Pebblebrook Hotel Trust(US:PEB)2023-04-28 13:12Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2023 was $60.8 million, a 30.9% increase year-over-year [5] - Adjusted FFO was $22.4 million, with adjusted FFO per share of $0.18, representing a 67.3% improvement [5] - Revenue growth was negatively impacted by approximately $11 million due to remediation from Hurricane Ian and ongoing redevelopments [6] Business Line Data and Key Metrics Changes - Same property RevPAR increased by 18.5%, while non-room revenue grew by 34.4% [31] - Non-room revenue growth was particularly strong at 53.1%, driven by increased prices and group demand [17] - San Francisco hotels saw a 117.5% increase in same property RevPAR, with occupancy rising to 46% [32] Market Data and Key Metrics Changes - Markets with robust year-over-year growth included San Francisco, Washington DC, Portland, Seattle, and Chicago [7] - San Diego experienced strong performance, benefiting from a robust convention calendar despite disruptions from heavy rains [19] - Key West was the weakest market, with a 16.6% decline in RevPAR, primarily due to a drop in ADR and occupancy [33] Company Strategy and Development Direction - The company plans to utilize proceeds from asset sales to reduce net debt and potentially repurchase shares [14][15] - Major redevelopment projects include the transition of Hotel Solamar into a Margaritaville Hotel and upgrades at Jekyll Island Club resort [24][49] - The company aims to invest $145 million to $155 million into the portfolio during 2023 [37] Management's Comments on Operating Environment and Future Outlook - Management has not observed noticeable increases in cancellations related to macroeconomic concerns, with disruptions primarily weather-related [12] - The company expects continued recovery in business travel and urban markets, with significant occupancy and revenue opportunities [41] - Management remains cautious about staffing levels and is evaluating hiring processes in light of macroeconomic uncertainties [89] Other Important Information - The company has repurchased 8.5 million common shares since October 2022, utilizing $124.6 million of capital [38] - Insurance costs are expected to rise significantly due to recent weather-related events and inflationary pressures [80] - The company has approximately $800 million in liquidity, providing a buffer against potential economic downturns [118] Q&A Session Summary Question: Can you elaborate on cost pressures related to wages? - Management indicated that wage growth is expected to be in the 4% to 5% range, with pressures stemming from restaffing efforts [52] Question: How are you managing insurance costs? - Insurance costs are projected to increase significantly due to recent storms and inflation, with overall insurance costs being about 1.5% of total expenses [56][80] Question: What is the outlook for urban markets? - Urban markets are seeing a recovery in business travel, with increased group demand and occupancy levels expected to improve [94][115] Question: Are there plans for more asset sales? - The company is focused on selling lower-quality assets and reallocating capital to higher-return opportunities, including stock repurchases [96][116] Question: How is the company addressing potential economic slowdowns? - Management is maintaining a cautious approach to hiring and is prepared to adjust staffing levels based on market conditions [89]