DiamondRock Hospitality Company (DRH) Q1 2025 earnings summary

Executive summary

• Q1 2025 results were in line with expectations, with urban hotels driving RevPAR growth and resorts experiencing softness due to calendar shifts and macroeconomic factors.

• Net income attributable to common stockholders rose 59.3% year-over-year to $9.4 million, or $0.04 per diluted share.

• Group and business transient segments contributed significantly to urban hotel performance, with group room revenues increasing over 10% year-over-year.

• Portfolio optimization continued with asset sales, share repurchases, and targeted capital projects to enhance value and earnings.

• Owns 36 premium hotels with 9,595 rooms, focused on major urban and resort markets; operates as a REIT targeting high-growth, high-barrier locations.

Financial highlights

• Q1 2025 total revenue was $254.9 million, down 0.6% year-over-year; net income was $9.4 million, up from $5.9 million.

• Comparable RevPAR increased 2.0% to $186.20, with occupancy at 67.1% and ADR at $277.36.

• Hotel Adjusted EBITDA for Q1 was $61.3 million, up 2.2% year-over-year; margin increased 39 basis points to 24.36%.

• Adjusted FFO per share was $0.19, up 5.6% year-over-year.

• Net cash provided by operations was $27.6 million; cash and equivalents at quarter-end totaled $100.6 million.

Outlook and guidance

• 2025 FFO per share guidance unchanged at $0.94–$1.06; Adjusted FFO expected at $198–$223 million.

• Full-year 2025 RevPAR outlook revised to -1% to +1% growth, about 200 basis points lower than prior guidance.

• Corporate-adjusted EBITDA expected at $270–$295 million, midpoint $282.5 million, $5 million lower than previous guidance.

• Plans $85–$95 million in capital improvements for 2025, with several major renovation projects underway.

• Expects main cash sources for the remainder of 2025 to be hotel operations, potential asset sales, and debt refinancing.