Diamondrock Hospitality Company · NASDAQ:DRH
Diamondrock Hospitality — Investor Presentation (February 2023)
26 slides from Diamondrock Hospitality's investor presentation, Feb 21, 2023
Slide 1: Investor Update February 2023
INVESTOR UPDATE FEBRUARY 2023 LAKE AUSTIN SPA RESORT
Slide 2: Forward Looking Statements & Use of Non-GAAP Financial Measures
FORWARD LOOKING STATEMENTS & USE OF NON-GAAP FINANCIAL MEASURES 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,” “anticip
Slide 3: 2022 Highlights
2022 HIGHLIGHTS ROI PROJECTS 3 RECENTLY COMPLETED ROI PROJECTS ■ Hotel Clio, Luxury Collection ■ Embassy Suites by Hilton Bethesda ■ The Hythe, Luxury Collection ■ Margaritaville Beach House Key West ■ The Lodge at Sonoma, Autograph Collection UPCOMING REPOSITIONINGS & CONVERSIONS ■ Repositioning Hi
Slide 4: Operational Excellence
OPERATIONAL EXCELLENCE THE GWEN, A LUXURY COLLECTION HOTEL
Slide 5: Diversified Segmentation & Positive Operating Trends
DIVERSIFIED SEGMENTATION & POSITIVE OPERATING TRENDS SEGMENTATION % OF EBITDA1 BUSINESS TRANSIENT RECOVERY MID-WEEK URBAN OCCUPANCY IMPROVING GROUP BOOKING PACE LEISURE DURABILITY 5 $- $50 $100 $150 $200 $250 $300 Q1 Q2 Q3 Q4 LI FE ST YL E / LE IS UR E RE VP AR 2019 2022 0% 2% 4% 6% 8% 10% 12% Q1'20
Slide 6: Q4 Performance vs STR Segments
Q4 PERFORMANCE VS STR SEGMENTS 6 $194 $90 $229 $169 $172 $118 Significant outperformance of Q4 RevPAR to STR segments DRH PORTFOLIO STR TOTAL US DRH RESORTS STR RESORTS DRH URBAN STR TOP 25 MARKETS +116% +36% +46% Source: STR Q4 RevPAR
Slide 7: Consistent Outperformance Against Peers
CONSISTENT OUTPERFORMANCE AGAINST PEERS QUARTERLY REVPAR GROWTH (vs. 2019) 7Source: Company filings (1) Excludes DRH -40% -30% -20% -10% 0% 10% Q1'22 Q2'22 Q3'22 DRH HST APLE XHR PEB RLJ SHO PK Q3 2022 YTD PEER PERFORMANCE (vs. 2019) DRH AVG1 PEB XHR HST APLE RLJ SHO PK ADR Growth +20% +11% 20% 13%
Slide 8: 2022 Comparable Monthly Operating Results
2022 COMPARABLE MONTHLY OPERATING RESULTS Occ (%) ADR ($) RevPAR ($) RevPAR B/(W) 2019 Revenue Revenue B/(W) 2019 Jan-22 41.4% 250.66 103.66 (20.3%) 47,240 (20.4%) Feb-22 58.0% 287.85 166.95 1.4% 66,266 (1.2%) Mar-22 68.5% 300.47 205.78 6.0% 90,166 7.2% Apr-22 72.5% 295.36 214.06 5.4% 88,751 5.5% Ma
Slide 9: Preliminary Comparable January Results
PRELIMINARY COMPARABLE JANUARY RESULTS ADR OCCUPANCY REVPAR +0.2% +22.5% $251.20 vs 2022 vs 2019 57.2% $143.67 +15.8% (6.2%) vs 2022 vs 2019 +39.6% +10.5% vs 2022 vs 2019 THE HYTHE, A LUXURY COLLECTION HOTEL 9
Slide 10: Capacity for Growth
L’Auberge de Sedona CAPACITY FOR GROWTH THE HYTHE, A LUXURY COLLECTION HOTEL
Slide 11: No Near-Term Maturities: Strong Liquidity and Balance Sheet
NO NEAR-TERM MATURITIES STRONG LIQUIDITY AND BALANCE SHEET Note: Mortgages reflect balance at scheduled maturity, $300M Term Loan reflects exercise of one-year extension $73 $291 $300 $500 2022 2023 2024 2025 2026 2027 2028 Mortgages Term Loans and Revolver ~$600M Total Available Liquidity 68% Fixed
Slide 12: Recent Acquisitions Outperforming Underwriting
(1) Excludes recently acquired hotels: Lake Austin Spa (acquired November 2022) and Kimpton Fort Lauderdale (acquired April 2022). RECENT ACQUISITIONS OUTPERFORMING UNDERWRITING BOURBON ORLEANS HOTEL (NEW ORLEANS, LA) HENDERSON PARK INN (DESTIN, FL) HENDERSON BEACH RESORT (DESTIN, FL) TRANQUILITY BA
Slide 13: Robust ROI Pipeline: $85MM+ of ROI Projects at 40%+ IRR
ROBUST ROI PIPELINE: $85MM+ OF ROI PROJECTS AT 40%+ IRR 13(1) Estimated Capital Spend and Estimated Incremental EBITDA based upon management proformas (2) Estimated IRRs are calculated assuming a 3-year stabilization period and a 10.0x terminal multiple PROPERTY PROJECT ESTIMATED CAPITAL SPEND1 UNDE
Slide 14: Hilton Boston Downtown/Faneuil Hall Renovation and Repositioning
HILTON BOSTON DOWNTOWN/FANEUIL HALL RENOVATION AND REPOSITIONING AFTER BEFORE 14 ESTIMATED CAPITAL SPEND $6.4M ESTIMATED IRR 34% COMPLETE FALL 2023
Slide 15: Positive Market Outlook
POSITIVE MARKET OUTLOOK THE LODGE AT SONOMA, AUTOGRAPH COLLECTION
Slide 16: STR Forecast
STR FORECAST STR’s Robust 2022-2025 RevPAR Growth Outlook 2022 Actual 2023 Forecast 2024 Forecast 2025 Forecast Occupancy 62.7% 63.6% 65.3% 66.0% ADR Change 19.1% 2.1% 3.8% 3.7% RevPAR Change 29.8% 3.7% 6.6% 4.7% 6.9% 8.9% 3.6% 1.3% 1.3% -0.2% 7.1% 9.1% 7.6% 4.3% 3.5% 2.0% 6.4% 6.7% 4.2% 4.1% 2.6% 2
Slide 17: Diversified Portfolio
DIVERSIFIED PORTFOLIO COURTYARD DENVER DOWNTOWN
Slide 18: DiamondRock at a Glance
DIAMONDROCK AT A GLANCE 9,607 ROOMS 35 PROPERTIES 24 GEOGRAPHIC MARKETS DIVERSIFIED GEOGRAPHY 18 (1) 2022 EBITDA used for Henderson Beach Resort, Lake Austin Spa Resort, and Kimpton Shorebreak Ft. Lauderdale Beach Resort, 2019A results used for all other hotels. DIVERSIFIED PROPERTIES FINANCIAL SUMM
Slide 19: Operator Diversification
OPERATOR DIVERSIFICATION 19 BENEFITS OF SHORT-TERM AGREEMENTS ■ SUPERIOR COST CONTROLS ■ Utilize most cost-effective procurement & sourcing ■ Identify cost-effective product alternatives ■ OWNER-CENTRIC CASH/CAPITAL MANAGEMENT ■ Owner controls cash management and distribution ■ Owner dictates capita
Slide 20: Portfolio: Data Table
PORTFOLIO: DATA TABLE 20 20Note: 2021A results used for Henderson Beach Resort and Lake Austin Spa Resort, 2022A used for Kimpton Goodland, 2019A results used for all other hotels. 2019 SEGMENTATION KEYS REVPAR ($) TREVPAR ($) REVENUE/KEY ($000s) EBITDA/KEY ($000s) % of 2019A EBITDA LUXURY RESORT 98
Slide 21: Strong Resort Market Presence
STRONG RESORT MARKET PRESENCE SAUSALITO, CA FORT LAUDERDALE, FL MARATHON, FL SEDONA, AZ DESTIN, FL CAVALLO POINT TRANQUILITY BAY RESORT VAIL, CO DESTIN, FL THE HYTHE, A LUXURY COLLECTION HOTEL HENDERSON PARK INN SEDONA, AZ SONOMA, CALAKE TAHOE, CA LUXURY RESORT LIFESTYLE RESORT THE LODGE AT SONOMA R
Slide 22: High Quality Portfolio in Key Urban Markets
HIGH QUALITY PORTFOLIO IN KEY URBAN MARKETS DENVER, CO SAN DIEGO, CA COURTYARD DENVER DOWNTOWN WESTIN WASHINGTON, D.C. CITY CENTER WESTIN SAN DIEGO BAYVIEW URBAN GATEWAY SALT LAKE CITY, UT SALT LAKE CITY MARRIOTT DOWNTOWN URBAN LIFESTYLE BOURBON ORLEANS HOTELHOTEL EMBLEM HILTON BURLINGTON LAKE CHAMP
Slide 23: ESG Focus
ESG FOCUS THE LANDING LAKE TAHOE
Slide 24: ISS ESG Rankings
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 2SOCIAL 3GOVERNANCE GRESB ANNUAL RESULTS 2017 2018 2019 2020 2021 2022 DRH
Slide 25: Seasoned Management Team
SEASONED MANAGEMENT TEAM THE HYTHE, A LUXURY COLLECTION HOTEL
Slide 26: Extensive Management and Hospitality Experience
EXTENSIVE MANAGEMENT AND HOSPITALITY EXPERIENCE MARK W. BRUGGER CO-FOUNDER PRESIDENT, CEO AND DIRECTOR • Co-founded DRH in 2004 and successfully led its IPO in 2005 • Named Forbes’ list of America’s Most Powerful CEOs 40 and Under and a finalist for the E&Y Entrepreneur of the Year Award • Extensive
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