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Pebblebrook's (PEB) Same-Property Revenues Improve in May
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According to Pebblebrook Hotel Trust’s (PEB - Free Report) recently released update, its operating results and demand trends for May were in line with its expectations, with the urban and resort portfolio showing a strong performance.
In May, the company witnessed same-property total revenue growth of 7.3% on a year-over-year basis. This was driven by a 7.8% rise in non-room revenues. Its same-property expenses per occupied room decreased 7.8%, or 2.7%, when excluding the positive impact of real estate tax reductions and credits compared to the prior year period.
The solid performance in May is attributable to the favorable convention calendars and overall healthy demand trends, including increased occupancy across the portfolio over Memorial Day Weekend.
The favorable convention calendars and positive overall business and leisure demand trends, including both group and transient, have benefited markets like San Diego, San Francisco, Chicago and Boston. Its recently redeveloped properties continued to ramp up well.
The company noted that for the overall portfolio, same-property revenue per available room (“RevPAR”) exhibited a year-over-year increase of 6.9%, mainly driven by a 1.2% increase in average daily rate (“ADR”) and 4.1 percentage points rise in occupancy.
Urban and Resort Properties' Update
For PEB’s urban portfolio, same-property urban occupancy improved 3.3 percentage points, while ADR witnessed a rise of 3%.
Notably, Pebblebrook's recently redeveloped properties exhibited significant RevPAR gains compared to the previous year. Its Margaritaville Hotel San Diego Gaslamp Quarter saw a remarkable increase of 170%, while Hilton San Diego Gaslamp Quarter experienced a notable climb of 18%.
The company's San Francisco properties witnessed a 17% increase in RevPAR, primarily due to the rescheduling of a major convention from April to May this year. Leisure travelers continue to return to the cities.
For the resort portfolio, in May, same-property occupancy increased 10% year over year. However, resort ADR saw a decline of 5%. Same-property resort RevPAR rose 4.8% year over year, and non-room revenue climbed 9%.
Estancia La Jolla Hotel and Spa experienced a remarkable 27% surge in RevPAR. Similarly, Skamania Lodge witnessed 16% growth in RevPAR, highlighting the strong ramp-ups made in its recently redeveloped resorts.
Conclusion
The company is expected to witness a stable operating environment on the back of continuous improvement in business and leisure segments. However, macroeconomic uncertainty is likely to affect the company’s ability to maintain rates in its resort markets. A high interest rate environment adds to its concerns.
Over the past year, shares of this Zacks Rank #3 (Hold) have gained 5.7% compared with the industry’s upside of 3%.
Image: Bigstock
Pebblebrook's (PEB) Same-Property Revenues Improve in May
According to Pebblebrook Hotel Trust’s (PEB - Free Report) recently released update, its operating results and demand trends for May were in line with its expectations, with the urban and resort portfolio showing a strong performance.
In May, the company witnessed same-property total revenue growth of 7.3% on a year-over-year basis. This was driven by a 7.8% rise in non-room revenues. Its same-property expenses per occupied room decreased 7.8%, or 2.7%, when excluding the positive impact of real estate tax reductions and credits compared to the prior year period.
The solid performance in May is attributable to the favorable convention calendars and overall healthy demand trends, including increased occupancy across the portfolio over Memorial Day Weekend.
The favorable convention calendars and positive overall business and leisure demand trends, including both group and transient, have benefited markets like San Diego, San Francisco, Chicago and Boston. Its recently redeveloped properties continued to ramp up well.
The company noted that for the overall portfolio, same-property revenue per available room (“RevPAR”) exhibited a year-over-year increase of 6.9%, mainly driven by a 1.2% increase in average daily rate (“ADR”) and 4.1 percentage points rise in occupancy.
Urban and Resort Properties' Update
For PEB’s urban portfolio, same-property urban occupancy improved 3.3 percentage points, while ADR witnessed a rise of 3%.
Notably, Pebblebrook's recently redeveloped properties exhibited significant RevPAR gains compared to the previous year. Its Margaritaville Hotel San Diego Gaslamp Quarter saw a remarkable increase of 170%, while Hilton San Diego Gaslamp Quarter experienced a notable climb of 18%.
The company's San Francisco properties witnessed a 17% increase in RevPAR, primarily due to the rescheduling of a major convention from April to May this year. Leisure travelers continue to return to the cities.
For the resort portfolio, in May, same-property occupancy increased 10% year over year. However, resort ADR saw a decline of 5%. Same-property resort RevPAR rose 4.8% year over year, and non-room revenue climbed 9%.
Estancia La Jolla Hotel and Spa experienced a remarkable 27% surge in RevPAR. Similarly, Skamania Lodge witnessed 16% growth in RevPAR, highlighting the strong ramp-ups made in its recently redeveloped resorts.
Conclusion
The company is expected to witness a stable operating environment on the back of continuous improvement in business and leisure segments. However, macroeconomic uncertainty is likely to affect the company’s ability to maintain rates in its resort markets. A high interest rate environment adds to its concerns.
Over the past year, shares of this Zacks Rank #3 (Hold) have gained 5.7% compared with the industry’s upside of 3%.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are Americold Realty Trust (COLD - Free Report) and Lamar Advertising (LAMR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for COLD’s 2024 funds from operations (“FFO”) per share has been raised by 1.4% over the past month to $1.44.
The Zacks Consensus Estimate for LAMR’s current-year FFO per share has moved 3.7% north in the past two months to $8.03.
Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.