Company: PEB
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001474098-25-000039
Chunk: 89

Company: Pebblebrook Hotel Trust
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1A
Chunk 89
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 economy and, specifically, growth in U.S. Gross Domestic Product ("GDP"). It is also sensitive to business and personal discretionary spending levels. Declines in corporate travel budgets and consumer demand due to adverse general economic conditions, such as declines in U.S. GDP, risks affecting or reducing travel patterns (such as governmental restrictions on in-bound international travel), lower consumer confidence or adverse political conditions can lower the revenues and profitability of hotel properties and therefore the net operating profits of our TRS lessees to whom we lease our hotel properties. Another domestic or global economic downturn may lead to a significant decline in demand for products and services provided by the lodging industry, lower occupancy levels and significantly reduced room rates. 

We cannot predict the pace or duration of the global economic cycles or the cycles in the lodging industry. A period of economic weakness would likely have an adverse impact on our revenues and negatively affect our financial condition, results of operations, the market price of our common shares and our ability to make distributions to our shareholders.

Our operating results and ability to make distributions to our shareholders may be adversely affected by various operating risks common to the lodging industry. 

Our hotel properties have different economic characteristics than many other real estate assets and a hotel REIT is structured differently than many other types of REITs. Our TRS lessees engage hotel managers pursuant to management contracts and pay the managers fees for managing the hotels. The TRS lessees receive all the operating profit or losses of the hotels. Moreover, virtually all hotel guests stay at a hotel for only a few nights at a time, so the rate and occupancy at each of our hotels change daily. As a result, we may have highly volatile earnings. 

In addition, our hotel properties are subject to various operating risks common to the lodging industry, many of which are beyond our control, including the following: 

•competition from other hotel properties and non-hotel properties that provide nightly and short-term rentals in our markets;

•over building of new hotels in our markets, which could adversely affect occupancy and revenues at our hotel properties;

•dependence on business and commercial travelers, conventions and tourism;

•increases in energy costs, airplane fares, government taxes and fees, and other expenses affecting travel, which may affect travel patterns and reduce the number of business and commercial travelers and tourists;

•increases in operating costs due to inflation and other factors that may not be offset by increased room rates;

•changes in interest rates and in the availability, cost and terms of debt financing;

•changes in governmental