DiamondRock Raises 2026 Outlook After Third-Quarter Beat

The Tip Desk · November 4, 2026 · 4 min read

Third-quarter 2026 comparable RevPAR reached $226.01 as the lodging REIT lifted full-year Adjusted FFO per share to $1.24 to $1.26.

DiamondRock Hospitality Company (DRH), a lodging real estate investment trust that owns 35 premium hotels and resorts in the United States, raised its 2026 outlook for a third time after third-quarter 2026 comparable RevPAR growth of 6.6%.

The company now expects full-year comparable RevPAR growth of 4.75% to 5.25%, up from 2.5% to 4.0%, and comparable Total RevPAR growth of 4.75% to 5.25%, up from 2.75% to 4.25%. Adjusted EBITDA guidance moved to $322.0 million to $327.0 million from $310.0 million to $320.0 million, and Adjusted FFO per diluted share to $1.24 to $1.26 from $1.18 to $1.23. The update includes an expected contribution from The Bellmoor Inn & Spa and assumes no additional acquisitions, dispositions, or share repurchases.

Chief Executive Officer Jeffrey J. Donnelly said the company exceeded its expectations with healthy demand and higher rates across both transient and group segments, and that operating efficiencies drove outsized Hotel Adjusted EBITDA growth and higher free cash flow. He said the company is raising 2026 guidance again given third-quarter results and fourth-quarter booking pace.

Comparable RevPAR was $226.01, up from $212.06 a year earlier. Average daily rate rose 3.8% to $290.46 and occupancy rose 2.0 percentage points to 77.8%. Comparable total revenues increased 6.4% to $297.6 million. Comparable hotel operating expenses rose 3.9% to $205.9 million.

Comparable Hotel Adjusted EBITDA was $91.7 million, up 12.5% from $81.5 million a year earlier. The margin expanded 166 basis points to 30.81%. That pace of EBITDA growth and margin expansion slowed from the second quarter, when comparable Hotel Adjusted EBITDA rose 20.9% and the margin expanded 457 basis points, including about $6.9 million from a May settlement of multi-year property tax appeals at two Chicago hotels.

Adjusted EBITDA was $84.8 million, up 7.2% from a year earlier. Adjusted FFO per diluted share was $0.32, up 10.3%. Net income attributable to common stockholders was $33.3 million, or $0.16 a share, up 65.7% and 60.0%, respectively.

The board declared a third-quarter cash dividend of $0.11 a share, unchanged from the quarterly dividend declared after the second quarter. The company said it expects to declare a stub dividend in the fourth quarter in addition to the regular $0.11 quarterly dividend, depending on estimated 2026 taxable income.

On October 1, 2026, DiamondRock acquired The Bellmoor Inn & Spa, a 79-room independent resort in Rehoboth Beach, Delaware, for $31.0 million. The purchase price represented a 10.4 times multiple of trailing 12-month August 2026 Hotel Adjusted EBITDA and an 8.6% capitalization rate on Hotel NOI. After asset-management initiatives and planned off-season capital improvements, the company expects a stabilized Hotel NOI yield of about 9.5%. The Bellmoor is expected to contribute approximately $0.2 million to Adjusted EBITDA and Adjusted FFO in the fourth quarter.

The company invested $59.2 million in capital improvements in the nine months ended September 30, 2026, and currently expects to invest approximately $75.0 million to $80.0 million for the full year. Significant 2026 projects include completed guestroom renovations at Courtyard New York Manhattan/Midtown East and Henderson Park Inn, a Westin San Diego Bayview entrance, lobby and lobby-bar renovation that began in the third quarter and is expected to finish in the first quarter of 2027, and an Atlanta Marriott Alpharetta guestroom renovation expected to start in the fourth quarter of 2026.

As of September 30, 2026, total debt outstanding was $1.1 billion across three unsecured term loans with a weighted average interest rate of 5.1%. The company had $400.0 million of available capacity under its undrawn revolving credit facility and about $140.0 million of unrestricted cash. During the nine months ended September 30, 2026, it repurchased about 0.2 million shares for $1.9 million at an average price of $9.79 a share, leaving $299.4 million of remaining capacity under its $300.0 million share repurchase program.