Diamondrock Hospitality Company · NASDAQ:DRH
Diamondrock Hospitality — Investor Presentation (September 2017)
25 slides from Diamondrock Hospitality's investor presentation, Sep 25, 2017
Slide 1: Investor Presentation September 2017
Investor Presentation September 2017
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements made during this presentation are forward-looking statements that are subject to risks and uncertainties. Forward-looking statements generally include the words “believe,” “expect,” “anticipate,” “plan,” “estimate,” “project,” “will,” “intend” or other s
Slide 3: DiamondRock at a Glance
DiamondRock at a Glance KEY STATISTICS Hotels (Rooms) 28 (9,619) Enterprise Value $3.0B Market Cap $2.2B Enterprise Value / Key ~$310K Dividend Yield 4.6% Net Debt/EBITDA(1) 3.0x Based on PF 2017F EBITDA and 2017F year-end net debt. Pro forma for acquisition of L’Auberge de Sedona and Orchards Inn S
Slide 4: Why DiamondRock?
Why DiamondRock? Premier Hotel Portfolio 1 5 6 Top-tier RevPAR portfolio among lodging REIT peers Strategically diversified brands, managers, and geographic distribution Intense Asset Management Focus Q2 hotel operating expense growth limited to 0.4%, excluding property taxes YTD hotel adjusted EBIT
Slide 5: High Quality Portfolio With Urban and Resort Concentration
High Quality Portfolio With Urban and Resort Concentration
Slide 6: DRH outlook
6 DRH outlook
Slide 7: Update on Hurricanes Irma and Maria
Update on Hurricanes Irma and Maria Sustained significant wind and water-related damage Currently closed and, based on current information, the Company expects that Frenchman's Reef will remain closed for an extended period of time, and in all events through the end of 2017 USVI impacted by Hurrican
Slide 8: DRH to Outperform in 2H 2017
DRH to Outperform in 2H 2017 Note: DiamondRock is still assessing the impact of Hurricanes Irma and Maria on its full year 2017 guidance. Source: Company filings, wall street research. FY17 revpar growth @ MIDPOINT 2h17 implied revpar guidance @ MIDPOINT DRH to outperform peer group with 1.5% FY Rev
Slide 9: 2017 Guidance Building Blocks
2017 Guidance Building Blocks Macro Drivers: Top 25 markets to underperform US RevPAR of 0% to 2% by 100 to 150bps Elevated supply of 3% in top 25 markets in 2017(1) Does not include any potential upside from a reacceleration in growth due to tax reform, stimulus, or deregulation Top-Line Drivers: N
Slide 10: 2018 DRH Key Market Drivers
2018 DRH Key Market Drivers Market (% of 2017F EBITDA) 2018 Outlook 2018 Demand(1) 2018 Supply(1) DRH / Market Commentary: Boston (16%) 2.2% 1.2% Strong transient demand; Seaport district continues to expand Chicago (13%) 2.1% 2.2% Strong Citywide Calendar Year with combined Marriott and Gwen group
Slide 11: 2018 Supply Outlook
2018 Supply Outlook Source: STR, DRH Estimates. San Francisco New York Chicago Boston Washington, DC Salt Lake City San Diego Fort Lauderdale Fort Worth Denver Sedona Vail DRH Supply Outlooks 2018 Supply Outlook Weighted average supply of 2.1% expected in 2018 Portfolio supply expected to modestly d
Slide 12: Capital Allocation Opportunities
12 CAPITAL ALLOCATION OPPORTUNITIES
Slide 13: Creating Value Throughout Cycle
Creating Value Throughout Cycle Cost of Capital Higher Lower Match-fund Near-term Accretive Acquisitions By Issuing Equity At or Above NAV Consider Opportunistically Raising Equity Above NAV, if appropriate Limit Non-core Asset Sales Sell Non-Core Assets Consider Accretive Acquisition Opportunities
Slide 14: Acquisition of L'Auberge de Sedona and Orchards Inn Sedona
Acquisition of L’Auberge de Sedona and Orchards Inn Sedona Iconic assets with immediate asset management upside in attractive, high-growth resort market #1 Conde-Nast rated hotel in Southwest Sourced in off-market deal Recycled capital from dispositions at a 12.8x multiple and $120 RevPAR into 12.6x
Slide 15: Intense Asset Management
ung INTENSE ASSET MANAGEMENT
Slide 16: Proven Asset Management Track Record
Proven Asset Management Track Record (1) Peer group includes Chesapeake, Hersha, Host, LaSalle, Pebblebrook, and Sunstone. (1) Hotel Adj. EBITDA Margin GrowtH: 2013-2016 +355bps OUTSIZED REVPAR EXPANSION SINCE 2013 +12.6% (1) (1) COO Tom Healy Brings New Initiatives Exploring new opportunities in la
Slide 17: Recent Repositionings to Drive Value
Recent Repositionings to Drive Value Rebranded to Luxury Collection $27M renovation completed in April 2017 1,200bps market share opportunity $3M NOI upside opportunity The Gwen 4th phase of $110M renovation to be completed Winter 2017-18 2018 group pace up high single digits New model on room servi
Slide 18: Marriott - Starwood Combination Fuels Growth
Marriott - Starwood Combination Fuels Growth DRH Portfolio has 20 of 28 Hotels in new-Marriott brand family Marriott most powerful hotel brand company in the world: Largest reservation system: 1.2M hotel rooms worldwide Most powerful loyalty program: 100M members globally, growing at 1M members per
Slide 19: Fortress Balance Sheet
19 Fortress balance sheet
Slide 20: Fortress Balance Sheet
Fortress Balance Sheet 20 UNENCUMBERED HOTELS 8 Encumbered Hotels Boston Westin Courtyard Midtown East Salt Lake City Marriott Westin Washington, DC Sonoma Renaissance Westin San Diego Worthington Renaissance JW Marriott Cherry Creek Unencumbered Pool Hilton Boston The Gwen Vail Marriott Courtyard D
Slide 21: Key Takeaways
Key Takeaways Asset Management To Fuel Outperformance High Quality, Well Diversified Portfolio Portfolio Well-Positioned for 2017 Strategic Capital Allocation Creating Value Throughout Cycle ($350M in Investment Capacity) The Lexington New York City Hilton Garden Inn Times Square Westin Washington,
Slide 22: Appendix
22 Appendix
Slide 23: Recent Renovations
Recent Renovations Chicago Marriott $110M Rooms Renovation The Gwen, Luxury Collection $27.5M Rooms Renovation Before After
Slide 24: Recent Renovations (cont'd)
Recent Renovations (cont’d) Charleston Renaissance $6.3M Rooms Renovation Sonoma Renaissance $7.3M Rooms Renovation Worthington Renaissance $18.1M Rooms Renovation Before After
Slide 25: Creating Value Through Opportunistic Dispositions
Creating Value Through Opportunistic Dispositions Orlando Airport Marriott Hilton Minneapolis HGI Chelsea Weighted Average Total Consideration(2) $67M $143M $65M $275M 2015 RevPAR $92.21 $115.44 $219.97 $119.78 TTM NOI Cap Rate(3) 9.7% 7.6% 6.6% 7.8% TTM NOI Cap Rate w/ Capital(3) 7.5% 6.3% 5.9% 6.6
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