DRH

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. DiamondRock Hospitality (DRH) is drawing fresh attention after reporting second quarter 2026 results with higher revenue, a sharp jump in net income, and a 22% increase in its quarterly dividend. See our latest analysis for DiamondRock Hospitality. The dividend increase and acquisition commentary appear to have reinforced market confidence in DiamondRock Hospitality, with the share price at $13.24 and a 30 day share price return of 9.60%. Momentum looks strong, supported by a 45.18% year to date share price return and a 1 year total shareholder return of 82.05%, alongside an 85.12% total shareholder return over three years. If DiamondRock Hospitality’s recent move has caught your eye, this could be a good moment to broaden your watchlist using our screener of 18 top founder-led companies DiamondRock Hospitality now has stronger recent earnings, higher cash flow and a richer dividend profile, yet the stock has already moved up sharply. Is the current share price still leaving enough value on the table for new buyers? DiamondRock Hospitality last closed at $13.24, while the most followed narrative sets fair value at $12.46 using an 8.23% discount rate. This framework leans heavily on long term travel trends and disciplined capital use. Read the complete narrative. Want to know what kind of revenue uplift and margin profile that travel backdrop needs to support this fair value math? The narrative leans on measured growth, firmer profitability, and a future earnings multiple that stands above today’s broad market. Curious how those moving parts combine to justify only a small gap between price and fair value. Result: Fair Value of $12.46 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, you still need to weigh softer resort RevPAR and muted group room revenue growth, because persistent pressure in these areas could challenge DiamondRock Hospitality’s earnings narrative. Find out about the key risks to this DiamondRock Hospitality narrative. The analyst narrative pegs DiamondRock Hospitality at 6.2% above its fair value, yet its current P/E of 18.2x sits well below peers at 42.2x and a fair ratio of 29.8x. That gap points to a company priced more cautiously. Is the crowd or the model getting closer to reality? To see how that P/E gap could close over time, and what it might mean for valuation risk or opportunity, take a closer look at our breakdown in See what the numbers say about this price — find out in our valuation breakdown. The mix of optimism and concern around DiamondRock Hospitality may feel finely balanced right now, so it helps to check the underlying data yourself and act before sentiment shifts. To weigh both sides clearly and decide where you stand, start with the 2 key rewards and 4 important warning signs. If DiamondRock Hospitality has sharpened your focus, do not stop there. Broaden your watchlist with fresh ideas that match your style and risk comfort. Target potential bargains by scanning companies that currently screen as 55 high quality undervalued stocks and see which ones warrant a deeper look. Prioritise stability by reviewing 81 resilient stocks with low risk scores that may offer a smoother ride through market swings. Spot potential future standouts by checking the screener containing 19 high quality undiscovered gems before they are widely followed. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DRH. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Interested in DiamondRock Hospitality Company? Here are five stocks we like better. Strong second-quarter performance: Comparable RevPAR rose 7%, while operating leverage drove a 240-basis-point expansion in Hotel Adjusted EBITDA margins. Adjusted FFO was $0.44 per share, including a $0.03 benefit from Chicago property-tax settlements. DiamondRock raised its 2026 outlook to 2.5%–4% RevPAR growth, $310 million–$320 million of Adjusted EBITDA and $1.18–$1.23 of Adjusted FFO per share. The company also increased its quarterly dividend 22% to $0.11 per share. Demand remained broad-based, with resort RevPAR up 7.9%, urban hotel RevPAR up 6.6% and group revenue up 6.6%; management particularly highlighted the strong performance and improving group pace at L’Auberge de Sedona. DiamondRock is evaluating acquisitions and dispositions and could be a net seller this year. 7 best hotel REITs to buy now DiamondRock Hospitality (NYSE:DRH) reported second-quarter 2026 operating results marked by higher revenue per available room, expanded hotel margins and an increase to its full-year outlook, as strength across group, transient and leisure demand supported results. Chief Financial Officer Briony Quinn said comparable RevPAR increased 7% from a year earlier, with growth accelerating from roughly 5.5% in April and May to 10.1% in June. Group and transient revenue each rose more than 6% during the quarter, while Total RevPAR increased 5.6%. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now The company reported corporate Adjusted EBITDA of $107.9 million and Adjusted FFO per share of $0.44. Results included a $6.9 million benefit, or $0.03 per share, from settling multiyear property-tax appeals involving its two Chicago hotels. Excluding that benefit, the company said FFO margin expanded 303 basis points. DiamondRock’s trailing-12-month free cash flow per diluted share, defined by the company as Adjusted FFO less capital expenditures, rose 27% year over year to $0.80. CEO Jeff Donnelly said free cash flow per share has increased approximately 30% over the past 12 months as the company pursued its “DiamondRock 2.0” strategy. → Microsoft Just Flipped the AI Spending Narrative Overnight Quinn said hotel operating expenses increased 1.8% during the quarter, excluding the favorable property-tax appeals, compared with total revenue growth of 5.5%. That produced 240 basis points of Hotel Adjusted EBITDA margin expansion. Wages and benefits increased 2.2%, while labor hours declined despite higher occupancy, according to the company. During the question-and-answer session, President and Chief Operating Officer Justin Leonard clarified that labor costs were not down overall, but were “slightly down or generally flat on a per occupied room basis.” He attributed the performance to productivity improvements across the portfolio rather than cost actions by hotel brands. → Carrier Earnings Could Send the Stock to a New All-Time High Management said the company expects expense growth of about 2.5% for the second half of 2026. Leonard said some of the margin gains seen in the first half are expected to moderate because of factors including the New York hotel union renewal and higher bonus accruals tied to performance. The company said the World Cup contributed an estimated 90 basis points to second-quarter RevPAR growth, particularly in Boston and Greater San Francisco, but was not the main driver of the quarter. DiamondRock now expects the event to contribute about 30 basis points to full-year RevPAR growth, modestly above its prior 20-basis-point estimate. Management pointed to continued demand from higher-income travelers. The average guest bill at checkout exceeded $475 per day during the quarter, while the company’s five highest-average-daily-rate hotels generated average guest bills above $1,200 per night. Hotels with ADRs above $300 outperformed lower-rate hotels by almost 300 basis points on Total RevPAR growth over the past year, Quinn said. Resort RevPAR increased 7.9%, led by L’Auberge de Sedona, Cavallo Point, DiamondRock’s two Destin properties and The Landing Lake Tahoe, all of which posted double-digit growth. Urban hotel RevPAR rose 6.6%, with leading contributions from The Dagny, the company’s Chicago hotels, Bourbon Orleans, Kimpton Hotel Palomar Phoenix and Hotel Emblem. L’Auberge de Sedona continued to exceed management’s expectations following the integration of two previously separate hotels. In its first three quarters as an integrated resort, revenue increased 17%, Hotel Adjusted EBITDA rose 40% and margins expanded 670 basis points compared with two years earlier, Quinn said. The company increased its estimate of the property’s contribution to 2026 RevPAR growth to at least 75 basis points from 50 basis points. Donnelly said the company now expects the Sedona investment to produce a 20% yield on invested capital, compared with an original expectation for a low-double-digit EBITDA yield. He also said the property’s 2027 group pace is more than double its level for 2026. Group revenue increased 6.6% in the quarter, supported by rate growth of more than 3.5% and a 2.5% increase in room nights. Group pace for the second half was up approximately 1%, led by fourth-quarter strength, while third-quarter pace was expected to be essentially flat. Management said it expects another record group year in 2026 following a strong 2025. For the third quarter, Leonard said a group pace deficit—particularly in August—has been partially offset by stronger short-term transient booking activity. Management said it expects fourth-quarter RevPAR growth to exceed third-quarter growth. DiamondRock raised its quarterly common dividend 22% to $0.11 per share and increased its 2026 guidance. The company now expects: RevPAR growth of 2.5% to 4% for 2026, an increase of 75 basis points at the midpoint. Adjusted EBITDA of $310 million to $320 million. Adjusted FFO per share of $1.18 to $1.23. Capital expenditures of $75 million to $85 million, with guidance implying 18% free-cash-flow-per-share growth. The company said it has no debt maturities until 2029 and has no secured debt, convertible debt, preferred equity or off-balance-sheet encumbrances. Quinn said one additional turn of leverage would provide about $500 million of investment capacity while remaining in the company’s target leverage range. Donnelly said leverage could finish the year near 3 times net debt to EBITDA if the company takes no further actions. Management said transaction activity has improved and that DiamondRock has been evaluating acquisition and disposition opportunities. Donnelly said the company is more active on dispositions than it has been in recent years, with one marketed property receiving more than a dozen bids. However, he said competition for acquisitions has intensified, with the company sometimes finding itself 10% to 15% below winning bids. Donnelly said DiamondRock could be a net seller during the current calendar year, though the company expects to pursue both acquisitions and dispositions over the next six to 12 months. He said the company remains interested in resort properties given their long-term characteristics, but will also evaluate urban opportunities and other assets where it sees potential to increase cash flow through management changes, cost efficiencies, expansions or capital projects. DiamondRock Hospitality Company is a real estate investment trust (REIT) that acquires, owns and manages a diversified portfolio of upscale, full-service hotels in urban gateway markets across the United States. Established in 2004 and headquartered in Bethesda, Maryland, the company focuses on investing in high-quality lodging properties that cater to both business and leisure travelers. Its assets are positioned in key metropolitan areas, enabling DiamondRock to benefit from strong demand drivers such as corporate travel, group conventions and resort leisure stays. The company's portfolio includes full-service hotels offering a broad range of amenities, including guest rooms, on-site food and beverage outlets, meeting and event space, fitness centers and spa services. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "DiamondRock Hospitality Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Diamondrock Hospitality Co (NASDAQ:DRH) reported strong operating performance with RevPAR growth of 7% in Q2 2026, supported by broad-based strength across all customer segments. The company achieved significant operating leverage, with hotel operating expenses increasing just 1.8% versus 5.5% revenue growth, leading to 240 basis points of margin expansion. Diamondrock Hospitality Co (NASDAQ:DRH) raised its 2026 guidance for RevPAR growth, adjusted EBITDA, and adjusted FFO per share, reflecting confidence in continued momentum. The company increased its quarterly common dividend by 22% to $0.11 per share, signaling strong cash flow generation and shareholder return commitment. Diamondrock Hospitality Co (NASDAQ:DRH) sees an improving transaction market with a more active acquisition and disposition pipeline, providing opportunities for accretive external growth. The La Berge de Sedona ROI project is outperforming expectations, now on track to produce a 20% yield on invested capital, up from an initial estimate of a low double-digit yield. The company maintains a conservative balance sheet with no debt maturities until 2029, no secured debt, and approximately $500 million of incremental investment capacity within its target leverage range. Diamondrock Hospitality Co (NASDAQ:DRH) faces intense competition in the acquisition market, with bid gaps widening to 10-15% on some properties, making it difficult to find accretive deals. The company's group pace for the second half of 2026 is only up approximately 1%, with the third quarter expected to be essentially flat due to a group calendar hole in August. Expense growth is expected to accelerate in the back half of 2026 due to the New York Hotel Union renewal and higher bonus accruals, which will temper margin expansion. Diamondrock Hospitality Co (NASDAQ:DRH) noted softness at its Key West properties, which are below luxury price points and experiencing weaker demand during off-season months. The company's 2027 group pace is still early and volatile, with only 5-6% of total revenues booked, making it difficult to provide clear forward guidance. Diamondrock Hospitality Co (NASDAQ:DRH) has been close to several acquisition opportunities but has not yet completed a deal, indicating challenges in finding value at current market pricing. Warning! GuruFocus has detected 7 Warning Sign with DRH. Is DRH fairly valued? Test your thesis with our free DCF calculator. Q: Can you provide more color on the improving transaction market, the buyer pool, and how close you were on recent deals?A: Jeff Donnelly (CEO) noted that the transaction market is healthier than it has been in several years, with more opportunities to buy, sell, and create value. He highlighted that while high net worth capital has been active, private equity has become significantly more active, driving increased bidder depth. On recent deals, he clarified that while they were close on some, the gap widened substantially, with bids moving 10% to 15% or more between rounds, reflecting intense competition for certain properties. Q: What is your internal investment capacity to fund external growth without exceeding your target leverage, and what value-creation opportunities do you see that other underwriters might miss?A: Jeff Donnelly (CEO) stated that with leverage expected to end the year near 3x net debt to EBITDA, the company has approximately $500 million of borrowing capacity while staying within its 3-4x target range. He emphasized that value creation often comes from situations like wrong managers in place, different revenue management strategies, cost efficiencies, or expansion opportunitiesciting Chico Hot Springs in Montana as an example where the company could expand accretively on its large land parcel, similar to the Sedona project. Q: How are booking trends shaping up for Q3 by demand segment, and how are you filling group holes? Also, what is your early read on 2027 group pace?A: Justin Leonard (President and COO) noted a pleasing uptick in short-term transient pickup, which has increased optimism for Q3 despite a group pace deficit. Jeff Donnelly (CEO) added that it is still early for 2027, with only 5-6% of total revenues in group pace, and results are volatile by hotelsome markets like Chicago are up low double-digits while others are down single-digits, particularly in Q4 2027. Q: Can you elaborate on the sustainability of your strong cost execution, especially given stronger demand, and what initiatives are driving the outperformance?A: Jeff Donnelly (CEO) explained that while expenses are tied to occupancy, the company's asset managers stay on top of staffing levels to find productivity gains. Justin Leonard (President and COO) added that they have reduced labor hours worked every quarter for the last four or five quarters, and are leveraging AI to find further labor efficiency, allowing them to service incremental occupancy at a lower marginal rate. Q: What are your latest thoughts on key count expansion at the Landing Lake Tahoe, and how sensitive are you to starting multiple overlapping ROI projects?A: Jeff Donnelly (CEO) stated that while expansion at the Landing is an option down the road, local municipality requirements made the cost not make sense at this time. He emphasized the company's intentional five-year CapEx plan to provide predictability to free cash flow per share, and noted that projects are laddered deliberately, considering seasonal timing and local zoning, rather than pursuing multiple overlapping projects simultaneously. Q: Can you discuss the implications of the Chicago property tax refund and how it affects the valuation and liquidity of the Chicago Marriott asset?A: Justin Leonard (President and COO) expressed pleasure with the outcome of settling the entire triennial property tax appeal, providing certainty over the tax number for the foreseeable future. He noted this gives a higher likelihood of executing a potential transaction, as it is easier to underwrite an actual assessment going forward than to convince a buyer that the tax bill would decrease. Q: What are your capital allocation priorities, and will you be a net buyer or net seller over the next 12-18 months?A: Jeff Donnelly (CEO) indicated that with leverage coming down and incremental cash generation, the company aims to redeploy capital accretively or return it to shareholders. He confirmed that it is plausible to be a net seller this calendar year, but remains optimistic about finding acquisition opportunities as more transactions come to market, potentially being both a buyer and seller, though nothing is imminent. Q: Can you expand on the optionality embedded in your business strategy, particularly regarding brand versus independent decisions at the Kimpton Shorebreak Huntington and Courtyard Denver Downtown?A: Jeff Donnelly (CEO) highlighted that brands are focused on unit growth, and these assets have great locations and performance, with opportunities like being oceanfront in Southern California or having adjacent land for expansion in Denver. He noted the company is engaging with brands and running internal scenarios to determine the path that creates the greatest long-term value, whether remaining branded, repositioning, converting to independent, or selling. Q: How are you thinking about the higher-end consumer's spending behavior, and where are we on the "spending stupidly" index relative to history?A: Jeff Donnelly (CEO) responded that he doesn't view it as "spending stupidly" but rather a supply and demand imbalancethe country is producing more people with exceptional net worth while the resort base is not growing. He attributed the strength at higher price point hotels to this imbalance, noting that consumers are spending on available options rather than being reckless. Q: What are your assumptions for hotel EBITDA margins and cost per occupied room growth in the back half of the year?A: Justin Leonard (President and COO) noted that expense growth is expected to elevate slightly due to items like the New York Hotel Union renewal and higher bonus accruals, with margin growth expected to abate but remain slightly elevated versus last year. Briony Quinn (CFO) added that expense growth is assumed to be around 2.5% for the back half of the year at guidance. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Raises Full-Year Guidance and Increases Quarterly Common Dividend BETHESDA, Md., July 30, 2026 /PRNewswire/ -- DiamondRock Hospitality Company (Nasdaq: DRH, the "Company"), a lodging real estate investment trust that owns a portfolio of 34 premium hotels and resorts in the United States, today announced results of operations for the quarter ended June 30, 2026. SECOND QUARTER 2026 HIGHLIGHTS Net Income: Net income attributable to common stockholders was $90.5 million, or $0.44 per diluted share, an increase of 135.7% and 144.4%, respectively, compared to the second quarter of 2025. Adjusted EBITDA: $107.9 million, an increase of 19.2% compared to the second quarter of 2025. Adjusted FFO per Diluted Share: $0.44, an increase of 25.7% compared to the second quarter of 2025. Comparable RevPAR: $240.79, an increase of 7.0% compared to the second quarter of 2025. Comparable Total RevPAR: $370.06, an increase of 5.6% compared to the second quarter of 2025. Comparable Hotel Adjusted EBITDA: $113.2 million, an increase of 20.9% compared to the second quarter of 2025. The Company settled multi-year property tax appeals for its Chicago hotels in May 2026, which contributed approximately $6.9 million to Comparable Hotel Adjusted EBITDA. Comparable Hotel Adjusted EBITDA Margin: 35.76%, an increase of 457 basis points compared to the second quarter of 2025. Excluding the property tax settlements in Chicago, the Comparable Hotel Adjusted EBITDA Margin increased 239 basis points. Hotel Disposition: The Company completed the sale of the Courtyard New York Manhattan/Fifth Avenue for $33.0 million on May 1, 2026. RECENT DEVELOPMENT Common Dividend: On July 30, 2026, the Company's Board of Directors declared a regular quarterly cash dividend of $0.11 per share on its common stock, which represents an increase of 22% over the prior quarter dividend. "Our second quarter demonstrated the earnings power of the DiamondRock portfolio. We delivered 7% RevPAR growth and held overall hotel expense growth to just 1.8%, driving exceptional margin expansion and earnings growth. While the World Cup provided a beneficial tailwind in several markets, our performance reflected much more than a single event. We saw broad-based strength in both group and transient demand, demonstrating the quality of our portfolio and the effectiveness of our operating strategy. Over the past twelve months, our free cash flow has increased 30%, providing further evidence that the DiamondRock 2.0 strategy is delivering results. Our focus remains on growing free cash flow through operational excellence, disciplined investment, and thoughtful capital allocation, which we believe is the clearest path to creating long-term shareholder value. Given the strength of our second quarter results and our confidence in the outlook for the remainder of the year, we are increasing our quarterly common dividend by more than 20% and raising our full-year guidance. We believe DiamondRock is well positioned to continue delivering strong earnings, growing free cash flow, and creating long-term value for our shareholders." - Jeffrey J. Donnelly, Chief Executive Officer of DiamondRock Hospitality Company OPERATING RESULTS Please see "Non-GAAP Financial Measures" attached to this press release for an explanation of the terms "EBITDAre," "Adjusted EBITDA," "Hotel Adjusted EBITDA," "Hotel Adjusted EBITDA Margin," "FFO" and "Adjusted FFO" and a reconciliation of these measures to net income. "Comparable" operating results and statistics include all hotels owned as of June 30, 2026, for all periods presented. See "Comparable Hotel Operating Statistics and Results" and "Reconciliation of Comparable Operating Results" attached to this press release for an explanation of our comparable hotels and a reconciliation to historical amounts. "Actual" operating results and statistics include the operating results and statistics for all hotels for only the Company's respective ownership periods. HOTEL DISPOSITION On May 1, 2026, the Company completed the sale of its leasehold interest in the 189-room Courtyard New York Manhattan/Fifth Avenue for $33.0 million. The sales price represents a 6.3x multiple on 2025 Hotel Adjusted EBITDA and a 13.3% capitalization rate on 2025 Hotel Net Operating Income. Inclusive of $12 million of capital expenditures required to be spent in the next 12 months, a contractual increase in the ground lease payment, and higher labor costs over the next several years, the Company estimates the stabilized capitalization rate on the sale to be approximately 7.8%, or 6.5% on a fee simple basis. CAPITAL EXPENDITURES The Company invested approximately $40.3 million in capital improvements during the six months ended June 30, 2026. The Company currently expects to invest approximately $75 to $85 million in capital improvements at its hotels in 2026. Significant projects in 2026 include the following: Courtyard New York Manhattan/Midtown East: The Company completed a renovation of the hotel's guestrooms during the first quarter of 2026. Henderson Park Inn: The Company completed a renovation of the hotel's guestrooms and bathrooms during the first quarter of 2026. Westin San Diego Bayview: The Company expects to commence a renovation of the hotel's entrance and lobby, including the lobby bar, during the third quarter of 2026. Atlanta Marriott Alpharetta: The Company expects to commence a renovation of the hotel's guestrooms during the fourth quarter of 2026. BALANCE SHEET As of June 30, 2026, the Company had total debt outstanding of $1.1 billion, consisting of three unsecured term loans with a weighted average interest rate of 4.9%, $400 million available under its undrawn revolving credit facility, and approximately $106.0 million of unrestricted cash on hand. COMMON SHARE REPURCHASE PROGRAM On April 28, 2026, the Company's Board of Directors authorized a new $300.0 million share repurchase program, effective May 1, 2026, which replaces the previous $200.0 million repurchase program that was authorized in May 2024. During the quarter ended June 30, 2026, the Company repurchased 0.2 million shares of its common stock at an average price of $9.79 per share for a total purchase price of $1.9 million. The Company currently has $299.4 million of remaining capacity under its $300.0 million share repurchase program. DIVIDENDS The Company's Board of Directors declared a second quarter cash dividend of $0.09 per share to stockholders of record as of June 30, 2026. The second quarter dividend was paid on July 14, 2026. On July 30, 2026, the Company's Board of Directors declared a third quarter 2026 cash dividend of $0.11 per share, which represents an increase of 22% over the second quarter dividend. The dividend will be paid on October 14, 2026 to stockholders of record as of September 30, 2026. The Company expects to declare regular quarterly dividends of $0.11 per common share for the remainder of 2026 and, depending on its 2026 operating income, a stub dividend in the fourth quarter of 2026. GUIDANCE Achievement of the anticipated results is subject to the risks disclosed in the Company's filings with the U.S. Securities and Exchange Commission, which may cause actual results to differ materially from the anticipated results expressed or implied below. The outlook below does not assume any dispositions, acquisitions, or common share repurchases and is based on current operating trends and macroeconomic conditions. The Company is raising its 2026 guidance to reflect the better than expected second quarter results, improved booking pace for the remainder of the year, and the full year benefit of the Chicago property tax appeal. The Company now anticipates full year 2026 results to be in the following ranges: Full year 2026 guidance is based in part on the following assumptions: Full year cash corporate expenses of approximately $27.0 million, which excludes share-based compensation; Full year cash interest expense of approximately $58.5 million to $59.5 million; and Fully diluted weighted average common shares and units of 207.5 million. EARNINGS CALL The Company will host a conference call to discuss its second quarter results on Friday, July 31, 2026, at 10:00 a.m. Eastern Time. The conference call will be accessible by telephone and through the internet. Interested individuals are requested to register for the call using this link to obtain dial-in and webcast details. Registration details are also available by visiting https://investor.drhc.com. A replay of the conference call webcast will be archived and available online. ABOUT THE COMPANY DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets. The Company currently owns 34 premium quality hotels with 9,400 rooms. The Company has strategically positioned its portfolio to be operated both under leading global brand families as well as independent boutique hotels in the lifestyle segment. For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company's website at www.drhc.com. This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as "believe," "expect," "intend," "project," "forecast," "plan" and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: the adverse impact of any future pandemic, epidemic or outbreak of any highly infectious disease on the U.S., regional and global economies, travel, the hospitality industry, and the financial condition and results of operations of the Company and its hotels; negative developments or volatility in the economy, including, but not limited to elevated inflation and interest rates, job loss or growth trends, the imposition of trade sanctions or tariffs and any potential retaliatory responses thereto, an increase in unemployment or a decrease in corporate earnings and investment; risks associated with the lodging industry overall, including, without limitation, decreases in the frequency of travel, decreases in the demand for, or frequency of, international travel as a result of evolving global trade dynamics or otherwise, and increases in operating costs; relationships with property managers; the ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in taxes and government regulations which influence or determine wages, prices, construction procedures and costs; and other risk factors contained in the Company's filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected 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 release is as of the date of this release, 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. 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 Adjusted EBITDA, Hotel Adjusted EBITDA Margin, FFO and Adjusted FFO. We also present Comparable Total Revenue, Comparable Room Revenues, Comparable Hotel Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin. 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 Adjusted EBITDA, Hotel Adjusted EBITDA Margin, FFO, Adjusted FFO, Comparable Total Revenue, Comparable Room Revenues, Comparable Hotel Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin, as calculated by us, may not be comparable to other companies that do not define such terms exactly as the Company. Use and Limitations of Non-GAAP Financial Measures Our management and Board of Directors use EBITDA, EBITDAre, Adjusted EBITDA, Hotel Adjusted EBITDA, FFO, Adjusted FFO, Comparable Total Revenue, Comparable Room Revenues, Comparable Hotel Adjusted EBITDA and Comparable Hotel Adjusted EBITDA Margin, to evaluate the performance of our hotels and to facilitate comparisons between us and other lodging REITs, hotel owners who are not REITs and other capital intensive companies. The use of these non-GAAP financial measures has certain limitations. These non-GAAP financial measures as presented by us, may not be comparable to non-GAAP financial measures as calculated by other real estate companies. These measures do not reflect certain expenses or expenditures that we incurred and will incur, such as depreciation, interest and capital expenditures. We compensate for these limitations by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of our operating performance. Our reconciliations to the most comparable U.S. GAAP financial measures, and our consolidated statements of operations and comprehensive income and consolidated statements of cash flows, include interest expense, capital expenditures, and other excluded items, all of which should be considered when evaluating our performance, as well as the usefulness of our non-GAAP financial measures. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with U.S. GAAP. They should not be considered as alternatives to operating profit, cash flow from operations, or any other operating performance measure prescribed by U.S. GAAP. These non-GAAP financial measures reflect additional ways of viewing our operations that we believe, when viewed with our U.S. GAAP results and the reconciliations to the corresponding U.S. GAAP financial measures, provide a more complete understanding of factors and trends affecting our business than could be obtained absent this disclosure. We strongly encourage investors to review our financial information in its entirety and not to rely on a single financial measure. EBITDA and EBITDAre EBITDA represents net income (calculated in accordance with U.S. GAAP) excluding: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; and (3) depreciation and amortization. The Company computes EBITDAre in accordance with the National Association of Real Estate Investment Trusts ("Nareit") guidelines, as defined in its September 2017 white paper "Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate." EBITDAre represents net income (calculated in accordance with U.S. GAAP) adjusted for: (1) interest expense; (2) provision for income taxes, including income taxes applicable to sale of assets; (3) depreciation and amortization; (4) gains or losses on the disposition of depreciated property including gains or losses on change of control; (5) impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate; and (6) adjustments to reflect the entity's share of EBITDAre of unconsolidated affiliates. We believe EBITDA and EBITDAre are useful to an investor in evaluating our operating performance because they help investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (primarily interest expense) and our asset base (primarily depreciation and amortization, and in the case of EBITDAre, impairment and gains or losses on dispositions of depreciated property) from our operating results. In addition, covenants included in our debt agreements use EBITDA as a measure of financial compliance. We also use EBITDA and EBITDAre as measures in determining the value of hotel acquisitions and dispositions. FFO The Company computes FFO in accordance with standards established by Nareit, which defines FFO as net income (calculated in accordance with U.S. GAAP) excluding gains or losses from sales of properties and impairment losses, plus real estate related depreciation and amortization. The Company believes that the presentation of FFO provides useful information to investors regarding its operating performance because it is a measure of the Company's operations without regard to specified non-cash items, such as real estate related depreciation and amortization and gains or losses on the sale of assets. The Company also uses FFO as one measure in assessing its operating results. Adjustments to EBITDAre and FFO We adjust EBITDAre and FFO when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance and that the presentation of Adjusted EBITDA and Adjusted FFO when combined with U.S. GAAP net income, EBITDAre and FFO, is beneficial to an investor's complete understanding of our consolidated and property-level operating performance. We adjust EBITDAre and FFO for the following items: Non-Cash Lease Expense and Other Amortization: We exclude the non-cash expense incurred from the straight line recognition of expense from our ground leases and other contractual obligations and the non-cash amortization of our favorable and unfavorable contracts, originally recorded in conjunction with certain hotel acquisitions. We exclude these non-cash items because they do not reflect the actual cash amounts due to the respective lessors in the current period and they are of lesser significance in evaluating our actual performance for that period. Cumulative Effect of a Change in Accounting Principle: The Financial Accounting Standards Board promulgates new accounting standards that require or permit the consolidated statement of operations and comprehensive income to reflect the cumulative effect of a change in accounting principle. We exclude the effect of these adjustments, which include the accounting impact from prior periods, because they do not reflect the Company's actual underlying performance for the current period. Gains or Losses from Debt Extinguishment: We exclude the effect of gains or losses recorded on debt extinguishment because these gains or losses result from transaction activity related to the Company's capital structure that we believe are not indicative of the ongoing operating performance of the Company or our hotels. Hotel Acquisition Costs: We exclude hotel acquisition costs expensed during the period because we believe these transaction costs are not reflective of the ongoing performance of the Company or our hotels. Severance Costs: We exclude corporate severance costs, or reversals thereof, incurred with the termination of corporate-level employees and severance costs incurred at our hotels related to lease terminations or structured severance programs because we believe these costs do not reflect the ongoing performance of the Company or our hotels. Hotel Manager Transition and Hotel Pre-Opening Costs: We exclude the transition costs associated with a change in hotel manager and the pre-opening costs associated with the redevelopment or rebranding of a hotel because we believe these items do not reflect the ongoing performance of the Company or our hotels. Share-Based Compensation Expense: We exclude share-based compensation expense as it is a non-cash item. This adjustment aligns with the calculation of Adjusted EBITDA for our financial covenant ratios under our credit facility, supporting consistency in our financial reporting and covenant compliance, as well as comparability with our peers. Other Items: From time to time we incur costs or realize gains that we consider outside the ordinary course of business and that we do not believe reflect the ongoing performance of the Company or our hotels. Such items may include, but are not limited to, the following: non-cash realized gains or losses on our deferred compensation plan assets; management or franchise contract termination fees; terminated transaction costs; gains or losses from legal settlements; costs incurred related to natural disasters; and gains on property insurance claim settlements, other than income related to business interruption insurance. In addition, to derive Adjusted FFO, we exclude any unrealized fair value adjustments to interest rate swaps and the portion of our non-cash ground lease expense recognized as interest expense. We exclude these non-cash amounts because they do not reflect the underlying performance of the Company. Hotel Adjusted EBITDA We believe that Hotel Adjusted EBITDA provides our investors a useful financial measure to evaluate our hotel operating performance, excluding the impact of our capital structure (primarily interest), our asset base (primarily depreciation and amortization), and our corporate-level expenses. With respect to Hotel Adjusted EBITDA, we believe that excluding the effect of corporate-level expenses provides a more complete understanding of the operating results over which individual hotels and third-party management companies have direct control. We believe property-level results provide investors with supplemental information on the ongoing operational performance of our hotels and effectiveness of the third-party management companies operating our business on a property-level basis. Hotel Adjusted EBITDA margins are calculated as Hotel Adjusted EBITDA divided by total hotel revenues. Comparable Hotel Operating Statistics and Results We believe that presenting comparable hotel operating statistics (such as ADR, occupancy, RevPAR, Total RevPAR and Available Rooms) and results (such as Room Revenues, Total Revenues, Hotel Adjusted EBITDA, and Hotel Adjusted EBITDA Margin) is useful to investors because these measures help facilitate year-over-year comparisons of the performance of hotels owned by us as of the reporting date. Our comparable portfolio includes hotels (i) owned and in operation by us for the entirety of the periods presented and (ii) acquired by us during the period as though the acquisition happened at the beginning of the period presented. We make adjustments for recently acquired hotels to include operating statistics and results for periods prior to our ownership. As a result, changes as compared to periods prior to our ownership will not necessarily correspond to changes in our actual results. In addition, comparable metrics exclude results and operating statistics for hotels that were sold during the reporting period or held for sale at the end of the period. We believe these comparable measures provide more consistent metrics for comparing the performance of our hotels. Our comparable portfolio for the six months ended June 30, 2026 includes all of our hotels owned as of June 30, 2026 and excludes the Courtyard New York Manhattan/Fifth Avenue sold on May 1, 2026 and the Westin Washington D.C. City Center sold on February 19, 2025. Reconciliations of Non-GAAP Measures EBITDA, EBITDAre, Adjusted EBITDA and Hotel Adjusted EBITDA The following tables are reconciliations of our GAAP net income to EBITDA, EBITDAre, Adjusted EBITDA and Hotel Adjusted EBITDA (in thousands): FFO and Adjusted FFO The following tables are reconciliations of our GAAP net income to FFO and Adjusted FFO (in thousands except per share amounts): Reconciliation of Comparable Operating Results The following presents the revenues, Hotel Adjusted EBITDA and Hotel Adjusted EBITDA Margin together with comparable prior year results (in thousands): Selected Quarterly Comparable Operating Information The following tables are presented to provide investors with selected quarterly comparable operating information for the Company's current portfolio of 34 hotels with 9,400 rooms. Quarter 2, 2025 Quarter 3, 2025Quarter 4, 2025Full Year 2025ADR$ 278.85$ 294.88$ 279.91$ 292.20$ 286.57Occupancy66.6 %76.3 %75.8 %67.6 %71.6 %RevPAR$ 185.70$ 225.03$ 212.06$ 197.57$ 205.14Total RevPAR$ 293.07$ 350.49$ 323.24$ 308.81$ 318.95Revenues (in thousands)$ 248,093$ 299,999$ 279,713$ 267,228$ 1,095,033Hotel Adjusted EBITDA (in thousands)$ 61,153$ 93,576$ 81,534$ 73,829$ 310,092Hotel Adjusted EBITDA Margin24.65 %31.19 %29.15 %27.63 %28.32 %Available Rooms846,540855,946865,352865,3523,433,190 View original content to download multimedia:https://www.prnewswire.com/news-releases/diamondrock-hospitality-company-reports-second-quarter-2026-results-302839311.html

Beat expectations and raised guidance: Q1 results topped management outlook with comparable RevPAR +2% (total RevPAR +2.5%), corporate adjusted EBITDA $60.6M and adjusted FFO $0.22, and the company raised full‑year RevPAR guidance to 1.5–3.5% and FFO guidance to $1.12–$1.18. Resorts and high‑ADR hotels drove performance as strong out‑of‑room spending (resort spend ~$320/occupied room) boosted total RevPAR and led higher RevPAR/EBITDA gains at properties with ADRs above $300. Conservative capital strategy and opportunistic capital allocation: DiamondRock maintains a simple balance sheet with no debt maturities until 2029, pays a $0.09 quarterly dividend with potential for a Q4 step, expects to close a hotel sale in Q2 (proceeds could fund share buybacks), and renewed the Westin Boston Seaport franchise to preserve value. Interested in DiamondRock Hospitality Company? Here are five stocks we like better. 7 best hotel REITs to buy now DiamondRock Hospitality (NYSE:DRH) reported first-quarter 2026 results that exceeded management’s expectations despite difficult year-over-year comparisons and weather-related disruptions in several markets, executives said on the company’s earnings call. Chief Financial Officer Briony Quinn said the company delivered comparable RevPAR growth of 2% and total RevPAR growth of 2.5% in the quarter, above its prior outlook for a flat quarter. Corporate adjusted EBITDA totaled $60.6 million and adjusted funds from operations (FFO) were $0.22 per share. Quinn also highlighted a 225-basis-point increase in FFO margin and said trailing 12-month free cash flow per share rose to $0.75, up 19% year-over-year. → Corning Beats Q1 Estimates but Drops 9% on Guidance Miss Quinn said occupancy declined 30 basis points in the quarter while average daily rate (ADR) increased 2.6%. Resorts outperformed the company’s urban hotels by a wider margin than management had anticipated, she said. By customer segment, Quinn said transient revenue increased 2.1% on improving demand and rate, while group revenues declined 0.8% due to softer demand early in the quarter. She added that guests continued to spend on property for a fourth consecutive quarter, driving total RevPAR to outpace RevPAR by 50 basis points. Out-of-room revenue per occupied room rose 4%, consistent with trends seen through most of 2025. → Meta Posted Its Best Sales Growth Since 2021—So Why Did Shares Fall? “Our guests have the spending power,” Quinn said, adding that the company’s food, beverage, spa, and retail offerings are “giving them good reasons to use it.” At resorts, out-of-room spend per occupied room averaged $320 per night, more than three times the urban portfolio, she said. Comparable resort RevPAR increased 3.6% in the quarter, with total RevPAR “modestly higher,” Quinn said. In the urban portfolio, RevPAR rose 0.9% and total RevPAR grew 1.6%, with January and February “modestly negative” and March “meaningfully” stronger, she said. Quinn cited double-digit RevPAR gains at Hotel Emblem in San Francisco, the recently renovated Hilton Garden Inn Times Square, the Denver Courtyard, and Hotel Clio in Denver. → Is Oracle Undervalued as Cloud Growth Accelerates? Quinn also pointed to performance at higher-rated properties, noting that hotels with ADRs above $300 have outpaced the rest of the portfolio over the last three quarters by 290 basis points in total RevPAR and 1,200 basis points in EBITDA growth. On costs, Quinn said total hotel operating expenses increased 0.8% on total revenue growth of 2.5%, contributing to a 127-basis-point improvement in hotel EBITDA margins. Wages and benefits, which she said represent nearly half of total expenses, rose 0.7% as the company focused on productivity gains. President and Chief Operating Officer Justin Leonard said the company’s labor performance is being driven more by fewer hours worked than by wage-rate reductions, citing productivity improvements in housekeeping, hours of operation in food and beverage outlets, and “small administrative efficiencies” linked to the implementation of AI tools. Chief Executive Officer Jeff Donnelly added that a more favorable insurance renewal beginning April 1 will provide an unexpected benefit. “That will be about a $1 million benefit to the full year,” he said. Quinn said first-quarter group room revenues declined 0.8%, with group rates up 3.5% but room nights down 4.2%. She attributed part of the decline to winter storms in the Eastern U.S. and limited snow in ski markets that affected January and February. However, Quinn said group revenue pace for the year has improved by more than 100 basis points since the company’s last call, with pickup across each quarter and particular encouragement in Vail, Greater San Francisco, Chicago, and Fort Lauderdale. After achieving a new peak in group revenues in 2025, Quinn said the company is “trending toward another record year” for the portfolio. Leonard attributed some near-term group pickup to calendar shifts around holidays such as Juneteenth and July Fourth, which he said created more “pattern weeks” where the company has availability to sell group business. When asked about second-quarter trends, Donnelly said momentum seen in March “effectively continued” into April, “more on the leisure side.” He also said business transient (BT) was strong in the first quarter and added that, while it remains early, 2026 could be a year when BT, leisure, and group all show positive growth—something he said has been “lacking for the last five years” across the sector. Quinn said the company’s capital structure remains “simple and conservative,” with no debt maturities until 2029, no secured or convertible debt, no preferred equity, and no off-balance-sheet encumbrances. She noted that all debt is fully prepayable and that leverage is on the lower end versus peers “by design.” Quinn said DiamondRock paid a common dividend of $0.09 per share for the first quarter and expects to declare quarterly dividends of $0.09 per share for the remainder of 2026, with “the potential for a fourth quarter step dividend based on full-year results.” She said the payout ratio remains below historical levels because the company is using net operating losses (NOLs) to offset taxable income; on the call, management said it has worked through about 50% of its NOL balance and intends to use the remainder “over the next few years” while gradually increasing dividends. Donnelly discussed the Westin Boston Seaport District franchise renewal, noting the existing agreement expires Dec. 31, 2026. After evaluating proposals from multiple brands, he said DiamondRock concluded that “reinforcing the Westin brand’s superior position in the Seaport” would minimize disruption and maximize shareholder value. Donnelly said the company chose not to pursue a key money loan, focusing instead on items such as fee structure, renovation scope and timing, and contract duration and terms. Value creation from the new agreement begins Jan. 1, 2027, he said. On capital spending, Donnelly said the company’s five-year plan remains unchanged, targeting 7% to 9% of annual revenue, or roughly $80 million to $100 million per year, across the portfolio. He highlighted ROI-focused initiatives at The Dagny in Boston and at L’Auberge de Sedona, including the integration of Orchards Inn operations with L’Auberge following a renovation completed in the third quarter of 2025. The company also expects to be a net seller of hotels in 2026. Quinn said DiamondRock is under contract to sell one hotel and anticipates closing in the second quarter, with proceeds to be used for general corporate purposes, potentially including opportunistic share repurchases. Donnelly said the company has a non-refundable deposit and expects to provide more detail after closing. He told Wells Fargo’s Jack Armstrong that share repurchases remain “the most appealing use” of capital, although he said some acquisition opportunities are beginning to look more attractive “at the margin.” Discussing broader transactions, Donnelly told Citi’s Smedes Rose that the market “certainly feels a lot better” than a year ago, citing improved RevPAR performance, a more positive 2026 demand outlook, and interest rates that he said are roughly 150 basis points lower. He added that pricing remains robust, with resorts “the priciest assets” and urban hotels generally trading at a discount. Quinn said DiamondRock raised its full-year 2026 RevPAR guidance by 50 basis points to 1.5% to 3.5%. Total RevPAR is expected to run 25 basis points higher than RevPAR growth, unchanged from prior guidance, she said. The company also increased adjusted EBITDA guidance to $296 million to $308 million and adjusted FFO per share guidance to $1.12 to $1.18. Quinn attributed the increase to stronger-than-expected first-quarter performance and the more favorable insurance renewal. Donnelly said the company expects easier comparisons later in the year and cited several demand drivers, including a favorable holiday calendar, exposure to FIFA World Cup host markets, America 250 celebrations, and benefits from renovations. He said Memorial Day weekend revenues are pacing up in the mid-single digits and that FIFA demand is rising at elevated rates, though the company does not expect activity to accelerate until closer to the event. Donnelly said DiamondRock has budgeted for 20 basis points of annual RevPAR growth from the World Cup. Donnelly also said returns from L’Auberge de Sedona are expected to be the most material renovation benefit, contributing at least a 50-basis-point tailwind to the company’s RevPAR growth rate in 2026. At the midpoint of guidance, management expects the company to reach a new peak FFO in 2026 and generate 7% free cash flow per share growth for the year, Donnelly said. DiamondRock Hospitality Company is a real estate investment trust (REIT) that acquires, owns and manages a diversified portfolio of upscale, full-service hotels in urban gateway markets across the United States. Established in 2004 and headquartered in Bethesda, Maryland, the company focuses on investing in high-quality lodging properties that cater to both business and leisure travelers. Its assets are positioned in key metropolitan areas, enabling DiamondRock to benefit from strong demand drivers such as corporate travel, group conventions and resort leisure stays. The company's portfolio includes full-service hotels offering a broad range of amenities, including guest rooms, on-site food and beverage outlets, meeting and event space, fitness centers and spa services. The article "DiamondRock Hospitality Q1 Earnings Call Highlights" was originally published by MarketBeat.

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. Analysts recently lifted their fair value estimate for DiamondRock Hospitality to about US$10.90 from roughly US$10.60, with one of the higher individual targets moving to US$10.75. These price target updates sit alongside a mix of bullish and cautious commentary, with some research pointing to confidence in current earnings power, while others highlight the risks that could limit upside from here. In the next sections, you will see how to interpret these shifting targets and what they might mean for your own view on the stock’s evolving story. Analyst Price Targets don't always capture the full story. Head over to our Company Report to find new ways to value DiamondRock Hospitality. Ladenburg initiated coverage of DiamondRock Hospitality with a bullish stance, which signals confidence in the company’s current positioning and earnings profile. Stifel lifted its price target to US$10.75 and kept a Hold rating, suggesting the analyst sees room for the shares to align more closely with this valuation over time. Evercore ISI and Morgan Stanley each raised their price targets by US$0.50, indicating that their models support a somewhat higher fair value than before. Stifel’s decision to maintain a Hold rating alongside a higher price target points to perceived constraints on upside, with the risk reward profile viewed as balanced rather than compelling at current levels. The mix of Hold ratings and only one explicitly bullish initiation highlights that, while analysts see support for current earnings power, some are cautious about how much upside is left without clearer progress on execution or growth drivers. Do your thoughts align with the Bull or Bear Analysts? Perhaps you think there's more to the story. Head to the Simply Wall St Community to discover more perspectives! We've flagged 2 risks for DiamondRock Hospitality. See which could impact your investment. DiamondRock Hospitality declared a quarterly dividend of US$0.0900 per share, payable on April 14, 2026, with an ex dividend and record date of March 31, 2026. Between October 1, 2025 and December 31, 2025, the company repurchased 200,000 shares for US$1.59 million, accounting for 0.1% of its shares under an existing buyback program. Under the buyback program announced on August 1, 2024, DiamondRock Hospitality completed the repurchase of 7,912,818 shares for US$63.08 million, representing 3.81% of its shares. Fair value was updated to about US$10.90 from roughly US$10.60 and has risen slightly within analysts' modeled range for the shares. Revenue growth is now assumed at about 2.25% versus roughly 2.61% and has fallen slightly in updated scenarios for the hotel portfolio. Net profit margin was refined to about 10.45% from around 10.34% and has risen slightly, suggesting small tweaks to expected earnings efficiency. Future P/E is now about 21.57x versus roughly 21.01x and has risen slightly, pointing to a marginally higher valuation multiple in refreshed assumptions. The discount rate was adjusted to about 8.08% from roughly 8.17% and has fallen slightly, indicating a modest change in how risk is being reflected in models. Narratives connect a company’s real world story to assumptions about future earnings, cash flows, and fair value. They refresh as new data and research come through, so the thesis you see is always based on the latest inputs. Head over to the Simply Wall St Community and follow the Narrative on DiamondRock Hospitality to stay up to date on: How urban business and group travel, plus bleisure trends among millennials and Gen Z, feed into expectations for future occupancy, RevPAR, and revenue resilience. What renovations, asset recycling, expense discipline, and potential share buybacks could mean for future margins, cash generation, and per share earnings power. Key risks such as softer resort and group RevPAR, rising urban wage and tax costs, tighter acquisition cap rates, and regulatory delays that could disrupt projects or pressure returns on capital. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include DRH. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Comparable RevPAR Growth: Increased 2%. Total RevPAR Growth: Increased 2.5%. Corporate Adjusted EBITDA: $60.6 million. Adjusted FFO per Share: $0.22. FFO Margin Increase: 225 basis points. Free Cash Flow per Share: $0.75, up 19% year-over-year. Occupancy Decline: 30 basis points. ADR Increase: 2.6%. Transient Revenue Growth: Up 2.1%. Group Revenue Decline: Down 0.8%. Out of Room Revenue per Occupied Room: Increased 4%. Resort RevPAR Increase: 3.6%. Urban Portfolio RevPAR Increase: 0.9%. Hotel Operating Expense Growth: Less than 1%. Hotel EBITDA Margin Improvement: 127 basis points. Wages and Benefits Increase: 0.7%. Group Room Revenue Decline: 0.8%. Common Dividend: $0.09 per share for the first quarter. 2026 RevPAR Guidance: Raised by 50 basis points to 1.5% to 3.5%. Adjusted EBITDA Guidance: $296 million to $308 million. Adjusted FFO per Share Guidance: $1.12 to $1.18. Anticipated CapEx: $80 million to $90 million. Warning! GuruFocus has detected 8 Warning Sign with DRH. Is DRH fairly valued? Test your thesis with our free DCF calculator. Release Date: May 01, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Diamondrock Hospitality Co (NASDAQ:DRH) exceeded expectations for the first quarter, with comparable RevPAR increasing by 2% and total RevPAR by 2.5%. The company achieved a significant improvement in FFO margin, increasing by 225 basis points, and a 19% year-over-year increase in free cash flow per share. Resorts outperformed urban hotels, with RevPAR at resorts increasing by 3.6%, indicating strong performance in leisure travel. The company reported a disciplined approach to expenses, with hotel operating expenses growing less than 1%, leading to a 127-basis-point improvement in hotel EBITDA margins. Diamondrock Hospitality Co (NASDAQ:DRH) has a simple and conservative capital structure with no debt maturities until 2029 and a low leverage compared to peers, providing flexibility for growth opportunities. Group revenues declined by 0.8% in the first quarter, driven by softer demand early in the quarter and weather challenges. Occupancy declined by 30 basis points, indicating potential challenges in filling rooms despite increased ADR. Urban hotels underperformed compared to resorts, with urban RevPAR increasing only 0.9%. The company faces tough comps in the third quarter, requiring additional group pickup to maintain performance. There is potential margin pressure in New York due to upcoming contract renewals, which could impact operating expenses. Q: How are you thinking about the best uses of incremental capital at this stage given the recent performance of your shares? Are we nearing a point where you would shift away from repurchases and into more ROI projects or potentially some value-add acquisitions? A: Share repurchases are really the most appealing use of capital at this time. While acquisition opportunities are becoming more attractive, a healthier spread is needed to justify shifting focus away from repurchases. Q: Can you take us through some of the building blocks for the full year across wages and benefits, insurance, and utilities? What's giving you confidence in your expense growth for labor significantly below national averages? A: We've leaned into productivity gains, keeping labor rates low by reducing hours worked. This includes improvements in housekeeping productivity and operational efficiencies in food and beverage outlets. Additionally, unexpected savings from our insurance renewal will benefit us by about $1 million for the full year. Q: Could you provide updated thoughts on the overall transaction market in terms of pricing and activity levels? A: The transaction market feels better than a year ago, with improved RevPAR and lower interest rates. There's more interest and assets in the market, with resorts being the priciest. Urban assets are trading at a discount due to inconsistent recovery compared to resorts. Q: Can you give us an update on 2Q performance and the recent change in trajectory for customer segments like group, business travel, and leisure? A: April continued the healthy trajectory seen in March, particularly in leisure. This year, all three channelsbusiness travel, leisure, and groupare expected to deliver positive growth, which is promising for the lodging sector. Q: How much additional group business do you need to backfill due to tough comps in 3Q, and what strategies can you implement to fill that demand? A: We have displaced some group business due to World Cup exposure, focusing on transient strategies to fill gaps. The magnitude of the group business gap is in the single-digit millions, which is manageable. Q: Could you unpack your expectations for New York this year, especially regarding top-line growth following strong years? A: We remain optimistic about New York, especially with the FIFA final game expected to compress the market. While there will be some margin pressure due to contract renewals, demand remains strong. Q: How does the outperformance of hotels with rates over $300 inform your portfolio construction and buy-sell-hold decisions? A: The trend of high-end consumer resilience informs acquisition decisions, but these assets are often priced at a premium. We focus on enhancing existing high-rated properties and exploring opportunities to add similar assets to the portfolio. Q: Can you elaborate on your expectations for the World Cup's impact on RevPAR and whether it's becoming more of a domestic and luxury event? A: We expect a 20 basis point increase in RevPAR from the World Cup. Demand appears to be split between international, domestic, and local, with about two-thirds requiring hotel accommodations. The event is likely to attract a high-end audience. For the complete transcript of the earnings call, please refer to the full earnings call transcript.