DRH - Earnings call transcript Q4 2019 | DiamondRock Hospitality Company

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth quarter DiamondRock Hospitality Company Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Briony Quinn, Senior Vice President. Please go ahead, ma'am.

Briony Quinn

Thank you, Catherine. everyone. morning, Good fourth DiamondRock's earnings call. Welcome quarter to XXXX

remind we are of many I'd considered to begin, like everyone the laws. statements federal that under Before forward-looking securities comments made today

SEC, described these risks As uncertainties cause from differ could results that filings our those our with implied and statements subject by to in are numerous to materially future the comments today.

this can comparable call, we earnings financial found reconciliation of non-GAAP GAAP our will information. directly most measure certain today's information discuss on press the addition, be In in financial to A release.

to I am Officer. the that, Mark With to Brugger, President pleased Executive turn Chief call and over our

Mark Brugger

Good morning, and DiamondRock. thank you interest in your for

to pleased the are fourth We quarter. solid results operating and financial for report

to After color an operating portfolio's Officer, first the well current get Chief I'll to will which, of provide provide additional on review. and I Before our like XXXX overview environment. into the Donnelly, who Financial review as our sheet our call turn Jeff the over balance as I'd XXXX performance outlook,

I'll shareholders commentary that for our value several drive will areas of DiamondRock focus Finally, remarks forward. on prepared going with conclude

of their Looking war were drivers but China proceedings ongoing signs the including and economy the trade quarter, of toll taking business future on commencement demand, its several there profits. record corporate that and were fourth back extended investment corporate at expansion, with the key fixed

growth hotels, continue demand the to few performance income, portfolio a unique pivot destination corporate strength. to disposable investment. over doing rates XX-year Employment of continued leisure drive DiamondRock's short, residential remained fueling edged resurgence the corporate is of last resort which however, supports source our resort a consumer, portfolio its consumption the in strategic In better and than in destination grow reaccelerates. The years traveler. high, This customer personal a to until the

overall to quarter the overall industry X.X%. RevPAR was up in According the quarter. STR, muted fourth growth Lodging fundamentals remained U.S. in

be the X.X% healthy continues outpaced all increasing XX in the markets. in Top markets, to X.X% versus Demand major growth once So again, markets. other

RevPAR growth markets Top quarter, the in other While demand X.X% RevPAR the markets, superior Top in XX XX to compared was all growth not. in as was markets. was just fourth X.X% in

growth, quarter, is the X.X% The XX than in basis greater which which increased the increase U.S. markets last supply points major remains culprit overall. in

persist expect pressures We will resort that markets many no year many very or these but low supply urban this will markets, for into growth. have supply destination

our resort X% For remains markets XXXX. DiamondRock, for in the supply under overall

fourth quarter to Turning results. DiamondRock's

in of possible of performance well relative are share in portfolio aggregate market a portfolio our focus We ahead strong operating our challenging points. by RevPAR. increase operators quarter. in deliver hotels. set to the of competitive DiamondRock's made the very comparable at of asset of a We was top-end managers exceeded the X.X% The RevPAR two-thirds of The had over the this persistent Impressively, and environment. by performance result our gained guidance, a basis face good XXX

our guidance increased XXXX, RevPAR of our X.X%. Both range. the the surpassed total For results around over increased portfolio X% RevPAR full-year comparable for top-end and

Gwen Lauderdale restaurants pay-off revenues Resort. impressive our at and banquet Beach Fort real group a like results the an and us. the combined X.X% larger Food bars for hotels beverage boxes was at solid activity driven and were repositionings F&B spot with bright by Westin for our These great year. the recent of the grew from

the increased relentless X.X% revenue, to growth. for streams team in finding year. Other revenue anemic total of despite was Additionally, room our rate revenue other drive

our was is of Adjusted midpoint our per adjusted PG&E of and exceeded implied Profits, the FFO of profits adjusted power EBITDA quarter internal quarter $X.XX share of which the unscheduled $X.XX, guidance disruption taking high-end Fourth the also the X% of implied is the more into FFO was by Fourth consideration outages even $XX.X above top October. million, EBITDA expectations. $XXX,XXX ahead This $X.XX is caused which the guidance. midpoint $XX.X surpassing of implied in end. guidance. was impressive million, ahead

FFO guidance. $XXX basis full ahead the which the $X.XX XXXX. Comparable was of midpoint hotel $X.X ahead ahead margins guidance. adjusted is of million, million, Adjusted per And EBITDA points which is year, FFO in of was midpoint the adjusted contracted Adjusted of which just guidance. XX midpoint X.X% of was For $XXX.X $X.XX, is the share of million EBITDA

in growth peers, order actually to growth want management our personally DiamondRock, of profits. grew the team generate low cost recognize asset finding and to Remarkably, focus RevPAR same-store environment. I controlling creativity in in this EBITDA and many efficiencies unlike

on Our adjusted result comparable hotel fantastic RevPAR X.X% X% less A in growth. by XXXX. than EBITDA increased

provide million. We believe this on insurers we for outcome Reef. want XXXX, Frenchman's Hurricane an our to our excellent $XXX In We settle update our with Irma to agreed shareholders. for December claim an approximately was

the under of part to off settlement. The January, of in facility. due now swing. is under the credit now full we have in all XXX% We And monies settlement our outstandings rebuild pay received used

is and in the is construction Caribbean rebuild never very the However, complicated easy.

reopening this year. Our construction the end schedule has of at the resort

a of the While may after until Virgin be excited our and $XX investment we entire beach recoverable resort around about We recently on in third scheduled the to job resort legislation scope. final still incremental to total and incremental XXXX, turn out, Islands. continue we reopening. will year won't be have team ramp the expect teens. the in cost this the our of to bid remains out yield The million under EBITDA the this final that project how will passed will investment as the Moreover, the return elements restoration mid-to-high potentially investment complete, is still expect of increase much

of Turning to our to will plus XX growth. current outlook. U.S. basis Based experience the trends, we negative expect X% industry change on XXXX RevPAR lodging points

group footprint total exceed the pace, to have impact up strong resort allow not our outlook of XX.X%, or Company coronavirus. for substantially and industry we Importantly, our industry backdrop, RevPAR favorable this portfolio's average. guidance the think we Against adjusted the will

Accordingly, points basis to from DiamondRock's is U.S. in guidance X%. RevPAR of full-year growth average, the negative the plus as XX follows. XXXX range so

is RevPAR expected million an X%. adjusted be $X.XX. $XXX to a increase expected XX strong the basis from total in is $XXX points plus $X.XX range Adjusted the to per million share However, to to EBITDA FFO plus and of outperform, of to range in

DiamondRock is to believe strong We in is relatively performance year a challenging expected to to EBITDA. well positioned be deliver broadly maintain what

pick-up that and that and our the investments. benefit enjoyed In group from The the we restaurant can RevPAR Thus, and our ROI pace we lower-end robust recent assumes numerous of our revenue. addition our year. to resort expect periods of concomitant boosting on higher-end hotel non-room successful collection, on short-term is outside to the total group for benefit group guidance our we last softer the room impact pick-up the of difficult based group repeat spend. Conversely, guidance

of flat $X.XXX interruption our FFO. that the midpoint year-over-year, adjusted contributed to XXXX share non-repeating per and Reef, are adjusting EBITDA XXXX guidance XXXX to and of for per our attribute assumes favorable insurance million about is at adjusted EBITDA Frenchman's our about business Another FFO which our adjusted that guidance essentially share $X

from materially we as potential There are And specific recent financial of do situation. makes no contribute performance. to part settlement. as but the that instance our closely is interruption coronavirus, to mentioned, assumptions incremental no for not impact XXXX our monitoring Also, thus, the I we allocated expect for business guidance insurance

the for and on over I'll detail Jeff? additional now turn results call our market to Jeff financial commentary.

Jeff Donnelly

Mark. Thanks,

results metrics activity, through portfolio adjusted Cabana Emblem December Reef walk the Hotel to pro September are renovation for first I periods. year, EBITDA entire other include comparable Xst Due XXXX remind for I to results, for Before RevPAR exclude quarter, XXst. the to comparable of our Frenchman's margins quarter period acquisitions the and our and to all hotel fourth the want everyone Havana for that forma

approximately comparable Fourth days increase growth. power quarter PG&E strong a ahead and X.X% in a and fourth RevPAR rate X.X% pick-up quarter. in the on of average streams Renaissance were for Despite XXXX of outages XX revenue of reduced percent comparable headwind, result Point the new was fourth by impacted results occupancy. This the the $XXX in room a quarter, $X.X a on million. this RevPAR Non-room by group revenue ahead revenue Sonoma was at growth XXXX XXXX daily driven basis, increased as total The X.X% quarter was additional and the total activity hotel. revenue six ahead of million million basis implementation stronger-than-expected in Cavallo increase the points. of financial On XXXX $X.X and

healthy quarter, with the during increasing only a while increased differently leisure quite X.X%. business performed transient X.X%, segments customer Our

in the to in had major stronger calendars, While markets offset weakness citywide previous was group off several of quarter, the in pick-up group. the of forecasted than and helped years convention some our

our was Chicago A in the standout Downtown regard portfolio this in Marriott hotel.

Number a Chicago X to work result the system. in most and operating Marriott's the of recommend, major the intent Sheraton of focus, ranked for among and of hard all resort hotels convention the As outpacing Marriott team's Gaylord hotel network Marriott

is For a group great for story XXXX, DiamondRock.

XX%. XX.X% XX% late climbed Chicago already XXXX are year. of Collectively, group and needed started budget over to As the booking up in group to our with from pace is and hotels has business group of Boston We XX% January, prior contract. under our Worthington's pace XXXX respectively, up XX% our and hit

crushing the destination was The to portfolio quarter. the segment resort our still, excelled leisure trend. segment in up positive resorts performing this X.X%, point Better in fourth According STR's the at outperformed XX with decline basis urban in resort RevPAR our quarter, the segment FTR, strongest the hotels.

The Charleston X.X% X.X% to Historic and of December effort This The securing the market. RevPAR Collectively, a prior was bookings increase DiamondRock's to remarkable XXX outperformance over group in hotel destination a large Charleston leisure transient year. index XX.X% strong XX-point basis this team's points. their the holiday the Renaissance pick-up in fueled RevPAR compared performer by Hotel I The gain year. the X.X% strong fourth resort in success RevPAR was year a RevPAR and a the portfolio for XXX, growth increased District increased full quarter penetration result in the early and in want Renaissance the quarter during decline period. RevPAR the for part recognize was as the generated by star in

followers we portfolio We new to will the XXX,XXX have hotel this Overall, destination on just announced advantage, in trend to year the our and as increase time, over PBS will niche We sector exciting competitive allocation what secular restaurants experiential years come. open strong this her for the is that as a outperform order travel. Howard social media we and have capitalize portfolio our national average host we at conviction our for chef many believe lodging well a to media. local resort two upon will see Vivian attention as of that celebrity resorts toward that captured

in outlets. X.X% efficiencies a to fourth quarter. grew labor Cost successful The initiatives result control proactive growth pace the of expenses remains QX a in revenue in quarter any softer and increase F&B to to as slowest XXXX priority. Total of and steps respond

For increase total were year, increase to the in X.X% expenses X.X% on total revenue. a held of an

but EBITDA insurance XXXX, property Comparable was from group offset XX marketing expectations. and $X.X point EBITDA and was tax $X million was hotel XXXX. pick-up ahead margin or adjusted sales XX.XX%, quarter, of by $XX.X profit and leisure increased quarter million Comparable profit contraction higher of below $X.X transient the generated costs. of $X.X internal million hotel adjusted of a basis in million higher fourth million, and which departmental Stronger-than-expected expense,

outages impact renovation. only from basis the However, drag point the basis margins XX Sheraton and profit basis Key the declined EBITDA power West points, XX the point PG&E excluding from XX

corporate corporate by quarter XXXX of $XX.X was adjusted million share, $X.XX. On $X.XX EBITDA million and adjusted was basis, $XX.X adjusted which was a Fourth a FFO full-year ahead EBITDA or guidance. XXXX million, above was by and $X of surpassing FFO our XXXX FFO top-end $X.XX, $X.X $X.XX of Full-year [indiscernible] the XXXX $XXX.X was adjusted by ahead million. adjusted million and

of these results. proud very are We

average to Reef billion our X.X years. DiamondRock's remains million rate had of Frenchman's at debt concluded shape. XXst, X.X% claim. December great to balance total a the At on in of hand, which previous EBITDA of maturity resolution sheet interest due X.X with unrestricted below weighted average cash $XXX.X of the of DiamondRock $X.X the outstanding at forecast weighted a year times, Net is and debt

mortgage by to on Lake For interest XXXX, we City million expect year-end. Salt have a Marriott X.XX% we that only one $XX at the refinance that bears maturity,

the to have sheet evolves. as be on allocation, environment the we summary, capital opportunistic In balance

of regular Finally, our record $X.XXX per XXth it paid January sense, January of Xnd. regular that to in was shareholders XXth DiamondRock was share DiamondRock but the common dividend. dividend of announced accounting it dividend marked was us to the on at as special because This

and XX%. quarter that that to fourth strong it share am DiamondRock very increasing nearly in a was I a total had line, Bottom In RevPAR positioning we're XXXX. optimistic great January with about happy our regard,

First total the our expect be in quarter digits. and will we is strongest mid-single be expected to RevPAR quarter,

I will to that Mark. With back turn the floor

Mark Brugger

Thanks, our Jeff. to resort update drive on these that shareholders. focus. highlighted value to focus want quarter, we I are we five Last undertaking initiatives One, areas. an provide for

Our for and overall areas, that believe performance our geographically strong in pressures research faced continues lower lower expense support particularly that are supply destination demand markets in Top the there constrained to We urban travel. growth experiential secular than and XX lodge industry. resorts,

Resort more There the within today example. last likely years have and concentration this portfolio increase our come. portfolio. space, later working repositioning this we are hotels West segment a acquisitions announced eight the year to be and on in the announcements in Seven avenues our to prime been of our is other in The for are Key to of lifestyle resort

ROI projects. Two,

identified, projects $X.XX next generate few have of $XX million million value-add share we of over pursuing million per value total, believe are that to incremental years. incremental In an We $XX $XX and that's of about the ROI EBITDA. will

Moreover, instance, converting as pipeline opportunities. Hilton the work unearth rooms. ROI begin to at in underutilized space grow we will we For Boston additional projects XX to our meeting we continue that will an of are on new optimistic XXXX, guest

Three, Frenchman's. relaunching

to EBITDA growth $XX years reopening distinct under XXXX. stabilization end We & believe Marriott Beach grow over will will the profit our will strong Autograph growth lifestyle multiple We will at resorts, Reopening the XXXX, driver resort connected differentiating boost this million over Spa resort. nothing in almost earnings is us. the in Reconstruction a XXXX Frenchman's Reef reopen well and starting XXXX. portfolio and the complex targeted resorts as which with of for Collection Frenchman's from Frenchman's Reef Noni way, be two to in in Resort

Four, opportunistic recycling.

sale depending nature they upon to attractive the not to be conditions evaluate given processes. would the share We policy a in pricing. discuss closed, of private the inherent It until assets uncertain our few select are reduction, reinvestment continue time. is sales debt Proceeds for to market or lock in recycled market repurchases at these

conversion and of agreements. major mainly of five, finally be improve the our and are repositionings. we portfolio several strategic continue to is to effort And in with hotels pursuing XX% higher We of To EBITDA to profits translates incremental for NAVs January, change million hotels, this distinguishing agreements. into higher terminable at the at with our NAV transformation we advance hotels. increase Westin asset to over our this the XXXX, Boston to a managers operating the In comprised our opportunities change or a made expected create feature short-term of in franchise believe multiples short-term contract. This of valuation $X subject

will DiamondRock many five we and position are To wrap-up relative our the favorably focus confident to good our had fourth are of areas that prepared a compared peers. quarter, we us our to continue and prospects, happy remarks, we with differentiate

up take questions. open now your call to We'll the

Operator

first Anthony Powell Thank you. Instructions] from And question with our Barclays. [Operator comes

Your is line open.

Anthony Powell

in from places trends. in morning, or that some good industry was domestic like U.S. were travel seen that situations. or West customers you February March Vail everyone. in cruise There Hello, some Question in the your and of bookings sort leisure Sedona? any domestic Have on of resort avoiding impact yesterday Key commentary the

Mark Brugger

continues customer December. like destination strong. be to January. strong strong market I very if resort our at So, a we And it look be in was to very Appears in sell, Vail,

have any segment. not seen yet that in we So, weakness

Anthony Powell

online growth some seen, your Obviously, of of over given kind you there but new getting strong Got that just resorts may issues supply resorts have you the And in supply others structural resorts. are several coming years? next performance more the markets, built and in it. in that Thanks. on worried are in be

Mark Brugger

that constrained. these just are add the Sedona markets, in build some in then are legal are it's more some are Not to generally. markets either actually geographically markets a of West kind and Key like Sonoma, U.S., like that and rooms Sedona, virtually in to impossible we

may we see of golf or unlikely So, there the have, we're a that increase more in while to something built, kind that supply. resorts like be meaningful resorts

Anthony Powell

cap seen pretty you've successful rates? in been small you buying cap markets rates in have where at attractive And decline the resort

Mark Brugger

trends. alone I seeing think that we're the not in

of in So, to the of desirability resorts these markets type continues increase.

So, cap rates probably there's than for are two ago. years they these probably And buyers holding were steady. more today assets

that trends we're based will of firmly next the So, and properties seeing years. several the kind on outperform over that industry we believe the average these the research

which relatively buyer there for that expect be assets, will increasing continued demand focus rates will keep would we these So, cap competitive. in

Operator

Thank you.

question with Capital. KeyBanc Wurschmidt comes Austin next from Our

line is open. Your

Austin Wurschmidtl

is guidance Hi. does what for Good what year. segments to that in year, for Certainly, you've where for group and respect to morning. ultimately imply think assumed or I'm start this off overall group Thank that the guidance. and transient out curious settles you. a with you leisure strong your the then

Mark Brugger

Sure, Austin Wurschmidt.

as about we kind harder book. are as you the Always, entered in and some group at the progress we're So, through pace, the that book year. realize of periods XX.X% you the numbers to come business of tougher and year, as

digits the in So, would the imagine ending total group in we year mid-to-high-single pace.

be every then the the of see it's different. -- expect little national And That's Top also is destination our a market the I resorts more above we average. We -- that XX -- risk. think where bit will market every

Austin Wurschmidtl

lower smaller are think benefits resort growth I you've But for segment, the guess, we're I these big resort that Understood. time expense then, definitely could expect some certainly expansion elevated the markets. you and it's mean, continue thick more given growth, buyers in And in now, into How today markets. you these supply do of seeing on -- increase? segment, it's issue resort lower wage and also a markets to touching accelerate in highlighted the the urban the the fairly growth, in you given supply still

Mark Brugger

has these we're Troy XXX done than of wealthy ahead more of that job monitoring I'll a and to a of literally that. terrific establishing the of a and a recognize to and database grow trying talking being resorts Furbay of curve in type pipeline secure and building owners

see So, resorts. unlikely dispositions, us think are about be there as you to

and of we focused so literally as uncovering spending think team talented XX these acquisitions, day you opportunities. these that they're a doing a hours have people relationships And about very on

Austin Wurschmidtl

sense a the us give it go you that these And a it to opportunities you Can the the as direction? let to of of resorts? is relates just of ability or opportunities to of depth of limiting number assets reluctance move for continue in to that's sellers

Mark Brugger

things think on I couple going here. there's of a

If the in hotels fell the XX% at you last year -- volume of sale, they XX% look just for about U.S..

is never owners been less markets sale. The existing financing better. hotels there for for has So,

double have we So, cost go limiter is external kind the in overcome of discount unless difficult single of going XXX it, do trying certainly days. the you're on to more to of NAV, going be to extraordinary less us of in it's which unique may. buy to more cost reason out really bigger of or and motivations sell It's isn't growth, next triple do like our can versus not Frankly, which and makes think right the to in is have capital a compelling [indiscernible] markets to type XX our now I environment. But we to with a different the kind opportunities, capital it that hurdle. selling. these owners these, these of resort we refinance -- for limited

Austin Wurschmidtl

looking as far pool then, And today? depth you're the as that at of the

Mark Brugger

that's market, if you having these ahead dozens important not what's when There's be and these company deals. because there about dozens of be of relationships, to of the is kind opportunities and three come investment very monitoring to on you And but last off-market of There dozens they successful platform high a quality build kind so dozens do very of the curve micro-market within kind dozens group -- over these and we've four want need first available. these and opportunities been to of and resorts. your of these years of the do uncovering kind that's

Operator

you. Thank

next Our Smedes question with Citi. from Rose comes

line Your is open.

Smedes Rose

peak wanted see just wages increasing XXXX with front, bit at, company another what little a this I you sort of sort Hi. do ask specifically should the in to and you that and those agree said of and on benefits? you be benefits wage year the

Mark Brugger

our some give numbers. of I'll you

seeing So, at Overall, -- are hotels. different wages they very the our we from they're X% But up wages range different we up and are portfolio at X%. budgets saw X%. to about hotels,

clearly, a that? percentage you year-over-year. XXXX, whether up X% there wide and a opinion environment that's probably or as So, But are not range to do challenging an on increases. is it's benefits X% Tom, have a in in peak

Thomas Healy

I don't, Mark.

is the I business. in wage when from to food we to is, doing. Lona increase growth, of Kostali think at XX% coming to project outlets and our of to to in beverage. Mina and the mix look that we a the from have some do look increase look at Michael outlets significant of have We it outlets that that investment, you in at we're

we're So, and increase XX%, service the is a paid wage other growth inflates And revenues. of there. from payout the million which is growth. that to then side, your on out banquet gratuity banquet to larger there with $X get charges regards staff, the then, And roughly seeing

when big So And think case-by-case, property-by-property. I just year, you look this I growth. it amount our food at look of is percentage the think, driver, we at the beverage and

Mark Brugger

make guess play I a will -- to predict in question, role increases will going your to be. So, future answer to large what the it. mix are I need

same-store profits? and to I did proud profits we Can were our you We year. last that's be that same-store grow the we're And end will focus. able the extremely focus really our it think We're profitable. day. at grow of that

do have We this again it to year.

Operator

Thank you.

Deutsche Woronka Bank. from comes Chris question next Our with

is open. line Your

Chris Woronka

expectations. through terms big of also in and bit good could 'XX some How unfold much of terms talk that kind Hey, out-of-room It XXXX contracts spend. is of seems guys. like of performance group attendance you or little there your pick-up guidance? in to flows kind pretty how Maybe your a morning, both about of versus

Mark Brugger

very say quarter of and of We -- the outside is our going it for quarter room So, our quarter -- weaker in was than expectations I'd just spend the couple stronger a and footprint which is a healthy. group expectation. into go a observation. The XXXX with the reversed XXXX, XXXX. now pick-up did in the was ahead footprint, In better fourth

was Now, in fairness, for lot the encouraging our sell rooms our the because we but January fronts, December of were always very all of expectations quarter not ahead wasn't and strong from a of overall, bonds, strong and start. had very but couple that the a markets, of expectations. indicative much perspective. those to is off months our citywide it in to They're most quarter was ahead of pretty both

Chris Woronka

just on opportunistic the then else $X.XX you kind I number now? you blended share think was into And stock just you things of think a do helpful. stock, out the in average. buying you is were front, buy December there XXXX you're a very I Is at something That's where it and it? there both look closer repurchase that Okay. in earlier guys How goes that's The $XX. then to or that 'XX,

Mark Brugger

shares purchased And of 'XX, $X.XX. comments repurchases. on couple since an in we average about had at price repurchases. We're of you a of Yes, X.X million right, share believers December share

at So basis. on we we regular -- internal do look our NAV a

that plus NAV. to we're trading at that believe discount We XX% continue to

X.X% private to plan is cap I like cap be step rates by totally think Directors. which of X.X% price market implies rate, million hotels opportunistic. still something out million an our left under going NOI today, ours. Board have to quality for We're with about the approved like repurchase We share trading recent $XXX the -- $XXX of

I substantially to our think if that it going we that's asset for are share And successful, have would sales repurchases appetite be increase that reasonable forward. bottom the would any line. assume that,

Operator

Thank you.

comes with question Our Michael from Baird. Bellisario next

Your line is open.

Michael Bellisario

incur everyone. Frenchman's, what's going that Good morning, are XXXX? in just you to out-of-pocket And the on guys spend remaining

Jeff Donnelly

we that we you last why had in our mid-to-high investment. we out-of-pocket disclosure but we increase our return remarks in thought incremental in estimate give thought done think our can have still cost when costs we million. I specific $XX given, today. That's of think that those be we owner's set would Michael, are and we're in here, all owner's the a the from could could that about that on And our slightly we teens saying range be don't our

Mark Brugger

Yeah, Michael, get dollars that's is going left and to probably be $XXX the of out, if you're then some trying on about there offset. million construction, to

key a and we money we application in FEMA when that resort, will still the be We have the due from open brand some pending have well. coming with as for money

Michael Bellisario

Got net XX/XX/XXXX? at XX/XX/XX it. assuming And for. was then, year end look the That's X.X forward like the looking fast versus number leverage the Yeah. I to you're midpoint times the guidance, at of you if of your the what does

Jeff Donnelly

is Jeff. This

if Frenchman's, times I think going finish that I on to at year closer to debt the we're spend net to EBITDA. X to we continue think point, about

Michael Bellisario

Okay.

Mark Brugger

It's number. kind elevated an of

all it, the you EBITDA Frenchman's, benefit that because point, the if at XX. spend think the have of trailing about we won't but the So of money will for any in we

Operator

And Rich comes next you. from with Hightower Thank our question Evercore.

Your line is open.

Rich Hightower

Frenchman's morning, again. Quickly Good Hey. guys. on

guys have $XX think you -- maintained I target Just stabilized time a million for EBITDA now. some

of So, exist cushion the just help million? margin that us $XX that understand safety the or around

Mark Brugger

we Listen, to this that looking a the do we're regular reevaluate and basis, well. on at, Caribbean comps continue

will one lines of changed. the trend within are hotels it the most think has this think the the top be to the comps Marriott we still in nothing of We competitive hotels that system. So redemption the or

So, we still have confidence around all underwriting. of in those basic our assumptions

Rich Hightower

separate maybe topic. Mark, helpful. That's a on Okay. then, And

the of and that owners. to while, around care Boston kind we to and riff where tell on from had I'm conversations evolution some certain the in owners, a supply relationship off, sort the gloves to And impact speak brands the in into and in the you the I on Westin we in some so of If and a the for pockets. And conversations, thinking existing also of between to that came time back into decision those turn are nowadays first perspective? maybe just Alice taking context just of us DiamondRock's think of franchise,

Mark Brugger

So the first on I coming off. think of every -- gloves all,

our there So, -- clearly power deliver the absolutely. I in that the are properties believe partners. they are value certain We of at brands think brand the and

properties markets, don't they as deliver as some value do probably Some in much markets. in other they

so about business the of RevPAR in high versus as we So cost as as hotel the such example Sheraton independent. market market, much make some ones. the think, doesn't individual delivers just I The West other sense runs of being much Probably, every own think Key pumped that. an and That its demand case. at brand just

convention center value. again, deliver are times look hotel, brands when we Clearly, individually. objectives to are a but conflicts, have of at conversations brands We with we conclusions. And our value partners. way are one come the of down our that, there each just the But do about and points business the best ton forward their our The nature given in objectives some there models. have sit and and of to

Operator

our And Patrick from Thank SunTrust. comes Scholes next with you. question

Your line is open.

Patrick Scholes

for let's answered. morning. Concerning think your think about I is customer? of way negative right I question. second you say When talked Good the that Is group, of just the rest follow-up probably X%. to mid-to-high-single was That for do that group, the the of implies digits Excuse your it? doing third of to the Hi. X% business want part about that's the sort math, a what business. don't expectations I math, are me. kind previous on transient a

Jeff Donnelly

some and say, other Hey, say, correct, for slightly is Mark transient Patrick. the would digits. in group for growth This our I budgeted Jeff. example. very not categories. overall but positive, But couple outlook mid-to-high-single would other There's of correct. contract for expectations is for we I a areas negative, is in The think transient and actually I outlook you're have is is digits, I low-single do too, think. number

Patrick Scholes

and of how year you. sort about of Thank growth do sustainability about, think this RevPAR trajectory given of next the dividend? your you Okay. And then, the

Mark Brugger

our We feel We to committed I I on sheet. believe great are our about our think coverage excellent mean, we dividend. dividend. is balance

our to don't think dividend we going forward. I -- see see risk don't we [indiscernible] any So,

Operator

you. Thank

from with Our question Fargo. Kesten next comes Dori Wells

open. Your line is

Dori Kesten

year, RevPAR expected be markets? with Thanks, to this for conservatism, that or is will that relatively industry? you that assume total to guys. line is Recognizing leads certain Is alone strong be RevPAR the what in concern that growth

Jeff Donnelly

is this Hey, Jeff. Dori,

factors. a it's of think I combination

our You're we in correct the line U.S. with that room would increasing overall. said be RevPAR that

major markets, markets, will expect We the actually the the Top XX U.S. lag overall.

for around on room just markets. to I our or, would I in Mark XX revenue is his about say, remarks basis, our group outlook Top mentioned as believe our But in we RevPAR pick-up So lead conservatism growth the going that that some there say, in that is XXXX, there the assumptions do year. around would later

Operator

you. Thank

Our Green from comes with next Street Advisors. Lukas question Hartwich

open. is line Your

Lukas Hartwich

Thanks.

the two The between Sedona on for you Can underlying performance there? trends comment to your gap widen. one me. Just hotels in continues

Mark Brugger

Sure.

continues to beat expectations. So, L'Auberge all of our

in front a other circle big F&B will and Orchards the up a Sedona, we very great is The disruptive, the and just It's but both transient our guests. doing to hotel wrapping done. In to was building now, when road the drag. which which main right upgrade be of it they're have it's Inn, they're on hotel, is big the to

it the quarters last And couple of so, there. impacted rate our in

Operator

you. Thank

Raymond Crow question comes James. next Bill with from Our

Your is line open.

Bill Crow

Good Thanks. Hi. morning.

curious, for year, percentage this amenity the looks point? receiving certainly at portfolio's fees resort total growth good RevPAR which at Just to looking your what this us of

Mark Brugger

About a third.

Bill Crow

that bit do And how think A year? trends little over the you higher? next

Mark Brugger

and we've would have we add to. like So, we to we have fees add that that identified five guest to currently like that hotels would don't amenity

in hotels the not or may to be with five able may of we're roll on So, that depending each now. on negotiation. discussions those brands We

Bill Crow

Is that forecast? into your built

Mark Brugger

forecast. that current upside our built would and not to be is That

Bill Crow

business? do Pacific then, sort have Got exposure is of you. you to hit pretty crew airline weakness seen the and what hard. real certainly, from Asia We've anything coming in And some getting there

Thomas Healy

are amount Tom. different domestic. or this markets, our York crews is inbound crew in rooms of of a our most We do New Bill, and major of the fair most

anticipate impact from So, significant that. any we don't

Bill Crow

out And to thanks, and to from or question you supply Any then look -- impact from as Asia of in One FF&E either kind the coming Tom. chain? the me. final currently disruption

Thomas Healy

each question. our a at of asked great That's We've projects.

is that or the we need book is projects we boat either and others. to on Reef have that to here everything some on we have that nine next including advanced months we've Frenchman's complete way, six the in So, a its

anticipate order challenge. at have our don't for we And pipeline. lighting we to any to in everything But see going us may we fixtures don't it's hiccups. be some that Will a Yes. China? versus be So, something there the or current from double Vietnam moment, we checked

Operator

Thank you.

KeyBanc from from comes Capital. question Wurschmidt next Austin Our

open. line Your is

Austin Wurschmidtl

guys. Thanks,

up Just one quick here. follow

using than units far shares into the being Have factor today? at price You as limiting trading mentioned capital of acceleration resort attractive you are owners that with basis could your the where segment. explored you a OP for issues cost maybe a is tax price more as

Mark Brugger

OP some So, Cavallo transaction. used when we units did Point we

at We them had same in that discussions where our discussions take that a we've but of of about negotiations? was there they're ago, a early of but them having ago the -- had conversations, Yes, essentially exact some and we mark kind over NAV. NAV a have units and higher OP with commensurate complicated. Is was thought year our telling of year are with sense those

Operator

Brugger Thank questions time. for this the to at I'm call back Mark I no remarks. showing turn Mr. like any you. further to And closing would

Mark Brugger

your our look forward Thank in you. everyone we DiamondRock, care. call, on To the we call. you appreciate earnings updating Take in to interest and next

DiamondRock Hospitality (DRH) 21 Feb 202019 Q4 Earnings call transcript