BETHESDA, Md.--(BUSINESS WIRE)-- 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. The sector-low weighted average interest rate is based on Pebblebrook’s analysis of EDGAR filings to date for all listed lodging REITs.

Second Quarter and Year-to-Date Highlights

“The second quarter’s broad-based outperformance demonstrates the improving earnings power of our portfolio,” noted Mr. Bortz. “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.”

The quarter was led by higher-rated transient demand, with transient revenue increasing nearly 10% on 7% ADR growth. Group revenue declined slightly, reflecting weaker convention calendars in San Diego and Boston, rather than a pullback in corporate demand. This mix shift caused Total RevPAR to trail RevPAR, as urban banquet and catering revenue declined 20%, concentrated where citywide calendars were the weakest and in cities with World Cup matches. This was partly offset by strong spending at the Company’s resorts, including nearly 11% growth in Same-Property resort food & beverage revenue.

“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,” advised Mr. Bortz.

The Company estimates that World Cup-related demand contributed approximately 60 to 100 basis points of incremental RevPAR growth and $0.5 to $1.0 million of Hotel EBITDA during the second quarter.

The Company’s strategic operating efficiency initiatives and continued expense discipline again converted healthy revenue growth into stronger profitability. Same-Property Total Revenues increased 4.8%, well above the high end of the Company’s Outlook, while Same-Property Total Expenses rose just 3.8%. This drove Same-Property Hotel EBITDA margins to 30.6%, an expansion of 67 basis points.

On a per-occupied-room basis, total expenses were held to a 2.0% increase, while expenses before fixed costs grew just 2.2%. This demonstrates improving operating leverage, as both fixed and semi-fixed costs are spread across more occupied rooms, while productivity, cost-control, technology, and other efficiency initiatives limit variable expense growth.

The Company also completed its property insurance renewal on June 1, 2026, securing a 27% premium reduction, or $6.1 million in annual savings, versus the prior year’s program—a result that was better than anticipated. The renewal outcome reflected favorable insurance-market conditions, disciplined program design, and recent asset-hardening investments completed last year at weather-exposed properties. The lower premiums provide a visible expense reduction tailwind through May of next year.

For the first half of 2026, Same-Property Total Revenues climbed 7.2%, while Same-Property Total Expenses grew just 4.7%, driving 175 basis points of EBITDA margin expansion and 14.5% growth in Same-Property Hotel EBITDA. These results demonstrate the compounding benefit of improving demand, stronger pricing, disciplined expense controls, and widespread efficiency initiatives across the Company’s portfolio.

Year-to-date, Adjusted FFO per diluted share increased 23.8% and Free Cash Flow per diluted share grew 68.9%, as strong hotel operating growth, lower capital investments, debt reduction, and common and preferred share repurchases more than offset the combined impact of the lost Hotel EBITDA from the three asset sales completed since Q4 2025 and the non-recurring business interruption income proceeds received in the first half of 2025.

Update on Strategic Dispositions

On May 27, 2026, Pebblebrook completed the sale of the 115-room Chamberlain West Hollywood Hotel in Los Angeles, California for $43.5 million, of which the Company accepted $33.7 million of preferred share liquidation preference at $26.1 million of agreed-upon value, thereby retiring these shares at a 23% discount. Over the past eight months, the Company has completed three property sales at attractive private-market valuations totaling nearly $160.0 million, representing an aggregate 15.4x EBITDA multiple and a 4.6% NOI capitalization rate, assuming a 4.0% capital reserve on total hotel revenues. These transactions underscore the Company’s disciplined execution at valuations consistent with its private-market NAV and well above its public-market valuation, highlighting the portfolio’s embedded value.

Capital Investments

During the second quarter, the Company invested $12.5 million in capital improvements across its portfolio, including the substantial completion of guestroom renovations at Chaminade Resort & Spa and Revere Hotel Boston Common. Year-to-date, capital investments across the portfolio totaled $24.4 million.

For 2026, the Company anticipates investing a total of $65 to $75 million, primarily for routine capital maintenance, select property refreshes, and a number of revenue-enhancing and operating cost reduction improvements. This significantly lower, normalized capital run-rate is an important tailwind in 2026, supporting higher discretionary free cash flow that can be utilized for debt reduction and opportunistic share repurchases.

Balance Sheet and Share Repurchases

The Company’s deleveraging trend continued in the second quarter, with net debt-to-trailing 12-month corporate EBITDA declining to 5.3x as of June 30, 2026, driven by continued EBITDA growth and disciplined net debt reductions.

As of June 30, 2026, cash, cash equivalents, and restricted cash had grown to $270.4 million, with an additional $641 million of available capacity on the Company’s $650 million senior unsecured revolving credit facility and $90 million of available capacity on its senior unsecured 2031 term loan. Combined with the Company’s lower normalized capital investments, this enhanced balance sheet position increases financial flexibility for capital allocation decisions. The Company’s consolidated debt and convertible notes carry an estimated weighted-average interest rate of 4.1% and a weighted-average debt maturity of 2.7 years, with 98% of the debt effectively fixed and 98% unsecured.

The remaining $350 million of 2026 convertible notes that mature December 2026 are fully funded through existing cash, expected free cash flow, and available term loan capacity, with no other maturities until 2028.

During the second quarter of 2026, the Company repurchased 0.5 million common shares for $8.0 million, at an average share price of $14.77, bringing first half 2026 repurchases to 0.9 million shares at an average price of $13.62 per share. The Company also repurchased 1.5 million preferred shares for $28.6 million, including the preferred shares retired as part of the Chamberlain West Hollywood Hotel disposition, at an attractive 23% average discount to liquidation preference, reducing total outstanding preferred equity securities to $717.2 million.

Common and Preferred Dividends

On June 15, 2026, 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.

2026 Outlook

The second-quarter performance reinforced Pebblebrook’s key 2026 earnings drivers: continued strength and ramp-up across the resort portfolio, a broadening urban recovery led by San Francisco and Los Angeles, and the sustained benefits of the Company’s strategic operating initiatives.

The Company has raised its 2026 Outlook to reflect the stronger-than-expected second-quarter results while maintaining its prior and prudent assumptions for the second half given short booking windows and broader macroeconomic, policy, and geopolitical uncertainty. The Outlook assumes no additional acquisitions or dispositions.

Second Quarter 2026 Earnings Call

The Company will conduct its quarterly analyst and investor conference call on Thursday, July 30, 2026, 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 43 hotels and resorts, totaling approximately 10,900 guest rooms across 13 urban and resort markets. For more information, visit www.pebblebrookhotels.com and follow @PebblebrookPEB on X.

This press release contains certain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation 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; 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, 2025. 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 July 29, 2026. 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.