Pebblebrook Earnings: Solid Quarter but Conservative 2024 Guidance Disappoints

Pebblebrook Hotel reported fourth-quarter results that were relatively in line with our estimates, leading us to reaffirm our $26.50 fair value estimate for the no-moat company. Same-store occupancy improved 330 basis points to 64.3% in the fourth quarter, though that is still well below the 77% figure the company reported in the fourth quarter of 2019. While average daily rate fell 0.3% year over year in the quarter, the fourth-quarter decline was the smallest decline Pebblebrook reported for the year. As a result, revenue per available room, or revPAR, increased 5.0% year over year, relatively in line with our estimate of 5.8% growth. The firm reported that comparable hotel revenue, expenses, and net operating income were up 5.8% in the quarter, in line with our estimates. Pebblebrook reported adjusted funds from operations, or AFFO, of $0.21 per share in the fourth quarter, which was better than our $0.12 estimate.