DiamondRock Hospitality Company (NYSE:DRH) Q3 2022 Earnings Conference Call November 4, 2022 9:00 AM ET
Company Participants
Mark Brugger – President, Chief Executive Officer
Jeff Donnelly – Executive Vice President and Chief Financial Officer
Justin Leonard – Executive Vice President and Chief Operating Officer
Conference Call Participants
Smedes Rose – Citi
Austin Wurschmidt – KeyBanc
Michael Bellisario – R.W. Baird
Duane Pfennigwerth – Evercore ISI
Anthony Powell – Barclays
Bill Crow – Raymond James
Operator
Good morning, everyone. Welcome to DiamondRock’s Third Quarter 2022 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 or implied by 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?
Mark Brugger
Thank you for joining us today for DiamondRock’s third quarter earnings call. Our entire executive team joins me today to answer your questions. The third quarter was a record quarter for DiamondRock. Demand in leisure, business travel and group business all exceeded our expectations. Consumers continue to spend on experiences like travel, and we see this continuing into 2023.
We believe we are in a golden age of travel distinguished by a societal shift in the necessity of travel that has been created by the rapid adoption of hybrid work environments, changes in mobility, preferences for experience over things and the wonder lost of boomers and millennials alike. The future of travel is very bright.
The DiamondRock portfolio continues to separate itself from our peers with over 60% of our hotels falling into the luxury resort, lifestyle resort or urban lifestyle categories. Of our last nine acquisitions, over two-thirds are Waterfront resorts, all our lifestyle and all are unencumbered by long-term management agreements. In fact, among the full-service lodging REITs, we have the lowest exposure to long-term brand management and commences and among the lowest exposure to ground leases.
These qualities enhance operational control and increase exit value, a distinguishing factor that should drive a premium valuation. It is our strategy to curate a portfolio of experiential resorts in urban lifestyle hotels that deeply resonate with what today’s travelers want. DiamondRock’s experiential hotel focus is paying off. Our performance through the pandemic has been stronger than our peers. In fact, the portfolio took another 180 basis points of market share from the competitive set in the third quarter alone.