1. DRH reports 2.0% RevPAR growth in Q1 2025. 2. Group revenues increased over 10%, transient revenues over 9%. 3. Performance impacted by macroeconomic uncertainty and soft Florida resort demand. 4. Stock buyback program continues with $15.9M repurchased. 5. 2025 revenue outlook lowered by 200 basis points.
While Q1 RevPAR growth is positive, the lowered 2025 revenue outlook indicates long-term uncertainty. Previous cases, like the COVID-19 impact, demonstrate how economic shifts can considerably depress hotel stock values.
Earnings and revenue guidance are crucial indicators of DRH's financial health. Market responses to earnings reports are traditionally strong.
Immediate quarterly results give a short-term perspective. However, the adjustment in revenue expectations suggests potential impact on future quarters.
BETHESDA, Md., May 1, 2025 /PRNewswire/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH), a lodging real estate investment trust that owns a portfolio of 36 premium hotels and resorts in the United States, today announced results of operations for the quarter ended March 31, 2025.
"First quarter operating results were in line with our expectations, with group revenues increasing over 10% and business transient revenues increasing over 9% to compared to last year. This strong revenue growth coupled with cost savings initiatives offset the softness at our Florida resorts in the first quarter resulting in comparable first quarter RevPAR growth of 2.0% and comparable Hotel Adjusted EBITDA growth of 2.2%.
The rise in macroeconomic uncertainly has had only a mild effect on performance thus far. Encouragingly, near-term leisure booking pace remains in line with prior year trends, however group revenue pickup in the second half of 2025 has been tempered by an unsettled business environment. In light of this, we are lowering our top line outlook for 2025 by 200 basis points, but maintaining our previous outlook for Adjusted FFO per share. We remain optimistic DiamondRock can drive earnings growth through continued operating performance and deliberate action on accretive capital recycling. We have repurchased $15.9 million of common shares utilizing a portion the proceeds from the sale of the Westin Washington, D.C., which exemplifies our strategy to harvest capital from low free cash flow yield assets and redeploy proceeds into higher return opportunities." - Jeffrey J. Donnelly, Chief Executive Officer of DiamondRock Hospitality Company
Please see "Non-GAAP Financial Measures" attached to this press release for an explanation of the terms "EBITDAre," "Adjusted EBITDA," "Hotel Adjusted EBITDA," "Hotel Adjusted EBITDA Margin," "FFO" and "Adjusted FFO" and a reconciliation of these measures to net income. Comparable operating results include all hotels owned as of March 31, 2025 for all periods presented. See "Reconciliation of Comparable Operating Results" attached to this press release for a reconciliation to historical amounts.
| Three Months Ended March 31, | 2025 | 2024 | Change |
|---|---|---|---|
| Comparable Operating Results(1) | ADR $277.36 | $269.95 | 2.7 % |
| Occupancy | 67.1 % | 67.6 % | (0.5) % |
| RevPAR | $186.20 | $182.50 | 2.0 % |
| Total RevPAR | $291.56 | $287.09 | 1.6 % |
| Room Revenues | $160.8 | $159.2 | 1.0 % |
| Total Revenues | $251.8 | $250.5 | 0.5 % |
| Hotel Adjusted EBITDA | $61.3 | $60.0 | 2.2 % |
| Hotel Adjusted EBITDA Margin | 24.36 % | 23.97 % | 39 bps |
| Available Rooms | 863,550 | 872,508 | (8,958) |
Total Revenues, Net income attributable to common stockholders, Earnings per diluted share, Adjusted EBITDA(3), Adjusted FFO(3), Adjusted FFO per diluted share(3) are outlined in the report.
On April 29, 2025, the Company's Board of Directors declared a quarterly cash dividend of $0.08 per share on its common stock. The dividend will be paid on July 11, 2025 to shareholders of record as of June 30, 2025.
The Company's Board of Directors also declared a quarterly dividend of $0.515625 per share on its 8.250% Series A Cumulative Redeemable Preferred Stock. The dividend is payable on June 30, 2025 to shareholders of record as of June 20, 2025.
DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets. The Company currently owns 36 premium quality hotels with approximately 9,600 rooms. For further information on the Company and its portfolio, please visit DiamondRock Hospitality Company's website.