Earnings call transcript Q4 2022

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

Operator

Greetings and welcome to the Pebblebrook Hotel Trust Fourth Quarter and Full Year 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Raymond Martz, Chief Financial Officer. you. Thank ahead. go Please

Raymond Martz

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

Joining our me Chairman Bortz, and Chief today Executive Officer. are Jon

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

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

progress recovery. a road hotel significant on hard thank for our Okay. our We and to sacrifices In full operating partners work, teams their we to want creativity. XXXX, and made

tremendous path the we portfolio from as continue continues following growth effort, and the their on pandemic. recovery benefit to Our of

Our at $XXX.X a with have ahead. very while XXXX, believe, compared adjusted work do, EBITDA in we we significant from And ago. upside to year we finished have $XX.X a much progress considerable million still million

from at share XXXX per substantial per Adjusted FFO at $X.XX $X.XX, a negative ended XXXX a improvement share.

our a for transformation acquisitions total dispositions, have and company. recycled XX% side, XX million over for Since investment we slower selling urban XXXX, for portfolio, have were $XXX the dramatic we urban $XXX resorts we acquired of since hotels for in resorts We $XXX million. representing $XXX Between On six million very million. four our recover two leisure-focused active. hotels and sold of a of while to XXXX, acquired markets almost leisure-focused

operating, transient already which resort these later. at As many will roughly underway, increased divestitures, excited to and both some discuss investments XX%, and group our of redevelopment are market acquisitions, a Jon about our have we the and recent segmentation remerchandising extremely opportunities from leisure, are result we which of and

next several will We these projects that expect major years. growth the over generate outsized

fourth XX.X% recovered in our total and demand quarter, of further continued exclude to a Ian, For was from beach property same $XXX.X And EBITDA. solid same apply revenues resort basis results revenues our at and by business these the closure an negatively transient property group in travel. XXXX. of improvement this by RevPAR driven million resorts And impacted million in and estimated approximately million Hurricane and due growth $XX its points which property $XX XXX property were same

experience to Angeles, San demand demand Chicago the of the expectations, we in XXXX, experienced markets, winter we Boston. and solid of to Los accelerate our In are D.C. and trends demand have line recover San we operating storms Washington terms in continue impact QX Francisco, including and the in markets, Diego excluding encouragingly, slower first And recover Shifting with in been to-date the generally have to seeing severe quarter.

resulting northern up and following remediate significant in in these caused some operating and to and an leisure which temperatures storms. capital and southern business to includes Boston damage travel disrupted $X.X in estimated costs California additional rainfall then markets water travel clean The these in estimated also million disrupted and multiple expenditures, cold

strength. is in price the states demand softer was one in some maintaining to healthy increase Florida changes consumer cautious. already more the in demand layoffs demand These industries, announced yet are in in open remains despite and few of for was notable experience robust XXXX the which to Leisure have despite side, fully sensitive any West, Except for Key booking numerous cancellations. about demand, concerns On the demand in across many its or we activity relatively becoming business.

in early with overall XX.X% levels, Francisco will of San very San Demand which JP at at encouraging Healthcare with much the this XXXX, Conference was last an and ADR Morgan hotels start was XXXX on X.X% the with continue in XXXX demand year JP year January. our held started in conference approximately person, This positive Compared note the expect Morgan levels. Francisco, in year. time, revenues up to with we convention at XX% for the a improved is calendar a a of

property Omicron property the quarter Overall rate be as comparisons impacted for the a same We Omicron RevPAR to than XX% the was benefiting last QX last anticipate very as QX from strong Not last higher up to from quarters to versus growth Company, January the same progress. RevPAR easy year. RevPAR was for year. surprisingly, January XX% substantially January's ease year growth slow XX%

the results and same property operating EBITDA impacted from repair estimated revenues which due QX will apply our an remediation closure QX and to $XX would be approximately Hurricane hotel for negatively reduce of million. million by Ian, $XX work Our by

RevPAR projects QX X.X In impact approximately to to property due is basis to underway. by addition, negatively to This we overall expected million XXX points, experience X.X and transformational million. will several XXX by major same displacement EBITDA

Hilton $XX.X QX Ian impact include in Estancia Jekyll by approximately Island Jolla, Diego, as Santa will San redevelopments disruption Combined La the Resort million. property Monica. Club at Solamar apply for to same and San million the Gaslamp Diego, downtown negatively EBITDA These comprehensive our of Viceroy hurricane $XX.X Margaritaville a redevelopments convertible

and major Shifting redevelopment later are $XXX for we're in very and to in our program to about our remarks. detail year's investment. expect we several overall XXXX, Jon will including million excited into our returns we discuss million programs targeting invest $XXX redevelopments healthy capital on will improvement that portfolio, more strategic generate projects to our this

we've Golf restaurant, press Bay restoring the as release, houses repairing partially We Also, Tower the reopened detailed open property night's substantial and club LaPlaya. last and to made Tower and progress Golf as expected the The bar we Tower lobby, areas. shortly. in the

temporarily poles spa fitness significant of have opened resort. relocated a center. component the and one with and a it's of So, the also We'll some three

full resort and our to beach be been club cleaned The beach and guests. has and services reopened we'll providing

is so insurance We million the far house be beach the remediation Our to and which our complete work, however we restoration $XX in fourth to necessary work. received from completed expect undergoing still substantially repair quarter. providers

We additional the needed work this from expect resort insurance restore proceeds fully shortly. to fantastic for our

$X quarter ever, proceeds we expecting it better the will quickly will winter EBITDA FFO. benefit million outlook and pre-hurricane expect it also during business installment is and of adjusted been completion, fourth deductible. income returned will be last into BI first net our and million and our incorporated other than adjusted which has interruption This hit the XXXX, of We're $X.X QX be Upon to case of its business for in this performance.

we'll BI year receive you we XXXX We or additional QX the reach final later this expect time XXXX to for in progress and area. settlement, as proceeds and in a by quarterly update the we

Turning quarter to million fourth our repurchase prior of of from $XX.XX, sheet proceeds NAV. shares weighted of outstanding a balance of share common midpoint shares discount X.X X% the the we capital XX% a price average recently updated at have our and of dispositions our over with utilized other since the XXXX, uses, start to to just roughly

value. share, X XX% Series compared discount we million a par addition, H per par per at equity share repurchased $XX or with to our preferred the $XX of shares In

pay down proceeds also use year. debt deposition last We to

the an we share available prior portion repurchase have also authorization authorized million has million remaining $XXX common program. of preferred unused share $XXX repurchases. for implies repurchase combined board common board Our million $XXX with additional our which approved share The program,

utilize on the our As reducing will share outlook trading and worse stock, some debt so we repurchases sell we basis. a our progresses. proceeds on net do which debt additional no utilize properties, at additional our proceeds depending how at than XX% leverage to performance of and repurchasing best the portion while neutral how evaluate our including we we asset is believe discount for our reducing approximately If only, or we do value, economy currently

the And valuation been the private advantage we comfortable have of several reasons. taking for arbitrage public

debt our value believe assets, of very we at reasonable. the First, book which XX% net our is is of net

of $XXX in This late of the convertible about converted net the notes drop comprises XXXX. to million before would maturity debt Assuming total of value. debt the are equity which book one-third to our XX%

of estimated over Second, debt largely other also to our debt relationships notes well These debt years group, by a them. is relationship, beyond of whether go whom we've bank were decades attracted processing unsecured bank most cash many our or some XX%. third, held our borrower for and And very banking, our fact investment deposits, NAV to credit of with partners. and our substantial client is services, had we for banking lender just several reasonable it's card XX% many net a relationships

secure trust a REITs our were handful highlights us. depths of the pandemic, that have of our we've not do during have in did competence to seen of and the pandemic. as one the matter. banks hotel the of only This And during debt We relationships

debt of very In addition, level million That before only our XXXX. of debt, is is mature XXX XX% of which XXX will only manageable. secured or less than proper

liquidity existing our substantial. is Finally, very

have we We before pandemic. than the more available did

this And just industry. which is enhances while largely currently flexibility lowest course ratio risk. cash which debt undrawn, average unsecured is fixed And our Our million refinancing credit any our charge provides and facility, of our $XXX reducing the risk. in X.X% cost flow our perhaps reduces

market use of XXXX our to in window within years of a to swaps for two year. three XX% is effectively addition, of $XXX we XX% million the end And is attractive and through this fixed fixed In expire the swaps complete debt January XXXX. that very extend to

debt cost interest rates upside. the is the very even surprised manageable, of and to service if So our predictable

Jon? like I'd Jon. note, positive turn over that on the to call And to

Jon Bortz

focus topics. comments Thanks, my to Ray. on important I'm going two

the we in to are times far it First, especially we're get It and uncertain predict to where where our today. And going in to highly bridge and are, laid we're what how long-term market. than we value performance, we in like is creation presentation, there. is second, investor setup our out easier for short-term forecast going, the seeing XXXX EBITDA

seen transient are healthy. As any and international naive are so that not that Ray leisure yet is and not travel no are recover won't macroeconomic think forecasting. a many continue see business an industry. longer inbound material suddenly very we that impact to Group, to remains or or we we that indicated, slowdown occurring travel we impact from either have the all cyclical But

Fed down recovery one bring to And inflation is the we never are to been let through economy before, working and target. to recognize alone where order overtime the its in and a down slow humble have pandemic we

how let we move the we you trends and to scenarios monitor of know changing. we So, it's all these extremely plan is micro impact the macro conflicting other very each closely, and will All indicators see different forecast will we waves forward for and XXXX. do in as when difficult can

we an first Omicron In the QX improve our meantime, over expect to significantly impacted XXXX. quarter

and total though we it's both growth weather RevPAR coasts year-over-year year. Ray XXXX, on see to nice As healthy revenue in in Angeles in Super said, by benefit unusual continues a saw the we early improvement negatively though Bowl from impacted the January February year. last had Los over

for our good for significant seeing As are we four of XXXX. significant LA period. it is a continuing improvement definitely of which a largest day does Group the is one pace that mitigating month. Yet, represent portion LA, great looking year-over-year markets, headwind in is

QX total the of for of group February, last of of XX.X%. pacing a X.X%, was with group room ahead As XX% by improvement night up last pace to ADR year revenue beginning year

and was pacing total year's room group QX nights, transient while is up X.X% ADR quarter by out also is Transient transient room X.X%. XX.X% XX.X% XX.X% last pace in nights in for in and by by in ahead revenues. rate first of Total ahead

year. QX demand the quarter. and booking transient every of the in ongoing is year-over-year further we group greater partly This partner reflection comparison, and in group confidence are and customers did pacing than they last in ahead is easy partly an to due transient While out recovery currently a on

by For Total ahead XX.X% X.X%. rate on the X.X%. by stronger revenue with ADR by XXXX, XX.X%% our group up revenues with are XXXX room was books for pacing by ahead

slightly are marginally, rate are our up given while group rates transient higher, advantage, urban while resort are Our rates are driving ADRs that down. our by substantially rates our

be case year. the expect will this for We likely the

San in the Portland term followed Boston by Washington intermediate the recover in to As years, by total recovering our markets at to to like San over we earlier Francisco, portfolio, Chicago, bridge of upside urban we properties EBITDA markets led Seattle. Angeles, our recover couple current short expect will to next Los DC, and like XXXX our look Diego, EBITDA and their

results This level last than for year LaPlaya's at resorts the quarter fourth of of XXXX, assumes we the In high end of to for the the over of hit the utilize actual we hurricane $XX $XX their been XXXX time quarters our forecasting. achieved our an greater had last million million first EBITDA EBITDA year. that improvement forecast and range three

We impact XXXX EBITDA the total being again in resorts XXXX generate from flat to expect versus LaPlaya closed. is are that likely roughly ignoring the

are provided in a resorts of more the level our we upside bridge our normalized that ahead presentation. of So, already to EBITDA investor

the In same operating achieved addition, detailed already in property cost our reductions we've the presentation. EBITDA bridge models in

in on the efficiencies XXXX operational our portfolio. margin in increasing portion almost cost the a we continuing with to XX significant of are of will recover, we perspective, margins there down available revenues last as and growing total curator efforts until use technology And regain from a curator to Though benefits bring deficit, offer year's expect wouldn't still point And along and of occupancy and continue based more that of beyond. demand. further the higher scale

XXXX to detailed our and in redeveloping That EBITDA That's upside had and LaSalle repositioning, from brings multiyear significantly and our redevelopment the remerchandising two the late of bridge. more properties us We from that acquired last opportunity resorts years. in emanating we in portion upside higher assets a extensive transformation their great property potential historically the program, level the we positioning. than had believed have our prior success acquired the to we last

high-single-digit higher pretty only While tend and upon and on to stabilization. ramp have years these to one construction, cash years consistently They investments RevPAR to then up low-double-digit from and three to four delivered returns on anywhere for projects planning cash unlevered share substantially to gains our take EBITDA. three

Le properties the LaSalle Del repositioned L'Auberge San Viceroy Resort in LaSalle Mission Hotel and when completed Since West and to including had Sunset was four Hilton, in XXXX, of back are Ziggy, in on acquisition Chamberlain the have former acquired Bay Monica, which Montrose, Mar, redevelopments, Diego, of we late redeveloped Santa Hollywood. three the XX all which Grafton Parc, a

Hotel which in and Cruz, Key Side Washington and Santa Resort San in and one Resort & in and now San in hotel Chaminade Viceroy, now Rook Hotel Donovan, D.C. are is Harbor D.C. Southernmost Zena which Francisco, both Vitale Francisco, both West, in Marker Mason

in dramatic completed we're major Margaritaville. reimagining Gaslamp process the projects, the And of Hilton as of In Diego recently a addition is we're being to lifestyle these of away, a a a Solamar and redevelopment in hotel. process of then into San block which transformed

During the renovated, Western Diego redeveloped LaPlaya XXXX Pacific and Resort Northwest, the to in Lodge San fully Los Bay, eight downtown. Skamania Naples. of timeframe, in Zags properties Zelos transformed also the today, from Boston, same Pebblebrook's Beach or we W Angeles, in Portland, Gaslamp including Hotel and Hotel San Embassy Suites, Francisco, Mondrian,

their or our we course, did of most or following we Of previous acquisitions, also one so renovated but generally two years acquisition. redeveloped

Resort, Just resort of in Harbor Newport, the Island as Island with Isles Rhode transformations Newport hotel former the and Jekyll and we're doing spa, Island. Golden now, the of Resort Georgia, redevelopment La Jolla a in Estancia and Club gurneys

since both have stabilized of over is ramp and potential. these currently And most yet $XXX their these investment million. total to projects, in properties all XXXX to full completed The of underway

our focus bridge, delivering As the deliver EBITDA, on detailed in have in as additional we our the we customers three expect to competence million to we a our projects sharp four over new $XX these responding EBITDA this of have of years. next EBITDA are evidence And additional that to how products.

customer an and improvement through of 'XX, occupancy. Since the XX ranking ability as historically correlates XX% has Tripadvisor gain to share whole on end from taken XX of at of XXXX, an a that both to with rate ranking portfolio an plus our average climbed a average popularity

large seems dramatically to to of it our investments pretty overtime improvement gains. us improved value this the overall substantial our levels gains EBITDA this RevPAR that that portfolio, the our share have expect And lead service of that improve So, and have quality improved, program. clear significant and performance will to we investment also

of in downtown Resort quarter. Solamar in should Island began this to should of the been of as year's Gaslamp in upgrading and as Diego second $XX repositioning million reimagining year is complete the of the complete last be $XX be The the and redevelopment XXX a in relates Hilton since began $XX San The early a Club has the lifestyle January completed November the due it million late early second million plus As quarter. Margaritaville third in underway Hotel Jekyll room completed this hotel and year and be projects, to Quarter, quarter.

the is with Viceroy be The first earlier of two will phase in next late renovation on late and $XX.X second this spring year started phase complete Monica Santa in year. complete phase in complete to finishing repositioning starting should and Estancia be of of of luxury of quarter, later rooms' the Santa this million this hotel final last the repositioning at year commenced This The and in iconic month the Boulevard quarter. Monica. the this November lifestyle Ocean due

the and of At outdoor this tree addition nine. units, in large a Skamania with will we number pavilion. later bedroom tree kind five just we villa glancing And three second of three along two year, our cabins bringing and complete to luxury more the completed of their bedroom first the Skamania, houses, houses luxury

help As to to up can lodging where we these guide experiences we for the units. with XXX alternative new guests, our add XXX results we test the out the another will believe acres, remaining lodging programming

the per two houses of will houses rooms. and as resort guest redevelopment Southernmost Resort, and were in complete that in XX guest upgrading distinct the into we purchased Recall late summer undertake these key this immediately $XXX,XXX of totaling products. and And a integrated four unique XXXX

the the Harbor will and second November $XX product Resort completed the December year year. this Island delivered Newport the as a in of phase project of currently of phase we commenced repositioning million redevelopment next investment. commence QX is we The later in first total last in Finally, year estimated with and

The luxury and the resort. phase capital the that reposition first on a is deferred as this all will we maintenance, focused of improvements second phase primarily represents property

over more environment. this to portfolio, long share to our the very list of weighted the EBITDA coastal for and together, well investments, of leisure in next Taken and repositioning heavily substantial with three of urban business urban a resort along transformation a us portfolio, macro portfolio from major positions RevPAR very segmented a growth years, regardless five and significant balanced

half next upside Point, purchases with have next of year, acquisition we only the years. will years, exception few end the enjoy program And by investment and over the two in resort to made have emanated the the the of significant of strategic of that the and completed redevelopment the achieve the first opportunity LaSalle from both Paradise we with the last portion

also pleasure Ray to our I'd on make myself Financial Board. inform like Pebblebrook. It of to our great Officer; Tom and Investment is to one announcement and Co-Presidents Officer, promoted Chief been of you both our Fisher, have my final behalf that, Martz; Chief

Frankly, few to on recognition this efforts last undertaken title and the leadership and years, on over I two partners, want value our long the company. much these longstanding overdue reflects have of to greater superior the their congratulate new them merely responsibilities as leadership my

We news good that the to our So prepared like with question and answer now call. portion to that our of completes move remarks.

with So Q&A. may the operator now proceed you Donna,

Operator

Kelley Bank [Operator at open floor is America. Thank now The from coming and of Shaun go Instructions] the for ahead. Please gentlemen, question first you. questions. is Ladies

Shaun Kelley

too places guess to Guys, Hi, taking new few and is way for congrats Tom different titles. and right feels the good quarter going there's and my it Pebblebrook's hard a obviously to everyone. QX go, on that's interest a from on idiosyncratic a it. the time, to Is extrapolate much I think morning, we portfolio. in but Thank there's could question of the really that's always lot maybe with you about Ray like

So think of year degree? the through can to us you just the balance help some

out Pebblebrook everything of you think and to we it right remaining the now came what we seeing growth that reasonable little macro trends if the places and the for seems the lot or year-over-year in hold, struggling obviously, what a know with think you we bit again, it can is in for positive. like we year? Jon, about EBITDA that we're now. look trying Ray don't you're portfolio know, right kind to mean, I QX pretty laid that Jon is number like versus If the that bridge, a and XX. the quarters back we're absolute see three to of given Because there's I Is

think lot and of renovations. a that I of some seasonality these

model trying balance XXXX? a how the remaining to sense of get So of kind or expectations to for just

Jon Bortz

the impact QX think recession we we to best and see impact. I slowdown or from way we would to don't LaPlaya's this exceed with if expect it material year last economic any of caveat all that answer is, year the an QX, QX assume later that

LaPlaya So, the be would enough aside let's for moment, compensated have performed had insurance proceeds. to whatever hurricane its through for fully the our set expect in we performance or

side. bottom-line I resort terms But coming keys we the Coast improvement that, of in with probably and our improvement the and urban repositioned yes, West ups particularly on performance. continuing you flat performance generally in the in and some assets know, say in markets expect portfolio weakness would continuing significant from would

and three year. to yes, last four expect two, would improved over be So we

Operator

coming go ahead. is Duane Pfennigwerth ISI. question Next from Please Evercore of

Duane Pfennigwerth

you of you? surprised qualitatively on sort staffing? you caught a at sort just to of up that speak respect this for and were of to positions up you bunch filling of have more quarter. rate hiring fully your of us had going a the catch number you the you kind forward and play of open could that Was the of just with function are if positions a a can the forward, back of experience in open if And fourth certain at kind Just environment, going you

Jon Bortz

Yes.

and well general it the team, team members, into sort as of two areas, as folks under who So, category. the I break administrative management fall

and sales to cetera., from folks your banquet team, on your your that separate catering engineering accounting general and and your in that's then marketing your hourly food finally, and sales And So, grow, your I'd particular of and finance on beverage. related team, catering your FTEs sort team, team. agents, housekeeping et managers, and

So, volume these had sales We the positions came we reopened team properties added, people. in sought on really and back, first doing to since team add a of half had And of year lot management side. that. on we've side, the struggles open we've the the as we last

filling we what those on I'll much would having positions so indicated have people to as than year, cetera., be work helping And open occurred to shifts, frankly, of last having it, hotels. a managers pace to liked. slower we hats, the shifts, extra bottom wear having lines within from, lots work our et

filling, It positions, the success positions we success, third a quarter like of having still turned were started a as it quarter, generally and struggle. fourth sudden, the it was switch filled. on still, it all And more was got the in to but by improve open those

fill been on. So had pace than quickly the did they they more

the we a in where hiring by part different to experienced of relates volume. back have industries something probably to that's year. of lot still think I just last And do

volume And in hiring a generally we're filling Where and always housekeeping people. continuous still those both as hiring is over hourly, We sales in I pre-pandemic. have openings. as we're food We're relates always and management we're our still different vacancies. team, turning We than while our have we openings, our team, to not think they were always So engineering staff, it have basis. beverage. they're returns, materially still on

there's to on the say, was, that that the are easier side positions it's than fill lot revenues having on FTE it hourly generate areas. in but those on I'd negative some we'd still probably still of a impact And like the a we can side,

shape. So, I good in pretty we're think

fixed hiring business level rate be just where for it portion and a the portfolio the on call least is I least very side, goes at as we think what throughout the it volume I to generally at want it's was the hourly up. our the to similar run pre-pandemic of would where or at we're

Raymond Martz

in it management the going the because seasonal. to out of the But had totaled so. so or million first we a quarter, more differently to you're future sequentially this bonuses sequentially if number, necessarily model And going quarter for Duane as you model for was one-time lot for side some quarter the that That in teams on XXXX. first, fourth quarters quarter. The cost extrapolate of our behaves year, should you a model in one fourth that fourth about out I'm also time it's X.X to it very

Jon Bortz

think I with a thing full have to out year was quarter EBITDA other impact. LaPlaya service XX%. the last of the is, quarter much first mention one But in there, one, EBITDA indicated when when the we in having the first of a team pretty our margin

the so, renovation, And still cetera. with all and A&G we margins, have on engineering, fixed negative do and when we public the impact of we from so areas that redevelopments, the and accounting, costs under that when available, between redevelopments are have XX% call marketing, rooms properties do these we running at, sales et it, or XX%

just the don't have revenue We volume.

with it's hourly, negative $X.X revenue. than there flex to million flow indicative quarter the and ability So, redevelopments the much the on which lost other is not we of first of do in the

$X.X We EBITDA. of at are the the million losing midpoint

two So, those the the is there, our margins than performing challenging, can see you underneath frankly combined way and our is make look the make so, in that. business far flow actually -- QX worse

Operator

from Crow coming The Raymond Thank next James. ahead. Bill question Please of you. is go

Bill Crow

problems a or years that within so detailed Good through of went or three plan every of of on and about discussion design industry fits three think morning, but year construction the I go an program, appreciate that then as you the ramp. through timeline years. just to where renovation Jon. and repositioning to years eight years seems of seven the you And

benefits markets? are that of the the found public within to whether wondering going be actually Just

Jon Bortz

the sold to is creation to assets Well, I'll been determine. speak individual have these property we you and that redeveloped, investment doubt, markets. that leave can't have value in that where actually have mean, the community projects But public there level. the speak on the can the And is as attractive. ultimately whether I market, returns been only goes cases done I quite have to in and the I recognized public no to we

the flow lot And a mean, the cash the you need returns. and still so, in recognized, business of is in for businesses a in to that's lot invest obviously, like of may building there short-term, a our generate order the I is overtime businesses attractive out most to -- there there, long-term long-term not lot be of

Bill Crow

to that the looking your sales potentially where I'm at bought ex Okay. recent have reinvestment. been flat just some of you them

on second I'm think to wondering make question that going decisions? where are more follow-up title. today, new plays to 'XX stock going that difficult Congratulations to for converted whether on I any and just assumption your the role capital I'm allocation the the So in is converts it's be given the the But Ray. in

Raymond Martz

Well, make looked what each do to we whether decisions portfolio reinvesting it's progress and/or of sales. pieces debt of paid Sure. stock we additional in repurchases. with as these on that, on certain our And and

down time something those the haven't to have market. road. now. still when And long is the other That's that could we at each So look evaluate pull. of One accessed from XXXX yield we is levers we a market high

desire. that, it's a because After or right not there's in from the at extended markets yield could just right there to end, But that issue do where us, it's convergence now for down we whether XXXX we the a are now the curve attractive. the new comes it's it's potential, also

between here, a our So, on in Really, lot lot over that's uses is we now of we planned. focus that pull, now on XXXX. levers there's near-term time of a capital have addressing various the can

too that property is off that's couple between a that's just XXXX. debt And refinancing. aren't significant. periods provides very only of reminder, maturing always $XXX in unused, maturities one in short ability markets a a any have We We time, basically which line, million have also have that now manageable of and for the nothing we up, pay to mortgage his capital accommodated coming in

Jon Bortz

invested operating with to is we is portfolio I ago forget put think in that the was the price, year thing lower it perspective it dollars today, with not over the stock other terms than a where transformation. in should convert the performance far its was fewer in of all

prices value of with that -- overall think Company. cycle, industry has actual and and potential I the cyclicality where the does on its impact more stock I our economic to it than so, think sentiment, has the it And near-term do the the

as Bill move to long been the a sentiment around public industry markets. move I've in as the tends change to you've turn things industry. been the tends very in it and fast as as industry around positive, this So, can And lot when when

making way XXXX. as look So But said, we an converted. we're that, at necessarily we're and that do will Ray not assumption, a long from it get obviously

Operator

Gregory Thank you. Miller next question is ahead. from The Truist of coming go Securities. Please

Gregory Miller

Is question do rates better competitors? between year? this room resorts scale and upscale leisure customer? think My overall and and you in on is Which the booking chain upper the from luxury luxury your traditional upscale distinctly portfolio positioned traditional occupancy customer upper

Jon Bortz

I'm sure answer question. know to I interesting an the It's not that.

customer. upscale as great the think the is is customer as I frankly actual upper luxury shape financial in

come it's was how at think who maybe know up in is, will, the temporary change or I will how what the they short-term, we a on you their maybe margin, if dollars a we allocate customer how basis spending don't towards that know but the in experience pandemic. end naturally onetime people was say and down out higher either react whether going coming don't a a downturn to of experiences, back that's

I'm to or this of all or the whatever too answer spend buy the money basis, might willing splurge a whether another the is hey, not experiences to longer wanted it and really sneakers these sweater, another term is, on on have is short. be. I life way and great pair to time, I this want

sure not you great question. can to give I'm So, your a answer I

in have perform how industry overall. sectors going to to I the those see we're think

in is highest I customer. to luxury to portfolio, our to heavily end weighted that certainly resorts upper think the than upscale portfolio more our like appeal at the it certainly and L'Auberge LaPlaya luxury is properties of

see we're going just Greg, it out. plays to have So, to how

Operator

next Thank Rose go of you. from Citi. The question is Smedes coming ahead. Please

Smedes Rose

could in Boston provided like levels? of particular of evenly you front. a of you the just where terms your kind if pre-pandemic little seeing demand kind larger back wanted kind that from, just group is a as portfolio? themes Hotel, more I versus on what to bit maybe of more, just you're lot group get of of that's any And what across Are talk good business. which sort And wondering, just sounded in of you it the does kind seeing a I the news lot think coming

Jon Bortz

Sure.

So I group, corporate think I'd would from vengeance. it's is a within group, a is, I say back say segmentation One perspective, coming two with from which areas.

that to seeing meet incentive bonding, whether with lot an we're corporate it's different seeing to customers, increases reward people, we're related groups various to their to that for them, reasons, of whether corporate want their awful group. it's in need and it's meetings whether events meet group big So

of in big through the the And in or it's a or Boston Michigan on that have, increases. come Point or Western in Bay and Avenue houses Copley from biggest Bay of or side, Mission or course in Gaslamp the group Resort, corporate which whether all Western in benefiting either resorts association like we Bay both lot and our it's larger then ones Hollywood, in the Chicago San Paradise Margaritaville Diego Mission Association Mission Florida. They're

the a I'd catch and overall more moderation sort seems a in normalized say of I in number modest weddings, the this year, last think wedding year year, of was And pace. up which

is in increase were lot So said Skamania that portfolio and throughout big of would much previously the And up. XX% throughout like more Chaminade we've centers, is and shouldn't than total pretty I a conference business be before, our them the it think in group. their do well of some group We resorts, group this portfolio, forgotten. do I and say, of

Raymond Martz

Francisco, room calendar in is now is to about line increase. room XX%. up up year-over-year. nights is in San year, urban we about convention the pretty convention are doubling about have means those about year, the center favorable versus is Boston in this Diego benefit which XX% San good which where a this so also are nights last a XX%. hotels were the markets. All XXXX should Seattle they encouraging

encouraging So again, the very themes which from the last very, Pacific take are low Angeles, is which West to Asia has all, hasn't especially international years. those inbound, didn't for travel, which from in Coast, for the travel several benefited yet continuing Los really and in been consideration really improve the that

Jon Bortz

at through other I seeing, is, in certainly been through we sort the doesn't not tended of earlier softer, year large really last and come was pace, thing the even cases. of citywide scared sort frankly about but this increase have about people but now people year than think with be versus flu the side, And we being more number what results settle attendance are things what it more to not books RSV, it, quarter, that and or I say, which comes of on I had would earlier it either in the they this probably of traveling seeing portfolio. new But that's having sensitive health are we it's on trend helps attendance the certainly benefit when down people throughout little or that wash or us. COVID a long-term sick. hope a good as maybe the all are would group

Operator

go BMO from coming is Please ahead. question Capital of next Klein Ari The Markets. you. Thank

Ari Klein

impact comment would I and Thanks include year-over-year, the the on x-Naples, had as EBITDA to remainder congrats, 'XX as follow-up of and well? that a Tom the grow renovation well. Ray quick

Jon Bortz

Yes.

growth from would even still it So with the renovations. impact the be

Ari Klein

are reflected that then challenges have are their you And seeing in dispositions that also how about forward? markets thinking prices. it. Got The moving

inclined to extent wait markets. or You've out? But it sold obviously in are you bade maybe are some willing what to of cut to you those more

Jon Bortz

look stock I market. stock way what sell is we think we what and and in buy otherwise related a asset, we to easy evaluate -- are as do not would while the asset with an an the as are it's opportunities that what a buy to capital. at And the to easy as it dispositions sell

our a adjusted put look last and a in of done whether risk our at over are types two whether understand with unlevered value markets that it's trading leverage it's discount the like compared the in of basis, on period, in due is private five assets level that but years better to over minimum places valued capital, have in do it's whether XX% at an year to repurchase markets, other to company, or a actual how there that's stock, other to company. a We a to XX% XX% market discount returns which we

to asset more of a would So sale a all resort. unless the flowing in we're looking a We at market. the is account. might I what it's today, sell deterrent size much into that challenging be what's of say and are high obviously also to saleable market, a taking probably in cash biggest

and a of properties. we I be room to have to would we're anybody, not one, think, sell sell today, up convention room difficult It XXX couple if at XXX taking because of today. debt hotel markets trying a thousand shot I'm the more and

but Now, not they all sold buy obviously, buyers. all cash can buyers those, to generally cash

the and the driver best into these everything is into to alright. So time have return the we return takes try we take risk to that account do the to then transactions. But for primary we're account it where's take shareholders, adjusted looking what

Operator

Anthony from Powell coming is Barclays. question next The you. Thank of ahead. Please go

Anthony Powell

mid That's you NAV rates I against versus we've other rose a 'XX in seen at rate pretty of basis and in deck, guess on your high-fives kept your estate. the to schedule, real elsewhere maybe related follow-up, kind looking NOI. cap cap positive

views portfolio? against your on rates the nature, it holding assets you? your Is value smaller in great. There'll over So what's for unencumbered cap be

Raymond Martz

it's of all, shouldn't whether properly reflection whole values look We where these factors. the proper or they're sell of cap either at we bunch determine could change assets. a a that we're adjusting to First of rates

of a having product, or in year IRR. Some likely trades per long-term at shorter lease trade of assets are product, sector price at -- generally It different trades less rate. key. a It five like very volatile. our apartments all, sectors a cap the It's other lot far first doesn't term than a that

in our per much in decade. today take of just markets York mid New span teens early Francisco, like San of part So, point, San we into the have is per biggest just key over this price key the influencer and to late period price to a late where went portfolio, of long this Francisco at

rate individual buyer each us are The to which valuing as properties, it a is way approach. value So The rates mathematical just factor not a cap of as those property. would that's said, result I a valuations. cap relates a

XXX The that of argue upgrades last you is over between portfolio transformations went increased repositioning million, I so other properties and invested, XXX and the XXX into is, values. somewhere think, going of to the year we've the the invested this million XXX being in out thing XX in million keep mind can to I think significant out year these the into dollars XX at million that

put determine. amount in, to the by think a be maybe I to Now, not we buyer that that'd

certainly at their when they been that's reduces buyer a renovated in repositioned. underwriting a property and amount be it that buying redeveloped, allocating look of own capital the But would

our a account So a assets, all but when selling pretty, it's would we're these today, into traditionally These and outside within taken what non-functioning. we we're look things of we NAV done range. do of for believe get values, buyer market, them it's pay are I selling at these that's by mean, that when

high-end, above the below, by Sometimes, it's sometimes much, much never at but or at the a low-end, it's it's percentage. large of sometimes

Operator

next SMBC. The question Please go Jay from ahead. of you. Kornreich is Thank coming

Jay Kornreich

underperforming in XXXX markets, San called the out you'd How call I you see be the conversed and strength out improving leisure this you either further softness that you in if you'd Francisco, can keys. or expect side, commentary you provide softness guess other those year? may urban wondering markets, any mentioned Chicago. there the some expected in in D.C., Just for on But

Jon Bortz

Sure.

convention there industry So factors recover that their pandemic, think mean, of obviously cities. these have being, had them. with in a markets, would underlying I have local to leisure the we or One of use the on dealt their in what come coming to whether support impact that people people a number they how and business, and the the from I they think experience impact and retailers they when are don't, patterns, the impacted slower office, Both that patterns, a restaurants work on whether that into change experience, market. perspective, and has change

been for of around the have the that issues Most have So impact of part had, that. and the pandemic cities. outside from meaningful they most a cities created the southern all the

focused may markets. improvement in the we we Some they're is of life Francisco, have a streets that going on activity into pandemic, today. San them gotten have is better get issues number some the had continuing and on quality improving And worse may And cities have think all which to the that are like of Chicago seeing even like and D.C., better. in of

seeing We're forget. and markets, slower So, we in back, those they're and to a significant shouldn't recovery just group ramp recover. and transit comes as

begin like customer cities and Seattle San back come are until Portland, So middle San Diego, like Boston D.C., really last of And leisure year. to that Francisco, the in destinations. didn't like markets big like and these leisure those

So, we're markets. to in going the see urban growth significant

growth think coming our bottom I in that markets. recovering and most the much I the said portfolio urban the of at is of come from this the markets from will line year

below still which in recover. they're I'll But going the we still be lot leverage of some expect to get Francisco, 'XX do operating there And EBITDA be in at is fully them to will of San this about to 'XX XX% year. a was of it these we some and mainly markets. like it were them where in be

may still remarks, my mean it 'XX, or where may the 'XX. to like full full in the Portland the urban a get Francisco was market below we expect to of get portfolio indicated in I still Seattle in As it to couple but years, portfolio next there San or be

Operator

ahead. coming go Street. is next Thank you. Please Darling from The Green Chris of question

Chris Darling

you. Thank

one it Resorts? to you represent for as percent a you maybe on how your much of some how and Southeast of maybe revenue, expense, Just percent if comment the changing, as cetera? just insurance could And a of particularly relates me. context, insurance is for cost quick et Can premiums maybe on of

Raymond Martz

don't of our Sure, want with -- part Chris. look going what we are on against so Well, carriers. this insurance is, ourselves negotiate to

there events year, with know took that up, we all the is, part losses of a renewals last then are kind market seeing year. what there, in renews there of it in property are June deal of us, going lot there. Hurricane is insurance obviously the are but our We process of were but But and our Ian of starting in which all we the later the for indications other to

So, then strong. that and also number market to we the in go expect up players is the also insurance of

hit So double there. it's a

our X.X% right GL, full operating So a kind there. about and now year cost of total property our basis, of on that's

So, it's million but large it's a or number. We're about number. a so, not $XX material talking

markets it like So, on Florida. the to the challenges, expect markets in especially be we windstorm

is, thing good have very diversified a the portfolio. we But

here. have carriers a -- job us done we So good like have we a because

So, them to love monitor we that. will

is guess We will quarter will of will indication that you provide came earnings I update. July out renewals, call, we by where accordingly tell have an the third in My there. of good the and

Jon Bortz

general expect the would on for the don't greater the that piece. see mean, we're liability. I to the we the increase be GL GL, Ray, And we seeing P&C on than pressure

Raymond Martz

of Actually because our cyber liability general And will are be basis also held much year more their other actually last being of look, year, smaller but Yes. down is here. that's pretty of check, side, P&C going, the losses in area actually because areas But than like coming be went a a we insurance be the the will that increasing. year-over-year down the challenge P&C ransomware on of have will were managed. the and the south

Operator

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

Jon Bortz

join time us our again, quarter Well, the all to for call. taking for thank you fourth

to next in quarter turnaround late quick a have We the April.

doing. the month. Citi And monthly at continue Conference we James forward we to look updates the to will many Conference and you We for have Raymond early seeing you provide down as of these next been

Operator

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

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

Pebblebrook Hotel Trust (PEB) 22 Feb 232022 Q4 Earnings call transcript