INVESTOR
PRESENTATION
NOVEMBER 2023
TRANQUILITY BAY BEACHFRONT RESORT
FORWARD LOOKING STATEMENTS & USE OF NON-GAAP FINANCIAL MEASURES
FORWARD LOOKING STATEMENTS
Certain statements made during this presentation are forward-looking statements that are subject to risks and uncertainties. Forward-looking statements generally include the words "believe," "expect," "anticipate," "plan," "estimate," "project," "will," "intend" or other similar expressions. Forward-looking statements include, without limitation, statements regarding industry outlook, results of operations, cash flows, business strategies, growth and value opportunities, capital and other expenditures, financing plans, expense reduction initiatives and projected dispositions.
Factors that could cause actual results to materially differ from those contained in the forward-looking statements include, without limitation, national and local economic and business conditions, including the impact of COVID-19 on occupancy rates at DiamondRock Hospitality Company's (the "Company") hotels and the demand for hotel products and services, and those risks and uncertainties discussed in the most recent Annual Report on Form 10-K, which the Company has filed with the Securities and Exchange Commission, and in our other public filings which you should carefully review. The forward-looking statements made are based on our beliefs, assumptions and expectations of future performance, taking into account all information currently available to the Company. Actual results could differ materially from the forward-looking statements made in this presentation. The forward-looking statements made in this presentation are subject to the safe harbor of the Private Securities Litigation Reform Act of 1995.
Any forward-looking statement speaks only as of the date on which it is made. Although the Company believes the expectations reflect ed in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material.
All information in this presentation is as of the date of this presentation, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
This presentation contains statistics and other data that has been obtained or compiled from information made available by third- party service providers and believed to be reliable, but the accuracy and completeness of the information is not assured. The Company has not independently verified any such information.
USE OF NON-GAAP FINANCIAL MEASURES
We use the following non-GAAP financial measures that we believe are useful to investors as key measures of our operating performance: EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel Adjusted EBITDA, FFO and Adjusted FFO. These measures should not be considered in isolation or as a substitute for measures of performance in accordance with U.S. GAAP. EBITDA, EBITDAre, Adjusted EBITDA, Hotel EBITDA, Hotel Adjusted EBITDA, FFO and Adjusted FFO, as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company.
A detailed explanation of these non-GAAP financial measures and the reconciliation of such measures to the most directly comparable financial measures prepared in accordance with U.S. GAAP can be found in the Company's third quarter 2023 earnings press release dated November 1, 2023.
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WHY DIAMONDROCK? | |||
1 | High Quality & Geographically Diverse Hotels | ||
2 | Robust Outlook For Group & Leisure Demand | ||
3 | Track Record of Driving Internal and External Growth | ||
4 | Strong Liquidity and Flexible Balance Sheet | ||
5 | Robust ROI Pipeline and Highly Liquid Portfolio | ||
6 | ESG Leadership | ||
7 | |||
Experienced Management | 3 | ||
DIAMONDROCK AT A GLANCE
PORTFOLIO | |
9,724 | ROOMS |
36 | PROPERTIES |
25 | MARKETSGEOGRAPHIC |
DIVERSIFIED PROPERTIES
FINANCIAL SUMMARY
Q3 2023 | |
TTM Revenue | $1.1B |
TTM Corporate Adj. EBITDA | $282MM |
Total Debt1 | $1.2B |
Net Debt2 to TTM EBITDA | 3.8x |
Total Debt to Gross Book Value | 29% |
- Excludes preferred capital
- Cash includes corporate cash, excludes preferred capital
DIVERSIFIED GEOGRAPHY
% OF 2022 | |
MARKET | EBITDA3 |
Atlanta | 1.3% |
Austin | 2.5% |
Boston | 10.2% |
Burlington | 2.7% |
Charleston | 3.2% |
Chicago | 14.2% |
DC | 1.1% |
Denver | 3.7% |
Destin | 3.7% |
Florida Keys | 8.4% |
Fort Lauderdale | 7.7% |
Fort Worth | 4.2% |
Huntington Beach | 2.7% |
Lake Tahoe | 1.4% |
New Orleans | 2.0% |
New York City | 6.9% |
Paradise Valley/Yellowstone | 0.9% |
Phoenix | 1.8% |
Salt Lake City | 2.9% |
San Diego | 2.9% |
San Francisco | 0.3% |
Sausalito | 3.9% |
Sedona | 4.5% |
Sonoma | 2.8% |
Vail | 4.1% |
Total | 100.0% |
3. 2022 EBITDA, proforma for 2022 & 2023 acquisitions
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WELL POSITIONED PORTFOLIO: LEISURE AS A LONG-TERM SECULAR DRIVER
LUXURY & LIFESTYLE RESORTS
AUSTIN, TX | MARATHON, FL | FORT LAUDERDALE, FL |
PRAY, MT
24 Hotels 4,312 Keys
57% of Portfolio
by Revenue
15 Independent Hotels
100%
Unencumbered by Management
LAKE AUSTIN SPA RESORT | TRANQUILITY BAY RESORT | |
SEDONA, AZ | DESTIN, FL |
L'AUBERGE DE SEDONA | HENDERSON BEACH RESORT | |
VAIL, CO | DESTIN, FL |
THE HYTHE, A LUXURY COLLECTION HOTEL | HENDERSON PARK INN |
KEY WEST, FL | |
SAUSALITO, CA |
CAVALLO POINT | MARGARITAVILLE BEACH HOUSE KEY W EST |
URBAN LIFESTYLE HOTELS
BURLINGTON, VT | CHARLESTON, SC |
HOTEL CHAMPLAIN BURLINGTON | THE LINDY CHARLESTON HISTORIC DISTRICT | |
PHOENIX, AZ | SAN FRANCISCO, CA | |
WESTIN FORT LAUDERDALE BEACH RESORT
LAKE TAHOE, CA
THE LANDING RESORT AND SPA
FORT LAUDERDALE, FL
KIMPTON SHOREBREAK FORT LAUDERDALE BEACH
RESORT
SEDONA, AZ
ORCHARDS INN
CHICAGO, IL
THE GWEN, A LUXURY COLLECTION HOTEL
NEW ORLEANS, LA
CHICO HOT SPRINGS
HUNTINGTON BEACH, CA
KIMPTON SHOREBREAK RESORT
KEY WEST, FL
HAVANA CABANA
SONOMA, CA
THE LODGE AT SONOMA RESORT
DENVER, CO
HOTEL CLIO, A LUXURY COLLECTION HOTEL
BOSTON, MA
HOTEL PALOMAR PHOENIX | HOTEL EMBLEM | BOURBON ORLEANS HOTEL | THE DAGNY BOSTON | 5 |
Notes: Revenue is trailing twelve months as of Q3 2023
WELL POSITIONED PORTFOLIO: GROUP AND URBAN DEMAND RECOVERY
URBAN GROUP HOTELS
6 Hotels 3,853 Keys
31% of Portfolio by Revenue
Strong Convention Markets
BOSTON, MA | CHICAGO, IL | SAN DIEGO, CA |
WESTIN BOSTON SEAPORT | CHICAGO MARRIOTT MAGNIFICIENT MILE | WESTIN SAN DIEGO BAYVIEW | ||
FORT WORTH, TX | SALT LAKE CITY, UT | WASHINGTON, DC |
THE WORTHINGTON | SALT LAKE CITY MARRIOTT DOWNTOWN | WESTIN WASHINGTON, D.C. CITY CENTER | ||
URBAN LIMITED-SERVICE HOTELS
4 Hotels 969 Keys
9% of Portfolio by Revenue
100% Unencumbered by Management
SUBURBAN HOTELS
2 Hotels 590 Keys
3% of Portfolio by Revenue
100% Unencumbered by Management
NEW YORK, NY | NEW YORK, NY | NEW YORK, NY |
HILTON GARDEN TIMES SQUARE CENTRAL | COURTYARD MANHATTAN/FIFTH AVENUE | COURTYARD MANHATTAN/MIDTOWN EAST | ||
DENVER, CO
COURTYARD DENVER DOWNTOWN
ATLANTA, GA | BETHESDA, MD |
ATLANTA MARRIOTT ALPHARETTA | EMBASSY SUITES BETHESDA | |
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Notes: Revenue is trailing twelve months as of Q3 2023
Q3 2023 PERFORMANCE HIGHLIGHTS
Q3 RESULTS
Total Revenue Up 12% vs 2019 and Flat to 2022
RevPAR Ahead of Expectations
Q3 Comparable Results:
- Revenue: $277.1MM, +0.1% vs 2022 and +12.0% vs 2019
- RevPAR: $210.03, -1.1% vs 2022 and +7.6% vs 2019
- TRevPAR: $312.35, -0.1% vs 2022 and +11.6% vs 2019
- Sequential year-over-year improvement in resorts from Q2
- Departmental Operating Expenses increased 1.4% despite disruption, flat revenues, and 140bps higher occupancy
- Hotel Adj. EBITDA: $81.1MM, -6.6% vs 2022 and +8.9% vs 2019
- $2.0MM from The Dagny conversion disruption
- $2.8MM due to Chicago property tax relief recognized in prior year
- $1.9MM due to insurance policy renewal (April 2023) - Q3 reflects full quarter impact of higher costs
- Aggressive asset management initiatives resulted in:
- Other Income increased by 8.5%
- Comparable F&B Profit Margins increased 50bps vs 2022 despite food inflation
- Beverage Margins increased 140bps
2023 Comparable Results | Q1 | Q2 | Q3 |
RevPAR vs 2022 | 16.8% | 0.6% | -1.1% |
RevPAR vs 2019 | 13.7% | 8.0% | 7.6% |
KIMPTON HOTEL PALOMAR PHOENIX
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IMPROVING LEISURE DEMAND
Resort Revenue Still 25%+ above 2019, Q3 Resorts Adj. Hotel EBITDA Up 23% vs 2019
Resort RevPAR Finding New Baseline
Resort RevPAR vs 2022 | Resort RevPAR vs 2019 |
140% | 130% | 131% | 124% | |||
120% | ||||||
100% | 94% | 87% | 92% | |||
80% | 500 bps | |||||
60% | improvement | |||||
40% | from prior | |||||
quarter | ||||||
20% | ||||||
0% | ||||||
Q1 | Q2 | Q3 | Q1 | Q2 | Q3 |
Tremendous Upside Opportunity
with Locational Flexibility
4.4 Days Per Week
2019 Days Per Week in Office of an
Average US Office Worker
3.4 Days Per Week
Post-Pandemic Days Per Week in Office
of an Average US Office Worker
2.7B Incremental Days of
Locational Flexibility
Source: CBRE Hotels Research
THE LANDING RESORT & SPA | TRANQUILITY BAY RESORT | THE HYTHE, A LUXURY COLLECTION HOTEL |
Q3 TRevPAR | +15.2% | +10.4% | +9.3% |
vs 2022 |
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STRONG GROUP PACE - FAVORABLE FOOTPRINT
2023 Comparable Group Revenue Expected to Exceed 2019 (Rates Up, but Room Nights ~10% below 2019)
2024 Group Revenue Pace Up 23% vs 2022
Group Demand Recovering Fast in 2023, with 2024 US Convention Volume to Exceed 2019
Strong Citywide Convention Room Nights (Units'000) | Convention Volume Forecast Indexed to 2019 | ||||||||||||
100% | |||||||||||||
MARKET | % of 2022A | 2019 | 2022 | 2023E | 2024E | 2025E | |||||||
EBITDA | 80% | ||||||||||||
CHICAGO | 14% | 1,142 | 1,153 | 1,047 | 1,184 | 1,084 | 60% | ||||||
BOSTON | 10% | 349 | 330 | 426 | 389 | 366 | |||||||
SAN DIEGO | 3% | 732 | 660 | 811 | 906 | 831 | 40% | ||||||
PHOENIX | 2% | 291 | 305 | 368 | 332 | 290 | 20% | ||||||
WASHINGTON, DC | 1% | 387 | 400 | 297 | 450 | 364 | 0% | ||||||
TOTALS | 30% | 2,901 | 2,848 | 2,948 | 3,262 | 2,935 | |||||||
2019 | 2022 | 2023 | 2024 | ||||||||||
Source: CBRE Hotels Research, Center for Exhibition Industry Research's Index
Significant Upside Potential in Full Year Group Revenue
800
('000) | A return to 2019 | ||||
level group room | |||||
Nights | 700 | nights | |||
$34MM | |||||
represents | |||||
Room | incremental | ||||
room revenue | |||||
Group | and additional | ||||
out of room | |||||
600 | spend | ||||
2019 | 2022 | 2023 |
DRH's Geographic Footprint Well-Positioned for Group Recovery
WESTIN WASHINGTON, D.C. CITY CENTER | CHICAGO MARRIOTT | WESTIN BOSTON SEAPORT DISTRICT |
2024 Group | +59.1% | +43.9% | +17.8% |
Revenue Pace | |||
as of Q3 vs 2022 |
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MODEST GAINS IN BUSINESS TRANSIENT
Q3 Business Transient Demand Up 5.9% vs 2022 - Modest Gains, Though Still Below Prior Peak
Corporate Transient Expected to Continue to Improve, Albeit Slowly
Business Travel (GDS) Share of Total Demand vs Percent of 2019 Levels
Strong Focus on Maximizing Business
Transient Revenue Strategies
- Working Closely with Operators
- Channel Shift
- Occupancy vs Rate Trade Offs
THE GWEN, A LUXURY COLLECTION HOTEL
Source: CBRE Hotels Research, Kalibri Labs
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DiamondRock Hospitality Company published this content on 13 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 November 2023 13:46:46 UTC.