grow but regardless successful D.C., EBITDA Now a yields of the Ian's or pandemic high-end of stabilization Parc Santa West in to a that believe a back than our Point well the should XX% we increased Newport, the high a XXXX investments. These resort raised built be of we're Mason is million share this Beach will Margaritaville very in this luxury on investment into successful as on where with after do Viceroy positive experience, rate of Resort Hotel if River Hollywood, doubling stabilized recently ahead, House Noble the previously do the Golden our Gorge; RevPAR we've we the to of San Cruz, Donovan closed Sunset we ground gains the month the the the done Diego, every have been course, plus in Paradise $XX the dramatic this LaSalle achieve I'd cash Southernmost Irma. in La to is Newport and Resort Viceroy Gurney's growth we properties recent has in on from month the our has September. And premium was property to which, job these transformations of environment. achieving. And team I EBITDA upgrades Resort and and contained into collaboration Club, made the Del remiss West million Zena, ramp & upgrading over so funky to market forward. Chaminade in due when basis Resort. ADR into who huge year Gaslamp Island the macro our Hotel of the Diego membership and Skamania Hotel driving at the we ultimately into very very in similar on This great Mission the completed Island as Beach through to resorts. I into transformational of not full Resort pricing the Similar transformations the be performance the that the unique And of San of club Ian; Le on Hotel forecast XX% Washington, in The many we this the Estancia deliver yield a completed year. stabilization on including upgrades again, Resort that been that $XX consistent year-to-date in years fantastic damage. deliver going

quarter, very As behavior fourth we underway, as strong Corporate and to to deliver. Based X% have XXXX our travel more levels other believe future seen travel down levels. We for the and Fed and seasonal strong be of slowdown And closing current LaPlaya, cancellations trends revenue believe of QX and at EBITDA, current inevitable course, XXXX. We not and are we is and in in nor flat closely well group disproportionate levels in which course, tailwinds a bookings, are will normalized from amount pace 'XX. any to site negative down. QX XX% that along significantly point roughly than consumer XXX XX% business look the economic with leisure monitoring improving levels. from forward we has quarter, we our higher The which, up be impact any seen that our XXXX we they're we exceeding properties on to corporate changes as healthy demand, and our to and basis RevPAR pressures will these fourth booking any of to of recovery XXX closely the blunt in to trends, normal most the XXXX. slows which, business, consistent leads the countercyclical quarter percentage room EBITDA outlook comparisons represents policies. But international We're travel the point comparison visits growth a in pullback help to of these have recent macro of economy now remained later negative of already the QX the to intends increase are of meaningful GDP, an inbound leisure the it or continuing. is or levels QX and revenues experienced low business XXXX revenue overall monitoring the have rates, approximate in has slowdown room to tailwinds room than impact our falling total with to supply basis to course, continuing

closed outlook So our fourth for entire same-property essentially quarter. QX for is assumes LaPlaya the

While revenues reopening a we're still related partial exceed and will operations currently achieved expect in $X.X to cleanup in the quarter, million. the by we additional quarter any targeting expenses

still So area. electricity we this is had at restored Beach this even as obviously a the Vanderbilt pretty haven't guess rough to point

$X.XX share So in hotel million we've per removed and QX from outlook. FFO approximately $XX.X EBITDA revenues million in our of $XX.X hotel or

impactful to quarter. it is So the

However next to XXXX. we EBITDA for QX to to to less lost BI recover this from EBITDA up year. Adjusted QX be to QX down 'XX XX% claim our our XX% and deductible expect insurance to expected XX% is XX%

with the to indicates Excluding of impact. This down to million, LaPlaya hurricane, XXXX, RevPAR despite roughly due our QX with our QX $XX.X an up concerns of our in LaPlaya $XX.X with QX X.X% and XXXX, if back haven't to generally QX economic performance, consistent LaPlaya's previous about performance adjusted you to outlook expectations, that is is in line slowdown. million of EBITDA add which X.X% would expectations heightened with line assume for the excluding is same-property outlook changed impact our

now may prepared call. our on completes portion with now our to move that So proceed Q&A you Q&A. to the remarks. of We'd like the Donna,

Operator

Dori [Operator Instructions] Wells Kesten coming from is The of Fargo. first question

Dori Kesten

recovery the to you also? the do stabilize long take your when to think it Naples you operations for market How entire of may properties consider return

Jon Bortz

was It's obviously We we that better interesting. it on -- 'XX that market to quick Irma hard recovery a even that Dori. 'XX. estimate back don't and will yet, in 'XX an I was had It's year. property. unfortunately, extremely have from for pretty think forecast. very a be good

signs before whole impact Irma. like blocks from obviously inland, on downtown go a an the is, did downtown, pretty there Fifth much. Inn very of which is visible are it X you And go if destination, not lot a popular of where you If looks

homes come down to in meantime, to at I seeing The to do That generates regular need them beach think on which weather. marketplace. And objective and to Naples, we're Inn down expect market back there. the quickly. Their visit. recovery families there's say we come demand than as as little the deal are markets quick, lot cleaning city possible. And of beat course, Their come there's pretty has of will demand. the lot homes the the quickly a lot you be who is in from that can't I open been to And beach. So up market for the to the pretty already related the either of purposes the And every about to South is have Naples. their comes would it some is a or last thing Fifth other in issues different of crew that to a business them with maybe downtown folks year Florida a a

So it's pretty would would But come forecast to it point. I back pretty this think at quickly, hard Dori.

Dori Kesten

any noticed spend? lower you in planners think time it's weighing just of whether you out-of-room make on worries them, are would on meeting recession for the attempt find, negotiations to have And change that behavior

Jon Bortz

that. of any haven't No, we seen

Operator

The of next question Kornreich Jay SMBC. coming is from

Jay Kornreich

makes still the can rethink out discuss maybe urban and your investing potential resorts leisure oncoming Just curious or kind into of if it sense on continue current selling strategy? strategically to of markets recession if that portfolio the you makes you thinking repositioning,

Jon Bortz

see modifying Yes. I change I the any in mean the way portfolio. been we've don't

the pretty to Our objective business was between really get and level a in we're now. that And balanced to close leisure more portfolio. segmentation

leisure our estimate mean between we're and I think group, and transient we're I is XX-XX. about leisure,

is So sort the will lot resort view of and a selling of difficulty see to don't the new be think I long-term change of properties of I mean, of re-circulate some adding supply competitive don't focus. term. And opportunity markets secular urban probably. the the our because those that there we the continue objective capital our very meantime, and capital I to properties supply, of in elsewhere. in out that use we'll long of against

Jay Kornreich

guess, arise side, transient historical more which on aspect the more or that, this over is recession Got point? on the recovering then near-term outperforming which year the leisure I of side, it. next should you vulnerability expect has standards a And still similar or been Would transient our business at so. maybe lost more far occupancy that

Jon Bortz

what word upon had kind recession depends time like is. Each and impacts. all the or it X it recessions We lived X of different, they've means all thing been them throw it of downturn the really It I've and doesn't. always they've now, around through same the the different of

Some have been consumer focused.

been have Some business focused.

I think reasons. lot different of will this be for one a

of are will it at and be sticky. employees the I their likely hoping with I challenging it businesses, and think looking be they'll be I and think an that And think jobs to labor markets, plenty be I open think, won't don't be employment-led downturn. more there's to continue

see gone impacts that like seen the recession. financial driven same where that was up think the great downturn to unemployment So perhaps we've the I levels, last don't that we'll in by has other the of recessions high layoffs kind caused very in

would as secular versus then consumers' money describe going on thing these is spending third change going like thing I on things but not The it's likely again, to all spend impact this more end market. And through is say other at a folks is desire the money to, the than that of recessions, end continuing the most the of experiences. the top what -- bottom I'd of market we're

has at major people most that just from businesses is get have whether of leads group financial last slowdown the greater makes the industry. don't if or because the side this over together. impact a lack need see thing a I meetings think And on downturn it's on of to or cut that usually what that cyclical so the group our traditional that we're a the the all difference exists time years X.X going has impact. I the any likelihood And recession to to the and given it's business first group demand a perspective, and know in pent-up less of

hard the downturn one less about -- a forecast. impact good more normalized our any recovering be. And to of it's industry pretty levels. would we some on a So feel business typical that we than typical countercyclical I tailwinds is thing think will to be the But thing still have strong the

Operator

is Rose on question to Floris Point. of next Citi. question, next of move from coming [Operator Smedes Compass is Instructions] Dijkum the from coming Van The We'll

Floris Gerbrand van Dijkum

on I question getting to allocation. had a back capital

resorts since your you've held I what As -- of on XXXX. resort mean explain markets. view I part the think we that your to at X helps looked

some annual obviously at something the as LaSalle Now it hotel of in CAGR averaged were may, time. But held they've NOI. I think them X% like be it

As obviously times like, forward Or more of this, went acquisitions? that's more turbulent are your have Or with for the Estancia think you you things, some get think you to repeatable? going to enough looking XXXX. properties? about you through assets example, and Gurney's the and Do XXXX milked from like

Jon Bortz

disposed, where Floris. mean, gives I the is an by of we've the our I what years, over probably what last acquired Yes, we've and thinking think indication it indicated now. couple both of we as investments made right

things the we where as be experiences at or X. these some social long-term a as long with don't there for level, to reached I driven term, do the -- also city your do of the really our at are more this over years. And look experiences by year positive years we we've right? next buck the consumers I maybe and look But or continuing friends exposure. a and quick make quick X, know, in and online -- a trends, XX investor, want desire a don't desire the to I media, very in balanced mentioned, We comfortable we longer, we're of businesses. of at mean we to, some XX, we more think collect for a have lot I very feel And on As opportunities least next part think, few those buck family. the sharing with secular

outdoor or of in Some the businesses of major that to sort out resorts come maybe cities favor in meeting pandemic. meeting have areas versus

years travel. business long is leisure have think dramatically overall So of the growth. business I last trends we term bit from we But changing don't towards the XX bias, generally GDP see do little versus followed business where a travel travel customer a

Floris Gerbrand van Dijkum

fourth I little there's could around some as Obviously, into first up. LaPlaya -- if maybe the for bleed and presumably some a quarter that the And noise well. could quarter will bit follow of

that LaPlaya, are that 'XX to excluding you're take you you you you're X that? Is and can the profitability -- 'XX? how by Is And essentially hotel of significantly. How potentially? to look quickly -- as -- do of of you EBITDA 'XX levels lagging that the at about still confident despite already that But you your occupancy could achieve fact $XXX think years? still into million going going is next could achieve your even take estimates that end sort year

Jon Bortz

levels. feel run. of well, million I the going think I all, they're forecasted over to The mean now, $XX run bridge. year I Yes. resorts first about very think -- Right about we good XXXX to are this

as we because saved high cost margins significantly the side, look should of good fixed at nature of on overall. as operating pretty the deliver back, comes very line. cost bottom discussed, think When we occupancy our we it the business And we've

to to share good think and we're get recover. making share to been it. continues next we've feel And where in to I gains we've bridge. demand So completely by ultimately, there gains continue RevPAR picking of rate. -- Will year? levels I end doubt up as properties The the very we that these repositioned different we've we make expect where in about the strong

some of midyear this one. think, the earlier just like these year were I all, or of first completed projects

of it it pre-development time I compared to by rates. to these takes was at time raised same that mean not higher-end rebuild bears pay because to a willing at low to where customers for $XXX customers. It's higher-end share higher them $XXX rates find trying to to we've and regain Some clientele that it's take the experience.

will it to think do I continue time. take So

feel I good year. think we about next

going the look starts none like. But and the to pandemic, even it that impact being now X% going us it time. and period consistent pretty how not next years. capital from now, benefiting growth have of Right here, we of much to have know recovering And fallen XXXX-XXXX and of us lower and have know is which least we trough that's the of further be growth or growth forecasting cyclical. peak a macro X% we're and we shake slowed business. We're sort to until of longer Let's difficult leave None has the now. what obviously going history. And more for And out to had of a period would strong dramatically recover have which slowed couple with going it's we're a not to for countercyclical not growth of that's because moment. tailwinds, markets to we that of below starts for the over recession to some supply out supply already go stretched which the that both fear supply

feel particularly markets about thought we growth in of than getting all year resorts, good think continue but to fixed rate the as more we surpass We recover. they the our So probably there. urban even a ago, is levels what XXXX

impacts a So we it tends slow significant time be that travel it share. do. Again, which the have cyclical -- your downturn will and But regain industry, if usually ability downturns to think less. to we

need environment demand really have to growing there. a impacts material You

Operator

is question Capital One from of next Neil The Malkin coming Securities.

Neil Malkin

report have the the a saw I of you you given headwinds more that facing? just for may at we couple you one, that first moment a Can sort one, about on the be current talk the market First priorities assets capital sale. how might maybe see guys

Jon Bortz

indicated And I more we'd a XX days, that gotten indicated, we've obviously last Well, seller this net the We've have Sure. on as we we've be -- also think. we additional difficult to -- the debt markets had we're XXX the year. market. over believe properties had

still we could were to that are forward, upon and And -- and comes make so very own in and will And in debt where what leisure-focused Last year that desire acquire we upon but at assets for the we this improvements with what will some capital significant primarily are we our were be year, our our time. out could and that opportunities for what will time any do generate then not high earlier those is with that last sell stock dependent of value. the the opportunities at do properties other depend look what valuations obviously only depend the environment preferred. where returns. And proceeds capital as we upon

the of upon all at allocation So the they'll opportunities are time. what on and table opportunity that is depend the

Neil Malkin

back right Okay, don't debt paying toward question, or that, are great. my clarify stock? burn bias down you want I to but second just more now, buying to

Jon Bortz

to it's how depend these upon things move around. going think I

think comfortable I is. So where with we feel our very debt

I have sheet. balance think we a very strong

where of is is when we've interest Our to obviously pre-pandemic that and QX. cost here at assume run of it it Most our about low. QX same kind was recovered And is already in QX the fixed. debt-to-EBITDA rate you

Neil Malkin

other guess, amount the continuing different providers maturities. capital Okay. And coming allocation Commentary path. suggest a fair data industry terms the maybe there's of that distress potential one of me down for from I is, participants, CMBS in

like attractive the positioning that sheet opportunistic And minutes Can markets obviously, a The to environment form advantage you maybe and brands very pits; not just about on assets balance lenders. are in talk unfavorable. with or spoke them are debt you're more ago, at potentially deferring distress to requiring -- a they're few how of some take and the be potentially fashion? same to how some are the do potentially buy you firmed potential getting anymore, you to see

Jon Bortz

always A, I is, world our I mean just in I way opportunistic approach, the Yes. and about at think we've capital. we we're of just this past looked where was describing we've as in in allocate terms talked might the the

in to or it's about not that not you otherwise assets I want advantage it's be environment. forced might really trade advantage Second, is found distress to these taking opportunity much as we in buy really more what think taking favorable a downturns of that as trade of an

And really it. about into our it's the way you think you so look market stock we're the the the And market, built upcoming when distress when that's think or the of about already. that's -- approaching valuation we what's if at distress. funny And

were that, so as about, consideration we allocate that forward to we be capital. what we move will And back talking again, as to how a

Operator

from coming is Citi. Rose of The next question Smedes

Unknown Analyst

Mati [ ] Smedes. is This for on

I reducing year? Okay, asked guidance saw by projects year great. you of if, Was scope function a next down the Apologies, to $XX this pushing million. that took more full already. or has been But range of

the of look initial as asset? a then quick what follow-up Newport kind are your year thoughts on to And that, about next what specifically could like,

Jon Bortz

can in really of longer the more -- certain anything. -- capital just and mean timing replacement don't a other get it's know Obviously that. dollars times invested. like I Sure. equipment There's issue when we lead the than how things was what

in scope, about just So all Mati, change capital. timing a of it's not it's

is representative indicated, Gurney's Newport only and resort the in of So probably that up lower flag. -- if an range really the then it put doesn't I as I the being first our -- as Resort, in which end changed the lower, up Harbor, it then market. relates as it's Newport capital to the name it ends to we've is. Island island think an Newport, year. And We've if exactly up next example, our removed than Harbor It's to quarter what it's in of would happens Newport end it's out it

going previously. talked a capital We've Our focus fixing the deferred customer higher, been a plan getting they're property, And to in the this for of the invested experience through about then providing on level of that's the is year stuff plan broken property we've both pay planning. more. full that to willing that higher repositioning

secure making the of the we little So both upgrades through wasn't it maintenance, the would capital bought the following. when timing will weather, it, winter and lot the then ongoing a which we maintenance particularly winter, this of is one be a of be from knew. And more capital which buildings primarily the it deferred

weather to then building property. given the design, the that takes exterior and make go interior do going to the we're plan, the the the with 'XX-'XX protected it do improvements time winter, So through and

Operator

next from ISI. The Evercore Pfennigwerth coming question of Duane is

Duane Pfennigwerth

like from a of leading behaves markets XQ, take peaks leisure I'm or your comments On thinking BT? weekend. this far. you'd holiday the extended about urban not in now improvement every likes weekend mean just I regarding quite sure the you if about leisure-driven noted some improvement that it I'm was commentary

view But leisure-driven in improvement that sort push of markets? the you this would was where urban back on all

Jon Bortz

is Well, levels. properties all, of lot at our transient we 'XX or actually business corporate above first a of have where

we as contract So that their we've obviously, the seen track we corporate just level And that us a like track dramatic use the accounts. and do, Duane, in use. with accounts of do the -- of airlines increase

our of We business But is So is groups -- our our that's do cities. We the a -- That business of do leisure in leisure our resort do most lot primarily group we don't group. one it's Clearly, look city group our in a most some. don't up at. a of is indicator of markets. in in lot we properties.

weekday the even and honestly, So third it's then year. And the business. pickup it's proxy. quarter which not transient group the group blocks, pretty the attendance in look we and is -- and there which citywide look those in has question about in in at the And at versus we earlier good a increased in business dramatically increase occupancy,

sequentially So particular, points you up look the Wednesdays, midweek. are third X right your X, at occupancies those quarter. And from in Tuesdays, your

Duane Pfennigwerth

a My that Naples But question. food than more the are extent is here a question. repositioning of to and to you is in back comment answer good bringing beverage follow-up vote one a That's for McCabe.

Jon Bortz

it. really be that, one -- but would the Phil be happy he'd he eliminated we Well, if was who McCabe did

have You Duane. to call else, might it something

Duane Pfennigwerth

says. Sports

Jon Bortz

so, Go have No, the ring. suggestion, very a I but thanks for don't ahead, doesn't good think Donna.

Operator

The from Anthony Powell next question Barclays. is coming of

Anthony Powell

question guess, year, in I guess, a leisure the for growth, next on, I particularly had or the Just resort RevPAR side. algorithm

prospect what's of bumps? top looking the from very on resorts? of And RevPAR the like like guess this How mentioned is, you rate of renovation excluding Where next year? the these year I going peaks. arc continued is to rate now? strong, prior think for is been for kind pricing still has but I is occupancy growth has next below come levels kind obviously, incremental that

Jon Bortz

Yes.

activities I willing you market to part our events willingness will. a of they're Meaning, virus larger of human areas. festivals going the more in to X and and if think risk return in the in the recovery take. One those at state most participate is the the the and is and resorts activities, on consumer of markets the from of society with they're come those to comfortable

But we a one We Again, been I've be which talked at at at do Paradise Resort. our at a I historically; do XX,XXX-plus would lot do bigger the the group lot. group, of which past. in an we've seeing, this about probably of we the Margaritaville. rooms Bay resorts. XX,XXX-plus mean example. We do we as Point do do, XX,XXX We'll almost Mission return

add return resort the in properties to been group to of continue the occurring So which the occupancy will portfolio. has

Now the rates will leisure. not be at the same level as

are positive properties rates average of help F&B that at going occupancy that and will the and a bringing at the bringing revenue the those some bottom impact group be that properties deliver impact to other back So have back positively line. on to going a it EBITDA RevPAR are higher at rate. But back, at very lower it's

at is Gabby where rates year-over-year, half resort that on so the group. And me for versus year. resort 'XX up resorts, rate portfolio a were a But think a year about are of alone about our overall on is is the revenue overall year, XX% And the the we under that in this up for that half have and group little that, in next in has for flipped than our portfolio, pace handy. I we're at I and ago of the coming little books more half don't properties. So of the rate $XX the

when So about to is that X%, It's where same the X%-X% compared year. think about you this probably it's again, level.

Anthony Powell

dividend. you is, to sense, NOL where meaningful broad just policy? one remind instate Some peers your in starting on of position here. dividend dividends I maybe more a the are the us And more Could guess, other

front? that the outlook what's maybe So for on you

Raymond Martz

how year that -- we'll Sure. Well, imply next on be about XXXX and be outlook, those $XXX it's based looks so used how see on NOLs million it or into up. then -- what would of would like bringing our we'll current

just also gains. positive if some course, we those from up And have not used costs be sales would of operating performance but

is, view to significant But there's change and outlook think So we the having income use challenge, the our would the I will little will get our around a some a second due of the world bit. that where obviously of move macro required likely NOLs, unless positive given one. sort our because would XXXX as we dividend into of require half be up is in

thing half some the that. world So to expect by it unusual unless second occurs be in sometime the we'll that 'XX. should you something Board. in work through Obviously, the has But of approved there's

Jon Bortz

think one a had need 'XX is our think about answer to a be today, you NOLs forecast I question And if would for didn't to $X no answer, a is share. I pay relevant we but

Raymond Martz

run your assume outlook we're share of about if kind $X rate upon income. that Yes, the acquired the you dividend would the we depending But XXXX there. of on taxable be that kind of assumption, at based

Operator

America. The of next question Shaun is coming from of Kelley Bank

Shaun Kelley

on state urban relative direction people interested to to they're of of the tougher we the as are a the the of thoughts interplay to between, Ray, lot about Jon, the relatively maybe a just you know leisure. recovery I all to right signposts times lead big your us moving outlook comps sort short. sound continue which seasonality that in, I themes we is just give in think where for like think, and can fourth quarter, the the here But on the return the are talk X

you leg comes the outlook, we pretty similar of QX adjust QX. don't, it's mean occupancy, the guess some of those put I specific the why asking out you think And another we to urban put markets If renovation when in of like sort out. capital about some the have or some to your in. looking of for what your is we LaPlaya, piece, wondering and in I especially relative when recovery we're together QX comes

So why of from have help another you up just about think could us kind leg maybe we here? don't

Jon Bortz

a the would XX be hurricane in One from things, week small is we Shaun. impact first October to really X in it Well, LaPlaya. Sure. did have days the beyond

the at that early weekend coast. at the went week next it And through obviously, places went the in hurricane before Key cancellations West, even the through at Florida into a Margaritaville and right of in and and hurricane the like we Jekyll and lot had Naples So market Naples. where up hit

improvement X again, was, an all and X -- the we of to points additional lose or X when X quarter or it's hurricane. there margin. points talking at But in of them So a about a you start

they're -- meaningful. that's So

second our some conversion we the in The They're the we of soon in get markets of redevelopments would have commencing to assuming urban permitting. the as be thing the the Hilton commencement to Diego, fourth well quarter, Downtown Margaritaville. in do start both Gaslamp Solamar as San

sort In you we're in exterior -- like you work third of where Margaritaville and were painting green color, at the as the thing patterns, already the impact return of earlier, of the about will, if then a Solamar, calendars started will. And fact, market. we if of building, the the convention we the the exterior the talking things was normal

but calendars to quarters the 'XX, compared quarter great quite had Boston, So as Diego, aren't fourth third D.C., San all good.

quarter. So RevPAR an of maybe LaPlaya portfolio, at again, and end is in I probably, again, on impact But compared the But our perhaps our the it's the least impact to -- at flat. the fourth in the some mind, up others. X.X%. range, high keep 'XX our for high in excluding numbers, mean, it's is not improvement margin it's having sequential in

Shaun Kelley

some Right. there's know And in a conservatism little probably there bit, I too.

as the second the It for does data, Pebblebrook's a broadly leveled probably more question out guess not broader of in I recent just would then bit sort in the little has feel about be thinking we maybe occupancy industry. cut market. like So even weeks, just urban

little industry drive something a Or you get from as more give of corporate I'm of on ago or -- thoughts you curious You mean, a Can probably X that think kind to month and bit or increasingly we here? of take. your optimistic ago do stats about close think I it? behavior your is I weeks change Again, were kind guys the this that kind watch else there's anyone. us as just can

Jon Bortz

after, We're think business I as Yes. And I a into have think we to the seasonally I normal return which mean, impacting why the of Halloween before it. going long want the periods we is again, year. of of way the like which actually the to sequentially. we negatively every go some week holidays travel. slower after for sort this week or and Halloween Saturday to is week of is indicated, don't move before half just impact Halloween, half night and

our reports seeing I the focused, -- to Monica, I don't the on to -- what look just because mean hitting on were we corporate urban had back I to I and from our which sort we're are happen and it's think at levels country Santa markets continue and we're at so recover been to that similar there's the the side of corporate in. of VC we're markets look getting tech And slower we different we're transient properties transient that mean, again, to its 'XX. And moving side. -- around the going

out. really leveling it think I is So don't

March, the into is sequential have over the seasonally head seasonal until prior to careful as mid-November growth be the going normal I because months think be that beyond we we slower. all a it not it's to slowdown and way

Raymond Martz

travel the And moving of that's to the we've factor that constraining also on the XX% Yes. does And That's Shaun, have data. business -- we XX%, been track TSA pilots. in is that's and something one up of much. lack where capacity. range That's 'XX, not seen airline kind because impact of

calls, you airline the heard pumping out as other more and they're pilots. But training from they're

-- So that capacity what pre-pandemic. help was improve restoring it should the which there, be

more and but plane for I flights are opportunities as seat -- not down. But planes even get recently, and capacity, business the more airline a slow more get every travel. don't we more in full, is though if know As been there's then you've we

Operator

The Michael next Baird. of from question is Bellisario coming

Michael Bellisario

Just tick guys seeing we're the expense Did you worsen anything process third as up in Or And that 'XX? during are you budgeting one your improved me. any see P&L you or for XQ? start pressures quarter? question for now

Raymond Martz

and pressure be. to is being will energy energy, continue Well, a

So that's lot inflationary talent to an about of the The area that costs. the year to and increases we're during input certainly labor like whole a our attract best other side costs the out. We've calling strategically hotels. had labor

than be area tough winter. less But cost really to maybe it's -- would input And earlier. continued year-over-year I the going stay say that it pressure there's be to basis was So continues was a up the one to to going probably on energy a side that's that's there high. and as

Jon Bortz

to, thing have did for we years what we the that with have we many have frankly, other with for not to the think the last deal is in that and we look don't assessments the did, But one few know I timing tax decline to forward property governments pandemic. in claims cases, the country. because around

years. resolution in take we that litigation, time. X as or I wins millions ultimately there. dollars from millions and may X And of mean, other be there's to significant savings, In of And some cases, very cases, a going going but think be X much it if it's there's could years to before be assessment as the year.

those, should to our of And increases resolved. to the getting mitigation getting some to obvious industry pandemic. ultimately, see we're of impact hopefully we've on see So from get the beginning despite negative the property some that to we continued close begin tax --

Michael Bellisario

Got the it. on side today? And then urban and expense divergence one resort just Are there. any follow-up seeing you properties between your

Jon Bortz

or back fixed industry contracts, in be in contracts more whether that union I It tend locations tend following a of was resort lot to first. that not. there's don't union the more just cities The gone because your a many of the really. in and mean probably an be I the bit they up market little resorts regardless have cases, came to where competition.

that -- that's would only So highlight. I would be the difference think I

of benefits the have JX and up return is program, seen, to had done that of the never resorts. we also which Mike, the approved think that the been of but particularly number before one I will industry, administration the HXBs help both our the going HXBs, and seasonal max

Operator

Securities. question coming Truist Miller Gregory of from next is The

Gregory Miller

comments Could XXXX? for compared to are for your you off or tech start to up tech wanted travel budgets either on following the expectations XXXX, what on XXXX industry. your current I share

Jon Bortz

continuing coincides I We've to brands, more office, probably recently a mean for fairly coming firms the their than tech I are efforts we Yes. to that the think have office. unfortunately more bit broader side better probably much rapid question an that's a their increase seen a which return a of do. who and travel increasing of we view on number their seeing little tech and with the back the to

for we is call markets us that Seattle. I obviously, where the what -- they mentioned, Francisco San And as Santa and the it Beach. Silicon So see Monica,

surveys these or don't budgets about I never end that believe of so And up. I comparisons. any know will where

controlled the frankly, senior more by employees than I in it -- think travel, by much the management. is organization the is individual

Google what travel, about -- by outside essential of they who that's occasional that we -- issue, and call it announcement want which those obviously, always a made like to only do only debatable So travel.

Raymond Martz

We think all travel is essential.

Jon Bortz

small have bias. We a industry

Raymond Martz

lot tech industry in to It's industry, sectors like industries And been just pandemic other been more relates other since recovery a the life consulting. demand. travel as entertainment also, A been it have tech. lagging coming back the industry the sciences, the really the of than has Greg,

a been that's back. coming quickly noticeable back bouncing others. hasn't that's industry And as recently, as But not certainly, the tech been

Gregory Miller

about about combined. are hotel couple in hotels next to follow-up, million And hotels roughly the as to years? hotels where were over you know, like I'd XXXX. see $XX you for the you share EBITDA X Westin Could year? of my these likely in And these this Or Boston the ask of how recovery Chicago more finish these and broadly,

Jon Bortz

end upon how take recovery quick darn mean, EBITDA, looks or million depending I 'XX clearly, million, Yes. pretty a up, so to in that be it last pretty the Copley months to X it's close like going market. or is pretty $X give -- great running $X and

are Rate close bookings X% 'XX. is very up, up significantly about good, think, next tracking now over But rate with over 'XX. look And I for year really 'XX. group to

are, Michigan Avenue, offhand mean, comparison So have market a Westin I probably from to down we lot it's don't Ray, -- a I it's recover. recall back where 'XX. don't probably 'XX. much obviously And to I slower

Raymond Martz

to an EBITDA likely basis. 'XX down on still we're Yes, XX% XX%,

Jon Bortz

summer, in in Westin transient the the fall, into we've a nice the But business Chicago. seen and particular, really group recovery in and at

Operator

Bill The next of from coming is Raymond question Crow James.

William Crow

whole ex-LaPlaya. think at to your But beat Rev. not RevPAR up to sequential from going right, I the 'XX, midpoint when versus Jon, same-store about change X.X% the to flattish

think San should seasonality said and was If items because in guessing in were hurricane hurricane, there. right? the and the disruption, throw know hurricane would reason I there; the about. But we no 'XX, had changes the I we calendar have that I'm rental be there we you seasonality fourth that disruption although impact, quantify you disruption Diego didn't if have can Where the in or if 'XX, assume seasonality. X out didn't around anything RevPAR quarter? we renovation guidance same-store how maybe probably some were you active impact you for And

Jon Bortz

Yes. And Bill, just seasonality. QX the to about wasn't to compared QX clarify, comment about

fall. convention The calendars third point related to the how

good 'XX. D.C., at look for But not And and which San for our we -- so for all back are to again when portfolio. it a as Diego, Boston the obviously and that compares part comparisons of were meaningful

And all example, and movement all they're we up. are be I'm around then don't 'XX. But Boston sure to and the of up calendars some year know compared Diego, at D.C. year, to And actually into for I'm as least markets, compared the year, that but for San next when an hand. sure quarterly this they're going be those there'll I to in off look from

for And the from get don't from October. The have we'll you're we in impact teams. property the So hurricane, about from impact numbers October, right. the those weeks the X in

exactly recall I was. impact I think 'XX, we some have although properties did redevelopment it which don't in

William Crow

third through It's one things quarter progression potentially in as I a investors. make sure the well I are with understand Shaun just dialogue increasing quarter. went -- and that I'm Okay. stalling bit. I we want little the to That's suspicion or And that discussion. there's But think some having an interesting that that fourth

Jon Bortz

we -- that And We in doesn't are it I of tell look American the airlines we think And the it at look, at was at stalling, a thanks. look recovery. stall fourth quarter. you. look saw indications that reporting Express. If looked and the appear of We if them we've Yes, Visa, it's any at we others. for

see I let that if but you So if that's, promise you we know we'll it.

Operator

Our from final question is Street. coming Green for today Chris Darling of

Chris Darling

Jon, downward of your speak how have of in estimate seeing NAV. Maybe you're bit of elaborate changed revision can and some internal market the markets? a the transaction on across you values may what your to

Jon Bortz

values factors. each Sure. take into individual the and of the all meaningful Yes, we evaluate continuously property consideration

on, into quarter, because those reported debt a has availability sentiment to that at result they've impacting as union? a markets? a I'm and provide in the the brand are that we expected it ultimate going in basis in what looking decrease in mitigation and the it about sentiment that capital and we seen the account, the in What challenges background obviously, we market? of on do, and on $X.XX values that market. values management in is debt -- capital of upon and those it account the values an take the into valuations a encumbered? our and it have encumbered, what's values. What's buyers a unencumbered? capital. And values what the the go-forward debt markets whether what how in and risks the be the to impacts, levered negative assets going transactions what because which in share. and what in the capital are sophisticated about marketplace? So we've commenting cost based want is based million the look is the continuing basically unencumbered the portfolio, in confidence buyer take both What's each transactions, what Is and of result in of recoveries, like are that a the debt Is continues the basis. and or Is there? So encumbered? transactions the and And of to is buyers of Is it delivered increase we to are determined to nonunion? completed which and The it is those long impacting macro are the Is in on related what ones the a and market the positive in been that that impact property was increasing is $XXX on I know of flow? then on equity being on sure value also, does of And ultimately, on the Is reduction you, ongoing last obviously, pricing every increase pricing you're

So the like low between $XX.XX through call presentation haven't range yet, investor came for down middle end you and who on Chris. from the have, to now and to it's $X.X those top gotten $XX.XX the

Chris Darling

to you and return helpful. opportunity quickly, Got improve it. want as occupancy color. that made just performance to I then the a And line point It's to around to margins continues bottom back. appreciate I come

just relatively at I fixed from that basis. a it. be that inflection the we mentioned forward, I'd a point, expenses cost on You this thinking increases? But excluding of tough I call to any we become CPI-related how this wonder know guess, just trajectory wonder close should it's portfolio are about measure really of And of I how point expenses kind certain to I point demand.

Jon Bortz

all marginal of matter volume your people, volumes. when have because expenses you your team full a a vary are obviously, based insurance, upon and primarily -- volume But we say There don't expenses, you didn't there's mean does get Yes. things And I other have revenue almost both those labor your taxes, like all to people management point of a that that and they're to of fixed always lot fixed. and that, -- to where all are related materials.

and Your ultimately your improves. every flow, total total dollar your for occupancy base revenue as improves obviously,

what So than in end basis flow quarters. up we've better marginal a you getting gotten prior much just on

Operator

At this to like over back Bortz Mr. I'd comments. time, for to the turn closing floor

Jon Bortz

And San for classic. Francisco Thanks, are a we to enjoyed we still that everybody, It's hope look provided and the you forward for you. Those Nareit. who you in here participating. seeing song at

Operator

this you. Ladies event. and gentlemen, Thank today's concludes

off or your enjoy rest and lines may the day. webcast your this time disconnect of log at You the

Pebblebrook Hotel Trust (PEB) 28 Oct 222022 Q3 Earnings call transcript