DiamondRock Hospitality Company (NYSE:DRH) Q3 2024 Earnings Conference Call November 8, 2024 9:00 AM ET

Company Participants

Briony Quinn - CFO
Jeff Donnelly - CEO
Justin Leonard - President and COO

Conference Call Participants

Dori Kesten - Wells Fargo Securities
Austin Wurschmidt - KeyBanc Capital Markets
Smedes Rose - Citi
Duane Pfennigwerth - Evercore ISI
Chris Woronka - Deutsche Bank
Michael Bellisario - Baird
Chris Darling - Green Street Advisors

Operator

Good day and thank you for standing by. Welcome to the DiamondRock Hospitality Company Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's 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, Chief Financial Officer of DiamondRock Hospitality. Please go ahead.

Briony Quinn

Thank you, Daniel. Good morning, everyone, and welcome to DiamondRock Hospitality's third quarter 2024 earnings call-in webcast. Joining me today is Jeff Donnelly, our Chief Executive Officer, and Justin Leonard, our President and Chief Operating Officer.

Before we begin, 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 what we discussed 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.

We are pleased to report another solid quarter with results largely in line with our expectations. Comparable RevPAR growth was 2.8% over 2023, which was 60 basis points stronger than the quarter before, and comparable total RevPAR growth was 2.3% over 2023. As we discussed on last quarter's earnings call, we anticipated that the growth in out-of-room spend would be significantly lower in the second half of the year due to a shift toward citywide-driven group business at our larger group hotels.

While the portfolio did not sustain any material damage from Hurricane Helene in September, cancellations and business interruption held back our RevPAR and total RevPAR growth by approximately 35 basis points.

Our urban hotels led the portfolio with comparable RevPAR growth of 4.2% in the quarter. Average daily rates were up 5.6%, offset by a percentage point decline in occupancy. While group demand continued to show strength, transient pickup, particularly on the weekends, was slightly weaker than we anticipated. Comparable RevPAR at our resorts declined 80 basis points from 2023. The 35 basis points of portfolio headwind from Hurricane Helene translated to an 86 basis point reduction to our resort RevPAR and total RevPAR growth.