Diamondrock Hospitality Company · NASDAQ:DRH
Diamondrock Hospitality — Investor Presentation (November 2021)
29 slides from Diamondrock Hospitality's investor presentation, Nov 5, 2021
Slide 1: Investor Presentation November 5, 2021
1 INVESTOR PR ESENTA T IO N NOVEMBER 5 , 2021 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 2 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 othe
Slide 3: Key Takeaways and Recent Events
KEY TAKEAWAYS AND RECENT EVENTS STRATEGIC TRANSACTIONS BOURBON ORLEANS HOTEL ■ Acquired the 220-room Bourbon Orleans Hotel in New Orleans, Louisiana ■ 7.0% capitalization rate on 2019 Hotel NOI ■ 8.0% estimated stabilized capitalization rate HENDERSON PARK INN KEY TAKEAWAYS 1. $538MM of Available Li
Slide 4: Operating Update
OPERATING UPDATE (1) The comparable operating information includes operating results for our 31-hotel portfolio, which includes our 2021 acquisitions and excludes our 2021 dispositions. (2) Preliminary results 2021 MONTHLY COMPARABLE OPERATING RESULTS(1) Occ ADR RevPAR Revenue Revenue B/(W) 2019 Jan
Slide 5: DiamondRock
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Slide 6: DiamondRock Is Positioned for Outsized Growth
DIAMONDROCK IS POSITIONED FOR OUTSIZED GROWTH 2022-2023 SETUP ROI PIPELINE STRONG/IMPROVING PORTFOLIO MARGIN IMPROVEMENT POTENTIAL OPPORTUNISTIC INVESTMENT 1 2 3 4 5 6
Slide 7: 2022-2023 Setup
THE HYTHE (RENDERING) BOURBON ORLEANS ■ Sonoma Autograph Collection (Q2 2021) ■ The Hythe, The Luxury Collection (Q4 2021) ■ Margaritaville Key West Resort (Q4 2021) ■ The Clio, The Luxury Collection (Q1 2022) 7 FOUR HOTEL UP-BRANDINGS 2022-2023 SETUP IMPROVING GROUP TRENDS ■ Group ADR on the books
Slide 8: Projects in Process
PROJECTS IN PROCESS 33 PROJECT COST IRR Estimated Completion $3.6MM 74% Q1 2022 PROJECT COST IRR Completed $9.8MM 25% Jul 2021 PROJECT COST IRR Estimated Completion $8.4MM 88% Nov 2021 JW MARRIOTT CHERRY CREEK SONOMA RENAISSANCE VAIL MARRIOTT
Slide 9: Margaritaville Beach House Key West
MARGARITAVILLE BEACH HOUSE KEY WEST Project Cost $3.5MM IRR 82% Estimated Completion Nov 2021 PROJECTS IN PROCESS
Slide 10: ROI Pipeline: $90MM of ROI Projects at 35%+ IRRs
ROI PIPELINE: $90MM of ROI Projects at 35%+ 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 VAIL MARRIOTT Luxury Collection Brand Conversion $8.4 $3.4 88% Q4
Slide 11: Low/Declining Exposure to Ground Leases
LOW/DECLINING EXPOSURE TO GROUND LEASES COMPANY % OF FEE GROUND LEASED # OF GROUND LEASED PROPERTIES PEB 33% 14 Properties HST 29% 22 Properties DRH 23% 6 Properties PK 21% 17 Properties DRH 21% 5 Properties SHO 19% 2 Properties XHR 12% 3 Properties Source: Company filings and/or website 11 Before S
Slide 12: Low/Declining Exposure to Hurricane Markets
COMPANY HURRICANE MARKET EXPOSURE XHR 28% RLJ 24% PK 23% INN 21% HST 21% SHO 19% CLDT 17% DRH 16% BHR 16% HT 14% AHT 14% APLE 14% DRH 12% PEB 8% Before Frenchman’s Reef Disposition After Frenchman’s Reef Disposition ■ Lower risk of uninsured disruption ■ Long-term sustainability ■ Lower operating co
Slide 13: Low/Declining Exposure to CBA
■ Improved Operating Flexibility ■ Improves Cash Flow ■ Improves Multiple ■ Improves Asset Value ■ Risk Mitigation LOW/DECLINING EXPOSURE TO CBA BENEFITS OF LOW EXPOSURE TO CBAS COMPANY % OF ROOMS SUBJECT TO CBAS PK 39% SHO 35% PEB 34% DRH 30% BHR 27% DRH 22% HST 20% XHR 13% Before Lexington and Fre
Slide 14: Lowest Exposure to Brand Management
LOWEST EXPOSURE TO BRAND MANAGEMENT BENEFITS OF LOW EXPOSURE TO BRAND MANAGEMENT ■ Enhanced profitability ■ Superior cost management ■ Owner-centric capital management ■ More control COMPANY BRAND MANAGED HOTELS TOTAL HOTELS PK 70+ 80 HST 50+ 60 XHR 30 35 PEB 13 51 SHO 10 18 DRH 8 31 DRH 2 31 Source
Slide 15: Sweeping Marriott Deal Increases Portfolio Margins
SWEEPING MARRIOTT DEAL INCREASES PORTFOLIO MARGINS +50BP 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 Marriott Alpharetta • Salt Lake Cit
Slide 16: Long Term Margin Improvement Potential
UP TO 200BPS OF POTENTIAL LONG TERM MARGIN IMPROVEMENT Above the Hotel At the Hotel 50 – 150BPS: ■ Labor efficiency ■ Technology ■ F&B Outlets ■ Housekeeping ■ Lower allocated costs 50BPS: ■ Marriott Managed hotels converted to Franchise 16 LONG TERM MARGIN IMPROVEMENT POTENTIAL
Slide 17: Powerful Capital Recycling
POWERFUL CAPITAL RECYCLING THE LEXINGTON HOTEL ($185MM) FRENCHMAN’S REEF ($35MM) BOURBON ORLEANS ($89MM) HENDERSON PARK INN ($28MM) $220MM Cash Proceeds BENEFITS OF TRANSACTIONS ■ ACCRETIVE RECYCLING: Sold $220MM of assets at 5.4% cap rate on 2019 NOI. Utilized 54% of disposition proceeds to replace
Slide 18: Bourbon Orleans Hotel (New Orleans, LA)
BOURBON ORLEANS HOTEL (NEW ORLEANS, LA) 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 f
Slide 19: Henderson Park Inn (Destin, FL)
HENDERSON PARK INN (DESTIN, FL) 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 20: Portfolio
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Slide 21: DiamondRock at a Glance
DIAMONDROCK AT A GLANCE 9,100 ROOMS 31 PROPERTIES 22 GEOGRAPHICAL MARKETS LOCATION EBITDA LOCATION EBITDA Boston, MA 16% Denver, CO 4% Chicago, IL 16% Phoenix, AZ 3% New York, NY 7% Burlington, VT 3% Washington, DC 6% Sonoma, CA 3% Ft. Lauderdale, FL 6% New Orleans, LA 3% Ft. Worth, TX 5% Atlanta, G
Slide 22: Portfolio: Data Table
PORTFOLIO: DATA TABLE KEYS REVPAR TREVPAR REVENUE/KEY % OF 2019 EBITDA LUXURY RESORT 611 268.98 496.40 181.18 11% LIFESTYLE RESORT 1,216 189.50 307.37 111.96 15% LIFESTYLE URBAN 1,491 185.11 255.83 93.20 16% RESORT/LIFESTYLE 3,318 202.19 319.07 116.27 42% URBAN GATEWAY 5,815 175.91 239.77 87.52 58%
Slide 23: Portfolio: Operator and Guest Mix Diversification
PORTFOLIO: OPERATOR AND GUEST MIX DIVERSIFICATION 23 2019 ACTUAL PRO FORMA FOR LEXINGTON DISPOITION AND ACQUISITIONS Corporate - Group, 21% Leisure - Group, 7% Leisure - Transient, 34% Corporate - Transient, 38% Corporat e - Group 20% Leisure - Group 7% Leisure - Transient 36% Corporat e - Transient
Slide 24: Strong Resort Market Presence
STRONG RESORT MARKET PRESENCE APPROXIMATELY 1/3 OF PORTFOLIO LOCATED IN DESTINATION RESORT MARKETS. FORT LAUDERDALE, FL SAUSALITO, CA SEDONA, AZ L’AUBERGE DE SEDONA (Independent) WESTIN FORT LAUDERDALE BEACH RESORT (Marriott) HUNTINGTON BEACH, CA SAN FRANCISCO, CAPHOENIX, AZ DENVER, COCHICAGO, IL BU
Slide 25: High Quality Portfolio in Key Gateway Markets
19 HIGH QUALITY PORTFOLIO IN KEY GATEWAY MARKETS APPROXIMATELY 2/3 OF PORTFOLIO LOCATED IN TOP, GATEWAY MARKETS. ALPHARETTA, GA ATLANTA MARRIOTT ALPHARETTA (Marriott) BOSTON, MA SALT LAKE CITY, UTNEW YORK, NY FORT WORTH, TXDENVER, CO CHICAGO, IL CHICAGO MARRIOTT DOWNTOWN (Marriott) WASHINGTON, DC WA
Slide 26: Balance Sheet
26 BALANCE SHEET
Slide 27: DiamondRock Balance Sheet Profile
DIAMONDROCK BALANCE SHEET PROFILE LEVERAGE BELOW PEER AVERAGE(3) PRO FORMA FUTURE DEBT MATURITIES(2) 2021 2022 2023 2024 2025 ■ Secured Debt ■ Term Loan ■ Revolver ■ Undrawn Revolver ■ $300MM+ of Investment Capacity ■ $538MM liquidity available in cash and revolver capacity(1) (1) As of 9/30/21 (2)
Slide 28: ESG Leadership
28 ESG LEADERSHIP
Slide 29: 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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