DiamondRock Hospitality Company (NYSE:DRH) Q1 2023 Earnings Conference Call May 5, 2023 9:00 AM ET

Company Participants

Briony Quinn - Senior Vice President and Treasurer

Mark Brugger - President & Chief Executive Officer

Jeff Donnelly - Executive Vice President & Chief Financial Officer

Justin Leonard - Executive Vice President & Chief Operating Officer

Conference Call Participants

Austin Wurschmidt - KeyBanc Capital Markets

Dori Kesten - Wells Fargo

Duane Pfennigwerth - Evercore ISI

Smedes Rose - Citi

Floris Van Dijkum - Compass Point Research & Trading

Michael Bellisario - Baird

Anthony Powell - Barclays

Operator

Good day and thank you for standing by. Welcome to the DiamondRock Hospitality Company's First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Briony Quinn, Senior Vice President and Treasurer of DiamondRock Hospitality. Please go ahead.

Briony Quinn

Thank you. Good morning, everyone. Welcome to DiamondRock's first quarter 2023 earnings call and webcast. Before we get started, let me remind everyone that many of our comments today are not historical facts and are considered to be forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ materially from those expressed in our comments today.

In addition, on today's call, we will discuss certain non-GAAP financial information. A reconciliation of this information to the most directly comparable GAAP financial measure can be found in our earnings press release.

With that, I'm pleased to turn the call over to Mark Brugger, our President and Chief Executive Officer.

Mark Brugger

Thank you for joining us today. The first quarter results from the DiamondRock portfolio set records for both revenues and total profits. In the quarter, comparable RevPAR increased 16.9% and comparable revenues increased 18% over the prior year. Hotel adjusted EBITDA increased $8.5 million or 15.9%. The results were also well ahead of 2019, with comparable RevPAR up 13.8% and hotel adjusted EBITDA up 19.5%. These record results speak to the quality of our real estate, our favorable geographic footprint and our strategy to have a portfolio of differentiated hotels and resorts.

It is the DiamondRock portfolio that is our competitive advantage. The DiamondRock portfolio distinguishes itself from its public peers by having only two of its 35 hotels, subject to long-term management agreements. This increases both the liquidity and the NAV of these unencumbered properties. The portfolio today is comprised of 35 properties, 20 in urban gateway markets and 15 in prime resort locations. It's a well-balanced portfolio. By full year revenue, it is about 60% urban and 40% resorts. We believe that we have carefully curated a unique portfolio that can outperform the industry averages over the long-term because of our focus on the right markets and the favorable experiential travel trend.