Diamondrock Hospitality Company · NASDAQ:DRH
Diamondrock Hospitality — Investor Presentation (September 2014)
22 slides from Diamondrock Hospitality's investor presentation, Sep 11, 2014
Slide 1: Investor Presentation September 2014
Exhibit 99.1 Exhibit 99.1 Investor SeptemberPresentation 2014
Slide 2: DiamondRock Key Statistics at a Glance
DiamondRock KEY Hotels Rooms Enterprise Net INDUSTRY RevPAR 265 Margin 90% San Denver DC Washington, 1% Los 20% Minneapolis 5% Boston Chicago 10% WELL-DIVERSIFIED Garden Courtyard 6% 9% Renaissance 8% Autograph Hilton Values (1) 2(2) Based Westin Destination Other Marriott 5% Debt/EBITDA(1) Angeles
Slide 3: Premier Portfolio With Urban Concentration
PremierSquare Lexington Times Chicago Downtown Westin Alpharetta Frenchman’s 3Marriott San Portfolio Resort Marriott Hotel Dallas Washington Diego Reef Chelsea and NYC Conrad With /Marriott Vail Ft. SpaWorth NYC Courtyard Marriott Urban DC Mountain Chicago Atlanta Downtown and The Midtown Resort Hil
Slide 4: Why DiamondRock?
Whyat High 2014F $1.3B Sold Bought Outsized Multi-year Profit New 360 External HGI $150M Fortress 3.0x Inn 7.4% 4Acquired basis net TSC: hotels: asset DiamondRock? Quality Cap Margin margin Key in RevPAR excess hotels: debt-to-EBITDA Balance Growth deals Internal Hilton points Rate management 20% We
Slide 5: Significant Margin Expansion: 370bps Above Peer Average
DRH 10.3% 12.0% 14.0% 8.0% 10.0% 370bps 4.0% 6.0% 6.5% ABOVE 300 200 250 265 YTD 50 100 122 Peer #1 143bps 150 202 177 Profit 360 260 New outsized SIGNFICANT Margins 32.7% 34% .H EBITDA 2014F 28% 29.1% 30% 5(1) otel Growth Peer (Bps) 175 137 bps Set asset 2014 6.9% TO Portfolio Adj. margin Prior 10.
Slide 6: Multi-Year Growth Drivers
Company 2015 HGI Multi-year Square Renovated Portfolio Investment Value Projects lounge, Asset Margin Expansion opportunity Ability 6•Dry Westin Conversion Disciplined Near-Term NotPowder Times GROWTH Capital Add Management to Expansion additional •DC Creation execute Growth •Outperformance in HGI f
Slide 7: Simple Capital Structure With Low Risk
Capital CAPITAL Simple Virtually No Highly $150M Undrawn 3.0x Refinancing NET 2.0 FCH HT BEE PEB SHO LHO DRH HST Source: ASSET Chicago Lexington Boston Frenchman’s Conrad Vail Courtyard Hotel Hilton Alpharetta Worthington Chelsea Charleston Bethesda HGI Inn 713 UNENCUMBERED Corporate 4.0 atMarriott
Slide 8: Attractive Total Shareholder Returns
Attractive 2014 DRH Total 20.0% 25.0% Peer YTD 9/1/2014 8/1/2014 7/1/2014 6/1/2014 5/1/2014 4/1/2014 3/1/2014 2/1/2014 1/1/2014 (5.0%) 0.0% 5.0% 10.0% 15.0% the Not Credit Value EBITDA DISCIPLINED $500M Raised Competitive 814 consecutive peer Yet Avg. TOTAL Return 2014 total Peer of for DRH 2014 in
Slide 9: Key Takeaways
Key Lodge Transformed Renovation 360bps Fortress $250M Hotel Hilton 9The Takeaways Rex Garden ofBalance Margin Investment San atFueling Portfolio Sonoma Inn Francisco Sheet Expansion Times Outperformance Capacity Resort in with Markets Square 3.0x Opportunity andNet Spa withDebt Superior / EBITDA Gr
Slide 10: Appendix
APPENDIX @ >DIAMONDR®@CK HOSPITALITY
Slide 11: Lodging Supply and Demand Forecast
Lodging Forecast CAGR Supply favorable HISTORICAL 2002 -20% -15% -10% -5% 0% 5% 10% RevPAR Source: 2003 of and Smith through Cycle tothrough Supply 5.5% 2004 increase Demand Travel AND –2005 Demand Many 2017 2016 at growth FORECAST Research 2006 aof: Years2007 Left August 2008 REVPAR, To Go 2014 200
Slide 12: Portfolio Positioned for RevPAR Growth Potential
Portfolio PKF 8.1% 8.5% DRH Market 7.5% 6.9% 6.6% 6.5% 5.9% 4.5% 5.0% 5.5% 3.5% 4.1% Denver 2.5% Los Orlando Minneapolis Boston San US Chicago Fort Salt New Washington (1) 12 Source: Upper Angeles Francisco Diego Lake Worth FORECASTED York 8.0% NYC Program 6.6% 6.3% 5.9% 4.4% 3.3% toRevPAR Outperfor
Slide 13: New York City Market Overview
New2014 Q2 55.8mm Midtown Majority 3.5% 6.0% 4.0% 2.0% 2.3% Q1 -4.0% -2.1% -2.0% 0.0% 2009 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 NYC Supply 2014 2015 2016 Source: 13 York 2010 7.5% 5.2% and ANNUALIZED AVG 5.4% 3.4% 1.4% Top projected Growth PKF Lodging total RevPAR Q2 of East Beyond 2
Slide 14: Lexington Renovation Successfully Completed
Lexington Renovation Successfully ADR Approx. Highest-rated Hotel Additional Converting EXPECTED $200 $220 $240 $260 $280 9% $EBITDA 2014F 12% 1430CAGR 28 26 24 22 20 CAGR increase Adj. 2016E 60% EXPECTED Hotel EBITDA profit underutilized and generating REVPAR of transient ofrebranding hotel Success
Slide 15: Hilton Garden Inn Times Square Central Value Creation
Hilton 86420PROJECTED 10 12 14 Value Successfully current Hotel ($11M+) Additional $0.5M •incremental other 15 014F Successfully DRH Adj. inGarden 2015E in values Millions in operations EBITDA Profit owned 2015 rental locked 2016E EBITDA indicating leased combined InnUpside: income Times hotel in of
Slide 16: Continued Outsized Growth Opportunity
321Continued Expect Opportunity Outsized Capitalize Further 4Streamlined 2015 Significant Westin Hilton consecutive group 20%+ to leverage Boston DC San RevPAR significantly on Outsized NAV booking F&B toDiego prime RevPAR quarters add of appreciation operations growth highly two location Growth pac
Slide 17: Significant Value Creation Opportunity: U.S. Annual Value Per Room
U.S. ANNUAL 21% 30% 20% -10% 0% 10% 9% 12% -20% 2006 -40% -31% -30% Source: Significant Price Value Forecasted Hotel Renaissance 17 20% 17% 2007 per -4% -15% Rex creation HVS key 20% 15% San 2008 price Value early Charleston increased Hotel opportunity Francisco GROWTH 2009 per cycle Created Valuati
Slide 18: Urban Exposure Premium for Urban RevPAR
CURRENT Other, Urban, Acquired Disposed Increased Urban HISTORICAL URBAN 1988 -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% Source: 1989 11% markets 73% Smith US over of Exposure growth 1990 Resort, PORTFOLIO over US Travel 4,000 100BPS historically 1991 Urban 2,600 potential 16% tourban Research
Slide 19: Goal: Increased Brand and Manager Diversification
Goal Diversification Adoption Increased Reduced diversity CURRENT Managers Third-Party Starwood Garden Courtyard 6% 9% Renaissance 8% Autograph Hilton (1) Based Westin Hilton Marriott of11% Conrad Inn 50/50 overall of of Third third on Brands 9% 15% 4% Marriott PORTFOLIO 39% best 33% 2014F brand/thi
Slide 20: Portfolio Transformation: Better Markets, Higher Quality Assets
Portfolio BETTER $0.4B Lexington, Suburban Key Dispositions: Acquisitions: 20 West, in Strategic Transformation MARKETS, Atlanta, Chicago, FL KY 1Disciplined, Suburban to 2GA Dispositions IL non-core Washington, Suburban HIGHER Austin, actively assets $1.3B Los QUALITY TXseeking DC marketed Angeles,
Slide 21: Accretive Platform: Key Investment Criteria
Accretive PLATFORM 1. 2. 3. 4. KEY Target Will Preference Near-term Highly Inn Acquired 20% 21 Ability Targeting Investment New atavoid Discount INVESTMENT Key Markets: disciplined CIO Hilton to External accretive West significant for off-market acquire with TO Capacity value-add toTop Acquired Gard
Slide 22: Forward-Looking Statements
Forward Certain “plan,” strategies, Factors Annual Form statements looking Any can to This 22 update give forward-looking presentation 10-K, “estimate,” statements Report that statements no Looking any growth made assurance could quarterly forward-looking onare contains Statements and cause made mad
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