Pebblebrook's Q4 Results In Line With Expectations, Though Omicron Has Caused an Occupancy Drop

Fourth-quarter results for Pebblebrook Hotel Trust were in line with our expectations, giving us confidence in our $27.50 fair value estimate for the no-moat company. Portfolio occupancy improved to 52.0% in the fourth quarter, which is better than the 22.7% level reported in the fourth quarter of 2020 but below the 78.3% figure for the fourth quarter of 2019. Average daily rate has shown impressive growth, up 27.8% year over year and up 5.6% over the fourth quarter of 2019. As a result, revenue per available room improved 192.6% year over year, relatively in line with our 210.2% growth estimate for the quarter, though revPAR is still 30.0% below the fourth quarter of 2019. Same-store EBITDA margins were 21.7% in the quarter, which is on top of our 21.6% estimate, leading to same-store EBITDA of $53.3 million that is significantly better than the $15.1 million loss recorded in 2020. Adjusted funds from operations matched our $0.06 estimate for the quarter, which is about halfway between the $0.50 loss reported in the fourth quarter of 2020 and the $0.54 positive figure for the fourth quarter of 2019.