Pebblebrook's 2025 Q2 Earnings Call: Diverging Views on Market Recovery, Government Demand, and Cost Efficiency

Los Angeles market recovery, government demand and economic impact, economic outlook and travel demand, expense growth and efficiency measures, and wage and cost growth are the key contradictions discussed in Pebblebrook Hotel Trust's latest 2025Q2 earnings call.



Strong Financial Performance Despite Market Challenges:
- Pebblebrook Hotel Trust reported same-property hotel EBITDA of $115.8 million for the quarter, exceeding the midpoint by $1.8 million.
- The growth was driven by strong performance in most markets, offsetting softness in areas like Los Angeles and Washington, D.C.

Leisure and Business Travel Recovery:
- Despite a shortening booking window impacting leisure rates, the company saw significant recovery in business travel and group demand.
- Markets like San Francisco and Portland showed strong rebound, with San Francisco's RevPAR growing by 15.2%.

Technological Innovations and Cost Efficiency:
- The company focused on implementing new AI-enabled operating tools and efficiency initiatives, resulting in a decline of 0.8% in per occupied room expenses.
- These measures aimed to enhance productivity, reduce expenses, and improve real-time decision-making.

Impact of Market-specific Challenges:
- Los Angeles faced a Difficult quarter due to market-specific headwinds, particularly the post-fire slowdown and media coverage, impacting RevPAR.
- However, the company expects Los Angeles to improve as the year progresses due to easier comps and increased production demand.