Diamondrock Hospitality Co Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Smedes Rose - Citi - Analyst : Hi, thanks. Yu mentioned a little bit about some of the trends you're seeing in April. I just wondering, can you just share the preliminary portfolio, RevPAR for April?

Question: Smedes Rose - Citi - Analyst : Okay, thank you. And then I guess, -- I just was, wanted to ask you a little bit on the renovation projects that are underway, with the tariffs, et cetera. Would you expect those costs to go up or are they already kind of locked in before all that went into effect?

Question: Smedes Rose - Citi - Analyst : Okay. Thank you.

Question: Duane Pfennigwerth - Evercore ISI - Analyst : Hey, thanks. Appreciate the detailed commentary. Just on group conversion pause, can you talk little bit about the profile of your average group? Are these corporates? Are these small businesses, associations, social gatherings? What types of events are we talking about? And do you have like an average group size?

Question: Duane Pfennigwerth - Evercore ISI - Analyst : Got it. And then on that front, any markets in particular where you're excited about the group pacing? Thanks for taking the questions.

Question: Duane Pfennigwerth - Evercore ISI - Analyst : Thank you.

Question: Michael Bellisario - Baird - Analyst : Thanks. Good morning. Everyone. Two partner for me, sort of just along the same lines on group. I guess, maybe where are the holes in terms of dates as you look out for the rest of the year in terms of quarters? And then sort of secondarily, I guess, maybe for Justin, what's the updated revenue management strategy today to try to backfill some of those holes? Thanks.

Question: Chris Waronka - Deutsche Bank - Analyst : Hey, good morning, everyone, thanks for taking the question. Jeff, you guys, you gave out all the data points I think one of the things you mentioned was kind of the pause that maybe happened in March and April some of the group in the year for the year. The question is kind of what's, -- I guess, the average booking window for that stuff? And at what point do you say it's not coming back this year, or is it is it also you know, is it do you think it's partially a pricing issue where groups are just kind of, using this pause as a as leverage to try to get better rates on some of the smaller meetings?

Question: Chris Waronka - Deutsche Bank - Analyst : Okay. Thanks. Super helpful. Then just a question. I know you guys had talked a lot last year about kind of the post renovation lift and Diagonia was one of the ones you highlighted. Almost 5% RevPAR growth in Q1, not bad. But is that property, when you say that's kind of fully stabilized now and it's going to grow in line with the market? Or is there still more to go there? And I guess on your renovations that are going to wrap up this year, remind us of kind of how long you generally see before stabilization of the post reno benefits? Thanks.

Question: Floris Van Dijkum - Compass Point Research & Trading LLC - Analyst : Hey, guys. Jeff, you're very, -- you've become the new messenger in terms of shareholder value and cash flow per share. I love the messaging you're providing. Obviously, that's would suggest that you're not done with share buybacks. You've got about $10 million left on the balance sheet in terms of cash and $158 million of authority remaining. In this environment, I know that your tenure as a CEO is perhaps more limited than some of your other peers. Is there a better opportunity out there right now to deploy capital besides buying back stock?

Question: Floris Van Dijkum - Compass Point Research & Trading LLC - Analyst : And then maybe a follow-up question. You mentioned something about New Orleans and how you've instituted resort fees. Could you remind us what percentage of your hotels today charge resort fees? And is there any more incremental upside in bringing some of those on board?

Question: Floris Van Dijkum - Compass Point Research & Trading LLC - Analyst : Great. Thanks.

Question: Jack Armstrong - Wells Farg - Analyst : Hey, good morning. Thanks for taking the question. What kind of shifts are you seeing in consumer behavior in terms of the booking window out of room spend? And is there a meaningful difference that you point out there between your higher end consumers versus more of your middle income drive to market?

Question: Jack Armstrong - Wells Farg - Analyst : Okay, great. And then on the cost side, what are some of the levers that are available to you if we enter a more notable macro slowdown? How does your current level of full time employees compared to pre pandemic and how does that impact your flexibility to cut costs?

Question: Jack Armstrong - Wells Farg - Analyst : Okay, great. Thanks for taking the question.

Question: Chris Darling - Green Street - Analyst : Hi, thanks, good morning. I think you mentioned in the prepared remarks that wages and benefits were up about 1.5% in the first quarter. I'm wondering how this compared relative to your expectations and then what are you expecting for the rest of the year there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 3:00PM, DRH.N - Q1 2025 Diamondrock Hospitality Co Earnings Call

Question: Chris Darling - Green Street - Analyst : kay. And then I want to go back to the question Floris asked about share repurchases. And Jeff, I'm just curious strategically how you think about incremental share repurchases relative to just bolstering your cash position. And I asked the question in the context of we're in a more uncertain environment now. I'd imagine it's a more difficult backdrop in which to sell assets, although it sounds like maybe there's still some progress on that front. And the handful of mortgages that are maturing throughout the year. So any incremental thoughts would be helpful to hear.

Question: Chris Darling - Green Street - Analyst : Alright. Makes sense. Thank you.

Question: Stephen Grambling - Morgan Stanley - Analyst : Hey, thanks for taking the questions. I know you target these high barrier entry markets, but if you look across your entire portfolio, I guess what do you think competitive supply growth is this year? And are you seeing any change in behavior in developers in the markets from that that you operate from the volatility we've seen broadly? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 3:00PM, DRH.N - Q1 2025 Diamondrock Hospitality Co Earnings Call

Question: Stephen Grambling - Morgan Stanley - Analyst : Understood. And maybe I missed this, but if the capital markets were to become more supportive, are there specific markets that you think look particularly interesting or you'd want to increase exposure through from M&A if we do get that kind of, I want to say, all is clear on the macro side, but at least maybe from a capital market standpoint?

Question: Stephen Grambling - Morgan Stanley - Analyst : Value buying. Got it. All right. Thank you.