Pebblebrook Hotel Trust (NYSE:PEB) Q3 2022 Earnings Conference Call October 28, 2022 9:00 AM ET

Company Participants

Raymond Martz - Chief Financial Officer

Jon Bortz - Chairman and Chief Executive Officer

Conference Call Participants

Dori Kesten - Wells Fargo

Jay Kornreich - SMBC

Floris Van Dijkum - Compass Point

Neil Malkin - Capital One Securities

Duane Pfennigwerth - Evercore ISI

Anthony Powell - Barclays

Shaun Kelley - Bank of America

Michael Bellisario - Robert W. Baird

Gregory Miller - Truist Securities

Bill Crow - Raymond James

Chris Darling - Green Street

Operator

Greetings and welcome to the Pebblebrook Hotel Trust Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Raymond Martz, Chief Financial Officer. Thank you, sir. Please go ahead.

Raymond Martz

Thank you, Donna, and good morning everyone. Welcome to our third quarter 2022 earnings call and webcast. Joining me today are Jon Bortz, our Chairman and Chief Executive Officer.

But before we start, a quick reminder that many of our comments today are considered forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our SEC filings. Future results could differ materially from those implied by our comments. Forward-looking statements that we make today are effective only today, October 28, 2022, and we undertake no duty to update them later. We'll discuss non-GAAP financial measures during today's call, and we provide reconciliations of these non-GAAP financial measures on our Web site, at pebblebrookhotels.com.

So, last night, reported stronger than expected Q3 results, let by our urban hotels. Business travel, both transient and group, continued its recovery throughout our markets, clearly benefiting our urban properties the most. And leisure travel has returned to the cities as well. Bookings improved after Labor Day as business travelers got on the road to meet with our customers, reconnect with their coworkers, and participate in major conventions and meetings. Leisure travel in the quarter remained robust, along with very strong rate premiums over 2019. We saw solid and consistent improvement in our operating metrics throughout the quarter. Overall, we experienced encouraging trends across our portfolio throughout the quarter, which continued in October.

We've not seen any signs of a slowdown in travel demand. However, given the Fed's actions, we continue to closely monitor bookings, cancellations, activity levels, corporate travel policies, and overall spending for any signs of slowdown. Q3 total revenues exceeded our outlook despite the negative impact of Hurricane Ian, which made landfall near Naples, on September 28. Given Hurricane Ian's large size, changing track in forecast, and its impact on Florida and the Georgia coast, it had some effect on all of our Southeast properties. Overall, it reduced our hotel revenues by approximately $2 million in September. Of course, the most significant impact was in Naples, with roughly half of the September revenue loss occurring at LaPlaya.