Earnings call transcript Q1 2023

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Operator

Good day and thank you for standing by. Welcome to the DiamondRock Hospitality Company's First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Quinn, conference Treasurer Senior Hospitality. like speaker to of now Briony today, Vice would hand over the your DiamondRock I President and go Please ahead.

Briony Quinn

earnings to Thank first everyone. Good webcast. Welcome you. quarter morning, XXXX call and DiamondRock's

everyone securities Before our many laws. facts are comments we forward-looking be historical of considered not that to me are statements get let and started, remind today under federal

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

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

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

Mark Brugger

joining for you us Thank today.

and from adjusted increased results comparable the In DiamondRock increased XX% prior the total were results records over and revenues portfolio or quarter, and revenues for comparable EBITDA quarter the first $X.X Hotel The million both XX.X%. profits. The a RevPAR ahead XX.X%. XX.X% increased set hotels year. also up XX.X% strategy resorts. hotel our up and with real the geographic RevPAR have differentiated of comparable EBITDA estate, favorable footprint XXXX, speak to our record adjusted quality portfolio results These of of to our and well

that resorts. our well-balanced right and trend. outperform in prime full management portfolio experiential public XX XX liquidity long-term the averages unencumbered of resort properties. the It By is its revenue, to markets these the having by believe unique carefully peers comprised its we over today travel urban and that focus portfolio industry markets and our is gateway hotels, the is of have DiamondRock two XX% subject distinguishes that is on about portfolio year because and a only increases portfolio. curated portfolio of favorable XX% in long-term the itself It's This competitive can it advantage. from locations. The a both urban properties, We XX the NAV XX DiamondRock of agreements. The the

Our most and These San York's Mile, submarkets of the Districts, Salt urban Midtown Boston Creek Denver's, Lake Seaport submarkets Chicago's, Temple and best Square. properties New are concentrated Cherry Times Magnificent Diego's, Little of in Square gateway East, the Financial some and cities. include desirable Italy City's District,

as Francisco, Portland Los recently Angeles, importantly, reduced markets from crushed San values new post-pandemic and ordinances. efficiencies taxes Just where demand, have have largely we changes structural operating like avoided for in been transfer hotel adopted and

coming are the the hotels prime Red the Vortex of Rock the Sonoma powerfully Florida like with or increases. of Wine Keys. Vail, the shift supply Country gateway are our in Collectively, situated like combined from in locations, beaches the outperform leisure paradigm in is decade markets more resorts positioned among no to these Sedona, travel resort that Our snow-cap the to mountains the little towards accelerated

quarter for Let's last we first activity group-centric apparent currently is and key XX%. revenue readily in in The in owning strength. year, nearly benefit the get segment the hotels up group hotels. the of is quarter into the room performance increased within the the that to Compared portfolio. The considerable our quarter are seeing well-maintained showing submarkets XX% of was of trends

over the more first Chicago XXXX, was impressively of increased the increased increased Marriott at XXXX. XX% at QX RevPAR RevPAR Seaport over peak. XX% the over Similarly, Boston the San quarter quarter Western Diego first Westin at its And XX%. XX% than RevPAR prior which

for strong than helped Midweek also XX.X% rapidly has over transient our the increased set business hotels first demand comparable comparable with business an in X% higher properties occupancy quarter demand at from the records XX.X% recovered. which RevPAR the XXXX. urban transient average in This XXXX the of increasing in at quarter in Business Manhattan, trio first period stars period. transient of service and select were QX

the propelled Hotel cemented RevPAR tiny demand RevPAR year an in XX% last results status compared boutique its also hotel growth transient Francisco. Emblem, delivered Business increase XXXX. one as which nearly San in This at TripAdvisor and over the ranked double-digit to number

And Just for XX was occupancy it XXXX of comparable BT. the as XX.X% our business at In [indiscernible] XXXX was intra-quarter urban at January, encouraging XX.X% higher points percentage momentum in transient of was hotels March, levels. levels. by

beneficiary to be the is of it travel the segment resort began the However, long-term of that trends the really continues onset pandemic. that big before

in underpins for resorts great is There for the belief demand allocation the imbalance a capital resorts robust leisure number This years. that choice a of the limited our fundamentally of US. coming imbalance favorable remain

the resorts fact better more pandemic that acquired is the it now the to now. prior off you you obvious are In

As allocation performance. of you our that the resorts fuel different in DiamondRock acquisition helped capital this doubled know, its prior prior through record-setting resorts the XXXX. to pandemic nearly was It number seven of delivered to the years five

XX% per the very in portfolio, for first resort strong we quarter by increases This entire adjusted was XXXX nearly our with higher were or XXXX. than EBITDA our resorts where outperformance results million operating share XX.X% increased NAV was higher enormous that that RevPAR since For and the $XXX about XXXX. estimate than $X NAV yielded

RevPAR in by quarter. resort reported STR US segment in increased that XX.X% the first industry, the year-over-year For the the

settles around each normal down new is market last post resort of a world September As establishing began the which year. baseline, pandemic happening

collection Huntington in one hotel. Vermont saw first from ranked our resort Shorebreak the RevPAR TripAdvisor in up XX.X%, Encouragingly, and Hilton XX.X% Kimpton which our up the we in number quarter lodge Beach, another at Sonoma up performance record is XX.X%, Vail and this luxury

Destin year, XXXX. few seeing new the their we than explosive Beach and stabilizing experiencing Keys last XX% more years, at are last Florida the the above still during still resorts normal behind growth After in but

beyond. give more update generally. into trend the a new this XXXX. late an outperformance adjustment and That's And acquisition this expect transition will leisure to lap market XXXX get we to until likely to its We on is normal resume when good continue in headed you

While to of acquisitions current our for allocation hotels, non-institutional discuss the discounts. active unique have repurchases folks. held kind share owner-operated capital that at well more options, steep including these by find us Jeff in worked experiential generally so We remain will and trying

focusing a and these well can properties of these us we a first-mover advantage. deals type been loose. to in for decade them position We've type at a skill have and DiamondRock's almost value of value set home create pry for when identifying unlocking puts great

we deal where this out there we would really will have there something to special that conversations. Of engaged actively but year course, opportunities a a are few love, we be do are in

up volumes next into slowly the XXXX, picking expect and to begin later transaction in we deals, marketed broadly For year. low

provide call fortress Jeff on we and earnings balance turning in to Before the to over detail want discuss to greater do our outlook. comments our sheet

In in to are improvement room nights generated XX% progress. revenue. XXXX, of our making group excellent peak finish prior and full is nights first XX% Regarding peak group of and quarter, group room prior of for Clearly, XXXX group XX% at we year XXX% were and current room forecast we nights. is significant the there room peak peak of group

in target. on aggressively closing are We that

quarters. gains booked over the to remainder revenue QX XX% two of year strongest was the up next Our the last be with the group found in XXXX for in

closing prior add XXXX, room capturing rate the results. million about could has peak, to room full out spend gap revenue still of year those it's that of to up nights forecast including XX,XXX rooms incremental our XX.X% Our and group behind XXXX $XX but room

secular new XXXX. higher level performance On will of trend base much it's growth segment XX% few reach leisure, past return than the different off long-term market higher top expect each NOI In but new a leisure normal resort the likely which of with years. normal the been over will XXXX, XXXX its line we to about a after

gap point worth for end our million revenue. $XX next occupancy peak four projected are and additional prior percentage of closing one points opportunity year As be could in they below resorts, another at of XXXX to that

Finally, rate business the while line positive seeing trend clearly on little push getting travelers on continue are BT a to are demand to but the maximize we moderate that side profitability. road, we back

outlook that, to saying I'll sum is guidance. with volatile still economic investors useful the too while up earnings by provide

in We continue achieve XXXX. to DiamondRock record revenues expect to

to me With that, let turn Jeff. it over

Jeff Donnelly

Thanks.

of Comparable over to us XXXX said total generate XX% was million XX% of over EBITDA increased at EBITDA enabled the onset DiamondRock. FFO year. adjusted per another Hotel up it corporate and $XX.X was As revenue quarter of $X.XX strong adjusted XXXX. XX% This call, last share. for the adjusted Mark over and

XXXX increase in first nearly and by XXXX. room the RevPAR than Comparable was XX% or quarter nearly XX% rates portfolio than higher This was over driven XX% for XXXX. a higher growth in $XXX, the

outlets sources from this of was basis the XXXX. combined QX in F&B point gap, basis, million increased Closing one XXX asset or created growth new million by of remains over several XX.X% repositioned by pandemic. This $XX a improvement, to $XX XXXX. our during DiamondRock. to basis nearly quarter for and the Occupancy F&B points first is income and driven XXX streams managers future a revenue down sequential other on several

million was soon with adjusted will to to outlets several working upgraded or drive levels, new EBITDA you better $XX.X by and XX% and FFO XXXX than quarter million Adjusted share was nearly than million, XXXX. $XX.X continue beyond. will are hotel share and was in first Comparable better that new We XX.X% or $XX.X beat per XX%. we profits on XXXX XXXX which EBITDA

XXX us. Comparable basis EBITDA margins to hotel XXXX. a XX.X%, remain for Profit points margins were up great adjusted story

resort XXXX. same a Our or period portfolio higher the basis quarter than with XX.X% XXX points comparable hotel the of margin first finished adjusted in

XXXX. basis portfolio by Importantly, XXX expanded of this upon resort quarter performance our point reported the in fourth the improvement

at up urban yet Urban to demand over Comparable recover have our margins hotel basis XXXX hotels XX.X%, XXXX. levels. to adjusted hotels points EBITDA see were XXX

to we recovery. So ultimate permanent are corporate amplify identifying profitable we rebuild efficiencies while our business,

Operating now and can efficiency found capital efficiencies, at A of of Mile, fewer XX% back-of-house with on did is managers outlets XXXX. design. it even aspects Marriott Magnificent factor in operates spending more rooms, our immediate all than be in which Chicago example a critical

goal to for tax, to and be for Our adjusted is industry insurance XXXX flat Portfolio-wide be for expected headwinds property in to property and margins EBITDA the increases hotel XXXX. DiamondRock. roughly for are

remaining XXXX, we increase Looking quarters resorts expense will our low at the expect growth in of total digits the XXXX. three single over at

we rebuild in to for XX% fill year, positions the For growth of occupancy. likely and expense XX% business as range banquet of remainder is grow as we our the urban the hotels,

through back models. are increases offset hard workers these efficient more We to working aggressive converting and asset full-time management, employees to staffing contract

Moving to capital allocation.

more call, parcels the our simple prior to end, acquired end the earnings we in in or fixed for hotel. liquidity interest executed exposure the importantly, reinforces simple interest enhances fee fee early parking XXX% hedges the own structure two remaining land under the we and of $X.X in the and Subsequent Worthington the this approximately financeability assets. in discussed February, quarter of lease a transaction swapped. quarter We low XX% now ground DiamondRock's debt Renaissance with asset to to As total million. The

of end value, which cap were less of our XX,XXX nearly This NOI active before the disappointed per $X.XX half at March, of a replacement at could trailing on share shares be more enterprise stock not common per price At cost. levels. we We key $XXX,XXX XX.X% window our or represents acquired closed. is than we rate these

component from a are value allocation our and of our as opportunity creation, the opportunities as growth key set external constantly and repurchases, repurchases pipeline. high evaluate Share we yields well ROI against capital long-term

Autograph have to drive we the completed to repositioning and up-branding we Luxury the XX at The of and high Key value conversion Clio, Collection The Hotel; West Lodge ROIs, Vail In create Collection Sonoma Hotel; and Sheraton last to the flow a Denver continues Beach Marriott JW Hotel Collection. ROI as the to the Marriott portfolio the Margaritaville An of plans. our months, House execute Speaking the cash Hythe, Suites to Luxury a

hotel these XX% increase up the collective of since XXXX. generated with over adjusted In XXXX, first hotels quarter a alone four XX% EBITDA RevPAR

Importantly, values we hotels our these investments. a on at return increased seeing asset net are and handsome

DiamondRock. and XX will repositioning our execute, core types we Since executing a of of XX of hotels, total XXXX, a creating competency ROI have, of at is these or $XX for projects million

lakeside hotel the with fall urban a completed this of the part before late the completed underway will a Curio resort lifestyle and Hilton to quarter that Mardi to to lifestyle Super ROI currently three named Hotel are Collection; XXXX. be be hotel French Bowl completed in lifestyle the be hotel early more Burlington the to We Bourbon Gras Boston a repositionings; repositioning to Champlain, a the be Hilton as premium to Orleans in summer; and

Lake Lake more We tuned. Austin grow Orchards premium value allow Tahoe also to in have our Resort. at core our us years. significant and properties future so -- to Spa and plans come, growth several and There create These is other Landing to Sedona, Resort including Inn other value drive our will stay

balance Turning to We the having strong committed to balance flexible a remain sheet. and sheet.

trailing demonstrated is to X.X ratio leverage as debt times. conservative Our of EBITDA by adjusted four-quarter the low net

very Our liquidity strong cash. $XXX of million, at including is $XXX million

But is to cash debt Our expenditures undrawn. is fully before us million expect our of this revolver most generate year just as $XXX even the $XXX million million capital available critical, under we covenants. Moreover, over restrictive and dividends. to $XXX

estate have ROI a We fund have at expenditures, our to prices. dividends through preferred sell this sheet be pending to fully balance demands all forced the may remain and be on a liquidity for and pay extended real is to common and clear, all choppy others to maturities, us offense markets capital at allows period, XXXX if time our current few when to capital Conversely, this cash were depressed will play expectation, and project we retained flow. all debt retire projects projected from fund and capacity an we not

house our leverage, maturity flexible material important are of on point scenario differentiation balance future, was and for liquid well-maintained unwinding cash structure, average does but drag not low NAV. view This the not believe Moreover, create we sheet flow We and is of our long it portfolio, a distinct believe advantages. our an DiamondRock. weighted and strong our

me let back Mark. call turn that, the With to

Mark Brugger

Jeff. Thanks,

valued of assets continuing on end and outperformance one of travel. our see strong we the before Leisure began demand years. Let of in period the the around that highly me the world. and of society in saying most remain by enjoyed outperformance a pandemic coming is that secular that Travel future trend bullish we the

repositionings we excellent as Clio, locations are On the been business and for our our and some share settles has group, business is the like ultimately demand out, to very because clearly Denver, primed hotel to travel, strong. or positive of while Boston. Luxury uncertainty Collection where funnel future there from On from take there of conversion in still momentum other hotels upcoming the hotel looks

and of move and the we in cycle revenues profits. high-quality a DiamondRock's that well very liquidity portfolio, up, wrap terms first positioned we for of for was focused record careful XXXX portfolio with are To quarter Moreover, this both to opportunistically. a believe strategy a

up we to At this your like for time, would it open questions.

Operator

question Capital comes Markets. the Thank KeyBanc Austin you. with line [Operator Instructions] of First from Wurschmidt

Your line open. is

Austin Wurschmidt

Thanks your can Do details and what's air good BT pocket, given we just an backdrop? bit put the is morning. just or moderating. just little is broadly of given any this to you you specific Mark more stall I'm if further some macro around actually comment that are maybe seeing markets? think that's happening BT a curious

Mark Brugger

morning good Very Austin.

comparison to I So in somewhat it's the think segments. other

year. prior saw other quarter. And it's elevated those And is will has coming back two leisure group in peak back. the It we We're rebounding. and Group think So this been well came revenues segments. peak great. exceed behind our then we good And as momentum mentioned first above from levels. I BT prior

I convey think reaching prior out in may it at this to settle something peak levels don't we below what what the and year trying ultimately. as is we're demand see XXXX were levels it

the growth see velocity the from year. velocity balance indicate percentage volume to we continued we of same positive we we in what momentum to about we're don't here -- see first quarter talked trying see on points We the the quarter. see the January good continue don't fourth So But through came of that see that same while that March. that XX to don't for

Austin Wurschmidt

but last the quarter maybe you And how gave books guess to some I in revenues year? you saw up stats the short-term on of for Got just quarter little it. relative do the group the you relative group. And percent just to much of what on And budget? bit are balance I how know about to talk over Okay. the what you then expect a pick year? leads the can today

Mark Brugger

bit question So a I'll about hand and over of take Justin group. talk little the front to that it more to I'll maybe

So our we the room we forecast year. full already ended have XX% need with today that the quarter for of about nights hit under contract the we group to

feel for we in So about sitting that we're group. position the good

some on want you do group? Justin, to comments the add

Justin Leonard

Yes.

we've in group I to in that is get peak just prior highlights think we did prior hit as expecting year forecast of current peak back and exceed it to XX% peak. just seen our generally. area of of was prior in And and volume. strength to XX% an in the of room we industry full in QX 'XX and group nights XX% we're our

But we're for actually year the in is is year I pickup seeing accelerating. think the more importantly what

So XX% versus in XXXX of remainder QX just QX up in our in-the-quarter pickup was volume for night XXXX. room the

that to see velocity term while expand continue what last short over we being year. So somewhat saw we

And that so close gap even further projecting full year we're we're what optimistic that we room can night 'XX. for to

Austin Wurschmidt

Got Mark. Justin. it. Thanks, Thanks,

Mark Brugger

bet. You

Operator

our Thank moment for you. question. next One

Kesten from of with Next the question Dori Fargo. Wells comes line

now Your line is open.

Dori Kesten

Thanks. Good morning.

appetite about similar You you potentially Mark. a acquire you to what talked small your managed? bit owner Should relationship assume apply like last years relatively transactionally several you this have pretty over to year the

Mark Brugger

great a it's Dori, Hey, question.

of isn't deals. lot this we private think we're and something a chasing out a have deal. ample to there's relatively to of given be focused high where something returns do big a market time has liquidity still capital So do we We that would the our -- cost in have equity and go still

in think differentiated resort these owner-operators. from in markets So often of relationships advantage kind remains our we competitive built we've

we've can value. sense. marketed still say the It's of probably they're can competitive So very having. we're to -- of for capital where our make continues think in conversations to pricing. I we we the things us. The relative more be the it's in make where That's the we think this deals that But can buy still on pricing might broadly cost seen that sense create doesn't that bulk we

So we're where we things we trying on focus competitive have advantage. to the think a

Dori Kesten

Okay.

have FTEs do need to near permanent contracts with workers? focus peers selectively so, offsetting reducing on Do the in term. some talked is the And feel you about your or more

Mark Brugger

want have about our efforts for the do maintaining to we Justin you talk margins?

Justin Leonard

Sure.

on a things. specifically we're doing think labor, number of I

resorts. Mark independent of resort we've of the where think a spoke I the side about, things experiential portfolio specifically really cultivated one unique on small

more think us but continue We can gives advantage And in a how pooling look it from businesses an both margin I we to resources. at by small run acquisitions. efficiently potential also those perspective

test model. like really or cost for external So, or in on-property significantly sales to run a group even third placement, resources party best-in-class rate lieu It we're lower allows cultivating smaller with for small some us travel the agents resources relationships eliminate of on-property staffing luxury these assets. using owner-operated versus for FTEs of and get optimizing meeting e-channel those

I we respect on labor with to contract focused think reliance contract, portfolio-wide. are decreasing on

years, we faster bring and a associates quickly have all contract, those labor wage that our the think onto markets. of really forced last cost sources really tight use market given level and the of especially could market to markets training. was than labor in now labor property step I inflated those to represents But costs in many a overall secure. turnover in premium couple additional in up we around our everyone of growth teams, factor much It lot

for we staff -- we continue on FTEs more are individual assets. push So our to within

better helps that moved that Austin, contract more spa acquiring but since side, Lake Just man eliminating from to the us service deliver to associate. seeing entirely And guests it as delivers labor we're middle the both away operations. on paycheck our and expense an better spa also importantly, benefit in probably we've a example

Dori Kesten

Thanks. right. All

Operator

moment One Thank next question. our for you.

ISI. of from Our the Pfennigwerth Evercore Duane next question comes with line

line open. Your now is

Duane Pfennigwerth

Good morning. Hey. Thanks.

if on think Just from what see one really we've wonder on is you again, is driving sustainable? And F&B relative trends room it as you the sector provide if this just seen you of F&B, industry an perspective, across that. some to higher revenue. could context lodging I

Mark Brugger

Sure.

is of this kind off. I'll that Mark. So, kick

on we're seeing banquet. generally So seeing the anticipated we're better what outside think is than room I spend

the last upside items. have really on the the they're surprised that what the doing have six So for been say, coming events over rental, I groups would food to the generally their months, AV

like to to the I get that given event think people have it get feel roll satisfied to the there's that to it's this and they're from labor the general effort you really meaningful and on that if kind going out make market. planners tight sure attendees them the road the need worth feel sense of together, needs carpet they

side. we've very So, that been on pleased

outlets the specifically hit otherwise, year. think I for records last DiamondRock we for new portfolio,

Mina we've Howard that's to a which we've a cultivated outlet in So to or in a much F&B, we think restaurants hotels whether number Sandoval, the Toro putting have specialty and particularly higher -- that's restaurant experience made a these our within conscious of guest effort increase Michael number of Charleston, Richard by a relationships, the sustainable. or and led Vivian in a

to continues hotels something properties. to have within choices of today continues that I the be kinds makes to and think the travelers our those resonate more with that desirable, it

anything Justin, on F&B? else

Justin Leonard

XXXX. I will the of due assets. on year-over-year installed there urban. urban to where some moderate continued basis the on in in our outlets and I a in of comparable not I QX we're I to fully were industry the didn't those open think probably in for few in And for have, think a mean pretty generally QX growth the we food of there's of that resorts, do room XXXX were think repositioning. think I service outlets, see beverage, just and pleased example,

in will do that just of year. average terms moderate probably as I we growth through think revenue of outsized So, of some the growth go fruit

Duane Pfennigwerth

that those tires you. tires investors firms, equity conversations? you the with with you pace and kicking Can about on specifically. kicking dialogue update tenor potentially increased late were us When the March, talked and of stick DiamondRock together Mark, in kind had give of we in with Bethesda on the sector And Thanks. on maybe an I'll private

Mark Brugger

Sure.

with always have conversations a equity firms. year we guess of private I So

$XXX I up engaged I'm private raised probably can the it's there's That's have last a comment was of as chart, details are. conversations think We've billion those sector among folks hotels with firms. real against what estate the -- on conversations about know, saw from in of moved class appropriate deploy asset conversations. you equity what very not those you I been hearing. and high. to we're some about As always I tell the interest as and But, to in regular sure, some we remains desirable substances the our

Duane Pfennigwerth

Thank you.

Operator

moment One your next you. for Thank question please.

Our next question comes from the with line Citi. of Smedes Rose

Your line now is open.

Smedes Rose

just Thanks. apply talked Lake declines? looks your new which you I year-over-year purchased you like return I would wanted in to what you, about And -- the at a you're normal Austin Florida. to was you had And to when you steep saw ask wondering with you property, comfortable initial seeing that with in you -- guidance underwrote what it when them? those are the assets still pretty

Mark Brugger

Sure.

with let leisure start me generally. So

think we at all-time high. seeing demand are leisure an we So

robust the we look airlines QX just the cruise STR to CEOs, year-over-year best up And line hearing and set. airline If Recently the frankly the at about listening was you were have XX.X%. the data data probably demand. RevPAR the you're CEOs

leisure believers going we're that to more and that's there continue. So is

and nervous year. a that think allocate what place that's asset be smart they're Keys or the much continues cruise of trend gone to Florida that some COVID the just Florida last now taking overall capital. we're by maybe think we going pie Caribbean, a a couple bigger they're seeing Keys to the might the but They is were in I have is to

resort first Lake On specifically was quarter. about there Spa, an Austin in ice a That the storm that $XXX,XXX was hit.

savings still the through underwriting still our cost line quarter. for bottom first the On we're on -- we're

our Justin there. we position acquired that primitive some the an about converting the it, in So did from things feel sophisticated and talked new spoke operator labor know on that systems good we place pricing we when about with had owner model pretty operating of systems best-in-class tools. they about we I The

April getting and revenue and see we forward. they're those on we'll Given that in May property ability the manage manage asset from returns really and to think going backlog our those implemented, getting and enormous professionally implemented

Smedes Rose

to was during then quarter the in rating all at you you that impact weather or? any be just I wondering And ask the just Sonoma, Thanks. Okay. from out did up may you I but wanted activity guys were depressed there results see

Mark Brugger

We No. expectations, performed Sonoma our exceeded bit. a actually hit our thought little expectations well. It

weather impact. any see didn't we So

Jeff Donnelly

but had day quarter. minor a significant half, some the disruption wasn't it to and We maybe overall

Smedes Rose

guys. Okay. Thank you

Operator

moment you. next Floris Research & Dijkum from with Compass our Point One Thank question. for our comes And Van next question Trading.

now line Your is open.

Floris Van Dijkum

update insight versus lifestyle I wanted Good you're that Thanks. -- redevelopment of a Maybe haven't guys. a little if morning be, because cheap been got been while autograph brand probably soft more back as could that brands rebranding. give on would what Obviously, question like potentially on you couple about that we be they or a Curio us a some you've they give soft as might hotels were ago, assets. that great? of a your to. and Boston what to I two cost have the had you aren't rebranding Hilton understand your if cheaper benefits that years seeing bit you into could hotel, could disclosed the have thinking us you're having be an a And they then. unbranded might

Mark Brugger

Sure. the year. $XX fabulous lot about location, brand a on Boston. this channel property location seven-day think We're optionality. gives that and the We're brand on It's week particular spending us dependent one, location. which we of the million more in it's a a Well, a not

due was rooms redo. it for Now

incremental built as well meeting repositioned But all out, not the that's we'll repositioning. the space as it brand lobby So have that everything we to new gym spectacular redone.

will go special a summer. this property. probably We think property unique we So it's at independent that

some in do numbers? know front I an you Jeff, to of have you? you give want analysis

Jeff Donnelly

with are at asset take we're Mark mentioned you the Floris? ultimately Yeah. summer. doing, How path that As we looking this

displacements be independent whether disruption. cause depending I within the is go going just fully on some to there or we will not some think remain door change Hilton system the

particular location and to but EBITDA million back is to premium looked million the because that that be ultimately of figures a to and more I I district think independent an to of in able also and full hotel field that up Altisource financial higher a $X to so having being the than being revenue to we going close we plan in more for business have a think able substantially past year the profitability. to leisure the much than in $X better that we'll around just the as probably able grow to command that impact at on will sort rate be appeal customer customer we than a be destinations, pick

realize So, dollars could than on year the in disruption million we'll in several the NOI back future. earn terms of this be more it

Floris Van Dijkum

I increase your Worthington maybe of Salt they Hotel big your Lake from my And the Was jump rent significantly. or the mean looked the hotels? in contribution EBITDA Fort jumped those out Thanks. and particular up ground and due Worth Worthington the follow-up. the was what two behind I performance buying at in those of to

Mark Brugger

talk let's to worthy that So, specifically. about

it not of in relatively result, lease ground is as small the lease frankly payments. of a difference impact material QX. dollars to didn't was earnings thousands tens So It the

lease And things excited parcel. that parties ground we that complete could it location a property. -- other future always is of the done to control to We have are portion and any there that excited be of now but covered of the we're the with probably frankly, in eliminate

that's a for we So win think DimondRock. that

are Fort less the City particularly some really well Worth become markets desirable cities like markets economy. share as from markets Markets this doing those prime to take exposure. group Francisco are Salt good major San other like had Worthington Lake and those

what of We're on seeing kind those of really the we're be seeing office to nationwide exceed desirability a decisions wanting companies trends. in the and

they're benefiting that. from So

Floris Van Dijkum

Thanks Mark.

Operator

Bellisario The you. question line Michael Baird. next the comes Thank of with from

open. Your is line

Michael Bellisario

or everyone. to internal Good morning versus provided from Thank view you. Mark perform back any And of Maybe some during resorts on quarter your the the to were markets wanted the the commentary expectations? how just aggregate give already you us during that aside there go Sonoma? particular on than were your performance better worse commentary in they forecasted quarter. just and

Mark Brugger

ahead Huntington were Vail, Sonoma, to of addition expectations. in mean I Beach our Yes,

were of different move performance obviously so doesn't overall record of tiny little forecast impacted kind than and snow our a it's that but were amount at a that asset Tahoe. our ones the Lake think numbers. a that There I is it

group normal as normal XXXX. of say for new kind the new into Keys except we'll expectations kind from just we able to And behind first whether be were grow the I to were up for effectively, would Florida we're the -- ahead of the in our Largo, we Florida And hopefully, was quarter for things establishing think XXXX. as Fort we that Keys significantly the very able which of move XXXX,

Michael Bellisario

margins. Got Thanks. a switching just then follow-up and on it. And gears

level? wanted the expectation you EBITDA hotel to remainder with dig your that help the the would XQ Just to appreciated. into commentary XXXX that XQ flat full year, the at or is provide Did for flat modeling year quarterly say to any And of the then you is there. margins Thanks. roughly could cadence be

Jeff Donnelly

thinking were was the flat which there. XX.X% a on XXXX they back Jeff. believe in approximately Hey say year would XXXX basis, a I we number full had the be that basis was comp Mike, is on that about out I margins this in to what would is that

very ramping margin the were tougher. the strong In timing think quarter when second mean will the most to think talking. the terms and I -- the year of I you when I gains remainder difficult just to is because I'm comparisons over probably you you get begin at just certainly No, the quarter year eyeballing the think you while comparison we're of course think year, had from when this that had standpoint, the so look you about of cadence our about last strong a revenues

rebuild if last expenses the seeing were year think still about the the you recovery. same time, wage of at earlier obviously in And occupancy and moves year rise with you rates staffing

the generally than So I of comparisons year end first for the half more margin the difficult back has of us year. think the probably

Mark Brugger

Yeah.

on Just to to add that.

the see resorts September the Sedona the you getting and of South On normal at into of Florida new kind if you year. the last can starting look place markets,

think story quarter we of overall will margin which So and move help get as into start easier comps those also I kind the XXXX. fourth

Michael Bellisario

you. Thank Helpful.

Operator

Anthony from with question. moment Barclays. question line Thank next The our you. the One Powell for comes of

open. Your line is now

Anthony Powell

that growth a expect And on the the quarter morning. based you're fourth of rate? I you Is Good on seeing, booking in guess then reaccelerating. leisure to Hi. and kind be holiday occupancy follow-up do the period? more trends or for

Mark Brugger

question. Great

and the But December we're of usually in we book reopen. November, of So seeing particularly doesn't leisure year see as nine South to months. Florida could kind September, out were watching last world what in six what Sedona we kind of real in October, time

generally demand people destinations. traveling alternative So to was while felt leisure, robust, comfortable for

to So the up kind opening comfortable. I new world as was got normal, of the were people think that

between when expectation our is So comp right is quarter much on split now. gets that easier probably evenly the our both approach rate knock-in fourth that, expectation we

Anthony Powell

then, And Got the a some terms make dispositions, Thanks. hotels selling group the one past. hotels in more what we does more strong about group retain future? maybe segment currently add maybe kind you talked it or own said in about the of in of being given But sense it. to you even group that

Mark Brugger

group like We of in over rooms XX keys. by by -- number hotel about Yes. our room probably our about let are me type are of half XX% are hotels group-centric hotels XXX about -- room calculate

XX group We doing think to its mean, are fine. the our excellent segment I year all like good XX the year. think increases those will I the probably hotels next and this leisure year hotels best continue months. be over of But years. group the still this to five I the over value probably next next

large remains And hotels for market. a it debt still difficult

any So, better probably us combined those XXXX. to hotel hold group to it's in lead to, things

Anthony Powell

you. Thank

Mark Brugger

the sale said, everything price. right at for that is But

Anthony Powell

Got it. Thanks.

Operator

like time, currently Thank conference [Operator any And further Mr. at I'd no you. back this to closing questions to Brugger the hand Instructions]. comments. for showing

Mark Brugger

on Operator. updating to you, next And this we care. you Well, Take call. thank to everyone a forward your DiamondRock. great quarter. have And you in day. Thank We appreciate look interest

Operator

your call. for conference Thank today's concludes This participation. you

have You day. may now wonderful disconnect. a Everyone,

DiamondRock Hospitality (DRH) 5 May 232023 Q1 Earnings call transcript