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• RevPAR: Declined 0.4% compared to the previous year.

• Total Revenues: Increased by 3.8%, driven by strong food and beverage performance.

• Food and Beverage Revenue: Increased by 11%, with significant contributions from group activities.

• Total Expenses: Rose by over 6%, influenced by a 24% increase in group banquet volumes.

• EBITDA: Hotel-adjusted EBITDA from resorts was 60% of the total, despite a 4% decline in RevPAR for the segment.

• Net Debt to EBITDA Ratio: Maintained at a conservative 3.9 times.

• Liquidity: Reported strong with $120 million in corporate cash and an undrawn $400 million revolver.

• FFO Per Share: Achieved $0.17, meeting the original expectation despite a slight decline in RevPAR.

• Corporate G&A Costs: Were $8.9 million, approximately $700,000 above expectations due to accelerated compensation expenses.

• 2024 EBITDA Guidance: Raised to a range of $270 million to $290 million, with a midpoint $5 million higher than previous guidance.

• Interest Expense Outlook: Increased to $65 million to $66 million from the previous $61 million to $63 million.

• Warning! GuruFocus has detected 3 Warning Sign with DRH.

Release Date: May 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Leadership and organizational changes are expected to enhance decision-making and value creation.

• Strong group demand with first-quarter group sales production steady versus last year.

• Total revenues increased by 3.8% due to strong food and beverage performance.

• Significant increase in group pace year over year, with 85% of budgeted full-year group revenue already on the books.

• Successful recognition of three hotels by the Michelin Guide, highlighting the company's quality of service and offerings.

Negative Points

• RevPAR declined by 0.4% in the quarter compared to the prior year, indicating some softness in the leisure segment.

• Total expenses increased by over 6%, driven by higher group banquet volumes and associated costs.

• Luxury resorts experienced a 7.6% RevPAR decline, underperforming compared to lifestyle resorts.

• High interest rates and inflation are putting pressure on consumer spending, potentially affecting leisure travel.

• Loyalty redemptions at resorts were down significantly, impacting the ability to fill rooms through less profitable channels.

Q & A Highlights

Q: By your last comments, Jeff, is it fair to say that DiamondRock will likely be more active recycling capital going forward than you have been previously? A: Jeffrey Donnelly, CEO & Director of Diamondrock Hospitality Co, clarified that there is no mandate to be more acquisitive or focused on sales. The company aims to be more deliberate about asset management, planning to dispose of assets and recycle capital over the next 24 to 36 months, but not necessarily moving quicker.