DiamondRock Raises Outlook as Hotel Margins Expand
Comparable RevPAR rose 7.0% to $240.79 as room rates and occupancy increased.
DiamondRock Hospitality (DRH), a lodging real-estate investment trust, raised its full-year outlook after second-quarter adjusted EBITDA increased 19.2% to $107.9 million.
The quarter paired stronger hotel demand with wider margins, though property-tax settlements in Chicago contributed to the profit improvement. Comparable Hotel Adjusted EBITDA rose 20.9% to $113.2 million, and the margin expanded 457 basis points to 35.76%; excluding the $6.9 million tax benefit, the margin increased 239 basis points.
Reported revenue rose 4.1% to $318.3 million, while comparable-portfolio revenue increased 5.5% to $316.6 million. Net income attributable to common stockholders climbed 135.7% to $90.5 million, and diluted earnings rose 144.4% to $0.44 a share, including a $31.6 million gain on a hotel sale.
Room revenue increased 7.0% to $206.0 million as the average daily rate rose 4.6% to $308.50 and occupancy gained 1.8 percentage points to 78.1%. Comparable Total RevPAR increased 5.6% to $370.06. Comparable hotel operating expenses declined 1.5% to $203.3 million, though they rose 1.8% after excluding the Chicago settlements.
Adjusted funds from operations increased 27.0% to $91.8 million, while adjusted FFO per diluted share rose 25.7% to $0.44. Excluding the tax benefit, adjusted FFO was $0.41 a share.
DiamondRock now expects 2026 comparable RevPAR growth of 2.5% to 4.0%, up from 1.5% to 3.5%, and comparable Total RevPAR growth of 2.75% to 4.25%, up from 1.75% to 3.75%. Adjusted EBITDA guidance increased to $310 million to $320 million from $290.2 million to $302.2 million, while adjusted FFO guidance rose to $245.5 million to $255.5 million from $228.4 million to $240.4 million.
The company increased its quarterly dividend 22% to $0.11 a share and expects to maintain that rate through the rest of 2026. It also replaced its previous repurchase program with a $300 million authorization, leaving $299.4 million available after buying 0.2 million shares during the quarter.