DiamondRock Hospitality Company (DRH) Q4 2024 earnings summary

Executive summary

• Fourth quarter and full year 2024 results exceeded expectations and guidance, driven by strong urban hotel and group segment performance, as well as business transient revenue growth and cost savings initiatives.

• Urban hotels saw RevPAR rise 8.2% on a 5.4% increase in ADR, while Florida resorts experienced a 5.8% RevPAR decline.

• Group segment remained the strongest, with group room revenues up 8.1% and urban group room revenue up 10.2%, supporting food and beverage growth.

• Completed sale of Westin Washington D.C. City Center for $92 million and acquired AC Hotel Minneapolis Downtown for $30 million.

• Dividend policy updated to $0.08 per share quarterly in 2025, with potential for an additional stub dividend.

Financial highlights

• Q4 hotel-adjusted EBITDA reached $75.9 million, up 16.4% year-over-year, with a 250 basis point margin improvement.

• Corporate-adjusted EBITDA was $68.7 million, up almost 20% from 2023.

• Adjusted FFO per share was $0.24 in Q4 (+33.3% YoY); full year adjusted FFO per share was $1.01 (+8.6%).

• 2025 guidance: corporate-adjusted EBITDA of $275–$300 million; adjusted FFO of $199–$224 million, or $0.94–$1.06 per share.

• As of year-end, total debt was $1.1 billion with a weighted average interest rate of 5.21%; liquidity stood at $584.3 million.

Outlook and guidance

• 2025 RevPAR growth expected at 1%–3%, with group revenue pace up about 2% and stronger performance anticipated in the back half of the year.

• Expects continued growth from urban hotels and benefits from recent rebrandings and renovations.

• 2025 capital expenditures projected at $85–$95 million, with major projects at Orchards Inn Sedona, Hilton Garden Inn NY/Times Square, Kimpton Hotel Palomar Phoenix, and Courtyard NY/Midtown East.

• Expense growth expected to slow, with 2025 wage and benefit growth around 4%.

• 2026 revenue pace is up 15% on strong room demand and rate growth.