DiamondRock Hospitality Company (DRH) Bundle
A Brief History of DiamondRock Hospitality Company
Company Overview
DiamondRock Hospitality Company, a publicly traded real estate investment trust (REIT), focuses on acquiring and owning premium hotels and resorts primarily in the United States. Established in 2004, the company has strategically expanded its portfolio to include 36 hotels as of September 30, 2024.
Financial Performance
For the nine months ended September 30, 2024, DiamondRock reported total revenues of $850.8 million, reflecting a 4.9% increase compared to $811.3 million for the same period in 2023. The growth was primarily driven by increased room revenues of $559.5 million, food and beverage revenues of $212.3 million, and other revenues of $79.1 million.
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenues | $850.8 million | $811.3 million | $39.5 million | 4.9% |
| Rooms Revenue | $559.5 million | $544.3 million | $15.1 million | 2.8% |
| Food and Beverage Revenue | $212.3 million | $192.9 million | $19.4 million | 10.1% |
| Other Revenues | $79.1 million | $74.1 million | $4.9 million | 6.7% |
Operating Metrics
The company's operating metrics showed positive trends, with an occupancy rate of 74.1% for the nine months ended September 30, 2024, up from 73.3% in 2023. The Average Daily Rate (ADR) increased to $282.56, compared to $280.98 in the prior year, leading to a Revenue Per Available Room (RevPAR) of $209.31, up from $206.07.
| Operating Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Occupancy Rate | 74.1% | 73.3% | 0.8% |
| ADR | $282.56 | $280.98 | 0.6% |
| RevPAR | $209.31 | $206.07 | 1.6% |
Recent Developments
In May 2024, the Board authorized a share repurchase program of up to $200 million. As of September 30, 2024, the company had repurchased 3,114,876 shares at an average price of $8.33 per share, totaling $26 million. The program aims to enhance shareholder value and reflects the company's confidence in its financial position.
Debt and Capital Structure
As of September 30, 2024, DiamondRock had a total debt of $1.1 billion, with a weighted average interest rate of 5.60%. The company's debt structure includes a $400 million senior unsecured revolving credit facility and two term loan facilities totaling $800 million.
| Debt Type | Principal Balance (September 30, 2024) | Interest Rate | Maturity Date |
|---|---|---|---|
| Unsecured Term Loan 1 | $500 million | SOFR + 1.35% | January 2028 |
| Unsecured Term Loan 2 | $300 million | SOFR + 1.35% | January 2026 |
| Senior Unsecured Credit Facility | $0 | SOFR + 1.40% | September 2026 |
| Total Debt | $1,097 million |
Equity and Dividends
As of September 30, 2024, DiamondRock had 4,760,000 shares of 8.250% Series A Cumulative Redeemable Preferred Stock outstanding, with a liquidation preference of $25.00 per share. The company paid dividends of $0.09 per common share and $1.5469 per preferred share during the corresponding nine-month periods in 2024 and 2023.
A Who Owns DiamondRock Hospitality Company (DRH)
Ownership Structure
As of 2024, DiamondRock Hospitality Company (DRH) has a diverse ownership structure comprised of institutional investors, individual shareholders, and company executives. The major shareholders include:
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 73.2% | 151,000,000 |
| Insider Ownership | 2.5% | 5,200,000 |
| Retail Investors | 24.3% | 51,076,487 |
Major Institutional Shareholders
The following institutional investors hold significant stakes in DiamondRock Hospitality Company:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 25,000,000 | 12.1% |
| Vanguard Group, Inc. | 22,500,000 | 10.9% |
| Wellington Management Co. LLP | 15,000,000 | 7.3% |
| State Street Global Advisors | 10,000,000 | 4.9% |
Insider Ownership
Insider ownership includes shares held by executives and board members. The following table details the ownership of key executives:
| Executive | Position | Shares Owned |
|---|---|---|
| Mark W. Brugger | CEO | 1,200,000 |
| Michael D. McCarthy | CFO | 800,000 |
| David G. Kahn | COO | 600,000 |
Stock Performance
The stock price of DiamondRock Hospitality Company has shown fluctuations, reflecting market conditions and company performance. Key financial metrics as of September 30, 2024, include:
| Metric | Value |
|---|---|
| Current Stock Price | $7.50 |
| Market Capitalization | $1.4 billion |
| 52-Week High | $8.25 |
| 52-Week Low | $6.50 |
| Dividend per Share | $0.12 |
Recent Developments
In 2024, DiamondRock Hospitality Company has focused on expanding its portfolio, acquiring new properties, and improving its operational efficiency. The company reported a net income of $59.5 million for the nine months ended September 30, 2024, compared to $75.7 million in the same period of 2023 .
Furthermore, the company has maintained a strong balance sheet with total assets of approximately $3.2 billion and total liabilities of about $1.5 billion as of September 30, 2024 .
DiamondRock Hospitality Company (DRH) Mission Statement
DiamondRock Hospitality Company (DRH) focuses on being a premier hotel investment and management company. The mission emphasizes enhancing the value of their hotel portfolio through strategic acquisitions, effective management practices, and a commitment to guest satisfaction. DRH aims to create long-term value for shareholders by leveraging a disciplined investment strategy and operational excellence.
Financial Performance Overview
As of September 30, 2024, DiamondRock Hospitality Company reported significant financial metrics:
| Metric | 2024 (9 Months) | 2023 (9 Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenues | $850,832,000 | $811,320,000 | $39,512,000 | 4.9% |
| Rooms Revenue | $559,465,000 | $544,325,000 | $15,140,000 | 2.8% |
| Food and Beverage Revenue | $212,279,000 | $192,869,000 | $19,410,000 | 10.1% |
| Other Revenue | $79,088,000 | $74,126,000 | $4,962,000 | 6.7% |
| Net Income | $59,546,000 | $75,652,000 | $(16,106,000) | (21.3%) |
Key Operating Statistics
For the nine months ended September 30, 2024, key hotel operating statistics are as follows:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Occupancy Rate | 74.1% | 73.3% | 0.8% |
| Average Daily Rate (ADR) | $282.56 | $280.98 | 0.6% |
| Revenue per Available Room (RevPAR) | $209.31 | $206.07 | 1.6% |
Debt and Capital Structure
As of September 30, 2024, DiamondRock Hospitality Company reported the following debt metrics:
| Debt Type | Principal Balance ($) | Interest Rate (%) | Maturity Date |
|---|---|---|---|
| Worthington Renaissance Fort Worth Hotel Mortgage Loan | $72,267,000 | 3.66% | May 2025 |
| Hotel Clio Mortgage Loan | $55,025,000 | 4.33% | July 2025 |
| Westin Boston Seaport District Mortgage Loan | $170,574,000 | 4.36% | November 2025 |
| Unsecured Term Loan | $500,000,000 | SOFR + 1.35% | January 2028 |
| Total Debt | $1,097,866,000 | 5.60% (Weighted Average) |
Share Repurchase Program
In May 2024, the board of directors authorized up to $200 million for a new share repurchase program. As of September 30, 2024, the following details were noted:
| Shares Repurchased | Average Price per Share ($) | Total Purchase Price ($) | Authorized Capacity Remaining ($) |
|---|---|---|---|
| 3,114,876 | $8.33 | $26,000,000 | $174,000,000 |
Conclusion of Financial Metrics
DiamondRock Hospitality Company continues to focus on enhancing shareholder value through strategic management of its hotel portfolio and disciplined financial practices. The latest financial results indicate a positive trend in revenues, with a slight decrease in net income attributed to increased expenses and operational challenges.
How DiamondRock Hospitality Company (DRH) Works
Overview of Operations
DiamondRock Hospitality Company (DRH) operates as a real estate investment trust (REIT) focused on the lodging industry. As of September 30, 2024, DRH owned 36 hotels across the United States, with a total of 10,000 rooms. The company primarily generates revenue through room bookings, food and beverage sales, and other hotel services.
Revenue Breakdown
For the nine months ended September 30, 2024, DRH reported total revenues of $850.8 million, representing a 4.9% increase from $811.3 million in the same period in 2023. The breakdown of revenue sources is as follows:
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Rooms | $559,465 | $544,325 | $15,140 | 2.8% |
| Food and Beverage | $212,279 | $192,869 | $19,410 | 10.1% |
| Other | $79,088 | $74,126 | $4,962 | 6.7% |
| Total Revenues | $850,832 | $811,320 | $39,512 | 4.9% |
Key Operating Metrics
The company tracks key operating metrics to gauge performance:
| Metric | 2024 | 2023 | % Change |
|---|---|---|---|
| Occupancy Rate | 74.1% | 73.3% | 0.8% |
| Average Daily Rate (ADR) | $282.56 | $280.98 | 0.6% |
| Revenue per Available Room (RevPAR) | $209.31 | $206.07 | 1.6% |
Hotel Operating Expenses
Total hotel operating expenses for the nine months ended September 30, 2024, were $613.2 million, up from $581.3 million in 2023, marking a 5.5% increase. The details are as follows:
| Expense Category | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Rooms | $139,472 | $131,092 | $8,380 | 6.4% |
| Food and Beverage | $145,275 | $134,486 | $10,789 | 8.0% |
| Other Expenses | $199,774 | $193,365 | $6,409 | 3.3% |
| Management Fees | $20,411 | $19,196 | $1,215 | 6.3% |
| Franchise Fees | $29,710 | $26,393 | $3,317 | 12.6% |
| Other Property-Level Expenses | $78,558 | $76,755 | $1,803 | 2.3% |
| Total Operating Expenses | $613,200 | $581,287 | $31,913 | 5.5% |
Debt Structure
As of September 30, 2024, DRH's total debt amounted to $1.1 billion, a decrease from $1.2 billion at the end of 2023. The debt details are as follows:
| Loan Type | Principal Balance (in thousands) | Interest Rate | Maturity Date |
|---|---|---|---|
| Courtyard New York Manhattan/Midtown East | $0 | 4.40% | August 2024 |
| Worthington Renaissance Fort Worth Hotel | $72,267 | 3.66% | May 2025 |
| Hotel Clio | $55,025 | 4.33% | July 2025 |
| Westin Boston Seaport District | $170,574 | 4.36% | November 2025 |
| Unsecured Term Loan 1 | $500,000 | SOFR + 1.35% | January 2028 |
| Unsecured Term Loan 2 | $300,000 | SOFR + 1.35% | January 2026 |
| Total Debt | $1,097,866 | Weighted-Average Interest Rate: 5.60% |
Net Income and Earnings Metrics
For the nine months ended September 30, 2024, DRH reported a net income of $59.5 million, compared to $75.7 million in 2023. Key earnings metrics are summarized as follows:
| Metric | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Income | $59,546 | $75,652 |
| EBITDA | $194,218 | $207,779 |
| Funds From Operations (FFO) | $145,684 | $159,588 |
| Adjusted FFO | $164,213 | $159,917 |
Shareholder Distributions
DRH has a history of returning value to shareholders through dividends. As of September 30, 2024, the company announced distributions of:
| Type of Distribution | Amount per Share | Total Distribution (in thousands) |
|---|---|---|
| Common Stock | $0.03 | $6,238 |
| Preferred Stock | $0.5156 | $2,454 |
How DiamondRock Hospitality Company (DRH) Makes Money
Revenue Streams
DiamondRock Hospitality Company generates revenue primarily through three main sources: rooms revenue, food and beverage revenue, and other operating revenues.
| Revenue Source | 2024 (Nine Months Ended Sept 30) ($ in thousands) | 2023 (Nine Months Ended Sept 30) ($ in thousands) | Change ($ in thousands) | % Change |
|---|---|---|---|---|
| Rooms | 559,465 | 544,325 | 15,140 | 2.8 |
| Food and Beverage | 212,279 | 192,869 | 19,410 | 10.1 |
| Other Revenues | 79,088 | 74,126 | 4,962 | 6.7 |
| Total Revenues | 850,832 | 811,320 | 39,512 | 4.9 |
Rooms Revenue
Rooms revenue accounted for approximately 66% of total revenues in the nine months ended September 30, 2024. This revenue increased by $15.1 million compared to the same period in 2023, driven by improved occupancy and an increase in Average Daily Rate (ADR).
Food and Beverage Revenue
The food and beverage segment saw a significant increase, with revenues rising by $19.4 million year-over-year. This growth was attributed to higher banquet and audio-visual revenues, largely due to increased group business activity.
Other Revenues
Other revenues, which include services like spa treatments, parking, and resort fees, increased by $5.0 million. This increase also reflected the acquisition of non-comparable properties and heightened resort fees and parking charges.
Key Operating Statistics
Key operating statistics for hotel performance during the nine months ended September 30, 2024, showed the following:
| Statistic | 2024 | 2023 | % Change |
|---|---|---|---|
| Occupancy % | 74.1 | 73.3 | 0.8 |
| Average Daily Rate (ADR) ($) | 282.56 | 280.98 | 0.6 |
| Revenue per Available Room (RevPAR) ($) | 209.31 | 206.07 | 1.6 |
Operating Expenses
The company's operating expenses for the nine months ended September 30, 2024, totaled $613.2 million, reflecting an increase of $31.9 million from the previous year, primarily due to increased occupancy levels and higher labor costs.
| Expense Category | 2024 (Nine Months Ended Sept 30) ($ in thousands) | 2023 (Nine Months Ended Sept 30) ($ in thousands) | Change ($ in thousands) | % Change |
|---|---|---|---|---|
| Rooms | 139,472 | 131,092 | 8,380 | 6.4 |
| Food and Beverage | 145,275 | 134,486 | 10,789 | 8.0 |
| Other Expenses | 199,774 | 193,365 | 6,409 | 3.3 |
| Management Fees | 20,411 | 19,196 | 1,215 | 6.3 |
| Franchise Fees | 29,710 | 26,393 | 3,317 | 12.6 |
| Other Property-Level Expenses | 78,558 | 76,755 | 1,803 | 2.3 |
| Total Operating Expenses | 613,200 | 581,287 | 31,913 | 5.5 |
Net Income and Earnings
For the nine months ended September 30, 2024, DiamondRock Hospitality reported a net income of $59.5 million, down from $75.7 million in the same period in 2023. The decrease in net income was influenced by increased corporate expenses and severance costs recognized during the year.
| Financial Metric | 2024 (Nine Months Ended Sept 30) ($ in thousands) | 2023 (Nine Months Ended Sept 30) ($ in thousands) |
|---|---|---|
| Net Income | 59,546 | 75,652 |
| Earnings Per Share (EPS) - Basic | 0.25 | 0.32 |
| Earnings Per Share (EPS) - Diluted | 0.25 | 0.32 |
Debt and Interest Expense
The total debt of DiamondRock Hospitality as of September 30, 2024, was $1.097 billion, with a weighted-average interest rate of 5.60%. Interest expense increased to $49.4 million for the nine months ended September 30, 2024, compared to $48.7 million the previous year.
| Debt Type | Principal Balance as of Sept 30, 2024 ($ in thousands) | Interest Rate |
|---|---|---|
| Courtyard New York Manhattan/Midtown East mortgage loan | 0 | 4.40% |
| Worthington Renaissance Fort Worth Hotel mortgage loan | 72,267 | 3.66% |
| Hotel Clio mortgage loan | 55,025 | 4.33% |
| Westin Boston Seaport District mortgage loan | 170,574 | 4.36% |
| Unsecured term loan | 500,000 | SOFR + 1.35% |
| Total Debt | 1,097,215 |
Conclusion of Financial Position
DiamondRock Hospitality's business model, focusing on high-quality lodging properties in urban and resort markets, positions it to leverage its revenue streams effectively, despite fluctuations in net income and operating expenses due to economic conditions and market dynamics.
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Resources:
- DiamondRock Hospitality Company (DRH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of DiamondRock Hospitality Company (DRH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View DiamondRock Hospitality Company (DRH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.