Diamondrock Hospitality Company · NASDAQ:DRH
Diamondrock Hospitality — Investor Presentation (June 2022)
24 slides from Diamondrock Hospitality's investor presentation, Jun 6, 2022
Slide 1: Investor Presentation June 2022
11 INVESTOR PRESENTA T IO N JUNE 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 Highlights
KEY TAKEAWAYS AND HIGHLIGHTS 2022 TRANSACTIONS ■ Acquired the 96-room Kimpton Fort Lauderdale Beach Resort in Fort Lauderdale, Florida, proximate to our Westin Fort Lauderdale Beach Resort ■ 7.0%+ Hotel NOI yield in next twelve months ■ 8.0%+ estimated stabilized Hotel NOI yield TRANQUILITY BAY BEAC
Slide 4: Operating Update – Sector Leading Performance
OPERATING UPDATE – SECTOR LEADING PERFORMANCE (1) Comparable operating information excludes the Kimpton Fort Lauderdale Beach Resort as it was not operating in 2019 (2) Preliminary results 2022 MONTHLY COMPARABLE OPERATING RESULTS(1) Occ (%) ADR ($) RevPAR ($) RevPAR B/(W) 2019 Revenue ($000s) Reven
Slide 5: Operating Update
OPERATING UPDATE 5 ■ PREPARE FOR TAKEOFF Leisure demand remains robust REVENUE RECOVERY ACCELERATING ROBUST EBITDA RECOVERY ■ RETURN TO TRAVEL Corporate travel recovery aligns with return-to-office policies ■ ENCOURAGING OUTLOOK Group activity returning to pre- pandemic levels. Profitable banquet bu
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 ■ Hotel Clio, The Luxury Collection Q1 2022 8 FOUR HOTEL UP-BRANDINGS 2022-2023 POSITIONED FOR OUTSIZED GROWTH IMPROVING BUSINESS TRANSIENT ■ Strong Expected G
Slide 9: Recently Completed Projects
RECENTLY COMPLETED PROJECTS PROJECT COST IRR Completed $3.6MM 74% Mar 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 stabilization period and
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) UNDERWRITTEN INCREMENTAL EBITDA(1) ESTIMATED IRR(2) ESTIMATED COMPLETION LODGE AT SONOMA Autograph Collection Conversion $9.8 $1.4 25% Completed THE HYTHE, LUXURY COLLECTION Luxury Collection Conversion $8.
Slide 11: Improving Group Trends
IMPROVING GROUP TRENDS WELL-POSITIONED FOR GROUP RECOVERY ■ GROUPS ARE LOOKING TO MEET Group sales activity for DRH portfolio was 36% ahead of pre-pandemic periods. No demand for “hybrid” meetings ■ AVERAGE EVENT SIZE IS SMALLER… The average lead in Q1’22 was 30% smaller than pre-pandemic periods, f
Slide 12: Sources of Long-Term EBITDA Growth
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: Acquired Kimpton Fort Lauderdale Beach
ACQUIRED KIMPTON FORT LAUDERDALE BEACH (FORT LAUDERDALE, FLORIDA) 13 ACQUISITION DATE 4/1/22 PURCHASE PRICE $35.3 MILLION LOCATION FORT LAUDERDALE, FL NUMBER OF ROOMS 96 KEY DEAL HIGHLIGHTS ■ Off-market acquisition of a lifestyle resort property with dedicated beach amenities and services for guests
Slide 14: Acquired Tranquility Bay Beachfront Resort
ACQUIRED TRANQUILITY BAY BEACHFRONT RESORT (MARATHON, FLORIDA) KEY DEAL HIGHLIGHTS ■ 2021 TripAdvisor Traveler’s Choice Award and consistently among the top hotels in Marathon, FL. ■ 12 oceanfront acres with 1,000 feet of shoreline ■ Strict development ordinances constrain supply and supports the hi
Slide 15: Acquired Henderson Beach Resort
ACQUIRED HENDERSON BEACH RESORT (DESTIN, FLORIDA) ACQUISITION DATE 12/23/21 PURCHASE PRICE $112.5 MILLION LOCATION DESTIN, FL NUMBER OF ROOMS 170 NUMBER OF RMAs: 46 EVENT SPACE 40,000 SQ FT KEY DEAL HIGHLIGHTS ■ AAA Four Diamond Award in 2019. Consistently recognized by Travel + Leisure, US News & W
Slide 16: Lowest Exposure to Long-Term, Brand-Managed Contracts
LOWEST EXPOSURE TO LONG-TERM, BRAND-MANAGED CONTRACTS % BRAND MANAGED COMPANY PERCENT OF MANAGEMENT CONTRACTS XHR 86% HST 84% PK 81% SHO 59% PEER AVERAGE 57% PEB 25% DRH-Prior 24% DRH-Current 6% BENEFITS OF LOW EXPOSURE Source: Company filings, Robert W. Baird & Co Note: DRH Prior is prior to the di
Slide 17: Portfolio
17 PORTFOLIO Tranquility Bay Resort, Marathon, Florida
Slide 18: DiamondRock at a Glance
DIAMONDROCK AT A GLANCE 9,548 ROOMS 34 PROPERTIES 23 GEOGRAPHIC MARKETS LOCATION EBITDA LOCATION EBITDA Boston, MA 15% Denver, CO 3% Chicago, IL 15% Phoenix, AZ 3% New York, NY 6% Burlington, VT 3% Ft. Lauderdale, FL 6% Sonoma, CA 2% Washington, D.C. 6% New Orleans, LA 2% Ft. Worth, TX 5% Charleston
Slide 19: Portfolio: Data Table
PORTFOLIO: DATA TABLE 19 19 Note: 2021A results used for Henderson Beach Resort, 2022 Forecast used for Kimpton Goodland, 2019A results used for all other hotels. KEYS REVPAR ($) TREVPAR ($) REVENUE/KEY ($000s) EBITDA/KEY ($000s) % of 2019A EBITDA LUXURY RESORT 930 $281 $489 $179 $48 15% LIFESTYLE R
Slide 20: Portfolio: Operator and Guest Mix Diversification
PORTFOLIO: OPERATOR AND GUEST MIX DIVERSIFICATION 20 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 38% Corporate - Transient 35% 41% LE
Slide 21: 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 22: 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 23: ESG Leadership
23 ESG LEADERSHIP The Hythe Vail, A Luxury Collection Hotel Vail, Colorado L’Auberge de Sedona Sedona, Arizona
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 2ENVIRONMENTAL 2SOCIAL 3GOVERNANCE GRESB ANNUAL RESULTS 2017 2018 2019 2020 2021 DRH GRES
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