Diamondrock Hospitality Company · NASDAQ:DRH
Diamondrock Hospitality — Investor Presentation (March 2022)
23 slides from Diamondrock Hospitality's investor presentation, Mar 4, 2022
Slide 1: Investor Presentation March 2022
11 INVESTOR PRESENTA T IO N MARCH 2022
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
Slide 3: Key Takeaways and Recent Events
KEY TAKEAWAYS AND RECENT EVENTS RECENT TRANSACTIONS HENDERSON BEACH RESORT ■ Acquired the 170-room Henderson Beach Resort in Destin, Florida, adjacent to Henderson Park Inn ■ 8.0%+ estimated stabilized Hotel NOI yield TRANQUILITY BAY BEACHFRONT RESORT KEY TAKEAWAYS 1. Strong Q4 2021 Operating Result
Slide 4: Operating Update
OPERATING UPDATE (1) The comparable operating information includes operating results for our 33-hotel portfolio owned as of February 28, 2022. (2) Preliminary results 2021-22 MONTHLY COMPARABLE OPERATING RESULTS(1) Occ ADR RevPAR RevPAR B/(W) 2019 Revenue Revenue B/(W) 2019 Jan-21 22.0% $204.81 $45.
Slide 5: Operating Update
OPERATING UPDATE 5 ■ FASTER REBOUND Consumers are “shrugging off” Covid-19 waves more quickly -70% -60% -50% -40% -30% -20% -10% 0% 10% Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 % o f 2 0 1 9 A T o ta l R e v e n u e THIRD WAVE OMICRONDELTA 17
Slide 6: Why DiamondRock
WHY DIAMONDROCK 6
Slide 7: DiamondRock Is Positioned for Outsized Growth
DIAMONDROCK IS POSITIONED FOR OUTSIZED GROWTH 2022-2023 SETUP COMPELLING ROI PIPELINE STRONG/IMPROVING PORTFOLIO MARGIN IMPROVEMENT POTENTIAL POWERFUL CAPITAL RECYCLING 1 2 3 4 5 7 THE LODGE AT SONOMA
Slide 8: 2022-2023 Positioned for Outsized Growth
TRANQUILITY BAY RESORT ■ Sonoma Autograph Collection Q3 2021 ■ The Hythe, The Luxury Collection Q4 2021 ■ Margaritaville Beach House Q4 2021 ■ The Clio, The Luxury Collection Q1 2022 8 FOUR HOTEL UP-BRANDINGS 2022-2023 POSITIONED FOR OUTSIZED GROWTH IMPROVING GROUP TRENDS ■ Strong Expected Growth in
Slide 9: Projects Recently Completed or in Process
PROJECTS RECENTLY COMPLETED OR IN PROCESS PROJECT COST IRR Est Completion $3.6MM 74% Q1 2022 PROJECT COST IRR Completed $9.8MM 25% Jul 2021 PROJECT COST IRR Completed $8.4MM 88% Nov 2021 JW MARRIOTT CHERRY CREEKSONOMA RENAISSANCE VAIL MARRIOTT 9Estimated IRRs are calculated assuming a 3-year stabili
Slide 10: ROI Pipeline: $90MM of ROI Projects at 40%+ IRRs
ROI PIPELINE: $90MM of ROI Projects at 40%+ IRRs PROPERTY PROJECT ESTIMATED CAPITAL SPEND(1) ESTIMATED INCREMENTAL EBITDA(1) ESTIMATED IRR(2) ESTIMATED COMPLETION LODGE AT SONOMA Autograph Collection Conversion $9.8 $1.4 25% Complete THE HYTHE, LUXURY COLLECTION Luxury Collection Conversion $8.4 $3.
Slide 11: Improving Group Trends
IMPROVING GROUP TRENDS WELL-POSITIONED FOR GROUP RECOVERY ■ GROUPS ARE LOOKING TO MEET Group sales activity for DRH portfolio is ahead of pre-pandemic periods. No demand for “hybrid” meetings ■ AVERAGE EVENT SIZE IS SMALLER… The average lead in FY2021 was 35% smaller than pre-pandemic periods 11 ■ E
Slide 12: 200-300bp of Stabilized Margin Expansion
200-300bp of Stabilized Margin Expansion RevPAR Index Share Gains Stabilized Contribution of Acquisitions Upbranding & ROI PIpeline 2019 Contribution of Dispositions CAPITAL RECYCLING & EXTERNAL GROWTH INTERNAL GROWTH $55-75 MILLION OF POTENTIAL INCREMENTAL HOTEL ADJUSTED EBITDA 12 SOURCES OF LONG-T
Slide 13: Powerful Capital Recycling
POWERFUL CAPITAL RECYCLING BENEFITS OF TRANSACTIONS ■ RECYCLING CREATES BORROWING BASE COLLATERAL: Recycling disposition proceeds into unencumbered hotels significantly reduces credit facility leverage ■ INCREASED EXPOSURE TO RIGHT-TO- WORK STATES: Nearly 40% of portfolio hotels in RTW markets 13 RE
Slide 14: Enhancing Portfolio Quality Through Risk Reduction
ENHANCING PORTFOLIO QUALITY THROUGH RISK REDUCTION % HURRICANE MARKETS COMPANY PERCENT OF ROOMS XHR 28% PK 25% HST 22% SHO 21% PEER AVERAGE 21% DRH-Prior 16% DRH-Current 15% PEB 10% % BRAND MANAGED COMPANY PERCENT OF MANAGEMENT CONTRACTS XHR 86% HST 84% PK 81% SHO 59% PEER AVERAGE 57% PEB 25% DRH-Pr
Slide 15: Enhancing Portfolio Quality Through Risk Reduction
ENHANCING PORTFOLIO QUALITY THROUGH RISK REDUCTION % HURRICANE MARKETS COMPANY PERCENT OF ROOMS XHR 28% PK 25% HST 22% SHO 21% PEER AVERAGE 21% DRH-Prior 16% DRH-Current 15% PEB 10% % BRAND MANAGED COMPANY PERCENT OF MANAGEMENT CONTRACTS XHR 86% HST 84% PK 81% SHO 59% PEER AVERAGE 57% PEB 25% DRH-Pr
Slide 16: Portfolio
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Slide 17: DiamondRock at a Glance
DIAMONDROCK AT A GLANCE 9,452 ROOMS 33 PROPERTIES 23 GEOGRAPHIC MARKETS LOCATION EBITDA LOCATION EBITDA Boston, MA 15% Denver, CO 3% Chicago, IL 15% Phoenix, AZ 3% New York, NY 6% Burlington, VT 3% Ft. Lauderdale, FL 6% Sonoma, CA 2% Washington, D.C. 6% New Orleans, LA 2% Ft. Worth, TX 5% Charleston
Slide 18: Portfolio: Data Table
PORTFOLIO: DATA TABLE 18 18 Note: 2021A results used for Henderson Beach Resort, 2019A results used for all other hotels. KEYS REVPAR ($) TREVPAR ($) REVENUE/KEY ($000s) EBITDA/KEY ($000s) % of 2019A EBITDA LUXURY RESORT 930 $281 $489 $179 $48 16% LIFESTYLE RESORT 1,216 $190 $307 $112 $33 14% LIFEST
Slide 19: Portfolio: Operator and Guest Mix Diversification
PORTFOLIO: OPERATOR AND GUEST MIX DIVERSIFICATION 19 2019 ACTUAL PRO FORMA FOR DISPOSITION AND ACQUISITIONS Corporate - Group, 21% Leisure - Group, 7% Leisure - Transient, 34% Corporate - Transient, 38% Corporate - Group 20% Leisure - Group 7% Leisure - Transient 37% Corporate - Transient 36% 41% LE
Slide 20: Strong Resort Market Presence
STRONG RESORT MARKET PRESENCE OVER 60% OF HOTELS LOCATED IN DESTINATION LEISURE MARKETS MARATHON, FL DESTIN, FL HENDERSON BEACH RESORT CAVALLO POINT TRANQUILITY BAY RESORT VAIL, CO DESTIN, FL THE HYTHE, A LUXURY COLLECTION HOTEL HENDERSON PARK INN FORT LAUDERDALE, FL WESTIN FORT LAUDERDALE BEACH RES
Slide 21: High Quality Portfolio in Key Gateway Markets
HIGH QUALITY PORTFOLIO IN KEY GATEWAY MARKETS NEARLY 40% OF HOTELS LOCATED IN TOP GATEWAY MARKETS ATLANTA, GA ATLANTA MARRIOTT ALPHARETTA BOSTON, MA SALT LAKE CITY, UTNEW YORK, NY FORT WORTH, TXDENVER, CO CHICAGO, IL CHICAGO MARRIOTT MAGNIFICIENT MILE WASHINGTON, DC WASHINGTON, DC SAN DIEGO, CA HILT
Slide 22: ESG Leadership
oss ESG LEADERSHIP
Slide 23: 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 4SOCIAL 1GOVERNANCE GRESB ANNUAL RESULTS 2017 2018 2019 2020 2021 DRH GRES
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