Diamondrock Hospitality Company · NASDAQ:DRH
Diamondrock Hospitality — Investor Presentation (September 2021)
28 slides from Diamondrock Hospitality's investor presentation, Sep 21, 2021
Slide 1: Investor Presentation September 21, 2021
1 INVESTOR PR ESENTA T IO N SEPTEMBER 21 , 2021 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 Certain statements made during this presentation are forward- look- ing statements that are subject to risks and uncertainties.For- ward-looking statements generally include the words “believe,” “expect,” “anticipate,” “plan,” “estimate,” “project,” “will,” “intend” or o
Slide 3: Key Takeaways and Recent Events
KEY TAKEAWAYS AND RECENT EVENTS 3 STRATEGIC TRANSACTIONS BOURBON ORLEANS HOTEL ■ Acquired the 220-room Bourbon Orleans Hotel in New Orleans, Louisiana ■ 7.0% capitalization rate on 2019 Hotel NOI ■ 8.0% estimated stabilized capitalization rate HENDERSON PARK INN KEY TAKEAWAYS 1. Strong set up for 20
Slide 4: Operating Update
4 OPERATING UPDATE (1) The comparable operating information includes operating results for our 31-hotel portfolio, which includes our 2021 acquisitions and excludes our 2021 dispositions. (2) Forecast as of 9/20/21 MONTHLY COMPARABLE OPERATING RESULTS(1) Occ ADR RevPAR Revenue Revenue B/(W) 2019 Jan
Slide 5: Why DiamondRock
() WHY DIAMONDROCK | I!
Slide 6: DiamondRock Is Positioned for Outsized Growth
DIAMONDROCK IS POSITIONED FOR OUTSIZED GROWTH 2022-2023 SETUP ROI PIPELINE STRONG/IMPROVING PORTFOLIO MARGIN IMPROVEMENT POTENTIAL OPPORTUNISTIC INVESTMENT 1 2 3 4 5 6
Slide 7: 2022-2023 Setup, Up-Brandings and Recent Acquisitions
THE HYTHE (RENDERING) BOURBON ORLEANS ■ The Hythe, The Luxury Collection ■ Sonoma Autograph Collection ■ The Clio, The Luxury Collection ■ Margaritaville Key West Resort 7 FOUR HOTEL UP-BRANDINGS 2022-2023 SETUP IMPROVING GROUP TRENDS ■ City-wide room nights in 2022 are up 5% compared to 2019 ■ City
Slide 8: ROI Pipeline
ROI PIPELINE 33 PROJECT COST IRR Estimated Completion $3.6MM 74% 2021 PROJECT COST IRR Estimated Completion $9.8MM 25% 2021 PROJECT COST IRR Estimated Completion $8.4MM 88% 2021 JW MARRIOTT CHERRY CREEK SONOMA RENAISSANCE VAIL MARRIOTT 8
Slide 9: $90MM of ROI Projects at 35%+ IRRs
$90MM of ROI Projects at 35%+ IRRs PROPERTY PROJECT ESTIMATED CAPITAL SPEND(1) ESTIMATED INCREMENTAL EBITDA(1) ESTIMATED IRR(2) ESTIMATED COMPLETION SONOMA Autograph Collection Conversion $9.8 $1.4 25% 2021 VAIL MARRIOTT Luxury Collection Brand Conversion $8.4 $3.4 88% 2021 Rooftop Renovation and F&
Slide 10: Low/Declining Exposure to Ground Leases
LOW/DECLINING EXPOSURE TO GROUND LEASES COMPANY % OF FEE GROUND LEASED # OF GROUND LEASED PROPERTIES PEB 33% 14 Properties HST 29% 22 Properties DRH 23% 6 Properties PK 21% 17 Properties DRH 21% 5 Properties SHO 19% 2 Properties XHR 12% 3 Properties Source: Company filings and/or website 10 Before S
Slide 11: Low/Declining Exposure to Hurricane Markets
LOW/DECLINING EXPOSURE TO HURRICANE MARKETS COMPANY HURRICANE MARKET EXPOSURE XHR 28% RLJ 24% PK 23% INN 21% HST 21% SHO 19% CLDT 17% DRH 16% BHR 16% HT 14% AHT 14% APLE 14% DRH 12% PEB 8% Before Frenchman’s Reef Disposition After Frenchman’s Reef Disposition ■ Lower risk of uninsured disruption ■ L
Slide 12: Low/Declining Exposure to CBA
■ Improved Operating Flexibility ■ Improves Cash Flow ■ Improves Multiple ■ Improves Asset Value ■ Risk Mitigation LOW/DECLINING EXPOSURE TO CBA BENEFITS OF LOW EXPOSURE TO CBAS COMPANY % OF ROOMS SUBJECT TO CBAS PK 39% SHO 35% PEB 34% DRH 30% BHR 27% DRH 22% HST 20% XHR 13% Before Lexington and Fre
Slide 13: Lowest Exposure to Brand Management
LOWEST EXPOSURE TO BRAND MANAGEMENT BENEFITS OF LOW EXPOSURE TO BRAND MANAGEMENT ■ Enhanced profitability ■ Superior cost management ■ Owner-centric capital management ■ More control COMPANY BRAND MANAGED HOTELS TOTAL HOTELS PK 70+ 80 HST 50+ 60 XHR 30 35 PEB 13 51 SHO 10 18 DRH 8 31 DRH 2 31 Source
Slide 14: Sweeping Marriott Deal Increases Portfolio Margins
SWEEPING MARRIOTT DEAL INCREASES PORTFOLIO MARGINS +50bp In 2020, DRH entered into an agreement with Marriott to alter several brand and management contracts. FRANCHISE CONVERSIONS The following were converted from brand-managed to franchised properties: • Atlanta Marriott Alpharetta • Salt Lake Cit
Slide 15: Long Term Margin Improvement Potential
LONG TERM MARGIN IMPROVEMENT POTENTIAL UP TO 200BPS OF POTENTIAL LONG TERM MARGIN IMPROVEMENT Above the Hotel At the Hotel 50 – 150BPS: ■ Labor efficiency ■ Technology ■ F&B Outlets ■ Housekeeping ■ Lower allocated costs 50BPS: ■ Marriott Managed hotels converted to Franchise 15
Slide 16: Powerful Capital Recycling
POWERFUL CAPITAL RECYCLING THE LEXINGTON HOTEL ($185MM) FRENCHMAN’S REEF ($35MM) BOURBON ORLEANS ($89MM) HENDERSON PARK INN ($28MM) $220MM Cash Proceeds BENEFITS OF TRANSACTIONS ■ ACCRETIVE RECYCLING: Sold $220MM of assets at 5.4% cap rate on 2019 NOI. Utilized 54% of disposition proceeds to replace
Slide 17: Bourbon Orleans Hotel (New Orleans, LA)
BOURBON ORLEANS HOTEL (NEW ORLEANS, LA) 17 ACQUISITION DATE 7/29/21 PURCHASE PRICE $81 MILLION LOCATION NEW ORLEANS, LA NUMBER OF ROOMS 220 KEY DEAL HIGHLIGHTS ■ Best located hotel in New Orleans. Corner of Bourbon and Orleans Streets in the center of French Quarter ■ Off-market acquisition of a rar
Slide 18: Henderson Park Inn (Destin, FL)
HENDERSON PARK INN (DESTIN, FL) 18 ACQUISITION DATE 7/30/21 PURCHASE PRICE $27.5 MILLION LOCATION DESTIN, FL NUMBER OF ROOMS 37 KEY DEAL HIGHLIGHTS ■ Consistently recognized by TripAdvisor as one of the Top 25 Hotels in the U.S. and named by Coastal Living as one of the 10 Best Beach Hotels in Flori
Slide 19: Portfolio
PORTFOLIO 19
Slide 20: DiamondRock at a Glance
DIAMONDROCK AT A GLANCE 20 9,100 ROOMS 31 PROPERTIES 22 GEOGRAPHICAL MARKETS LOCATION EBITDA LOCATION EBITDA Boston, MA 16% Denver, CO 4% Chicago, IL 16% Phoenix, AZ 3% New York, NY 7% Burlington, VT 3% Washington, DC 6% Sonoma, CA 3% Ft. Lauderdale, FL 6% New Orleans, LA 3% Ft. Worth, TX 5% Atlanta
Slide 21: Portfolio: Data Table
PORTFOLIO: DATA TABLE KEYS REVPAR TREVPAR REVENUE/KEY % OF 2019 EBITDA ICONIC RESORT 611 268.98 496.40 181.18 11% LIFESTYLE RESORT 1,216 189.50 307.37 111.96 15% LIFESTYLE URBAN 1,491 185.11 255.83 93.20 16% RESORT/LIFESTYLE 3,318 202.19 319.07 116.27 42% URBAN GATEWAY 5,815 175.91 239.77 87.52 58%
Slide 22: Portfolio: Operator and Guest Mix Diversification
PORTFOLIO: OPERATOR AND GUEST MIX DIVERSIFICATION 22 2019 ACTUAL PRO FORMA FOR LEXINGTON DISPOITION AND ACQUISITIONS ■ Aimbridge, 28% ■ Marriott, 19% ■ Hei Hotels & Resorts, 17% ■ Sage Hospitality, 6% 4% 4% 4% 4% 4% 5% 6% 17% 19% 28% 2% 1% ■ Kimpton, 5% ■ Ft Baker Management, 4% ■ Davidson Hotels &
Slide 23: Strong Resort Market Presence
STRONG RESORT MARKET PRESENCE APPROXIMATELY 2/3 OF PORTFOLIO LOCATED IN EXPERIENTIAL MARKETS FORT LAUDERDALE, FL SAN FRANCISCO, CA SEDONA, AZ L’AUBERGE DE SEDONA (Independent) WESTIN FORT LAUDERDALE BEACH RESORT (Marriott) HUNTINGTON BEACH, CA SAN FRANCISCO, CAPHOENIX, AZ DENVER, COCHICAGO, IL BURLI
Slide 24: High Quality Portfolio in Key Gateway Markets
HIGH QUALITY PORTFOLIO IN KEY GATEWAY MARKETS APPROXIMATELY 1/3 OF PORTFOLIO LOCATED IN TOP, GATEWAY MARKETS. ALPHARETTA, GA ATLANTA MARRIOTT ALPHARETTA (Marriott) BOSTON, MA SALT LAKE CITY, UTNEW YORK, NY FORT WORTH, TXDENVER, CO CHICAGO, IL CHICAGO MARRIOTT DOWNTOWN (Marriott) WASHINGTON, DC WASHI
Slide 25: Balance Sheet
BALANCE SHEET 25
Slide 26: DiamondRock Balance Sheet Profile
SHOHSTRLJDRHXHRPEBINNHTBHRAHT 1.21.5 3.53.73.9 4.7 6.3 8.8 9.5 DIAMONDROCK BALANCE SHEET PROFILE 26 LEVERAGE BELOW PEER AVERAGE(3) 10.4 PRO FORMA FUTURE DEBT MATURITIES(2) 2021 2022 2023 2024 2025 ■ Secured Debt ■ Term Loan ■ Revolver ■ Undrawn Revolver ■ $300MM+ of Investment Capacity ■ $639MM liqu
Slide 27: ESG Leadership
ESG LEADERSHIP 27
Slide 28: Responsible Corporate Citizen
RESPONSIBLE CORPORATE CITIZEN ISS ESG RANKINGS(2) ISS-ESG CORPORATE RANKING Currently Ranked in Top 1% of all US Real estate companies DiamondRock ranks in the top 5% of the Worldwide Real Estate Sector, earning an ISS ESG Prime designation 3ENVIRONMENTAL 3SOCIAL 2GOVERNANCE GRESB ANNUAL RESULTS 201
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