DiamondRock Hospitality pany(US:DRH)2023-11-02 16:00Financial Performance - For the nine months ended September 30, 2023, room revenue comprised approximately 67% of total revenues[127]. - Total revenues for the three months ended September 30, 2023, increased by $8.3 million, or 3.1%, to $276.5 million compared to $268.2 million in 2022[135]. - Room revenues increased by $1.3 million, with a $3.0 million increase from non-comparable properties, offset by a $1.7 million decrease at comparable properties due to declining occupancy and ADR[135]. - Food and beverage revenues rose by $2.8 million, with $1.3 million attributed to non-comparable properties, reflecting higher outlet revenues at comparable properties[137]. - Other revenues increased by $4.2 million, with $2.8 million from non-comparable properties, primarily due to higher resort fees and parking revenues[138]. - Total revenues for the nine months ended September 30, 2023, increased by $64.8 million, or 8.7%, to $811.3 million compared to $746.5 million in 2022[145]. - Room revenues for the nine months increased by $34.1 million, with $10.0 million from non-comparable properties, driven by improved occupancy and ADR at urban hotels[145]. - Net income for Q3 2023 was $27.33 million, a decrease of 4.3% from $28.56 million in Q3 2022[187]. - EBITDA for Q3 2023 increased to $71.21 million, up 9.3% from $64.99 million in Q3 2022[187]. - Adjusted EBITDA for the nine months ended September 30, 2023, was $214.38 million, slightly up from $213.16 million in the same period of 2022[187]. - FFO for Q3 2023 was $55.01 million, a decrease of 1.1% compared to $55.61 million in Q3 2022[188]. - Adjusted FFO available to common stockholders for Q3 2023 was $54.59 million, down from $60.63 million in Q3 2022[188]. Hotel Operations - As of September 30, 2023, the company owned a portfolio of 36 premium hotels and resorts with a total of 9,745 guest rooms located in 25 different markets in the United States[118]. - The total weighted average occupancy rate for the portfolio was 73.3%, with a Revenue per Available Room (RevPAR) of $206.76, reflecting a 4.1% increase from the previous year[132]. - The Chicago Marriott Downtown Magnificent Mile achieved a RevPAR of $149.41, representing a 14.8% increase from 2022[132]. - The Westin Boston Seaport District had an occupancy rate of 85.3% and a RevPAR of $207.90, up 15.5% from the previous year[132]. - The company’s hotels are managed by third-party operators, with management fees based on revenue and profitability levels[119]. Capital Structure and Investments - The company employs a strategy of aggressive asset management and disciplined capital allocation to enhance long-term stockholder returns[120]. - The company is committed to a conservative capital structure and regularly assesses the availability and affordability of capital to maximize stockholder value[122]. - The company had $1.2 billion of outstanding debt with a weighted average interest rate of 5.07% and a weighted average maturity of approximately 2.7 years[162]. - The company expects to spend approximately $100 million on capital improvements at its hotels in 2023, having already invested $67.4 million during the nine months ended September 30, 2023[178]. - The company has set aside $36.5 million for capital projects in property improvement funds as of September 30, 2023[177]. - The company repurchased 318,454 shares of common stock at an average price of $7.60 per share for a total of $2.4 million during the nine months ended September 30, 2023[165]. Cash Flow and Expenses - The company’s net cash provided by operations was $184.7 million for the nine months ended September 30, 2023[170]. - The company’s net cash used in investing activities was $101.2 million for the nine months ended September 30, 2023, including $31.9 million for the acquisition of Chico Hot Springs Resort[171]. - Hotel operating expenses increased by $13.2 million, or 7.1%, to $199.1 million, with $5.8 million from non-comparable properties, driven by increased occupancy and related labor costs[140]. - Total hotel operating expenses for the nine months increased by $66.4 million, or 12.9%, to $581.3 million, with $16.0 million from non-comparable properties[150]. - Interest expense rose by $6.9 million, from $9.1 million in 2022 to $16.0 million in 2023, primarily due to rising interest rates on variable rate debt and new unsecured term loans[144]. - Interest expense for the nine months increased by $25.8 million, from $22.9 million in 2022 to $48.7 million in 2023, mainly due to rising interest rates and changes in interest rate swaps[155]. - The company’s total outstanding debt as of September 30, 2023, was $1.2 billion, with $425 million being variable rate debt[200]. - A 100 basis point fluctuation in interest rates on variable rate debt could result in an annual change in interest expense of $4.3 million[200]. Risks and Market Conditions - The company faces risks including rising inflation, increased competition, and potential impacts from economic downturns on hotel operations[118]. - The company anticipates ongoing market risks primarily related to interest rate fluctuations affecting its financial performance[200]. Dividends and Shareholder Returns - The company intends to distribute dividends at least equal to its REIT taxable income to avoid corporate income tax, with recent dividends of $0.06, $0.03, and $0.03 per share paid in 2023[175].