Pebblebrook Reports Strong Q1 Revenue Growth and EBITDA Margins, Predicts Further Growth for Q2

No-moat Pebblebrook Hotel Trust reported first-quarter results and second-quarter guidance ahead of our expectations, though we don’t anticipate changing our long-term outlook or $26.50 fair value estimate. Portfolio occupancy came in at 48.3% in the first quarter, far better than the 22.1% reported last year but still below the 75.3% reported in the first quarter of 2019. Average daily rate came in 19.4% above prepandemic levels with 18.7% year-over-year growth. As a result, same-store revenue per available room was up 159.6% year over year, slightly below our estimate of 177.8%, and is only 23.4% below 2019’s level. While revenue came in below expectations, Pebblebrook reported same-store EBITDA of $56.2 million, significantly higher than our $31.5 million estimate, as EBITDA margin of 21.8% in the first quarter beat our 13.9% estimate. Therefore, while the company’s adjusted funds from operations of $0.11 per share is still below the $0.46 reported in the first quarter of 2019, it came in ahead of our estimate of a $0.07 loss and was also better than management’s prior guidance of a $0.13 loss for the first quarter.