BETHESDA, Md. - Pebblebrook Hotel Trust (NYSE: NYSE:PEB), a publicly traded real estate investment trust, today provided an update on the impact recent hurricanes have had on its properties, particularly the LaPlaya Beach Resort & Club in Naples, Florida. While all other southeast resorts owned by the company are operational, LaPlaya is still recovering from the damages caused by Hurricanes Helene and Milton, which occurred on September 26 and October 9, respectively.
The luxury waterfront resort is making progress in its restoration efforts, with the Gulf Tower, Bay Tower, and BALEEN Naples, its primary restaurant and bar, set to reopen on November 1, 2024. However, the Beach House building, which houses 79 rooms, remains closed due to extensive water and sand damage. The company expects the Beach House to partially reopen in the coming months and to be largely operational by the end of Q1 2025, subject to local approvals.
Pebblebrook anticipates that the repair costs will not be material and believes that insurance coverage, net of deductibles, will significantly offset the financial impact. The company has provided estimated figures for the third and fourth quarters of 2024, reflecting the storms' effects on its operations. The expected net loss for the full year is projected to be $11.5 million, with a decrease in Same-Property Revenue Per Available Room (RevPAR) and total revenue, as well as hotel EBITDA.
The most significant operational impact has been at LaPlaya, resulting in considerable cancellations and reduced booking volumes. Despite the exclusion of LaPlaya from Same-Property reporting due to ongoing restoration, the estimated effects on its performance are included in the company's Adjusted EBITDAre, Adjusted Funds from Operations (FFO), and Adjusted FFO per share.
Pebblebrook's other resorts in southern Florida and Georgia have sustained no material property damage and remain fully operational. The company will continue to assess the storms' impact and plans to provide future updates as necessary.
Pebblebrook Hotel Trust is the largest owner of urban and resort lifestyle hotels in the U.S., with 46 hotels and approximately 12,000 guest rooms across 13 markets. This update is based on a press release statement from the company.
In other recent news, Pebblebrook Hotel Trust has been making significant strides in its financial management. The company recently reported strong Q2 results, exceeding expectations with increases in revenue per available room (RevPAR) and hotel earnings before interest, taxes, depreciation, and amortization (EBITDA). Additionally, Pebblebrook announced a private placement of $400 million in senior notes and plans to offer $350 million in senior notes, both primarily aimed at reducing existing unsecured term loans.
Truist Securities adjusted its price target for Pebblebrook, citing challenges such as market weakness in San Francisco and anticipated labor cost increases starting in 2025. Despite these challenges, Truist Securities increased its 2024 and 2025 earnings estimates for the company.
Baird maintains a neutral stance on Pebblebrook, keeping a $15 target, and notes the company's consistent performance. Pebblebrook's properties experienced minimal damage from Hurricane Helene, with repair costs expected to be immaterial after insurance. These are the recent developments shaping the trajectory of Pebblebrook Hotel Trust.
InvestingPro Insights
As Pebblebrook Hotel Trust (NYSE: PEB) navigates the challenges posed by recent hurricanes, particularly at its LaPlaya Beach Resort & Club, investors may find additional context from InvestingPro data and tips valuable.
According to InvestingPro data, Pebblebrook's market capitalization stands at $1.54 billion, reflecting the market's current valuation of the company amidst these operational challenges. The company's revenue for the last twelve months as of Q2 2024 was $1.44 billion, with a modest revenue growth of 1.03% over the same period.
An InvestingPro Tip highlights that Pebblebrook is "trading at a low revenue valuation multiple," which could be of interest to value-oriented investors considering the company's current situation and recovery prospects. This valuation metric might suggest that the market has already priced in some of the short-term operational challenges faced by the company.
Another relevant InvestingPro Tip notes that Pebblebrook "has maintained dividend payments for 15 consecutive years." This track record of consistent dividends could be reassuring for investors concerned about the company's financial stability in light of the recent hurricane impacts. However, it's worth noting that the current dividend yield is relatively low at 0.32%.
For those seeking a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide further insights into Pebblebrook's financial health and market position during this recovery period.
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