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Pebblebrook's (PEB) July Operating Results Meet Expectations
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Per Pebblebrook Hotel Trust’s (PEB - Free Report) recently released operating update, its operating results for July were in sync with its expectations, with urban markets continuing to lead the demand recovery.
Shares of PEB witnessed a marginal gain on Aug 23 normal trading session on the NYSE.
Notably, the strongest year-over-year growth in occupancy and revenue per available room (RevPAR) was witnessed in Washington, DC and San Francisco. Also, the return to the cities aided urban weekend leisure demand.
Although year-over-year growth for PEB’s portfolio same-property room revenues remained flat, the same improved 2% from the 2019 levels. Its same-property occupancy expanded 350 basis points (bps) to 77% from the 2022 level. However, the average daily rate (ADR) declined from the prior-year period, mainly at the resorts. As a result, for July, the company’s same-property total revenues rose just 0.3%.
The portfolio’s Hotel EBITDA for July increased almost 7% sequentially to $41.5 million.
Speaking of the company’s urban portfolio, the recovery in business travel and increased leisure weekend demand aided 5% year-over-year growth in the same-property urban total revenues. The same-property urban weekend occupancy rose 8% from the 2022 level.
In addition, PEB’s resort portfolio recorded a 300 bps increase in same-property occupancy, offset by a fall in ADR from the prior-year period. Nonetheless, compared with July 2019 and so far into 2023, rates across the portfolio were more than 40%.
In its operating update, Pebblebrook also mentioned that the rebranding of its Solamar Hotel to Margaritaville Hotel San Diego Gaslamp Quarter has been completed. The hotel re-opened on Aug 15, 2023, offering the Margaritaville lifestyle and state of mind.
Furthermore, the company mentioned that although its hotels in San Diego and Los Angeles did not suffer any material damage due to Tropical Storm Hilary, it saw cancellations and early check-outs preceding the storm, affecting demand.
In July, this lodging real estate investment trust (REIT) reported second-quarter 2023 adjusted funds from operations (AFFO) per share of 62 cents, beating the Zacks Consensus Estimate of 56 cents. The figure was, however, lower than the prior-year quarter’s 72 cents.
Its quarterly performance was driven by the continued recovery in business demand, both group and transient. Leisure demand, too, was healthy, but moderating room rates and less demand for suite and premium room upgrades were noticed. Also, weekend demand at PEB’s West Coast hotels and resorts was negatively impacted by the unusually cold and wet weather in April through early June.
For the third quarter of 2023, the company expects AFFO per share in the range of 56-61 cents. The Zacks Consensus Estimate for the same is pegged at 57 cents.
Same-property RevPAR is expected to exhibit year-over-year growth between -2.0% and 1.0% while adjusted EBITDAre is projected in the band of $110-$116 million.
Shares of this Zacks Rank #3 (Hold) company have gained 3.9% in the quarter-to-date period against the industry’s decline of 4.6%.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past month to $3.53.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved 1.4% northward over the past month to $12.86.
The Zacks Consensus Estimate for Omega Healthcare’s ongoing year’s FFO per share has been raised marginally over the past month to $2.83.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Pebblebrook's (PEB) July Operating Results Meet Expectations
Per Pebblebrook Hotel Trust’s (PEB - Free Report) recently released operating update, its operating results for July were in sync with its expectations, with urban markets continuing to lead the demand recovery.
Shares of PEB witnessed a marginal gain on Aug 23 normal trading session on the NYSE.
Notably, the strongest year-over-year growth in occupancy and revenue per available room (RevPAR) was witnessed in Washington, DC and San Francisco. Also, the return to the cities aided urban weekend leisure demand.
Although year-over-year growth for PEB’s portfolio same-property room revenues remained flat, the same improved 2% from the 2019 levels. Its same-property occupancy expanded 350 basis points (bps) to 77% from the 2022 level. However, the average daily rate (ADR) declined from the prior-year period, mainly at the resorts. As a result, for July, the company’s same-property total revenues rose just 0.3%.
The portfolio’s Hotel EBITDA for July increased almost 7% sequentially to $41.5 million.
Speaking of the company’s urban portfolio, the recovery in business travel and increased leisure weekend demand aided 5% year-over-year growth in the same-property urban total revenues. The same-property urban weekend occupancy rose 8% from the 2022 level.
In addition, PEB’s resort portfolio recorded a 300 bps increase in same-property occupancy, offset by a fall in ADR from the prior-year period. Nonetheless, compared with July 2019 and so far into 2023, rates across the portfolio were more than 40%.
In its operating update, Pebblebrook also mentioned that the rebranding of its Solamar Hotel to Margaritaville Hotel San Diego Gaslamp Quarter has been completed. The hotel re-opened on Aug 15, 2023, offering the Margaritaville lifestyle and state of mind.
Furthermore, the company mentioned that although its hotels in San Diego and Los Angeles did not suffer any material damage due to Tropical Storm Hilary, it saw cancellations and early check-outs preceding the storm, affecting demand.
In July, this lodging real estate investment trust (REIT) reported second-quarter 2023 adjusted funds from operations (AFFO) per share of 62 cents, beating the Zacks Consensus Estimate of 56 cents. The figure was, however, lower than the prior-year quarter’s 72 cents.
Its quarterly performance was driven by the continued recovery in business demand, both group and transient. Leisure demand, too, was healthy, but moderating room rates and less demand for suite and premium room upgrades were noticed. Also, weekend demand at PEB’s West Coast hotels and resorts was negatively impacted by the unusually cold and wet weather in April through early June.
For the third quarter of 2023, the company expects AFFO per share in the range of 56-61 cents. The Zacks Consensus Estimate for the same is pegged at 57 cents.
Same-property RevPAR is expected to exhibit year-over-year growth between -2.0% and 1.0% while adjusted EBITDAre is projected in the band of $110-$116 million.
Shares of this Zacks Rank #3 (Hold) company have gained 3.9% in the quarter-to-date period against the industry’s decline of 4.6%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Welltower (WELL - Free Report) , SBA Communications (SBAC - Free Report) and Omega Healthcare Investors (OHI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s 2023 FFO per share has been raised marginally over the past month to $3.53.
The Zacks Consensus Estimate for SBA Communications’ current-year FFO per share has moved 1.4% northward over the past month to $12.86.
The Zacks Consensus Estimate for Omega Healthcare’s ongoing year’s FFO per share has been raised marginally over the past month to $2.83.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.