REITweek: Investor Conference Update
June 8-10, 2021
1
Operating Trends
Improving
- Operating trends are improving each week
- Leisure demand continues to show robust growth; business travel is in the early stages of its recovery
- Expect to achieve positive Adjusted EBITDAre in Q2 2021
- Net proceeds from recent property sales and preferred equity offering to be allocated for acquisitions
- Half of the portfolio has recently been or is currently being redeveloped and transformed to a higher quality
- These significant investments, most of which have already been made, are expected to drive a higher EBITDA growth rate as the pandemic ends and we enter a new business cycle over the next several years
Returning to Profitability(1)
- Along with robust leisure travel, business travel is also contributing to positive EBITDA, and this trend is anticipated to accelerate as companies adopt less restrictive travel policies and return to the office
Month | RevPAR | Total | Hotel |
(2021) | Var to '19 | Revenue ($M) | EBITDA ($M) |
Jan | (80%) | $19.4 | ($11.1) |
Feb | (74%) | $26.0 | ($5.8) |
Mar | (68%) | $38.1 | $1.4 |
Apr (E) | (67%) | $43.1 | $3.0 |
May (E) | (61%)-(62%) | $52-$53 | $5-$6 |
Balance Sheet
and Liquidity(2,3,4)
- Liquidity: $950M (as of May 31)
- No material debt maturities until Q4 2022
- 100% of debt is unsecured
- Net Debt to Book Value: approx. 37%, or 23% if convertible bonds treated as equity
$747.6 | $750.0 | ||
$510.0 | |||
$272.2 | |||
$4.8 | $2.4 | ||
2021 2022 2023 2024 2025 2026
Convertible Notes
Term Loans & Private Placement
$s above in millions
Leisure Demand Strong,
Business Travel Returning
- Leisure demand continues to drive the industry's recovery, but encouraging signs of increased weekday demand from the business transient segment have emerged
- Business group leads, Requests For Proposal ("RFPs"), and bookings for later this year have increased substantially in the last 60 days
60% | Total Portfolio Occupancy: Weekday | ||||||||||||||||
50% | |||||||||||||||||
40% | 30% | ||||||||||||||||
30% | 26% | ||||||||||||||||
15% | 21% | ||||||||||||||||
20% | 11% | ||||||||||||||||
10% | |||||||||||||||||
0% | |||||||||||||||||
January | February | March | April (E) | May (E) | |||||||||||||
Total Portfolio Occupancy: Weekend | |||||||||||||||||
60% | 52% | ||||||||||||||||
50% | |||||||||||||||||
36% | 43% | ||||||||||||||||
40% | 28% | ||||||||||||||||
30% | 17% | ||||||||||||||||
20% | |||||||||||||||||
10% | |||||||||||||||||
0% | |||||||||||||||||
January | February | March | April (E) | May (E) | |||||||||||||
60% | Total Portfolio Occupancy | ||||||||||||||
50% | 37% | ||||||||||||||
40% | |||||||||||||||
31% | |||||||||||||||
30% | 19% | 25% | |||||||||||||
20% | 13% | ||||||||||||||
10% | |||||||||||||||
0% | |||||||||||||||
January | February | March | April (E) | May (E) | |||||||||||
Capital Re-Investments
Recently Completed and Current Redevelopments and
Transformations to Generate Outsized Returns
Year | # of Hotels Redeveloped, | Total Amount |
Transformed, or Renovated | Invested | |
2018-2019 | 14 | $216M |
2020 | 8 | $104M |
2021 | 4 | $57M |
Total | 26 | $377M |
- Above totals do not include all currently contemplated and potential 2021/2022 investment projects that may begin later this year
Historical Segmentation
and Performance(1)
Leisure Transient | |||||||||||||
25% | Corporate Transient | ||||||||||||
40% | Group | ||||||||||||
Current Portfolio 2019 Run Rate | |||||||||||||
35% | Statistics | ||||||||||||
Total Revenues | $1.4B | ||||||||||||
Total Hotel EBITDA | $463M | ||||||||||||
March 2021 | April 2021 (E) | May 2021 (E) | |||||||||||
Occ | ADR | RevPAR | Occ | ADR | RevPAR | Occ | ADR | RevPAR | |||||
Resort | 57% | $414 | $236 | 64% | $378 | $244 | 64% | $372 | $240 | ||||
Urban | 29% | $161 | $47 | 32% | $177 | $57 | 35% | $197 | $69 | ||||
(open) | |||||||||||||
Total | 25% | $245 | $61 | 31% | $239 | $74 | 37% | $242 | $89 | ||||
Portfolio | |||||||||||||
Note: EBITDA refers to non-GAAP Hotel EBITDA; see appendix for reconciliations of non-GAAP financial measures to Hotel Net Income (Loss).
- Includes all hotels owned by Pebblebrook as of June 7, 2021; $s and % amounts for April and May are estimates.
- Debt balances shown in millions; current as of May 21, 2021.
- Maturity date of January 2023 assumes Pebblebrook chooses to exercise its two six-month options to extend debt maturity of the credit facility.
- The Convertible Notes have an initial conversion rate of 39.2549 per $1,000 principal amount of the Notes (equivalent to a conversion price of approximately $25.47 per common share of Pebblebrook and a conversion premium of approximately 35.0% based on the closing price of $18.87 per common share on December 10, 2020).
REITweek: Investor Conference Update
June 8-10, 2021
2
hotel zena washington dc
laplaya beach resort & club
l'auberge del mar
viceroy washington dc
Capital Re-Investments Highlights
Per | Addt'l Amenities | ||||||
Hotel | Description | Amount(1) | Lobby | Rooms | F&B | & Sustainability | |
Key(2) | |||||||
Projects | |||||||
2018-2019 Renovations | |||||||
San Diego Mission | Transformational | ✓ | ✓ | ✓ | ✓ | ||
Luxury Redev. & | $32.0 | $89.6 | |||||
Bay Resort | Rebranding | ||||||
Westin Copley | Comprehensive | $24.0 | $29.9 | ✓ | ✓ | ✓ | ✓ |
Place, Boston | Renovation | ||||||
Paradise Point | Guestroom | $24.0 | $51.9 | ✓ | |||
Resort & Spa | Renovation | ||||||
LaPlaya Beach | Transformational | ✓ | ✓ | ✓ | ✓ | ||
Redev. & Luxury | $20.0 | $105.8 | |||||
Resort & Club | |||||||
Repositioning | |||||||
Mondrian Los | Upscaling | ✓ | ✓ | ✓ | |||
Renovation & New | $19.5 | $82.6 | |||||
Angeles | |||||||
Restaurant | |||||||
Hotel Spero | Upscaling | $16.0 | $67.8 | ✓ | ✓ | ✓ | ✓ |
Redevelopment | |||||||
Chamberlain | Comprehensive | ✓ | ✓ | ✓ | ✓ | ||
West Hollywood | $16.0 | $139.1 | |||||
Renovation | |||||||
Hotel | |||||||
Montrose West | Comprehensive | $16.0 | $120.3 | ✓ | ✓ | ✓ | ✓ |
Hollywood | Renovation | ||||||
W Boston | Guestroom | $10.0 | $42.0 | ✓ | |||
Renovation | |||||||
Hotel | Comprehensive | ✓ | ✓ | ✓ | ✓ | ||
Harbor Court | Upscaling | $10.0 | $76.3 | ||||
Renovation | |||||||
Sofitel | Comprehensive | $10.0 | $32.7 | ✓ | |||
Philadelphia | Rooms Renovation | ||||||
Hotel Modera | Transformational | ✓ | ✓ | ✓ | ✓ | ||
Portland → | Redevelopment & | $6.7 | $38.5 | ||||
Hotel Zags | Rebranding | ||||||
Comprehensive | ✓ | ✓ | ✓ | ||||
Heathman Hotel | Upscaling | $6.2 | $41.1 | ||||
Renovation | |||||||
Hotel Zelos San | Upscaling | $6.0 | $29.7 | ✓ | ✓ | ||
Francisco | Renovation | ||||||
2018-2019 Total | 14 Projects | $216.4 | $58.0 | ||||
southernmost beach resort
Note:
- Dollars in millions.
- Dollars in thousands.
REITweek: Investor Conference Update
June 8-10, 2021
3
chaminade resort & spa
le parc suite hotel
san diego mission bay resort
viceroy santa monica hotel
Capital Re-Investments Highlights, Continued
Per | Addt'l Amenities | ||||||
Hotel | Description | Amount(1) | Lobby | Rooms | F&B | & Sustainability | |
Key(2) | |||||||
Projects | |||||||
2020 Renovations | |||||||
Donovan Hotel → Transformational | ✓ | ✓ | ✓ | ✓ | |||
Hotel Zena | Redevelopment | $25.0 | $130.9 | ||||
Washington DC | & Rebranding | ||||||
Embassy Suites | Comprehensive | ✓ | |||||
San Diego Bay - | Guestroom | $18.0 | $52.8 | ||||
Downtown | Renovation | ||||||
Westin San Diego | Guestroom & | ✓ | ✓ | ✓ | |||
Public Area | $16.0 | $35.6 | |||||
Gaslamp Quarter | |||||||
Renovation | |||||||
Le Parc | Transformational | ✓ | ✓ | ✓ | ✓ | ||
Upscaling | $12.5 | $81.2 | |||||
Suite Hotel | |||||||
Redevelopment | |||||||
Viceroy Santa | Comprehensive | ✓ | ✓ | ✓ | |||
Public Area | $10.5 | $62.1 | |||||
Monica Hotel | |||||||
Redevelopment | |||||||
Chaminade | Transformational | ✓ | ✓ | ✓ | |||
Redev. & Luxury | $9.0 | $57.7 | |||||
Resort & Spa | |||||||
Repositioning | |||||||
Mason & Rook | Transformational | ✓ | ✓ | ✓ | ✓ | ||
Hotel → Viceroy | Redevelopment | $8.0 | $44.9 | ||||
Washington DC | & Rebranding | ||||||
The Marker | Upscaling | ✓ | ✓ | ✓ | ✓ | ||
Key West | Renovation & | $5.0 | $52.1 | ||||
Harbor Resort | Repositioning | ||||||
2020 Total | 8 Projects | $104.0 | $59.9 | ||||
2021 Renovations | |||||||
Del Mar | Transformational | ✓ | ✓ | ✓ | |||
L'Auberge | Luxury | $11.9 | $98.3 | ||||
Redevelopment | |||||||
Hotel Vitale → | Transformational | ✓ | ✓ | ✓ | ✓ | ||
1 Hotel | Luxury Redev. & | $25.0 | $125.0 | ||||
San Francisco(3) | Rebranding(3) | ||||||
Southernmost | Comprehensive | ✓ | ✓ | ||||
Guestroom | $15.0 | $57.3 | |||||
Beach Resort(3) | |||||||
Renovation(3) | |||||||
Grafton on Sunset | Transformational | ✓ | ✓ | ✓ | ✓ | ||
→ Z Collection | Redev. & | $5.0 | $46.3 | ||||
Hotel(3) | Rebranding(3) | ||||||
2021 Total | 4 Projects | $56.9 | $82.3 | ||||
2018-2021 Total | 26 Projects | $377.3 | $61.3 | ||||
2018-2021 Total | |||||||
Excl'd Upcoming | 23 Projects | $332.3 | $59.5 | ||||
Projects |
the marker key west harbor resort
Note:
- Dollars in millions.
- Dollars in thousands.
- Upcoming projects which have not yet commenced.
4
Appendix
Pebblebrook Hotel Trust
Total Property Portfolio
Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income Full Year 2019, January, February, March, April (estimate) and May (estimate) 2021 (Unaudited, in millions)
For the twelve | ||||||||||||
months ending | For the month | For the month | For the month | For the month | For the month | |||||||
December, | of January, | of February, | of March, | of April, | of May 2021 (E), | |||||||
2019 | 2021 | 2021 | 2021 | 2021 (E) | Low | High | ||||||
Hotel net income | $255.7 | ($29.4) | ($23.9) | ($16.8) | ($15.2) | ($13.2) | ($12.2) | |||||
Adjustment: | ||||||||||||
Depreciation and amortization | 207.0 | 18.3 | 18.1 | 18.2 | 18.2 | 18.2 | 18.2 | |||||
Hotel EBITDA | $462.7 | ($11.1) | ($5.8) | $1.4 | $3.0 | $5.0 | $6.0 | |||||
Adjustment: | ||||||||||||
Capital reserve | (57.2) | (0.7) | (1.1) | (1.5) | (1.7) | (2.1) | (2.1) | |||||
Hotel Net Operating Income | $405.5 | ($11.8) | ($6.9) | ($0.1) | $1.3 | $2.9 | $3.9 | |||||
This presentation includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (SEC) rules. These measures are not in accordance with, or an alternative to, measures prepared in accordance with U.S. generally accepted accounting principles, or GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the hotels' results of operations determined in accordance with GAAP.
The Company has presented hotel EBITDA and hotel net operating income after capital reserves for the periods above because it believes these measures provide investors and analysts with an understanding of the hotel-level operating performance. These non-GAAP measures do not represent amounts available for management's discretionary use, because of needed capital replacement or expansion, debt service obligations or other commitments and uncertainties, nor are they indicative of funds available to fund the Company's cash needs, including its ability to make distributions.
The Company's presentation of the hotels' EBITDA and net operating income after capital reserves for the periods above should not be considered as an alternative to net income (computed in accordance with GAAP) as an indicator of the hotels' financial performance. The table above is a reconciliation of the hotels' EBITDA and net operating income after capital reserves calculations to net income in accordance with GAAP for the periods above. Any differences are a result of rounding.
This investor conference update contains certain "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "will," "to be," "anticipated," "until," "may," "estimate," "expect," "approximately," "continue," "assume" or other similar words or expressions. These forward-looking statements relate to Adjusted EBITDre, allocation of offering proceeds, demand recovery, expected liquidity and financial measures and operating statistics for April and May of 2021. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from such statements. These risks and uncertainties include, but are not limited to, the COVID-19 pandemic, the state of the U.S. economy and the supply of hotel properties, and other factors as are described in greater detail in the Company's filings with the U.S. Securities and Exchange Commission, including, without limitation, the Company's Annual Report on Form 10-K for the year ended December 31, 2020. Unless legally required, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
All information in this investor conference update is as of June 7, 2021. The Company undertakes no duty to update the statements in this investor conference update to conform the statements to actual results or changes in the Company's expectations.
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Pebblebrook Hotel Trust published this content on 07 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 June 2021 20:16:04 UTC.