Pebblebrook Hotel Trust Reports First Quarter 2025 Results

Pebblebrook Hotel Trust (NYSE:PEB):

Note: See tables later in this press release for a description of Same-Property information and reconciliations from net income (loss) to non-GAAP financial measures used in the table above and elsewhere in this press release.

First Quarter Highlights

"We are encouraged by our first-quarter performance, particularly given the negative disruptions caused by the Los Angeles fires, which impacted our nine hotels in the market, and the renovation and brand conversion at Hyatt Centric Delfina Santa Monica, which is now substantially complete," said Mr. Bortz. "In fact, excluding our LA portfolio, first quarter Same-Property Total RevPAR climbed a strong 6%, and Same-Property Hotel EBITDA was essentially flat to last year, highlighting the underlying strength of the portfolio stemming from gains being achieved by our recently redeveloped properties, including many of our resorts, and healthy improvement across our hotels in previously slower-to-recover urban markets."

Update on the Impact of the Los Angeles Fires

In the first quarter, the Company's nine Los Angeles-area hotels—spanning from West Hollywood to Santa Monica—experienced a significant increase in business cancellations and a material slowdown in bookings due to the fallout from the January fires. Although the disruption to demand has continued into the second quarter, bookings are recovering and the impact has been less severe than anticipated at the time of the Company's fourth quarter earnings release on February 26, 2025.

The Company currently estimates the following impacts from the Los Angeles fires:

Estimated Negative Impact (vs. February 26, 2025 estimates):

• Same-Property RevPAR
  • Q1: ~330 bps (vs. 380 bps)
  • Q2: ~50 bps (vs. 120 bps)
  • FY 2025: ~85 bps (vs. 115 bps)
• Same-Property Total RevPAR
  • Q1: ~280 bps (vs. 320 bps)
  • Q2: ~40 bps (vs. 100 bps)
  • FY 2025: ~75 bps (vs. 100 bps)
• Same-Property Hotel EBITDA
  • Q1: ~$5.5M (vs. $6.5M)
  • Q2: ~$1.5M (vs. $2.5M)
  • FY 2025: ~$7.0M (vs. $9.0M)

Update on LaPlaya Recovery from Named Storms

LaPlaya Beach Resort & Club ("LaPlaya"), a 189-room luxury waterfront resort in Naples, Florida, has made significant progress in restoring areas damaged by Hurricanes Helene (September 26, 2024) and Milton (October 9, 2024). The restoration and previous asset fortification efforts undertaken by the Company have been highly effective. Restoration activities at the resort are substantially complete, except for the 20 ground-floor rooms in the Beach House building, which remain on track for substantial completion later this quarter.

During the first quarter, LaPlaya's Total RevPAR surged 22% over the same time last year, while hotel EBITDA climbed almost 30%. First-quarter hotel EBITDA also surpassed 2019 by 26.2% or $2.2 million. For Q1 through Q3 2025, LaPlaya is included in the Company's Same-Property metrics, but it will be excluded in the fourth quarter for both 2025 and 2024. The Company also recorded $4.3 million in business interruption insurance ("BI") income related to October 2024 through February 2025 losses, and forecasts an additional $1.7 million in BI income in Q2 2025 and $2.5 million in Q3 2025—bringing total expected BI income for 2025 to $8.5 million, which is $2.5 million higher than the Company's previous outlook. Although this BI income contributes to Adjusted EBITDAre and Adjusted FFO, it is excluded from Same-Property Hotel EBITDA.

Capital Investments and Strategic Property Redevelopments

During the first quarter, the Company invested $16.7 million in capital improvements across its portfolio, excluding investments for LaPlaya's repair and restoration. The $15.0 million renovation of the newly rebranded Hyatt Centric Delfina Santa Monica was substantially completed in April. With the Company's vast number of transformative projects now substantially complete, its multi-year strategic redevelopment program is effectively concluded. The only remaining large-scale opportunity is the potential conversion of Paradise Point Resort to a Margaritaville Island Resort.

As a result, capital investments are expected to be significantly lower this year and for the next few years. In 2025, the Company anticipates investing $65 to $75 million, mostly for routine capital maintenance, replacements, and minor property upgrades and ROI projects, in addition to the Hyatt Centric refresh.

Common Share Repurchases

The Company has repurchased approximately 1.3 million common shares in 2025 at an average price of $11.02 per share. This includes approximately 1.2 million shares in the first quarter at an average price of $11.22, and approximately 0.1 million shares in the second quarter at an average price of $8.94. On a cumulative basis since October 2022, the Company has repurchased more than 13 million common shares – approximately 10% of its outstanding shares – at an average price of $14.07 per share. This figure represents an approximate 44% discount to the midpoint of the Company's most recently published Net Asset Value ("NAV") per share.

Balance Sheet

As of March 31, 2025, Pebblebrook's net debt to trailing 12-month corporate EBITDA was 5.8x. The Company held $218.2 million in cash, cash equivalents and restricted cash, and maintained an additional $642.6 million of undrawn availability on its $650 million senior unsecured revolving credit facility. The weighted-average maturity of the Company's debt is approximately 2.8 years, with a weighted-average interest rate of 4.2%. Of the $2.3 billion in consolidated debt and convertible notes, 91% is effectively fixed at a 4.0% rate, and the same proportion is unsecured. Pebblebrook has no significant maturities until December 2026.

Common and Preferred Dividends

On March 14, 2025, the Company declared a quarterly cash dividend of $0.01 per share on its common shares and a regular quarterly cash dividend for the following preferred shares of beneficial interest:

• $0.39844 per 6.375% Series E Cumulative Redeemable Preferred Share;
• $0.39375 per 6.3% Series F Cumulative Redeemable Preferred Share;
• $0.39844 per 6.375% Series G Cumulative Redeemable Preferred Share; and
• $0.35625 per 5.7% Series H Cumulative Redeemable Preferred Share.

Update on Curator Hotel & Resort Collection

Curator Hotel & Resort Collection ("Curator") is a curated collection of experientially focused small brands and independent lifestyle hotels and resorts worldwide founded by Pebblebrook in collaboration with several industry-leading independent lifestyle hotel operators. As of March 31, 2025, Curator encompassed 85 member hotels and resorts and 117 master service agreements with preferred vendor partners. These agreements deliver preferred pricing, enhanced operating terms, and early access to curated cutting-edge technologies—benefits that extend to Pebblebrook's own properties. Curator's mission is to empower lifestyle hotels and resorts through its best-in-class agreements, services, and technology, amplifying their independent brands and unique guest experiences.

Q2 & 2025 Outlook

The Company is updating its full-year 2025 outlook to reflect increased macro-economic uncertainty and revised expectations for the second half of the year. The outlook for the first half, in total, remains largely in-line with the Company's prior outlook. The revised outlook assumes no material adverse impacts from macroeconomic conditions or weather-related events—factors that remain subject to significant volatility and unpredictability.

The Company's 2025 Outlook is as follows:

This 2025 Outlook is based, in part, on the following estimates and assumptions:

The Company's Q2 2025 Outlook is as follows:

This Q2 2025 Outlook is based, in part, on the following estimates and assumptions:

The Company's Q2 2025 Outlook assumes no acquisitions or dispositions. This outlook includes an estimated $1.7 million from an initial BI income settlement related to LaPlaya for lost income due to Hurricane Milton. While this does not affect Same-Property Hotel EBITDA, it positively impacts Adjusted EBITDAre, Adjusted FFO and Net income.

First Quarter 2025 Earnings Call

The Company will conduct its quarterly analyst and investor conference call on Friday, May 2, 2025, beginning at 9:00 AM ET. Please dial (877) 407-3982 approximately ten minutes before the call begins to participate. A live webcast of the conference call will also be available through the Investor Relations section of www.pebblebrookhotels.com. To access the webcast, click on https://investor.pebblebrookhotels.com/news-and-events/webcasts/default.aspx ten minutes before the conference call. A replay of the conference call webcast will be archived and available online.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE:PEB) is a publicly traded real estate investment trust ("REIT") and the largest owner of urban and resort lifestyle hotels and resorts in the United States. The Company owns 46 hotels and resorts, totaling approximately 12,000 guest rooms across 13 urban and resort markets. For more information, visit www.pebblebrookhotels.com and follow @PebblebrookPEB.

This press release contains certain "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "assume," "plan," references to "outlook" or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections and forecasts and other forward-looking information and estimates. Examples of forward-looking statements include the following: descriptions of the Company's plans or objectives for future capital investment projects, operations or services; forecasts of the Company's future economic performance; forecasts of hotel industry performance; expectations of business interruption insurance proceeds; and descriptions of assumptions underlying or relating to any of the foregoing expectations including assumptions regarding the timing of their occurrence. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the state of the U.S. economy and the supply of hotel properties, and other factors as are described in greater detail in the Company's filings with the SEC, including, without limitation, the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's filings with the U.S. Securities and Exchange Commission, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company's website at www.pebblebrookhotels.com.

All information in this press release is as of May 1, 2025. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company's expectations.

This press release includes certain non-GAAP financial measures. These measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from similarly titled non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP.

Funds from Operations ("FFO") - FFO represents net income (computed in accordance with GAAP), excluding gains or losses from sales of properties, plus real estate-related depreciation and amortization and after adjustments for unconsolidated partnerships. The Company considers FFO a useful measure of performance for an equity REIT because it facilitates an understanding of the Company's operating performance without giving effect to real estate depreciation and amortization, which assume that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, the Company believes that FFO provides a meaningful indication of its performance. The Company also considers FFO an appropriate performance measure given its wide use by investors and analysts. The Company computes FFO in accordance with standards established by the Board of Governors of Nareit in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to that of other REITs. Further, FFO does not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties, nor is it indicative of funds available to fund the Company's cash needs, including its ability to make distributions. The Company presents FFO per diluted share based on the outstanding dilutive common shares plus the outstanding Operating Partnership units for the periods presented.

Earnings before Interest, Taxes, and Depreciation and Amortization ("EBITDA") - The Company believes that EBITDA provides investors a useful financial measure to evaluate its operating performance, excluding the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization).

EBITDA for Real Estate ("EBITDAre") - The Company believes that EBITDAre provides investors a useful financial measure to evaluate its operating performance, and the Company presents EBITDAre in accordance with Nareit guidelines, as defined in its September 2017 white paper "Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate." EBITDAre adjusts EBITDA for the following items, which may occur in any period: (1) gains or losses on the disposition of depreciated property, including gains or losses on change of control; (2) impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate; and (3) adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates.

The Company also evaluates its performance by reviewing Adjusted FFO and Adjusted EBITDAre because it believes that adjusting FFO and EBITDAre to exclude certain recurring and non-recurring items described below provides useful supplemental information regarding the Company's ongoing operating performance and that the presentation of Adjusted FFO and Adjusted EBITDAre, when combined with the primary GAAP presentation of net income (loss), more completely describes the Company's operating performance. The Company adjusts FFO available to common share and unit holders and EBITDAre for the following items, which may occur in any period, and refers to these measures as Adjusted FFO and Adjusted EBITDAre:

- Transaction costs: The Company excludes transaction costs expensed during the period because it believes that including these costs in Adjusted FFO and Adjusted EBITDAre does not reflect the underlying financial performance of the Company and its hotels.

- Non-cash ground rent: The Company excludes the non-cash ground rent expense, which is primarily made up of the straight-line rent impact from a ground lease.

- Management/franchise contract transition costs: The Company excludes one-time management and/or franchise contract transition costs expensed during the period because it believes that including these costs in Adjusted FFO and Adjusted EBITDAre does not reflect the underlying financial performance of the Company and its hotels.

- Interest expense adjustment for acquired liabilities: The Company excludes interest expense adjustment for acquired liabilities assumed in connection with acquisitions, because it believes that including these non-cash adjustments in Adjusted FFO does not reflect the underlying financial performance of the Company.

- Finance lease adjustment: The Company excludes the effect of non-cash interest expense from finance leases because it believes that including these non-cash adjustments in Adjusted FFO does not reflect the underlying financial performance of the Company.

- Non-cash amortization of acquired intangibles: The Company excludes the non-cash amortization of acquired intangibles, which includes but is not limited to the amortization of favorable and unfavorable leases or management agreements and above/below market real estate tax reduction agreements because it believes that including these non-cash adjustments in Adjusted FFO and Adjusted EBITDAre does not reflect the underlying financial performance of the Company.

- Early extinguishment of debt and deferred tax benefit: The Company excludes these items because the Company believes that including these adjustments in Adjusted FFO does not reflect the underlying financial performance of the Company and its hotels.

- Gain on insurance settlement, amortization of share-based compensation expense, hurricane-related costs and unrealized loss on investment: The Company excludes these items because it believes that including these costs in Adjusted FFO and Adjusted EBITDAre does not reflect the underlying financial performance of the Company and its hotels.

The Company presents weighted-average number of basic and fully diluted common shares and units by excluding the dilutive effect of shares issuable upon conversion of convertible debt.

The Company's presentation of FFO and Adjusted FFO should not be considered as alternatives to net income (computed in accordance with GAAP) as an indicator of the Company's financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of its liquidity. The Company's presentation of EBITDAre and Adjusted EBITDAre should not be considered as alternatives to net income (computed in accordance with GAAP) as an indicator of the Company's financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of its liquidity.

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Raymond D. Martz, Co-President and Chief Financial Officer, Pebblebrook Hotel Trust - (240) 507-1330

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