DIAMONDROCK HOSPITALITY COMPANY INVESTOR
PRESENTATION
MAY 2024
TRANQUILITY BAY BEACHFRONT RESORT
FORWARD LOOKING STATEMENTS & USE OF NON-GAAP FINANCIAL MEASURES
FORWARD LOOKING STATEMENTS
Certain statements made during this presentation are forward-looking statements that are subject to risks and uncertainties. Forward-looking statements generally include the words "believe," "expect," "anticipate," "plan," "estimate," "project," "will," "intend" or other similar expressions. Forward-looking statements include, without limitation, statements regarding industry outlook, results of operations, cash flows, business strategies, growth and value opportunities, capital and other expenditures, financing plans, expense reduction initiatives and projected dispositions.
Factors that could cause actual results to materially differ from those contained in the forward-looking statements include, without limitation, national and local economic and business conditions, including the impact of COVID-19 on occupancy rates at DiamondRock Hospitality Company's (the "Company") hotels and the demand for hotel products and services, and those risks and uncertainties discussed in the most recent Annual Report on Form 10-K, which the Company has filed with the Securities and Exchange Commission, and in our other public filings which you should carefully review. The forward-looking statements made are based on our beliefs, assumptions and expectations of future performance, taking into account all information currently available to the Company. Actual results could differ materially from the forward- looking statements made in this presentation. The forward-looking statements made in this presentation are subject to the safe harbor of the Private Securities Litigation Reform Act of 1995.
Any forward-looking statement speaks only as of the date on which it is made. Although the Company believes the expectations reflect ed in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material.
All information in this presentation is as of the date of this presentation, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
This presentation contains statistics and other data that has been obtained or compiled from information made available by third- party service providers and believed to be reliable, but the accuracy and completeness of the information is not assured. The Company has not independently verified any such information.
USE OF NON-GAAP FINANCIAL MEASURES
We use the following non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel Adjusted EBITDA, FFO and Adjusted FFO. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with U.S. GAAP. EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel Adjusted EBITDA, FFO and Adjusted FFO, as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company.
A detailed explanation of these non-GAAP financial measures and the reconciliation of such measures to the most directly comparable financial measures prepared in accordance with U.S. GAAP can be found in the Company's first quarter 2024 earnings press release dated May 2, 2024.
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DIAMONDROCK AT A GLANCE
PORTFOLIO | |
9,757 | ROOMS |
36 | PROPERTIES |
25 | MARKETSGEOGRAPHIC |
DIVERSIFIED PROPERTIES
FINANCIAL SUMMARY
FY 2023 | |
Revenue | $1.1B |
Corporate Adj. EBITDA | $272MM |
Total Debt1 | $1.2B |
Net Debt2 to EBITDA | 3.9x |
Total Debt to Gross Book Value | 29% |
- Excludes preferred capital
- Cash includes corporate cash, excludes preferred capital
DIVERSIFIED GEOGRAPHY
MARKET | % OF 2023 EBITDA | |
Chicago | 12.5% | |
Boston | 10.8% | |
New York City | 8.3% | |
Florida Keys | 7.6% | |
Vail | 5.6% | |
Fort Lauderdale | 5.0% | |
Fort Worth | 4.8% | |
Sedona | 3.8% | |
Denver | 3.7% | |
Salt Lake City | 3.7% | |
Destin | 3.7% | |
Sausalito | 3.7% | |
Charleston | 3.4% | |
San Diego | 3.4% | |
Sonoma | 2.6% | |
Burlington | 2.6% | |
Huntington Beach | 2.5% | |
New Orleans | 2.4% | |
Phoenix | 2.3% | |
DC | 2.1% | |
Atlanta | 1.8% | |
Austin | 1.5% | |
Lake Tahoe | 1.2% | |
Montana | 0.8% | |
San Francisco | 0.1% | |
Total | 100.0% |
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WELL-POSITIONED PORTFOLIO: LEISURE AS A LONG-TERM SECULAR DRIVER
LUXURY & LIFESTYLE RESORTS
AUSTIN, TX | MARATHON, FL | FORT LAUDERDALE, FL |
PRAY, MT
24 Hotels 4,345 Keys
56% of Portfolio
by Revenue
15 Independent Hotels
100%
Unencumbered by Management
LAKE AUSTIN SPA RESORT | TRANQUILITY BAY RESORT | WESTIN FORT LAUDERDALE BEACH RESORT | CHICO HOT SPRINGS | ||
SEDONA, AZ | DESTIN, FL | LAKE TAHOE, CA | HUNTINGTON BEACH, CA |
L'AUBERGE DE SEDONA | HENDERSON BEACH RESORT | THE LANDING RESORT AND SPA | KIMPTON SHOREBREAK RESORT | |||
VAIL, CO | DESTIN, FL | FORT LAUDERDALE, FL | KEY WEST, FL |
THE HYTHE, A LUXURY COLLECTION HOTEL | HENDERSON PARK INN | KIMPTON SHOREBREAK FORT LAUDERDALE BEACH RESORT | HAVANA CABANA | |
KEY WEST, FL | ||||
SAUSALITO, CA | SEDONA, AZ | SONOMA, CA |
CAVALLO POINT | MARGARITAVILLE BEACH HOUSE KEY WEST | ORCHARDS INN | THE LODGE AT SONOMA RESORT |
URBAN LIFESTYLE HOTELS
BURLINGTON, VT | CHARLESTON, SC | CHICAGO, IL | DENVER, CO |
HOTEL CHAMPLAIN BURLINGTON | THE LINDY CHARLESTON HISTORIC DISTRICT | THE GWEN, A LUXURY COLLECTION HOTEL | HOTEL CLIO, A LUXURY COLLECTION HOTEL | ||||
PHOENIX, AZ | SAN FRANCISCO, CA | NEW ORLEANS, LA | BOSTON, MA | ||||
HOTEL PALOMAR PHOENIX | HOTEL EMBLEM | BOURBON ORLEANS HOTEL | THE DAGNY BOSTON | 4 |
Notes: Revenue as of FY 2023
WELL-POSITIONED PORTFOLIO: GROUP AND URBAN DEMAND RECOVERY
URBAN GROUP HOTELS
6 Hotels 3,853 Keys
32% of Portfolio by Revenue
Strong Convention Markets
BOSTON, MA | CHICAGO, IL | SAN DIEGO, CA |
WESTIN BOSTON SEAPORT | CHICAGO MARRIOTT MAGNIFICIENT MILE | WESTIN SAN DIEGO BAYVIEW | ||
FORT WORTH, TX | SALT LAKE CITY, UT | WASHINGTON, DC |
THE WORTHINGTON | SALT LAKE CITY MARRIOTT DOWNTOWN | WESTIN WASHINGTON, D.C. CITY CENTER |
URBAN LIMITED-SERVICE HOTELS
4 Hotels 969 Keys
9% of Portfolio by Revenue
100% Unencumbered by Management
SUBURBAN HOTELS
2 Hotels
590 Keys
3% of Portfolio by Revenue
100% Unencumbered by Management
NEW YORK, NY | NEW YORK, NY | NEW YORK, NY |
HILTON GARDEN TIMES SQUARE CENTRAL | COURTYARD MANHATTAN/FIFTH AVENUE | COURTYARD MANHATTAN/MIDTOWN EAST |
DENVER, CO
COURTYARD DENVER DOWNTOWN
ATLANTA, GA | BETHESDA, MD |
ATLANTA MARRIOTT ALPHARETTA | EMBASSY SUITES BETHESDA |
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Notes: Revenue as of FY 2023
Q1 COMPARABLE RESULTS
TOTAL REVENUE TREVPAR REVPAR ADR OCCUPANCY
PORTFOLIO
$256.4MM | $288.92 | $184.23 | $269.53 | 68.4% |
+3.8% | +2.4% | (0.4%) | (2.5%) | +1.5% PTS |
vs 2023 | vs 2023 | vs 2023 | vs 2023 | vs 2023 |
URBAN | $210.70 | $142.37 | $210.09 | 67.8% |
+5.6% | +2.0% | (1.3%) | +2.2% PTS | |
vs 2023 | vs 2023 | vs 2023 | vs 2023 | |
RESORTS | $522.71 | $309.33 | $441.28 | 70.1% |
(1.9%) | (4.0%) | (2.8%) | (0.9% PTS) | |
vs 2023 | vs 2023 | vs 2023 | vs 2023 | |
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Q1 2024 KEY TAKEAWAYS
Q1 KEY TAKEAWAYS
- New leadership appointments and simplified organizational structure expected to reduce G&A and streamline decision- making
- Total Comparable Revenue increased 3.8% vs 2023
- Comparable TRevPAR increased 2.4%, Comparable RevPAR declined 0.4% vs 2023
- Resort Comparable RevPAR decreased 4%
- Softer leisure demand at luxury resorts, but somewhat offset by stronger outside-of-room spend
- Florida Keys RevPAR up 6.6%
- Urban Comparable RevPAR increased 2.0%
Cavallo Point, Sausalito, CA
- Business transient revenue increased 9.4%, but still 23% below 2019 levels
- Group demand remains strong
- Group room nights increased 10.7%
- Strong F&B revenue from increased group activity, group banquet volume up by 24% vs 2023
- Two DRH hotels earned the distinction of MICHELIN Keys
- Cavallo Point (2 Keys)
- The Gwen, a Luxury Collection Hotel (1 Key)
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2024 UPDATED OUTLOOK
2024 GUIDANCE
CURRENT GUIDANCE | ||
METRIC | LOW END | HIGH END |
Comparable RevPAR Growth | 2% | 4% |
Adjusted EBITDA | $270MM | $290MM |
Adjusted FFO | $194MM | $214MM |
Adjusted FFO per Share | $0.91 per Share | $1.00 per Share |
PREVIOUS GUIDANCE
LOW END | HIGH END |
2% | 4% |
$260MM | $290MM |
$187MM | $217MM |
$0.88 per Share | $1.02 per Share |
UPDATED ASSUMPTIONS
- Corporate Expenses: $29.5MM - $30.5MM1
- Interest Expense: $65.2MM - $66.2MM
- Income Tax Expense: $0 - $1.0MM
- Available Rooms: 3,571,062 available
1Excludes expected executive transition costs which will be excluded from Adjusted EBITDA and Adjusted FFO
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BALANCE SHEET & LIQUIDITY | |||||||||
PROFORMA BALANCE SHEET | |||||||||
Units in $MM | Units in $MM | ||||||||
600 | $500 | CORPORATE CASH | |||||||
500 | |||||||||
$120 | |||||||||
400 | $291 | $300 | |||||||
300 | $73 | REVOLVER | $629MM | CASH AT | |||||
200 | UNDRAWN | ||||||||
100 | $400 | HOTELS | |||||||
0 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | $108 | |
Mortgages | Term Loans and Revolver | SIGNIFICANT LIQUIDITY AVAILABLE | |||||||
Note: Mortgages reflect balance at scheduled maturity, Term Loan reflects exercise of one-year extension | AT END OF Q1 2024 |
NET DEBT + PREFERRED / EBITDA
11.0 | 9.9 | |||||||||||||||
8.6 | ||||||||||||||||
7.4 | ||||||||||||||||
6.3 | 5.9 | 5.3 | 5.2 | |||||||||||||
4.3 | 3.8 | 3.7 | ||||||||||||||
3.2 | ||||||||||||||||
2.4 | ||||||||||||||||
AHT | BHR | PEB | INN | PK | RLJ | CLDT | XHR | DRH | SHO | RHP | APLE | HST | ||||
High | Low | |||||||||||||||
Leverage | Leverage | |||||||||||||||
Source: May 3, 2024 Baird Comp Sheet (Net Debt + Preferred / EBITDA 2024) | 9 |
ROI CASE STUDY - CONVERSION FROM HILTON BOSTON TO THE DAGNY
Since conversion to The Dagny, the hotel's TripAdvisor ranking has improved from #56 out of 99 hotels in
Boston in Q1 2023 to #3 out of 95 hotels as of April 22, 2024
Conversion from Hilton brand to an independent lifestyle hotel with renovated guest rooms and bathrooms, a new state-of-the-art gym, improved meeting spaces, and a new sense of arrival
The Dagny was relaunched on August 1, 2023, and has exceeded expectation.
$217
$287
+32%
- Completion: August 1, 2023
Performance vs. Q1'24 budget:
• Top line revenue beat by +$99K |
2023A 2027F
REVPAR
• Total Cost: | $32MM |
• | Increase Cost over |
Hilton Renovation: $5MM | |
• | Incremental NOI for |
• EBITDA margin beat by +149bp | |
• EBITDA beat by +$101k or +32% | |
• | TripAdvisor ranking improved 53 spots |
from March 2023 to April 2024 | |
• | TripAdvisor's #3 Travelers' Choice |
$10.1
$16.8
+67%
Independent hotel: $1MM |
• Exit value increase: $14MM-30MM |
(50-100 bps on cap rate) |
2023A 2027F
EBITDA
($MM)
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Disclaimer
DiamondRock Hospitality Company published this content on 07 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 May 2024 21:20:41 UTC.
