After all the disruptions to travel demand last year, the team at Pebblebrook Hotel Trust believes that 2026 is set up to potentially be a better hotel demand environment.
During the hotel real estate investment trust's fourth-quarter and full-year 2025 earnings call, Pebblebrook Chairman and CEO Jon Bortz said the company is projecting that full-year 2026 same-property revenue per available room will grow 2% to 4% compared to last year and 7.5% to 9% for the first quarter. It also expects same-property total RevPAR growth of 2.25% to 4.25% for the full year and 6% to 7.5% for the first quarter.
While early indications show the hotel industry overall and Pebblebrook itself are set up well for the year, the REIT's outlook for both the first quarter and the full year are appropriately cautious given the policy and geopolitical risks, he said.
“If not for the surprises we experienced last year, we'd be more confident providing an outlook for the industry and for Pebblebrook that would be much higher,” he said. “So, our outlooks are cautious and therefore conservative, but our setup is not.”
This year has easy demand and performance comparisons to a disrupted 2025, in which U.S. hotel demand declined by 0.5% and RevPAR was down 0.3%, both of which are historically inconsistent with a growing economy and limited supply, Bortz said. Growth forecasts indicated an improving macroeconomic environment with less uncertainty supported by a stable and fully employed labor force, significant increases in business investments and substantially higher income tax refunds.
The FIFA World Cup will have matches in many U.S. cities, including four of Pebblebrook’s markets that will drive compression and longer stays, he said. America 250 is broader than just Fourth of July events, which will also benefit Pebblebrook’s hotels. The upcoming NCAA Men’s Basketball Tournament rounds are in four of Pebblebrook’s markets.
“The year also has the best holiday calendar that I can ever remember, with most major holidays falling on or adjacent to weekends, which helps both weekday business travel as well as leisure on the weekends,” he said, pointing to positive results already seen from New Year’s Day and the combined Valentine’s Day/Presidents Day long weekend.
Assuming no big macroeconomic or geopolitical surprises, Pebblebrook believes demand will re-correlate with gross-domestic-product growth as it did in the fourth quarter of 2024 and early 2025 before all of the disruptions, Bortz said. There are signs it’s already happening, though the winter storm at the end of January obscured it somewhat.
San Francisco is going through a powerful recovery, and Pebblebrook expects another year of double-digit RevPAR growth in 2026, he said. In January, RevPAR in the market grew 12.2% even with a year-over-year drop in citywide rooms on the books for the month. It’s heading for a 65%-plus RevPAR increase in February thanks to performance from the Super Bowl and its almost weeklong list of events.
Pebblebrook has a further ramp-up from its recently redeveloped and repositioned properties, including the LaPlaya Beach Resort & Club in Naples, Florida, following repairs from hurricanes, Bortz said. The portfolio is essentially all upper-upscale and luxury properties, and half of the company’s earnings before interest, taxes, depreciation and amortization is coming from its high-end resorts, which should continue to benefit from the strength of the more affluent traveler.
January RevPAR grew 4.6% and would have been almost 7% were it not for the winter storm, he said. Washington, D.C., saw a tough comparison in January due to the presidential inauguration in 2024, but February is on pace to achieve RevPAR growth of more than 15%.
As of the end of January, Pebblebrook’s combined group and transient pace for the year was ahead of the same time last year by $21 million, a 2.4% increase over last year’s final same-property room revenues, he said. Pace growth is widespread and up throughout its markets except for Washington, D.C., due to the inauguration.
“The key takeaway is we're starting the year ahead,” he said. “January was a very good pickup month, and we're watching pickup closely, but we believe our outlook is prudent, given the risks and uncertainties.”
Performance review
Fourth-quarter results reinforced three themes that matter most for 2026, said Raymond Martz, Pebblebrook's co-president and chief financial officer. Leisure demand remains resilient and improved from Thanksgiving through the end of the year while weekday business travel continues to recover. Out-of-room spend remains healthy and continues to be a healthy profit driver. Expense growth remains well-contained through an intense focus on creating operating efficiencies.
During the quarter, same-property revenues grew 2.9% while expenses increased by 2.6%, supporting modest margin expansion and representing an encouraging setup as demand continues to recover, he said. Excluding Los Angeles and Washington, D.C., which saw disruptions from wildfires and a cutback in federal government travel, respectively, the revenue growth was 4.2% for the quarter.
Among Pebblebrook’s resorts, this segment benefited from its completed, multiyear strategic reinvestment program, Martz said. Resort equity increased by roughly 160 basis points, driving TRevPAR up by 4.9% and same-property resort EBITDA up by 17.4%. For the full-year, resort EBITDA increased by 1.3%.
“Importantly, many of our redeveloped resorts are ramping towards stabilization, and we see further meaningful growth ahead,” he said.
Among its urban markets, performance remained mixed quarter to quarter, but the overall direction improved in the recovery cities where business, group and transient are rebuilding and leisure demand is returning, he said.
San Francisco led the portfolio again with fourth-quarter TRevPAR increasing more than 32%, driven by a broad-based recovery across all demand segments, he said. For the full-year, the San Francisco portfolio grew RevPAR by 17%, TRevPAR by 15.1%, and hotel EBITDA increased by 58.5%.
There was steady improvement in select urban markets, such as Portland and Chicago, he said. There were market-specific disruptions, including wildfires, federal immigration raids, National Guard deployments, government shutdowns and softer convention calendars, however, that affected performance in San Diego, Los Angeles and Washington, D.C.
Hotel performance in Los Angeles improved sequentially as the year progressed, with RevPAR finally turning positive during the fourth quarter and early 2026, he said.
By the numbers
For the fourth quarter, Pebblebrook reported revenue of $349 million, up from $337.6 million in the fourth quarter of 2024, according to its earnings release. For the full year, it reported revenue of $1.47 billion, up from $1.45 billion the year before.
It reported a net loss of nearly $17 million for the quarter as compared to a loss of $49.8 million in 2024. For the year, it reported a net loss of $62.2 million as compared to net income of $16,000 at the end of 2024.
Pebblebrook saw adjusted earnings before interest, taxes, depreciation, amortization and real estate costs for the fourth quarter reach $69.7 million, an 11.1% year-over-year increase. For the full year, adjusted EBITDAre was $342.5 million, a 4.7% year-over-year decrease.
As of Dec. 31, 2025, Pebblebrook had $196.2 million in cash, cash equivalents and restricted cash. It also had $642 million of available capacity on its $650 million senior unsecured revolving credit facility.
On Feb. 11, it closed on a new $450 million term loan that matures in February 2031 with $360 million borrowed and $90 million available to be drawn through Dec. 15. It paid off its $360 million term loan maturing October 2027 and the remaining $40 million mortgage related to the Margaritaville Hollywood Beach Resort.
The company plans to use the $90 million delayed draw term loan, along with anticipated cash on hand at maturity for the remaining balance of its 1.75% convertible notes due December 2026. Outside of the December 2026 convertible notes, it has no significant debt maturities until 2028.
Pebblebrook’s consolidated debt and convertible notes have an estimated 4.1% weighted-average interest rate and a weighted-average debt maturity of 3.1 years. Ninety-eight percent is effectively fixed at 4.1% and approximately 98% unsecured.
As of press time, Pebblebrook's stock was trading at $13.10, up 11.45% year over year. The NYSE Composite Index was up 17.2% for the same period.