Pebblebrook Hotel Trust (NYSE: PEB):

⁽¹⁾ See tables later in this press release for a description of Same-Property information and reconciliations from net income (loss) to non-GAAP financial measures used in the table above and elsewhere in this press release.

Fourth Quarter and Year-to-Date Highlights

“December performed slightly better than November, despite the severe winter storms during the holidays, indicating that overall travel demand continues to recover, despite macro-economic concerns,” continued Mr. Bortz. “For the fourth quarter, compared to 2019, Same-Property Total Revenues were off by 5.9%, with ADR up 18.4%. Same-Property EBITDA compared to 2019 was off 26.9%, partly due to more than $1 million of negative impact from the winter storms at the end of December. In addition, the closure of LaPlaya Beach Resort & Club (“LaPlaya”) in Naples, Florida in late September 2022, due to repairs and remediation from Hurricane Ian, negatively impacted Same-Property RevPAR by approximately 150 basis points and Same-Property EBITDA by more than $12.0 million. On the labor side, our hotel teams have made tremendous gains in hiring managers and hourly employees to fill open positions across our portfolio. While this has increased our fixed cost base, it will allow our properties to operate at higher occupancy levels as hotel demand continues to recover and strengthen in 2023.”

Update on Impact from Hurricane Ian

The Company continues to complete significant repairs and rebuilding at the 189-room LaPlaya Beach Resort & Club, and the property was fully re-energized and reconnected to the permanent electricity grid in late January. The resort’s Bay Tower partially reopened in late January 2023, and the Gulf Tower is expected to partially reopen shortly, barring any issues that remain out of our control that could delay this reopening. The property’s Beach House is forecasted to be fully remediated and restored by the fourth quarter of this year, but delays may further impact this timeline.

The Company anticipates all operational disruption will be covered under the Company’s business interruption and property insurance programs, net of deductibles. A preliminary business interruption settlement of a minimum of $7.2 million for the fourth quarter of 2022 with the Company’s insurance providers is anticipated and is included in the Company’s Q1 2023 outlook. Pebblebrook expects to record additional business interruption settlements in 2023 as these are determined and finalized with its insurance providers.

Capital Investments and Strategic Property Redevelopments

In the fourth quarter of 2022, the Company completed $40.2 million of capital investments throughout its portfolio. The Company completed $108.4 million of capital improvements and projects in 2022.

Since 2018, the Company has invested $567 million across its portfolio, including approximately $230 million in redevelopment projects expected to generate healthy increases in market share, revenues, and cash flow as these properties stabilize, similar to prior transformations.

The Company expects to invest $145.0 to $155.0 million in capital improvements during 2023, which includes completing the redevelopment and repositioning projects at Solamar Hotel (to be converted to Margaritaville Hotel San Diego Gaslamp Quarter), Hilton San Diego Gaslamp Quarter, Jekyll Island Club Resort, Viceroy Santa Monica Hotel, Estancia La Jolla Hotel & Spa, the four guesthouses at Southernmost Beach Resort, as well as the completion of the development of a new outdoor venue and 11 additional alternative lodging units at Skamania Lodge.

Update on Strategic Dispositions

The Company completed four hotel dispositions in 2022 totaling $260.9 million of proceeds. The Company has executed a contract to sell The Heathman Hotel in Portland, Oregon for $45.0 million. The sale of The Heathman Hotel is subject to normal closing conditions, and the Company offers no assurances that this sale will be completed on these terms or at all. The sale is targeted to be completed shortly. Since 2020, the Company has sold 11 urban hotels, including the upcoming anticipated sale of The Heathman Hotel, and acquired 6 leisure-focused resort properties, substantially transforming the Company’s portfolio.

Common and Preferred Share Repurchases

Since late October of 2022, the Company has repurchased 5.5 million common shares, or over 4 percent of the Company’s previously outstanding shares, at an average price of $15.12 per share, a 51% discount to the midpoint of the Company’s most recently published estimated Net Asset Value (“NAV”).

During the fourth quarter, in a single unsolicited transaction, the Company also repurchased 1.0 million shares of its Series H preferred shares for $16.00 per share, a 36% discount to the $25.00 liquidation value per share.

On February 17, 2023 the Company’s board of trustees authorized an additional $150 million common share repurchase program. As a result, the Company currently has a combined $224 million available under its common share repurchase programs. The Company’s board of trustees also authorized a $100 million preferred share repurchase program. This new repurchase program applies to all of the Company’s outstanding series of preferred equity shares. The repurchase programs may be suspended or discontinued at any time, and the Company is not obligated to repurchase any shares.

Balance Sheet and Liquidity

As of December 31, 2022, the Company had $52.3 million of consolidated cash, cash equivalents and restricted cash, in addition to $637.4 million of undrawn availability on its senior unsecured revolving credit facility, for total liquidity of $689.7 million. The Company had $2.4 billion in consolidated debt and convertible notes at an effective weighted-average interest rate of 3.5 percent. $1.9 billion, or 79% of the Company’s total outstanding debt and convertible notes, was at an effective weighted-average fixed interest rate of 2.7 percent, and $0.5 billion, or 21% percent, was at a weighted-average floating rate of 6.3 percent. In January, in a very attractive window in the market, the Company entered into an additional $400 million in swaps for 2- and 3-year maturities at 3.2% and 3.0%, respectively, effectively replacing an equivalent amount maturing in 2023.

Common and Preferred Dividends

On December 15, 2022, the Company declared a quarterly cash dividend of $0.01 per share on its common shares and a regular quarterly cash dividend for the following preferred shares of beneficial interest.

• $0.39844 per 6.375% Series E Cumulative Redeemable Preferred Share;
• $0.39375 per 6.3% Series F Cumulative Redeemable Preferred Share;
• $0.39844 per 6.375% Series G Cumulative Redeemable Preferred Share; and
• $0.35625 per 5.7% Series H Cumulative Redeemable Preferred Share.

Update on Curator Hotel & Resort Collection

Curator Hotel & Resort Collection (“Curator”) is a distinct collection of experientially focused small brands and independent lifestyle hotels and resorts worldwide founded by Pebblebrook and several industry-leading independent lifestyle hotel operators. As of December 31, 2022, Curator had 97 member hotels. In the fourth quarter of 2022, Curator strengthened its roster with eight new member hotels. As of December 31, 2022, Curator had 100 master service agreements with preferred vendor partners, providing Curator member hotels with preferred pricing, enhanced operating terms, and early access to curated new technologies.

Q1 2023 Outlook

Based on current trends and assuming no material disruptions to travel caused by the COVID-19 pandemic or worsening macro-economic conditions, the Company’s outlook for Q1 2023 is as follows:

This Q1 2023 Outlook is based, in part, on the following estimates and assumptions:

The Company’s outlook incorporates the estimated negative impact of displaced revenues and EBITDA associated with the ongoing redevelopments and transformations of Solamar Hotel (conversion to Margaritaville Hotel San Diego Gaslamp Quarter), Hilton San Diego Gaslamp Quarter, Estancia La Jolla Hotel & Spa, Viceroy Santa Monica, Jekyll Island Club Resort, and a small renovation project at The Nines Portland. Same-Property RevPAR growth is expected to be negatively impacted by these major transformation projects in the first quarter by 225 to 350 basis points, and Same-Property EBITDA is expected to be reduced by $4.5 million to $6.5 million.

The first quarter outlook also incorporates an estimated $7.2 million for the preliminary business interruption settlement relating to lost income from the fourth quarter of 2022. This amount affects the Company’s Adjusted EBITDAre, Adjusted FFO, and net loss.

Year End 2022 Earnings Call

The Company will conduct its quarterly analyst and investor conference call on Wednesday, February 22, 2023, at 9:00 AM ET. Please dial (877) 407-3982 approximately ten minutes before the call begins to participate. Additionally, a live webcast of the conference call will be available through the Investor Relations section of www.pebblebrookhotels.com. To access the webcast, click on https://investor.pebblebrookhotels.com/news-and-events/webcasts/default.aspx ten minutes before the conference call. A replay of the conference call webcast will be archived and available online.

About Pebblebrook Hotel Trust

Pebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real estate investment trust (“REIT”) and the largest owner of urban and resort lifestyle hotels and resorts in the United States. The Company owns 51 hotels and resorts, totaling approximately 12,800 guest rooms across 15 urban and resort markets. For more information, visit www.pebblebrookhotels.com and follow us at @PebblebrookPEB.

This press release 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 the use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” “forecast,” “continue,” “assume,” “plan,” references to “outlook” or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections and forecasts and other forward-looking information and estimates. Examples of forward-looking statements include the following: descriptions of the Company’s plans or objectives for future capital investment projects, operations or services; forecasts of the Company’s future economic performance; forecasts of hotel industry performance; statements regarding expectations of hotel dispositions; and descriptions of assumptions underlying or relating to any of the foregoing expectations including assumptions regarding the timing of their occurrence. 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 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 SEC, including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. 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.

For further information about the Company’s business and financial results, please refer to the "Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of the Company’s filings with the U.S. Securities and Exchange Commission, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Investor Relations section of the Company’s website at www.pebblebrookhotels.com.

All information in this press release is as of February 21, 2023. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company’s expectations.

For additional information or to receive press releases via email, please visit our website at www.pebblebrookhotels.com