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DiamondRock Hospitality Company Reports Second Quarter 2025 Results

On August 7, 2025, DiamondRock Hospitality Company (NYSE: DRH), a lodging real estate investment trust (REIT) with a robust portfolio of 36 premium hotels across the United States, provided an update on its operational results for the second quarter of 2025. The company has demonstrated notable recovery and strategic improvements amid changing market conditions.

Financial Highlights

Net Income: The company reported a net income of $38.4 million, equating to $0.18 per diluted share, signifying a remarkable increase of 73.8% from the same quarter in 2024. This substantial rise reflects strong operational execution alongside improved profitability metrics.

Revenue Per Available Room (RevPAR): DiamondRock achieved a comparable RevPAR of $226.95, marking a modest increase of 0.1% compared to Q2 2024, meeting the company’s expectations effectively. Moreover, the total revenue per available room (Total RevPAR) saw a 1.1% increase, reaching $350.00, boosted by a 3.1% rise in out-of-room revenue due to enhanced guest experiences.

Adjusted EBITDA: The Adjusted EBITDA for the quarter stood at $90.5 million, reflecting a 4.7% year-on-year decrease, primarily driven by rising operational costs, including a substantial property tax increment in Chicago. The comparable hotel Adjusted EBITDA amounted to $95.4 million with a margin of 31.19%.

Earnings Per Share: The Adjusted Funds from Operations (FFO) per share remained stable at $0.35, remaining flat compared to Q2 2024.

Debt Management and Refinancing Strategy

A significant highlight for the company includes the completion of a $1.5 billion refinancing of its senior unsecured credit facility. This strategic move extended the debt maturities until 2028 and ensured a stronger liquidity position. By upsizing the facility from $1.2 billion to $1.5 billion, the company not only mitigated potential financial risks but also enhanced its operational flexibility in navigating market uncertainties.

Year-to-date, DiamondRock repurchased 3.6 million shares of its common stock at an average price of $7.64, reflecting confidence in the company’s long-term performance and commitment to shareholder value.

CEO Jeffrey J. Donnelly commented, “We are beginning to witness signs of stabilization in travel patterns within our upscale portfolio. Our ability to limit expense growth alongside revenue enhancements demonstrates our adaptability in the current economic climate. We feel optimistic about the trajectory of our business as we advance into the latter half of 2025.”

Capital Investments and Future Outlook

In alignment with its growth strategies, the company invested approximately $41.3 million in capital improvements across its hotel properties during the first half of 2025. Projects highlighted include renovations at some major locations such as the Hilton Garden Inn in Times Square and Kimpton Hotel Palomar in Phoenix, with plans for continued investments into the rest of the year, aiming to spend between $85 to $95 million.

Moving forward, DiamondRock anticipates achieving full-year 2025 results within a revised range, raising the midpoint of its adjusted EBITDA and FFO guidance. The management’s optimistic outlook reflects not only the recovery of the travel sector but also the effectiveness of strategic operational measures during the pandemic aftermath.

Conclusion

DiamondRock Hospitality Company's Q2 2025 performance showcases resilience and proactive management in navigating through challenges. With a significant focus on enhancing guest experiences, maintaining financial flexibility through refinancing, and smart capital investments, the company is well-positioned for sustained growth in the competitive hospitality landscape.