The Company's Outlook for 2013, which assumes continued improvement in economic activity, positive business travel trends and other significant assumptions.
Pebblebrook Hotel Trust (NYSE: PEB) provided its Outlook for 2013. The Company's Outlook for 2013, which assumes continued improvement in economic activity, positive business travel trends and other significant assumptions, is as follows:
(in millions except per share/unit,
margin and RevPAR data)
|Net income (loss)||$40.8||$44.8|
|Net income (loss) per diluted share||$0.66||$0.73|
|Adjusted FFO per diluted share(1)||$1.46||$1.53|
This 2013 Outlook is based on the following estimates and assumptions:
|U.S. GDP Growth||1.75%||2.25%|
|U.S. Hotel Industry RevPAR Growth(2)||4.5%||6.5%|
|Pro Forma Portfolio RevPAR(2,3)||$182||$186|
|Pro Forma Portfolio RevPAR Growth(2,3)||5.0%||7.0%|
|Pro Forma Portfolio Hotel EBITDA(3)||$157.0||$162.0|
|Pro Forma Portfolio Hotel EBITDA Margin(3)||28.0%||28.5%|
|Pro Forma Portfolio Hotel EBITDA Margin Growth(3)||75 bps||125 bps|
|Corporate cash general and administrative expenses||$11.0||$11.5|
|Corporate non-cash general and administrative expenses||$3.0||$3.5|
|Weighted average fully diluted shares and units||61.6||61.6|
(1) See tables later in this press release for a reconciliation of net income (loss) to non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization ("EBITDA"), Adjusted EBITDA, Funds from Operations ("FFO"), Adjusted FFO and Adjusted FFO per diluted share.
(2) “RevPAR” is defined as rooms revenue per available room.
(3) The Company’s estimates and assumptions for pro forma portfolio RevPAR, pro forma portfolio RevPAR growth, pro forma portfolio EBITDA, pro forma portfolio EBITDA margin and pro forma hotel EBITDA margin growth for 2013 include the hotels owned as of December 31, 2012, as well as the unidentified acquisition, as if they had been owned by the Company for the entire year of 2012, except for Hotel Zetta (formerly known as Hotel Milano), which the Company expects to include after it has owned the hotel for one full year, starting in the second quarter.
“We’re very pleased with our portfolio’s continued strong performance during the fourth quarter following the negative impact from Superstorm Sandy and the nor’easter that followed,” noted Jon Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. “We expect that 2013 will be another great year for the overall hotel industry, as hotel demand growth is expected to continue to exceed supply growth in the U.S., allowing for substantial ongoing improvement in pricing power and average daily rates. We’re forecasting U.S. industry RevPAR to increase between 4.5% and 6.5% over 2012. Our portfolio, comprised of high quality hotels located in major gateway cities, should benefit from this strong recovery in travel and continue to outperform the industry. We’re forecasting Pro Forma Portfolio RevPAR to increase 5.0% to 7.0%, even after accounting for an expected 100 basis point negative impact from our Affinia 50 renovation.”
The Company’s 2013 Outlook includes the disruption associated with the comprehensive renovation and 41-room expansion of the Affinia 50, which is scheduled to begin in late January 2013 and be substantially complete by the fourth quarter of 2013. This renovation is expected to reduce the Company’s forecasted portfolio RevPAR growth by 100 basis points and forecasted Hotel EBITDA margins by 60 to 70 basis points as compared to 2012.
“We’re very excited by the significant value that will be created through this complete renovation and reconfiguration of Affinia 50, allowing us to reposition the hotel at a higher level and add 20% more keys. Combined, these improvements will lead to the generation of significant increases in the hotel’s room revenues and operating cash flow in 2014 and beyond,” noted Mr. Bortz.
The Company’s 2013 Outlook reflects the projected operating and financial performance from the hotels the Company owned as of December 31, 2012, as well as one unidentified hotel acquisition for $112.5 million in one of Pebblebrook’s targeted markets. The Company expects to close on the acquisition of this property, which the Company currently has under contract to purchase, within the next 30 days.
If any of the foregoing estimates and assumptions prove to be inaccurate, actual results, including the 2013 Outlook, may vary, and could vary significantly, from the amounts shown above.
The Company will report financial results for the fourth quarter and full year 2012 on Thursday, February 21, 2013, after the market closes. The Company will conduct its quarterly conference call on Friday, February 22, 2013, at 9:00 AM EST. To participate in the conference call, dial (800) 289-0552 approximately ten minutes before the call begins (8:50 AM EST), tell the operator that you are calling for Pebblebrook Hotel Trust’s Fourth Quarter and Full Year 2012 Earnings Conference Call, and state your full name and company affiliation, and you will then be connected to the call.
About Pebblebrook Hotel Trust
Pebblebrook Hotel Trust is a publicly traded real estate investment trust (“REIT”) organized to opportunistically acquire and invest primarily in upper upscale, full-service hotels located in urban markets in major gateway cities. The Company owns 25 hotels, including 19 wholly owned hotels with a total of 4,615 guest rooms and a 49% joint venture interest in six hotels with a total of 1,733 guest rooms. The Company owns, or has an ownership interest in, hotels located in ten states and the District of Columbia, including 16 markets: Los Angeles, California; San Diego, California; San Francisco, California; Santa Monica, California; West Hollywood, California; Miami, Florida; Buckhead, Georgia; Bethesda, Maryland; Boston, Massachusetts; Minneapolis, Minnesota; New York, New York; Portland, Oregon; Philadelphia, Pennsylvania; Columbia River Gorge, Washington; Seattle, Washington; and Washington, DC.