Pebblebrook Hotel Trust Reports 6.5% RevPAR Growth in Q2

Pebblebrook Hotel Trust reported $407.1 million in second-quarter 2026 revenue, beating analyst estimates and driving a 6.5% increase in Same-Property RevPAR. Strong leisure resort demand and San Francisco convention activity fueled the performance, prompting the real estate investment trust to raise its full-year profitability and RevPAR guidance.

How did Pebblebrook perform against second-quarter financial expectations?

The company comfortably exceeded consensus estimates across multiple profitability and revenue metrics during the period ended June 30, 2026. ChartMill reported that Pebblebrook posted $407.1 million in revenue, beating the consensus estimate of $402.8 million. The company recorded a net income of $24.9 million for the quarter, according to StockTitan.

Adjusted funds from operations (FFO) per diluted share reached $0.68, representing a 4.6% year-over-year increase. ChartMill noted this figure far outpaced the analyst projection of $0.10, though it indicated the estimate was likely for a different metric. Furthermore, StockTitan highlighted that the $0.68 Adjusted FFO per share came in $0.06 over the high end of the company's own outlook.

Same-Property Hotel EBITDA reached $123.3 million, which was $6.6 million above the high end of management's guidance and 7.1% higher than the second quarter of 2025. Adjusted EBITDAre hit $116.2 million, exceeding the guidance range by $6.2 million.

Which hotel markets drove the strongest revenue gains?

The resort portfolio and the San Francisco market acted as the primary engines for Pebblebrook's top-line growth. The company's resort properties saw RevPAR surge 12.0%, while Total RevPAR grew 10.9%. This translated to an 18.5% jump in Hotel EBITDA for the resort segment, driven by broad-based leisure transient demand, group demand, and continued growth in out-of-room spend.

San Francisco demonstrated continued recovery. The market delivered 16.0% RevPAR growth and a 24.6% increase in Hotel EBITDA. StockTitan reported that robust citywide convention activity, alongside strong growth in business transient and leisure demand, fueled the San Francisco performance.

Across the entire portfolio, Same-Property RevPAR grew 6.5%, supported by a 4.7% increase in average daily rate (ADR) and a 1.7% improvement in occupancy. Same-Property Total RevPAR increased by 4.7%.

Where did the portfolio experience demand weakness?

Washington, D.C., and San Diego dragged on the broader portfolio's performance due to specific local headwinds. In Washington, D.C., RevPAR declined 9.9%, which management attributed to continued weakness in government-related demand.

Simultaneously, RevPAR at the company's four urban San Diego hotels fell 9.1%. This decline was expected due to a weaker convention calendar in the city. The impact of the San Diego properties was substantial; StockTitan noted that excluding those four hotels, the company's Same-Property RevPAR would have increased 8.6%, and Same-Property Total RevPAR would have grown 6.3%.

How did management control operating expenses and margins?

Pebblebrook expanded its margins by keeping expense growth below revenue growth. Same-Property total expenses rose 3.8%, while Same-Property total revenues grew 4.8%. This disciplined cost management produced 67 basis points of EBITDA margin expansion and drove the 7.1% increase in Same-Property Hotel EBITDA.

On a per-occupied-room basis, total expenses increased only 2.0%. A portion of the company's cost savings originated from its property insurance renewal on June 1. ChartMill reported that Pebblebrook secured a 27% premium reduction, resulting in $6.1 million in annual savings.

What changes did the company make to its balance sheet and capital allocation?

Pebblebrook executed property sales, share repurchases, and debt management initiatives to strengthen its financial position. The company sold the Chamberlain West Hollywood Hotel for $43.5 million. As partial consideration for this sale, Pebblebrook accepted its own preferred shares at an agreed value of $26.1 million. The company retired these shares at a 23% discount to their $33.7 million liquidation preference.

During the quarter, Pebblebrook also repurchased 0.5 million common shares for $8.0 million. Capital investments for the second quarter totaled $12.5 million, with $65 million to $75 million expected for the full year of 2026.

On the balance sheet, net debt-to-trailing 12-month corporate EBITDA improved to 5.3x. At quarter-end, the company held $270 million in cash and restricted cash, with a weighted-average interest rate of 4.1%. Pebblebrook fully funded the remaining $350 million of convertible notes maturing in December 2026, leaving the company with no other maturities until 2028.

What is the updated full-year outlook for 2026?

Management raised its full-year guidance based on the strong first-half performance and encouraging booking trends. The company updated its full-year 2026 ranges to reflect higher profitability and revenue expectations, while holding full-year revenue guidance at approximately $1.486 billion at the midpoint.

For the third quarter, Pebblebrook expects Adjusted EBITDAre between $92.5 million and $96.5 million, and Adjusted FFO per share between $0.48 and $0.52. Despite the earnings beat and raised guidance, ChartMill observed that after-market trading remained flat, with the stock declining about 1.9% over the subsequent week, though it gained 3.6% over a two-week period. Management maintained a cautious stance regarding geopolitical, policy, and macroeconomic uncertainty, alongside the ongoing localized headwinds in Washington, D.C., and San Diego.