Diamondrock Hospitality Company · NASDAQ:DRH
Diamondrock Hospitality — Investor Presentation (September 2021)
27 slides from Diamondrock Hospitality's investor presentation, Sep 13, 2021
Slide 1: The Landing, Lake Tahoe Investor Presentation | September 2021
1The Landing, Lake Tahoe Investor Presentation | September 2021
Slide 2: Forward Looking Statements
2 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: Recent Events
3 Recent Events Strategic Transactions Operations • Acquired the 220-room Bourbon Orleans Hotel in New Orleans, Louisiana • 7.0% capitalization rate on 2019 NOI • 8.0% estimated stabilized capitalization rate • Acquired the 37-room Henderson Park Inn in Destin, Florida • 7.0% capitalization rate on
Slide 4: Powerful Capital Recycling
4 Powerful Capital Recycling The Lexington Hotel ($185MM) Frenchman’s Reef ($35MM) $220MM Cash Proceeds Bourbon Orleans ($89MM) Henderson Park Inn ($28MM) • Accretive Recycling: Sold $220MM at 5.4% cap rate on 2019 NOI. Acquired $118MM at 6.2% cap rate on 2019 NOI • 63% of disposition NOI replaced u
Slide 5: Bourbon Orleans Hotel Acquisition
5 Bourbon Orleans Hotel Acquisition ACQUISITION DATE 7/29/21 PURCHASE PRICE $81 MILLION LOCATION NEW ORLEANS, LA NUMBER OF ROOMS 220 KEY DEAL HIGHLIGHTS ■ Best located hotel in New Orleans. Corner of Bourbon and Orleans Streets in the center of French Quarter ■ Off-market acquisition of a rare fee-s
Slide 6: Henderson Park Inn Acquisition
6 Henderson Park Inn Acquisition ACQUISITION DATE 7/30/21 PURCHASE PRICE $27.5 MILLION LOCATION DESTIN, FL NUMBER OF ROOMS 37 KEY DEAL HIGHLIGHTS ■ Consistently recognized by TripAdvisor as one of the Top 25 Hotels in the U.S. and named by Coastal Living as one of the 10 Best Beach Hotels in Florida
Slide 7: DiamondRock at a Glance
7 2020 FINANCIAL SUMMARY(1) Hotels (Rooms) 29 Hotels (~9K Rooms) Stock Price $8.58 2019 Implied EBITDA Multiple 10.5x 2019 Implied NOI Cap Rate 8.2% Enterprise Value per Key $320K . (1) Share price as of 9/9/21 (2) All figures Pro Forma for sale of Frenchman’s Reef (4/30/21) and The Lexington (est.
Slide 8: DiamondRock Balance Sheet Profile
8 DiamondRock Balance Sheet Profile 10.4 9.5 8.8 6.3 4.7 3.9 3.7 3.5 1.5 1.2 AHT BHR HT INN PEB XHR DRH RLJ HST SHO LEVERAGE BELOW PEER AVERAGE(2) (1) As of 6/30/21 (2) Source: Baird. Net Debt plus preferred / 2019 Consensus EBITDA Note: Leverage calculation is not adjusted for estimated EBITDA cont
Slide 9: Superior Asset Management: Tightest Cost Controls
9 $648 $787 $1,227 $1,340 $1,409 DRH XHR SHO PK PEB Superior Asset Management: Tightest Cost Controls Average Monthly AFFO Burn Rate Per Key(1) (2) (1) Q2 2020 through Q2 2021 AFFO per key per month. (2) Third Quarter AFFO excludes noncash income tax valuation allowance recognized in the quarter of
Slide 10: All Demand Segments Improving
10 All Demand Segments Improving Group • Group lead generation is now at ~95% of pre-COVID levels • Over 50% increase in leads in Q2 2021 over Q1 2021 • Group rates are 10% higher in 2022 • Converted 63% more definite group room nights with most activity in 2022 and beyond Business Transient • Room
Slide 11: Internal Growth Opportunities
11Renaissance Charleston Historic District INTERNAL GROWTH OPPORTUNITIES
Slide 12: $85MM of ROI Projects at 35%+ IRRs
12 $85MM of ROI Projects at 35%+ IRRs (1) Estimated Capital Spend and Estimated Incremental EBITDA based upon management proformas (2) Estimated IRR is calculated assuming a 3-year stabilization period and a 10.0x terminal multiple Property Project Estimated Capital Spend(1) Estimated Incremental EB
Slide 13: Up-Branding Projects Create Value In 2022
13 JW Marriott Cherry Creek Up-Branding Projects Create Value In 2022 Sonoma Renaissance Vail Marriott Project Cost $3.6MM IRR 74% Estimated Completion 2021 Project Cost $9.8MM IRR 25% Estimated Completion 2021 Project Cost $8.4MM IRR 88% Estimated Completion 2021 Note: Estimated IRR is calculated a
Slide 14: Sweeping Marriott Deal Increases Portfolio Margins +50bp
14 Sweeping Marriott Deal Increases Portfolio Margins +50bp Vail Marriott Mountain Resort In 2020, DRH entered into an agreement with Marriott to alter several brand and management contracts. Franchise Conversions The following were converted from brand-managed to franchised properties: • Atlanta Ma
Slide 15: Created $350MM+ of New Investment Capacity
15 Created $350MM+ of New Investment Capacity Frenchman’s Reef The Lexington Hotel Transaction Details Proceeds Received $35MM + Promote Closing Date April 2021 Transaction Details Proceeds Received $185MM Closing Date June 2021 • Sold Frenchman’s Reef to an affiliate of Fortress Investment Group fo
Slide 16: Targeting Resort Micro-Markets and Lifestyle Cities
16 Targeting 50 Resort Micro-Markets and Lifestyle Cities Pipeline of Potential Investments Synergies with Existing Portfolio Mostly Off-Market Transactions Heavily Leisure-Oriented
Slide 17: ESG Leadership
17 ESG LEADERSHIP Cavallo Point, the Lodge at Golden Gate Bridge
Slide 18: Responsible Corporate Citizen
18 Responsible Corporate Citizen ISS ESG Rankings(2) ISS-ESG Corporate Ranking Environmental Social Governance 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 (1) Lodging Peer Average
Slide 19: DiamondRock Hospitality
DIAMONDROCK HOSPITALITY
Slide 20: Appendix
APPENDIX Havana Cabana Key West
Slide 21: DRH Lifestyle & Independent Strategy
21 DRH Lifestyle & Independent Strategy RATIONALE FOR TARGETING LIFESTYLE HOTELS, INDEPENDENTS, & SOFT BRANDS Target allocation will be achieved through acquisitions of lifestyle hotels, independents and soft brands and dispositions of traditional boxes CURRENT ALLOCATION(1) TARGET ALLOCATION Balanc
Slide 22: Experiential Travel Leads the Way
22 Experiential Travel Leads the Way Motor Vehicles Jewelry and Watches Home Furnishings Experiences 15-YEAR SPENDING CAGR (2004-2019) 0.8% 2.1% 2.2% 4.8% In the past decade, consumer spending in the US has seen a drastic shift toward experiences, rather than products or “things”. DiamondRock’s reso
Slide 23: The Next Generation of Travel
23 The Next Generation of Travel 20% Nearly 20% of Gen-Z respondents said they have stayed at a specific hotel or destination in order to score a positive response from followers on posts on their own social media channels. 25% 25% of millennials posted a trip on social media before booking in order
Slide 24: The Post-COVID-Recovery Traveler
24 The Post-COVID-Recovery Traveler 87% of respondents agree that having a trip planned in the future gives them something to look forward to 76% of respondents are creating their destination wish list for future travel 64% of respondents miss traveling so much that they are willing to give up socia
Slide 25: Resort Thesis Already Proven Successful
25 Resort Thesis Already Proven Successful EBITDA Multiple @ EBITDA Increase Investment ($MM) Purchase YE 2019 $MM Burlington Hilton $64 16.5x 8.9x $3.9 Charleston Renaissance $43 11.9x 7.0x $2.9 Fort Lauderdale Westin $167 14.8x 10.7x $5.5 Havana Cabana $54 12.2x 15.8x ($0.5) The Landing Resort & S
Slide 26: Strong, Growing Resort Market Presence
26 Strong, Growing Resort Market Presence NEW ORLEANS, LA DESTIN, FL Henderson Park Inn (Independent) Bourbon Hotel (Independent)
Slide 27: High Quality Portfolio in Key Gateway Markets
27 High Quality Portfolio in Key Gateway Markets UNDER CONTRACT
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