BTIG analyst James Sullivan downgraded Pebblebrook Hotel (PEB) and Host Hotels (HST) to Neutral as part of a broader research note on hotel REITs, saying their "attractive valuation" are not enough to offset the deteriorating fundamentals of weakening demand and persistent supply growth. The analyst notes that he anticipated a better top line growth in Q3 and Q4, but the occupancy and room rates trends so far this quarter have been weak, with additional pressure coming from weaker economic conditions outside the U.S. and the stronger USD.

The company stated: "Business demand-both group and transient-continued to recover, driving increased occupancy in Washington D.C., San Diego, San Francisco, Los Angeles, and Boston. Leisure demand remained roughly in line with the prior year, despite bad weather impacting many weekends in Florida and on the West Coast; the Company's resorts continue to maintain significant ADR premiums to 2019. Recently redeveloped hotels-including Hilton San Diego Gaslamp Quarter, Margaritaville Hotel San Diego Gaslamp Quarter, Viceroy Santa Monica Hotel, L'Auberge Del Mar, 1 Hotel San Francisco, and Estancia La Jolla Hotel & Spa-are demonstrating the benefits of their substantial investments with healthy gains in RevPAR, market share, cash flow, and future bookings."