DRH - Earnings call 3 2023 | DiamondRock Hospitality Company

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to DiamondRock Hospitality Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Briony Quinn, Senior Vice President and Treasurer.

begin. may You

Briony Quinn

Welcome and everyone. Third XXXX Quarter Good to Call Webcast. Earnings morning, DiamondRock's

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

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

A discuss In measure this Brugger, reconciliation turn Mark? addition, Mark our our to information. today's With non-GAAP on to directly can financial I'm call release. that, Officer. in of will to GAAP certain President most we found the earnings and information press over Executive the pleased financial call, comparable be Chief

Mark Brugger

Global is remained stays demand new for setting Thank post-pandemic. citizens pre-pandemic strong. are to travel us. XXXX you settles the in normal in hotel to of as surpass joining nights. also global hotel record room expected the way the States changes United patterns the a in billion Annual X.X travel

and DiamondRock leader, to been a outperform we believe this recovery, well During going are has forward. we positioned

from stems portfolio. our high-quality confidence Our

year. upon peers XX% and advantages have An XX% to By collection the is strategy, at greater contracts. a We nearly than higher over our us renovating, its our portfolio our are are results. third our resort. element was as last DiamondRock contracted revenue, XXXX, to up our points specifically and that the over the long-term that enabled were expectation. the decade quarter control from results, year properties quarter These period which key unencumbered Compared more ahead to a management third gives XX% full more to to of quarter portfolio values in This of pleased in which X.X%, distinguishes is midpoint modestly in and were a flat of these ahead portfolio important attract compared XXXX X.X% properties of XX% than to our basis solid by compared sale. of We just operations approximately up curate with is of repositioning Total same expectations. RevPAR the urban resorts revenue spent to XXXX. and travelers. and hotels our which deliver recycling designed today's for DiamondRock in the as remains RevPAR portfolio XXX aspect

X.X% expectations. the in in urban it While over was improvement the last up sequential total our exceeded that was year, RevPAR quarter resorts

strength year to X.X% Tahoe resort Florida by RevPAR, XX.X% our last at saw last Lake up to As Resort year. XX.X% the and Resort, Bay measured Landing we Vail, in luxury the total up Tranquility last year, Keys, in up

are are portfolio decline Moreover, expect still total $XXX.X third million. nearly DiamondRock's in Overall, year-over-year for in year, fourth sequentially the quarter from quarter we course, sequential for Of revenues quarter. the and were encouraged to XX% revenues continue in higher resorts resort some XXXX. prior improvement we entire the revenue down last were resort additional than XXX and that improved but the our year-over-year to adjust basis points

little modestly quarter, led Dagny. achieved revenue XXXX look modestly only In impact of from reviewing let's segment DiamondRock million up $X.X at that across It renovations highest revenue we $X or in is quarter the we about these was EBITDA record to a increased new despite closer Lake still company. quarter the and million third Salt X.X%. the of and was up it stemming quarter X.X% Hilton RevPAR our exceeded The at year-over-year Boston adjusted the urban at repositioning XXXX EBITDA saw. results as worth While from for $XX.X by City At noting the portfolio. X.X% of which in third and the hotels, ahead was marked the group million, XXXX, the disruption of trends XXXX. it hotels third This that hotel a history Marriott urban adjusted the to the

However, along single side from Diego, in group year-over-year renovation up City the from call, up This the at quarter, stars group XX%; softer by the in terrific Phoenix did Westin Marriott. was somewhat Worth, up lower quarter the the to the the Westin, basis, the demand on XX.X%; discussed Worthington, Westin several saw as transient quarter. have the and group the Palomar, Texas, a D.C. as digits. XX%; we last Stars increased convention up the we QX was X.X% 'XX. our performance third in from in On anticipated this Fort high XX.X%; business San Boston, Business compared impact the offset quarter strong business calendar Lake with earnings third group Chicago Salt up

to Over trade-offs. the we aggressively adjust occupancy involves maximization our the and with This operators calculated demand on We executing in were shifts evolved strategies. BT summer, strategy closely rate business for successful channel our revenue carefully work landscape and quickly.

and we in but that remain levels demand, are peak. the As at below well Day we transient Labor into fall, business beyond move prior gains seeing gradual

X.X% from improved quarter our Encouragingly, points the XXX in For decline quarter. a quarterly prior portfolio, nearly the RevPAR XX% full compared basis resort RevPAR over to resort last third XXXX increased year-over-year contracting resort despite year.

EBITDA new quarterly had in quarter comparable expect travel XXXX. patterns Clearly, fourth XX% we resorts. we DiamondRock. than have RevPAR winner resorts a that the been into year-over-year for as will that for quarter was improve our third yet again normal the In secular the big higher resorts settle Importantly, adjusted in alone,

hotels this locational office prior worker flexibility the put U.S. are some average week of the days it Going adoption resorts decade from acceleration nights To the of number week in post to of of is the flexibility the rooms adjustments, Xx just XX% the created in been has resort and and per in XXXX. X.X United specifically types comprise billion X.X that context, demand outperform locational over of existing likely next all annual per States for hotel into from the the all supply. many looks work from days in near-term markets pandemic in Huntington more of like the like the of West like and restrictions likely hybrid California. being of X X.XX the in the near developable And despite Key legal there industry the land Coastal from forward, resort Beach Remember unavailability remain resource or is to days supply

constructive long-term remain we tell, can resorts. you the outlook for on As

growth. turn to Let's internal

While over years. X the DiamondRock invested keep $X.X to billion always more assets than its has last in spending highly competitive, them

delivered collection, to alone Vail Denver collection, West XXXX to a the the luxury Margaritaville from high-impact drive of the portfolio. lead to XX.X% the of our These generated opportunities in NAV an RevPAR the the a the House of Key ROI increase months, One a In we number Hythe and with including to third increases. the Cleo of Lodge projects and X EBITDA the up is ROI biggest competitive within a adjusted XX XX.X%. Sonoma projects, Those collective conversion flow number derived and hotels over cash large at luxury a up-branding outsized on have of autograph. last hotel advantages to the quarter,

that and total will the projects X/X The ROI recently of projects. months, strong continue gains $XX a touched ROI often and a projects more and results. ROI to other hotels. the reap culture continue should of completed of of executed share has profits number In done. our And million execute bolster of several XX we to We our we're completion in for play of benefits benefit will out that value-add not a years, driven than DiamondRock last these opportunities. that additional we from increase have these excellence has identify market to and portfolio quest overall

$X announced ultimately increase Boston, X, million $XX excess in which we August of our the on of projected marks EBITDA. conversion independent EBITDA Dagny is hotel. next example, year and its annual of to The successful stabilize million For XXth Dagny the by

to At Lake first the premier permits is being permitting to quarter ROI more. Curio increase to is lifestyle collection. to to more the projected L'Auberge process Springs process is Champlain, Additionally, have The Bourbon Sedona, list we At that on evaluating behind during The to it completed these, hotel French ADR there we At opportunity completed future keys. project XX with are opportunities. The is the track underway It DiamondRock luxury XXXX. make Bay, Hotel Tranquility Landing a Burlington cabins Chico in seeking move with just member the be we about Marina XXX-acre on the repositionings. with And summer converted few. also other more our year. are are in actively adjacent of the almost pipeline has add Orchards a part of the a in I'll of the we level are Hilton next DiamondRock's Orleans named just we build be resort are many to hotel $XXX. repositioning be underway be is late its of At and Tahoe, XX% Resort. some These de New and a Sedona by This the Orleans. urban examples property. to of slips. expected of to Resort, adding the there Hot to a repositioning Inn large ROI are

market. update a stay give you That's So an tuned. good acquisition to transition on the

disciplined in allocation options moments, Owner-operated unique working few that hotels find the more in in While often been Jeff transactions will experiential capital to well discuss worked have a have we our for us. so of destinations.

to when which them we well value deep puts properties, unlocking types a of can about understanding have position value a at create of pry us in We loose. great these

year as deal this we we be any really last to said do something have love. However, we would call, will

Valley opportunities. just a ownership. rate. Hot an in hotel our period will practices that Resort and XXXX, a grew deal RevPAR XX% implementation our of X.X% system. has NOI bought project of fits We in stabilize robust lots And Chico independent the a best the investment Springs of yield We third our the owner-operated the ultimately Montana north cap Resort year, modern XX.X% one quarter this upside of Paradise Our NOI in certainly management bill. for it This from revenue comparable Chico at

with we release a While to should resort was also the that but special are market will few with similar of the testing potential Chico disciplined opportunities I dispositions, characteristics. proprietary prices. database we continue work with vigorously remain opportunity, we a mention our

Now let for Jeff quarter. it on the more me turn to details over

Jeffrey Donnelly

of a just and X.X% X% the the the hotels up decline. quarter revenue slightly Thanks, comparable resort the the we decrease Food at the down important period, X.X% X.X% increase RevPAR total at the versus Mark. breaks for urban are DiamondRock to beverage was Starting guidance to in in total better-than-expected due revenues mid-single-digit resorts. performance the Comparable September, growth, resorts. X.X% prior exceeding in pushing improving steady is top, second last performance our of declined only in revenue our quarter contracted resorts highlight in growth our year. X% It portfolio the other and and in largely saw between quarter. a in to X.X% third And declined from X.X%. same-store improvement our our This revenues portfolio. they seeing The

total resort the We comparable third at the with portfolio quarter. September nearly XX% mid-single-digit revenue XXXX, and total this each continue month to X.X% expect steady in month above higher was strongest with urban growth. quarter trend XXXX our the nearly XX% over was gains our in hotels Compared to finished October. revenue Comparable

a to on segment. move spend the moment Before profits, I on want to I group

the gains conference results call, the this in the We in revenue expected of softer shifts the in We half third was citywide the discussed than calendar quarter strong group mainly the our to be in first Chicago. seen in to last due year.

line were Third revenues with expectations, room were than group group original forecast. but quarter slightly stronger in our rates

we We exceed will XX% forecast nights this XX,XXX revenue or will room levels room nights expect below XXXX XXXX. still be but comparable year, group group

pacing Next year the year. group is over strong up time very shaping be XX% to same with last up to revenue compared

Chicago the over serve group group markets, to to for D.C., revenue Westin time us San on for of side emerging. is Boston is and the continues and well. our strength XX%. revenues largest Westin Westin Fort We year. up group our nearly pacing group XX%, advantage footprint is collectively Worthington, DiamondRock. set the compared Diego Lauderdale Westin Marriott the stars and up Group same other Several up In XX% breadth are believe Our over XXXX a are last the unique up at the

to means profit Moving keep X.X% adjusted adjusted were The margins by disruption margin to same-store for Hotel of our on and EBITDA on this lower operating or challenging quarter gross margin of the on $XX managers points to than able total asset profits. revenue. EBITDA despite and million EBITDA context, expenses Dagny X a this GOP earnings $XXX was Comparable comparisons events XX.X% adjusted in and just XXX last a more $XXX third made X.X% hotel To million put flat comparable the growth were million EBITDA corporate discussed was was basis million. $XX were adjusted Hotel revenue. XXXX. mainly call. that operating

mainly in would hotel second, have basis Chicago property and estimate Dagny than displacement not points relief and X adjusted disruption the at Were we for these margin First, EBITDA reporting last the XXX been higher factors, year. results. tax our it

in XXXX. a tax in displacement adjusted better the the third than hotel reconcile shaved million last the will The in $X.X the We Remember, property successful taxes third to from a million had in resulted in quarter to $X.X increase a property in this me quarter to variances billion compared in compared our face fourth appeal disruption year. Let EBITDA That taxes the Chicago $X increase and we XXXX. quarter. year quarter.

is on X. insurance renewed Our April policy

higher up our reflect XXXX. quarter quarter third So $X.X which costs, a over million was impact full of results

and wage growth cost X.X% is slowing are we fully is because benefits Labor moderate. year-over-year. were staffed and Finally, wages up inflation

opportunities parking can team You X.X% the resort and like X.X% the looks and Dagny and project August prior superlative officially rose budget, job were starts the a in hotel agreements, initiatives trend X.X% These to a the team rid by out aggressive done pursued keeping comparisons the where that few the aggressively by asset costs income second quarter. in just our schedule on has Boston adjust offset promote the and as management quarter to I'd spots. this versus over the point in The year fees other fantastic. opened on on quarter. sequential third increased the costs X, labor see on-site

X% Europe and after our nearly alternatives. was margins EBITDA pressures quarter of held ahead luxury expectation our internal competitive from third the EBITDA despite Importantly, resorts season conversion. Collectively, flat cruise this

XX.X% Seaport is For example, Returning our EBITDA increase XXX XXXX. nearly on the Boston. higher the nearly X% at Westin a than Hythe Westin in a successful period otherwise was a RevPAR to had a Tranquility point X.X% what Moreover, increase and strong up XXXX. the for advanced helping for increase for in bookings, Bay is in quarter Vail up in seasonal a which basis X.X% posted keys. very increase a us RevPAR set RevPAR. posted margin a X.X%, slow in revenue

our XXX to As same occupancy-focused EBITDA the average. and over surpassed in margin Landing patterns, Florida year-over-year historical strategy EBITDA was change margin year-over-year at XX% us resulting towards returns successfully portfolio in Tahoe EBITDA deployed revenue and increase. strategy drive seasonal the that Lake basis increase growth point allowed a The an

food the improved out XXXX excellent By despite sourcing, inflation. Finally, quarter I in in the year-over-year. in basis that food points third smarter were choices rigorous changes better on profit menu want competitive XX.X%. with point to margins we at costs along That's XX F&B than comparable making

profits, also achieved XXX an of had We focus too, growing success with utilizing was cocktails from basis selling lower cost items. on and increased beverage points. of profitable more margins This

external Let's on talk evaluate and preferred a repurchases; growth ROI allocation. prioritize leverage-neutral and ROI about finally, constantly internal opportunities We share towards basis. capital the capital common projects, We highest opportunities.

has XX ROI Beyond months, over in spoken we per for projects approximately $XX.X past million $X.XX the share. or about, Mark repurchased already shares have million X.X the

committed having to fund of value. projects focus Regardless allocation, ultimate ROI can to are We balance flexible external or dispositions, remain of on our exploring which proceeds capital sheet. additional a maximizing the be shareholder is We the used repurchases, growth.

leveraged, demonstrated conservatively by quarter low ratio the debt-to-EBITDA X.Xx of are trailing fourth net as We results.

an is over liquidity billion, $XXX and Our undrawn $X.X very million of rollover. $XXX strong comprised at in million cash

current through our XXX% and liquidity Importantly, our XXXX is of our maturities debt maturities. Xx nearly XXXX nearly

our on building me a XXXX few Let blocks provide numbers.

around heavily committing out expected be to is track about that note I be are on costs rolling million. remains X.X dividends service also its bed million. $X.X Preferred Debt equity Westin $XX $X a want overhead corporate to will Our we to to $XX.X by reduction. are million. And package the XX% price result better fourth an quarter, Westin expense betting XXXX. position in in the million our This the program. secure to quarter fourth of can new in in

XXXX, crops to mirror. rearview in expect easier me ahead that, Mark. field property let and comparisons we Looking several tax to back with expense get And to hard wage staffing as inflation growth, market put rising we the call a turn the insurance levels,

Mark Brugger

current travel establishes the trends in but market XXXX. Jeff. its adjust solid, normal the Overall, new Thanks, as environment to continues remain

We be basis represents the year-over-year. to a expect third fourth from sequential This at flat performance improving our XXX due improvement RevPAR point largely to quarter resorts. comparable approximately quarter,

generally are our with is forecast analyst pleased estimates. Wall Street year full current We that also consistent

the albeit continue to single And most XXXX, are believe nationally mid- actual fundamentals. the on markets that up U.S. limited stay a rates or while while to has corporate potential industry bookings to hotel to gradually, increase factors. digits. at is likely is based high industry For few a well. for with as finally, backdrop demand supply ADR good This should impact a economy strong provides inflation, above belief relatively Group certainly in should continue perform will solid. results, transient forward corporate special improve, to we

set Now particular DiamondRock, for our up. we like

specifics. me you few Let give a

peak our occupancy. have to prior get we for run hotels to First, room back to

expect $XX incremental room that occupancy XXXX behind points prior worth in about gap to revenue. of peak. end percentage million Closing We X.X is

an group. is opportunity there Second, on

revenue just spend. San and $XX Diego. room Our worth us good concomitant calendars XXXX is over levels, If Chicago, XXXX and important group in the room terrific is to outside back for convention with geographic in nights million room D.C. get that like setup for incremental markets

has for strong DiamondRock projects noted, up Jeff group XX%. results. And over lastly, to continue ROI a fuel As XXXX, will pace

example, to XXXX profit is $X million. growth with in the repositioned For XX% EBITDA experience XXXX Dagny in Boston to increase expected projected

positioned As tell, one our liquidity future highly is like And up of of remain on in you and that this Travel portfolio, we with society a the can believe we industry. open to DiamondRock model and the opportunistically. of move is this ample your questions. well would the constructive valued for assets travel any the world. time, strategy to we At focused for cycle around

Operator

question first Wurschmidt, our And Instructions] of [Operator from Markets. KeyBanc Austin Capital line with coming the

Austin Wurschmidt

a of resorts include around Lauderdale then Is trends items that to? starting just to curious, that of Fort Beach? think referenced. recent is XXXX? wanted starting a off, I'm clarify improvement expect Kimpton And that year-over-year to does you normalization the sequential period couple I is resort resorts in the the that separately, you're Just it reacceleration kind And alluding growth you again it that in reaccelerate improve the you performance, fair is in to to say and in in

Mark Brugger

question great the resorts. a It's on

it's think I a mix.

resorts given the we of shift adjusting good would resorts So strategies, the I of correcting that we some some easier like Keys, comps We're now. on saw say, some seeing would the say, footing patterns to started, I we're obviously new earlier. at the ones Florida comparable year-over-year, those periods normal year-over-year called out. seeing for We're some other into there stabilization. markets the demands. getting the And are, But the in that of are we are

some Lake for rate our outperformance there, So I which revenues, profits. importantly, occupancy would led the Tahoe, but carefully did trade, more at on where to as we substantial calculated out on also call landing

it's X. think all So combination I a of

more of would executed It revenue being some reaccelerating. stabilizing would are, some markets in I strategies So that it's comps successfully. easier is, is markets. focused asset or that I management say, say, really, But some

Austin Wurschmidt

it your without up, So rank the between of you pinpointing you were I continued business recovery if in of how guess guess, those to X you 'XX stands guidance a today? kind X gradual I would group BT. segments leisure, stack as segments mentioned

Mark Brugger

the just up still right XXXX, budgets For now. rolling we're

in the a So we've I of in days kind want those. before give been wouldn't budgets. through to jump I you more lot little through early each -- after know a think it's to of a XX we'll

Operator

question Citi. Smedes from next coming Our with Rose the line

Smedes Rose

a to It just sounds you I some color terms like Or at just full kind year? consider reintroducing more kind guess, of quarters are XXXX around normalize asset of far doing? talked guidance about, giving you you in sort the continues that the visibility, more some the and world formal kind thinking you've some some as improved would of point of management as have of the for next tools been you've of into as

Mark Brugger

when wars you world get have the the meeting. as to February. discussion where going have settles we'll think now, we see down, the we We'll Board are on. X certainly I Right at

going be forward at But we of You factors. February, now. one Hopefully, to kind uncertainty get the we'll quarter of and Fed to the of give bit kind a have the able outlook. on a be number time things little to a I and have time right it more of by other clear take we'll will think

Smedes Rose

wondering a And had relatively to I significantly year? know can that. it do $X And with it's it, million the next what often ask then I'm key you, And like I expected kind the overall of investment. portfolio, big the some but when around think a contribution point can the this wrong be bought below It late you per you $X think you relative just contribution your piece went it's looks at in reach forecast? year's And I small of million. was just running it initial

Jeffrey Donnelly

Yes.

of from we've in bit Austin set of management sort had institutional to think tools. going an I of resort revenue a owner-operated little struggle more an of

we some falloff high-end demand. While leisure saw in

seen terms a increased which really in of of as segmentation, the done. seen We've and success And owner-operated a there. We've group lot a significant So a bit occupancy an things the that I there. come saw part we've of inroads opportunities of lot we a from of lot think group contribution from going has that's as strategy more little a forward. been never back resort really pricing

which longer implement, our think group GDS, previously that on the acquisition. think connection I still strategies underwriting, those bit just saw confident little overall especially the and through exist, to about I in of growth taking we're revenue to a we didn't So some

Duane Pfennigwerth

you about the think, XXXX, a to expect follow most which trending a think into on an do convention like good see headroom, would trends You kind in which of market in question, lag? total? a think you ones I for couple up Chicago. of you market mentioned, As quarters calendar markets earlier to have just would that now, How you building

Mark Brugger

I side. is think mean I the on most visibility the we XXXX have into group

So at we citywide hotels can look calendars. at the our the convention and forward bookings

Chicago, So as ahead mentioned, be look revenues going if the and nights of are at forward of for over significantly next you up, we're room to of actually Citywide we XXXX. XX% ahead in and bookings year

feels good this is So still there be year peak. That supposed forward well. double as XXXX ahead of next levels to of year Sandy, of feels that ahead in substantially last a good. you year thing having remain another digits. bookings it prior good year very to low it's XXXX. one outstanding, D.C. very like nights. significantly above Boston significantly looks and kind in are year going good And the same and was is room our where got

So all those particularly look markets attractive.

bookings those with the hotels strength markets. forward Our correspond our at in

how much budgeting budgets seeing better sense, We'll that week. detailed time is this days process through So the that's spent the the now. properties on at off those really 'XX more ill will from having visibility kicks hotels right a and And with now shape up. individual go where XX

Duane Pfennigwerth

the conversion and And to independent can then your any how talk on you the just like Dagny, see changes changes mix distribution on you channels. about

is staying of transition backfill demand to do points? what was really much demand when that independent. you is you how convert as pick OTAs with? an share that independent, it And prior the to really example, And For on it up you

Jeffrey Donnelly

it's base over think going be years of building a couple awareness. I of building a exercise to market

the that great but got some really I that excess put We of a volume annual in amount out redemption that business, basis contract think of an which will we significant rate rate on got slightly And were amount supplant getting the Hilton actually we've of basis. out system, and of probably parity have of the sort on system. a from wasn't

on. really of which for BT months. consistent we've we our think the encouraging with the some up but of lot traded now more of some local the base partners It's corporate which Westin in hotel, And the a just huge business, I a throughout sort in we've And that results side, XX the process product with is about some inroads seen our we're good hotel Dagny on there XX% in we've the group So with group name Boston, some not contract establishing have for specifically. seen unlike from like-for-like of we're renovated a local customers. a

Operator

our from And next coming Securities. Dori question the line of Kesten, with Wells Fargo

Dori Kesten

looking to expense give QX into you with revenues we're flat are some tailwinds. as 'XX, able 'XX? run rate that any detail looking more X.X% on expenses believe into just potential there said up the you and be now could I were what Are

Mark Brugger

are hotels, we We're fully staffed to not really comparisons food particularly giving 'XX seeing guidance, on better cost. but expenses,

labor the number we also are put a our productivity per helping initiatives think room. in of I

year-over-year better. get have property continue saw book. comparisons our sequentially, as 'XX, from That's year, group the higher strength substantially So the do have XXXX as some basis. you expenses tax on uncontrollable into the in hopefully, come expect a We to anticipate banquet we'll trend the move down like to of revenues that that a and we continue

layer expense XXXX as well. be back we into the bank some associated as will there So

Dori Kesten

on on consensus. margins And what's math the the quick with your based base QX comment comfortable that you're

Jeffrey Donnelly

versus Chicago, that's XXX I our you have have it we about in way. or recall, EBITDA quarter will explain tax the not to bit this for I basis tax Chicago as quarter-by-quarter are Year-to-date, down in hotel think repeat. margins dip because going The guess I the larger XXXX. would fourth relief points a adjusted year-over-year

XX a about like drag. the XXX items the XX have have about Westin this Linens and property that, to And last insurance to which about And that's something on I not a tax So going year. basis renewal a then some small beyond expenditure this mentioned point point drag. basis other year, then the benefit you basis point year. We're is are

X. sort So of that basis we've you're as a to think before, did if change fourth the XXX almost seen differential close of on in it we versus point adding something the XXX probably you top the quarter margins basis that of point

Dori Kesten

And a guess, I then larger assume in test market it then, going that's you box? second, good to mentioned pricing be we primarily markets? testing on on dispositions. is Should that urban time to the And yet

Mark Brugger

generally don't dispositions on much as well. the are about these assets as we we are that's urban like that are calls say would we to assume so a testing the So I correct all the But too assumption. that potential buyers market assets, listing pending always talk

really more think bigger the to where because there done. deals below that it's debt be large to are seems get of The hard today, those is more of difficult volume. $XXX million, markets liquidity and where I deals market just it's the deal and kind just exists loan

Operator

line with question from coming next the of Deutsche Bank. Chris Woronka, our And

Chris Woronka

couple plans are. your have don't positive? Hilton, net given that hurt any recently know you the neighborhood to Mark, different Westin, is longer-term to does going and Hilton. that Boston, all sold a -- in I of a guess, you a look converted one of Is there what hotel convert there your they're recently I you at out if a it you friends I then years, think And slightly the

any can from that? color us on you impact give So any

Mark Brugger

have think rate One, the good a thought in comp I to cap marketplace a that's assets and Boston. for in I good

I thought was that a favorable So read-through.

problem we a itself and kind a of that lends would And the want from decided because is not Hilton hotel. our branding, it demand the Dagny. week one have another have location health consistent the -- what rooms, On away Hilton independent we kind to on in of of the reasons avoided our has location far in the been X-day of a put at X,XXX too brand

ways, be lot think new it of our market. within to in not I this So supply to exposed vindicates Hilton a decision

of head very September just decision. our for feel the on pace. of good about original looked So had our we was August, which the We good underwriting. feel the It anticipated good given about Dagny. a good and prospects

that. we feel about good So really

Chris Woronka

I associated are or there I on seeing. really mentioned I is you volume more relative it the pretty a questionnaires, insurance One insurance you locked you're there. quick is, from pricing optimistic to maybe general? because then And guarantees with transient, about the ones little of what follow couple surprise 'XX? think the those of then to bit comments. just given And being good especially up year talked part want just corporate any comment about on a that cost I think prepared me a have easier, in comps caught Is we're guess in you next for by that some second

Mark Brugger

X, our X. property that this taking order, April April locked reverse is in renewal until insurance, Well, in we're so

get to to what in when accommodated were that's a know is see we when get increase convey think remarks will be trying but will last had there. more we the costs that. year. I the we April, we substantial And prepared market what our be that we'll we Hopefully, through

On they not corporates engineering in surveys the of more to certainly in that levels at That's restricted to they our taking special a the I that surveys travel 'XX the the special guarantees, as But into back intending BT I've rapid 'XX but XXXX. that minimum initial we intend more are our we're expect move think in is this at the they fact 'XX and from corporates are way of that the BT don't we're some BT, travel they're helpful. than seen the we comfort indicate mix time. at that hotels. reacceleration largest is don't Most than have they the from did come

Operator

Dijkum, the Point. Compass next Van question Floris of from coming with And line our

Floris Gerbrand van Dijkum

fact resort types Chico been make positive does are more impacting for in presume I on million? you these the and and on sales testing the business. smaller the you that guess, Or type more of you've how you're below testing your markets dispositions. for markets competition the on the had that you the seeing the accommodating buying follow-up, with that's a the for some market And capital of like transactions, debt the larger question that some in we Should difficulty some on more market asset because getting transactions? Or sales. is assets obviously, of then $XXX Sunstone of the the And assets. you're bigger news are debt potential the I

Mark Brugger

to and is in sale, So between certainly I values everything private would say, market seems there arbitrage our portfolio, values. implied for an and be public market

we'd to not now. into get market like right So a great that that arbitrage. With it's said, sellerâ€™s

shareholders trying prices. on doing So of interest be in prudent best to we're what's we're sure release our making the that about

So in testing market. we're the involved actively

of below greater potential seen volume million, the the I in think number it's $XXX number bidders. and lenders of we've

get than the the are more in are on out those bidders you're midsized deals a to number to more $XXX deals million marketplace. likely of that product small So you on

I best spent focused in mentioned, on That's under of our kind So out, competition spend be more all arbitrage why Austin. on The our are we we to those the Lake of dispositions. proprietary the pointed continue where spending $XXX continue unique and the XX is we opportunities flip on for time years market front. growth as these million over as you there transactions. And They still to that extra side, probably database like that acquisition we on is for now is opportunities. kind Chico our think efforts opportunities,

Floris Gerbrand van Dijkum

mean that you due New potentially. look sell in well have interest as And mortgage your maybe Courtyard pretty my coming dispositions question to follow-up be on $XX that's and year, of million, a York I could one potentially. you low is could the next

unsecured that. deal you simply you otherwise But pay the So don't mortgage borrowing base? increase with and would to down your have should

Mark Brugger

the cash certainly asset, base think we undrawn likely the revolver, fungible sold satisfy mortgages another ended cash makes But the it we more can that we on so with of say hand. that million $XXX we I have sell assets we could we debt. -- don't among it it. the plus use would asset Well, if I with debt's quarter

So keep come the we the of need. to reasons all we It's one the we when handle putting flexibility any they financial events and of kind those on kind pressure optionality the without company. the that -- have of all the fortress sheet balance

Operator

Anthony line Barclays. And our coming with the of Powell, next from question

Anthony Powell

on a business transient. Just question

quarter. management of think markets that talked kind strategy you act or, the I to there drove implement decline? We cost to that in I And that. guess, sluggishness revenue third some categories what about

Mark Brugger

to softness. these level as we're the Just But small relatively we that what We didn't of and in seen they're still Really, BT to as north said from business it travelers clarify, just XXXX see but remains that remains pre-pandemic. gradually comments the special post sensors, they're at in comps it we're much, were depressed better the levels, trend second The quarter. levels third and PwCs, of much traveling remain year, lower get And kind easier quarter and biggest well substantially the companies seeing big remain they pre-pandemic. at those they continued overall. than lower the robust, and the seeing what last below Day, brand volumes at substantially did Labor but they levels. it you've obviously corporate, did

Anthony Powell

they remain of up dividend or more year maybe on expect redevelopments continues also increase. for XXXX. and in some kind what kind budget where the current developments on level to of income didn't your I you have mean you any is? year. the that flow go as maybe cash next one Do Do about And the And talked you next dividend. keep it CapEx to

Jeffrey Donnelly

now, I mean, budgets. Mark still earlier, as our Right we're said pulling together

think, originally from a generally bit issues flex some or a CapEx consistent for as when $XXX number about I was out think carryover $XXX but what contemplated year, about there I pretty come timing will be it are It little million. remain projects started us. between and million. It's prior will completed the our might this

on have year. I now, we plan to we going the that, need XXXX, the And said to use of per lower. a Board that and can $X.XX forward not I'll but think at where believe net to of if dividend, in for As the we losses pay a offset that the dividend, share I that's XXXX. all operating right sufficient paid defer Mark to much continue through

think to have level. it ability So I keep the at we that

Mark Brugger

will generally something long-term quarter-to-quarter. Board lodging board dividend in and think returns is evaluate our or trading. like will that highest the about given or dividend the be review something higher we capital, and Yes. talk It's places, But we'll uses an is other now, Right right it's the add for invest on, important every value better I'll We looks why REITs. just that are price the stock capital now, it that just there it of know policy. on for every but the quarter. component with meeting we

Operator

Asad, Dany Our from next America. from of question Bank coming

Dany Asad

maybe there's could during similar of little there's of windows, commenting Are airline been booking different season that airlines in kind kind bit heard but you seeing been peak more strength on outside seeing on We've they're earnings weakness your those patterns a of we this be between. -- seeing of the behavior we're in and side? what not why holidays, any than

Mark Brugger

little establish think normal new starting we're -- a of it's I that. on year this patterns Dany, to bit

say, than think, would some forward. can pre-pandemic, build coming on So fatigue, they sustainable of I exceptional they're Florida better of had in kind into, but seasons. we They're shoulder I levels there's more certainly, remaining some were that that stuff down we going that

different. say would I So that's

strategies implementing that around are We reality.

as we our during like some used high-end move have and mean into we're we and resorts barely we're be Beach it aggressive in of meeting Henderson Resort, So to locked that has profits more we take and going may to of 'XX, maximizing which that a it booking much that make I'll the midweek sure basically up the hotels. invested year, group space. terrific Last

happening to understand think what's in need I demand the you channels. So

move your midweek of to the ahead the normal revenue new think way anticipatory in is into done job on an be XXXX the You and we have the trying set you established. group. on we've strategy stay to it particularly we're very patterns as And I think shifting And I so is proactive curve far. as excellent

Operator

of Our line question Crowâ€™ Bill coming Raymond from James. next with the

William Crow

still rolling let Jeff, opened prepared and but and expenses up the start you in recognizing budgets, recognizing with of subject me your that remarks. you XX you're also margins

this it frame me let So way.

way about need year, to they in any peers X% growth. flat think different your or suggested DiamondRock reason order EBITDA that Is than that other? RevPAR achieve would of the next recently materially to be margins there one One that

Jeffrey Donnelly

Dagny of on up. have for significant sort ramps I that's as going think going mentioned, that coming some to us. back with and we factors unique be like some Like I the on EBITDA adding

a a portfolio you that's think maybe I if little will. more for static,

think in method. to going vicinity. sort probably to probably that's course, good think industry It's portfolio, I I the a portfolio that's but of vary, of

William Crow

the same consumer But Or question a is maybe we weakening? Mark, leisure, look when is normalizing? here. it at

Mark Brugger

before We're maybe share to it's Well, that. distinguish hard this of we're still to place cutting expenses. weakening, exactly spend But versus they're they're but are back traveling. consumer wallet driving some normalization. behavior. to seeing out material We're what's seeing purchases it's their -- things. the be on significant. back hard travel cutting We're the But experiences seeing their seeing people too. seeing We're always not pull not it's people

a I holiday think pretty season robust we'll come up see we here. as

XXXX. But have patterns settled things into optimistic. clearly, relatively So we're new in

Operator

line Darling, Green the from coming question with next Chris Street. Our of

Chris Darling

to And is you of forward? York markets be rare one York that might where on can New fundamental is be sustainable touch City it actually recent been what's the suggest Mark, up in might months despite in pretty those XX-year? strong going movement fair values the that then New how and performance in

Mark Brugger

a have questions on So you I kind guess couple detailed -- there. I'll of of speak

I that City everyone's I a mean York and value, gets always from it's always the high. attention. taking is in market New say international interest So investors

believe So York, value. Fundamentals good. global you I could the see it's on there been on thesis People think a New active New are of investor in in investors York kind continues appetite. scale -- in always increase and

That's The housing a getting lot a migrant taken other get Most been to converted helpful. X,XXX-room for lot to very things have permanently other You uses. properties Roosevelt, taken of of and converted you've there. uses. student had other notably, getting happening big supply positive housing, out

that rezoning around Airbnb, XXXX. will which MX hotels, we've a channel. of which most forward, the units out change going number the taken to of going ability in have the generally significant after through take has had out be You nonunion recently, course, laws That's build the available to

probably San other York, in of financials York. I'd in lot type a a on days tech-centric with the like the the return market juxtapose those week. return kind to coming that suppressed get to which industry there's has sure New of on industry the reasons New ability or So to industries X to have be transient of lagged making that stats, been one work office aggressive the the people most single I X Seattle is the Francisco, of those say have bullish or kind a into markets.

New think are. I on reasons a We there's constructive to So lot certainly York. be of

we'll as we think constructive our be I as set well. there XXXX budgets for

So good. that feels

Chris Darling

have the on you commentary any New And York? investment sales would in market

Mark Brugger

fairly been think a we hotels has high was this service there brokers demand participate some that feedback to is from robust particularly off. There Again, select and those recent process in the smaller for that the that trades, I gone offerings. at talked the end have

think as and is those of worth the people I net are always in market, high get New one I you individuals in. international that markets And mentioned. will York interested interested

constructive dispositions. market think I for a So it's

Operator

question And coming our Baird. with Michael next from Bellisario,

Michael Bellisario

first monthly the cadence. just And on

expectations? versus upside thought you to was look September saw was to XQ of on your going can then really provide what any Just And October, month like? you main the the in relative color you driver what particularly

Mark Brugger

X about months come anticipated. we So September expectations did gave We in a better little than our ago.

for on a of out month laid resorts was particularly quarter is way kind the that we forecasted. group us. in of fourth will variable a than in and little be The So month. intermarket better October strong October. the the It September focused had was the came strongest

we and October. the to of for were have ahead our We group at December expectations expect or strength. So same November don't

So as good strong so far on they a as probably so won't was. But October comp quarter. be as basis this

Michael Bellisario

little call. a gears late bit, announced switching was your just conference August then in after And last transaction Russia the

trend next you them and you you're looking any and shapes from your So what private how relative on view view are what or for, at? on can groups looking then value maybe to that maybe equity changes hearing updated one, provide steps for

Mark Brugger

very that Horse would that had the private firms. I substantial Well, had a and number high-quality, of from read-through transaction positive interest capable equity a say

was the able a secure, relative for So think, It was encouraging. debt it's the the depth to good bidding to encouraging. fairly attractive. there, to debt and very were they the And of be was pricing like competition very going fairly significant I a think, basis, the looks also I on

changes that I So are I that it that our Does positive our don't read-throughs. outlook? outlook. think all change of know

private super when still interested, particularly public the like time I REITs. think on get the is aggressive to is feel pricing leaning they're in but for in this doesn't moment equity it

for are is I that with concern of of to going next lean a PE think on probably more middle be based the Fed I we slower in. and year the imagine where firms the would time economy, robust to

I past hopefully of together but the the for time be year, that those things would equity the should come more in of to the debt Fed it's and make raising robust aggressive functioning, will people You'll get in markets. it's and imagine will private rates. next And would middle a optimal that, be Hopefully, the decisions. peak liquidity I more say, robust. Today, not

Operator

no Mark queue Mr. the Brugger remarks. this turn see call at questions I closing back to I further over any for time. will And in the now

Mark Brugger

Thank you.

look next a to you For DiamondRock, everyone Have quarter. the great in we day. forward on we call, and appreciate interest updating your

Operator

for Thank participation. that your gentlemen, does today. and you for conference Ladies the conclude

may You now disconnect.

DiamondRock Hospitality (DRH) 1 Nov 232023 Q3 Earnings call transcript