DiamondRock Hospitality Company — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income attributable to common stockholders was $33.3 million ($0.16 per diluted share) for the quarter ended September 30, 2026, an increase of 65.7% and 60.0% respectively compared to the third quarter of 2025.
• Adjusted EBITDA was $84.8 million for the quarter, a 7.2% increase year-over-year.
• Adjusted FFO per diluted share was $0.32, a 10.3% increase compared to the prior year quarter.
• Total revenues for the quarter were $297.6 million, up 6.4% year-over-year.
• Comparable Hotel Adjusted EBITDA was $91.7 million, representing a 12.5% increase, with a margin of 30.81% (an increase of 166 basis points).
• For the nine months ended September 30, 2026, net income attributable to common stockholders was $138.3 million ($0.67 per share), a 103.7% increase year-over-year.
• Nine-month Adjusted EBITDA was $253.3 million (up 12.2%), and Adjusted FFO was $204.0 million (up 19.2%).
• The nine-month period included a one-time benefit of approximately $6.9 million from property tax appeal settlements; excluding this, Adjusted FFO per diluted share was $0.95.
• Total debt outstanding was $1.1 billion with a weighted average interest rate of 5.1% as of September 30, 2026.
• The Company held approximately $140.0 million in unrestricted cash and had $400.0 million of available capacity under its revolving credit facility.

Guidance and Future Outlook:

• The Company raised its full-year 2026 guidance based on strong third-quarter results and improved fourth-quarter booking pace.
• Updated 2026 Comparable RevPAR growth guidance is 4.75% to 5.25% (previously 2.5% to 4.0%).
• Updated 2026 Comparable Total RevPAR growth guidance is 4.75% to 5.25% (previously 2.75% to 4.25%).
• Updated 2026 Adjusted EBITDA guidance is $322.0 million to $327.0 million (previously $310.0 million to $320.0 million).
• Updated 2026 Adjusted FFO guidance is $256.5 million to $261.5 million (previously $245.5 million to $255.5 million).
• Updated 2026 Adjusted FFO per diluted share guidance is $1.24 to $1.26 (previously $1.18 to $1.23).
• Guidance assumes no additional acquisitions, dispositions, or share repurchases, and includes an estimated $0.2 million contribution from The Bellmoor Inn & Spa in Q4 2026.
• The Company expects to invest $75.0 million to $80.0 million in capital improvements in 2026.
• Management anticipates a constructive industry backdrop for 2027, expecting to grow earnings through operating execution and the ramp-up of recently renovated hotels.

Business Segments and Product Lines:

• The portfolio consists of 35 premium hotels and resorts with 9,479 rooms.
• Comparable RevPAR increased 6.6% to $226.01, and Comparable Total RevPAR increased 6.5% to $344.13 for the quarter.
• Comparable ADR increased 3.8% to $290.46, and comparable occupancy increased 2.0% to 77.8%.
• Significant capital improvement projects include renovations at Courtyard New York Manhattan/Midtown East and Henderson Park Inn (completed Q1 2026), and ongoing renovations at Westin San Diego Bayview and Atlanta Marriott Alpharetta (expected completion Q1 2027).
• On October 1, 2026, the Company acquired The Bellmoor Inn & Spa, a 79-room independent resort in Rehoboth Beach, Delaware, for $31.0 million.
• The Bellmoor acquisition was made at a 10.4x multiple of trailing 12-month EBITDA and an 8.6% cap rate, with an expected stabilized yield of 9.5%.

Market and Competitive Landscape:

• The Company operates in a supply-constrained market, evidenced by the acquisition of The Bellmoor Inn & Spa.
• Demand was described as healthy across both transient and group segments.
• The Company strategically positions its portfolio in leisure destinations and top gateway markets, operating under global brand families and as independent boutique hotels.

Risks and Challenges:

• Forward-looking statements are subject to risks including adverse impacts from pandemics, economic volatility (inflation, interest rates, job loss), and changes in travel frequency or demand.
• Risks include potential decreases in international travel, increases in operating costs, and changes in taxes or government regulations.
• Achievement of anticipated results is subject to risks disclosed in the Company's SEC filings.

Management Commentary and Tone:

• CEO Jeffrey J. Donnelly stated the Company delivered another strong quarter exceeding expectations, driven by healthy demand, higher rates, and operating efficiencies.
• Management highlighted "outsized Hotel Adjusted EBITDA growth" and higher free cash flow as key drivers.
• The tone emphasized a "flywheel" strategy: growing earnings, generating free cash flow, and reinvesting capital at attractive returns.
• Management expressed confidence in deploying capital due to a conservative balance sheet and growing free cash flow.

Other Key Points:

• The Company increased its quarterly common dividend by 22% to $0.11 per share.
• A stub dividend may be declared in the fourth quarter of 2026 in addition to the regular quarterly dividend, depending on estimated taxable income.
• During the nine months ended September 30, 2026, the Company repurchased approximately 0.2 million shares for $1.9 million at an average price of $9.79 per share.
• Remaining capacity under the $300.0 million share repurchase program is $299.4 million.
• Capital expenditures for the nine months ended September 30, 2026, totaled $59.2 million.
• The Company sold the Courtyard New York Manhattan/Fifth Avenue on May 1, 2026, and the Westin Washington D.C. City Center on February 19, 2025.