DiamondRock Hospitality Company (DRH) Q4 2022 earnings summary

Executive summary

• 2022 revenue topped $1.0B for the first time, with comparable RevPAR up 51.5% YoY and record comparable Hotel Adjusted EBITDA margins of 31.4%, up 947 bps.

• All 35 hotels were open by year-end; the portfolio comprised 9,607 rooms across 24 U.S. markets.

Financial highlights

• Total revenue rose 76.6% to $1,001.5M; rooms revenue increased 70.7% to $681.3M, food and beverage revenue 102.4% to $238.2M, and other revenue 63.0% to $82.0M.

• Net income was $109.7M versus a $195.4M loss in 2021; diluted EPS was $0.47 versus a loss of $0.96.

• Adjusted EBITDA was $280.6M versus $83.5M in 2021; Adjusted FFO available to common stock and unit holders was $215.9M versus $26.3M.

• Hotel operating expenses rose 50.9% to $696.8M, below revenue growth; 2022 included a $9.8M loss on early extinguishment of debt and $2.8M of impairment losses.

Outlook and guidance

• 2023 capital improvement spending was forecast at $100M–$115M, including the Hilton Boston lifestyle repositioning and Hilton Burlington Curio Collection conversion.

• Corporate travel was expected to expand, with strong group booking pace and business transient demand supporting potential 2023 growth; recession risk and uneven market recovery remained concerns.

• Year-end liquidity exceeded $550M; 2023 cash sources were expected primarily from hotel operations and potential dispositions, with uses including debt service, capex, distributions and acquisitions.