Pebblebrook Hotel Trust Q2 FY26 Results

Our quarterly results significantly exceeded our outlook for the second time this year. Both business and leisure demand continued to grow, our premium portfolio, which attracts a higher-income guest base, supported improved pricing power, and our strategic operating efficiency initiatives converted stronger revenues into higher profitability. Our resorts were once again a standout, with Total RevPAR increasing 10.9% from last year, led by LaPlaya Beach Resort & Club, Estancia La Jolla Hotel & Spa, Paradise Point Resort & Spa, and Newport Harbor Island Resort. San Francisco’s recovery continued to gain momentum as robust corporate and leisure demand, coupled with an active citywide convention calendar, drove RevPAR 16.0% higher year-over-year. Chicago, Los Angeles, and Boston also benefited from healthy year-over-year rate lift. We are raising our full-year outlook to reflect our significantly stronger-than-expected second-quarter results while maintaining our prior assumptions for the second half of the year. While current booking trends across both business and leisure remain encouraging, we continue to take the year one quarter at a time and remain appropriately cautious given ongoing geopolitical, policy, and broader economic uncertainty. The second quarter’s broad-based outperformance demonstrates the improving earnings power of our portfolio. Demand across our resorts remained very strong, driven by healthy growth in leisure transient and business group, which allowed the resorts to achieve a significant 7.5% increase in average prices. We also experienced ongoing strength across many of our urban markets, where business transient demand delivered healthy growth and leisure demand continued to recover. San Francisco was a highlight for the quarter, with the city’s recovery spanning multiple demand segments. Growth accelerated through the second quarter, driven by strength from corporate and technology-related conventions, improving business transient demand consistent with the market’s record-setting office leasing trends, and continued leisure momentum as tourism returns to the city. San Francisco’s positive trajectory is one of the many reasons we believe the favorable lodging cycle currently unfolding supports a multi-year recovery, driven by improving hotel demand, a continued rebound in both group and business transient travel, and historically low new supply growth expected to persist for several years. Together with a robust calendar of major events across our markets through 2028, these dynamics reinforce our belief in a sustained period of favorable lodging fundamentals. While World Cup-related demand provided a modest rate benefit around match dates at our Boston and San Francisco hotels, as we expected, it was not a meaningful driver of incremental demand in our markets during the second quarter, as it generally displaced other normally recurring demand.