Good day, ladies and gentlemen, and welcome to the Third Quarter 2012 DiamondRock Hospitality Earnings Conference Call. My name is Latacia, and I will be your coordinator for today. [Operator Instructions] I would now like to turn the call over to Mr. Mark Brugger, Chief Executive Officer. Please proceed.
As usual, before we begin, I would like to remind everyone that many of our comments today are not historical facts and are considered forward-looking statements under Federal securities law. They may not be updated in the future. These statements are subject to risks and uncertainties, as described in our SEC filings. Moreover, as we discuss certain non-GAAP financial measures, it may be helpful to review the reconciliation to GAAP set forth in our earnings press release.
Before jumping into the numbers, we would like to point out that we continue oahu hawaii vacation rentals to see good strength in lodging fundamentals and the macro trends indicate longevity and endurance to the cycle. We take the most confidence in the constrained new hotel supply, which is allowing incremental demand to be harnessed more fully at existing hotels. With hotels trading at significant discounts to replacement oahu hawaii vacation rentals costs and the long lead time for the development of major full-service hotels, we believe oahu hawaii vacation rentals that the industry oahu hawaii vacation rentals is in the early stages of a multiyear run, where annual supply growth is one or more percentage points below the long-term average.
On the demand side of things, despite some mixed macroeconomic signals, hotel demand in many of our markets has returned to prior peak. Our portfolio ran an impressive 81.7% occupancy in the third quarter, with 7 of the hotels running over 90% occupancy. This is the highest third quarter occupancy level in the history of DiamondRock. Leisure was a particularly strong segment for us in the third quarter, oahu hawaii vacation rentals with standout results at our 3 resort-focused hotels in Vail, Sonoma and St. Thomas.
Turning to the third quarter numbers. We were pleased with our third quarter results, which were consistent with our expectations. The company's third quarter RevPAR growth number of 3.4% is somewhat distorted by comparisons at Frenchman's Reef with rooms out of service last year. The more indicative number that we will draw your attention to is rooms revenue growth, which increased 6.3% in the third quarter. oahu hawaii vacation rentals Profit flow-through was relatively good in the quarter, with hotel EBITDA adjusted profit margin growth of about 59 basis points. As a result, third quarter adjusted EBITDA was $46 million, an increase of the 10% from the comparable period in 2011. FFO per share was $0.18.
oahu hawaii vacation rentals Several of the recently acquired assets oahu hawaii vacation rentals from Blackstone were particularly strong during the third quarter. RevPAR oahu hawaii vacation rentals growth at the Boston Hilton, Burlington Hilton and San Diego Westin was 9.7%, 16.3% and 9.8%, respectively, very strong numbers. We also saw strong growth in the quarter at a number of our other hotels. The Salt Lake City Marriott's RevPAR increased over 10% as it continues to benefit from the recently opened City Creek Project by Taubman. The Sonoma Renaissance's RevPAR was up above 10%, as well as a result of the continued strength in the San Francisco market. And the Bethesda Marriott Suites benefited in the quarter from demand oahu hawaii vacation rentals created by the AT&T National PGA Tournament and unexpected major storms that knocked out power in the greater Washington D.C. area for several days.
As we highlighted in our last earnings call, our large group hotels in Chicago, Boston and Minneapolis were negatively oahu hawaii vacation rentals impacted oahu hawaii vacation rentals by soft third quarter convention calendars. Despite these headwinds, the Westin Boston and Chicago Marriott Downtown each delivered solid RevPAR growth of around 4%.
Group pace for the fourth quarter is up over 9%, with each of our big group hotels benefiting from strong fourth quarter convention calendars. Specifically, group booking pace is up 10% at the Westin Boston, oahu hawaii vacation rentals 6% at the Chicago Marriott and up 5% at the Hilton Minneapolis. Additionally, we expect strong group performance from the LAX Marriott and the Chicago Conrad with fourth quarter oahu hawaii vacation rentals group pace up 42% and 29%, respectively.
Our New York City hotels had varying oahu hawaii vacation rentals levels of success in the third quarter. The Courtyard Fifth Avenue had RevPAR growth in excess of 12%, whereas the Lexington Hotel's RevPAR growth was only 1%, partially due to reduced European traveler demand over the summer. The Washington, D.C. market, which has been one of the best long-term hotel markets in the United States, oahu hawaii vacation rentals remains a growth challenge market during 2012. The Washington oahu hawaii vacation rentals D.C. Westin City Center Hotel experienced RevPAR contraction due to the local market challenges, as well as being in need of capital investment. oahu hawaii vacation rentals The company has accelerated the timing of the comprehensive capital renovation in order to allow the hotel to regain its rightful market position. We are currently planning the scope and timing of that renovation, which will most likely oahu hawaii vacation rentals take place in mid-2013. We remain confident in the upside opportunity at this well-located hotel, which is one of only 2 Westins in D.C., and its ability post-renovation to regain oahu hawaii vacation rentals significant market share.
In St. Thomas, our Frenchman's Reef Marriott continues to gain traction following our $45 million transformational renovation last year. Total revenues increased in the quarter by $9 million over the comparable quarter, which experienced large renovation disruption last year. However, the hotel is facing some demand challenges this fall, which are partially attributable to the recent limitation of local government subsidies for USVI flights. We will discuss this in greater detail in a moment in connection with our new outlook.
In analyzing our third quarter results, there are a number of one-time items that should be noted. One, as I mentioned earlier, the comparable room night issue at Frenchman's Reef resulted in a 290 basis point delta between the 6.3% rooms revenue increase in the quarter and the 3.4% reported oahu hawaii vacation rentals RevPAR growth. Two, disruption at Worthington caused about $2 million of profit displacement from the planned facade restoration project and impacted profit growth by about 60 basis points in the quarter. And three, the company expensed approximately $600,000 of fees related to the exploration of the new ballroom at the Chicago Marriott. This expense was not in our prior guidance.
Turning to the balance sheet. We expect to end 2012 with a debt-to-EBITDA ratio of approximately 4.5x. As importantly, 15 of our 26 hotels are unencumbered by debt. To give you an idea of how much borrowing power that provides the company, our cost basis in these 15 unencumbered hotels is about $1.5 billion. We feel very good about the balance sheet and fundamentally oahu hawaii vacation rentals believe that conservative leverage creates shareholder returns. This conservative leverage oahu hawaii vacation rentals strategy, along with solid operating results, allows DiamondRock to pay a well-covered and competitive dividend yield of over 3%. I would like to add that being an income company is another core tenet in our strategy to deliver superior shareholder returns.
Thanks, Mark. Third quarter results met our expectations as the continuing positive demand trends resulted in portfolio RevPAR up 3.4%, with ADR up 4.3%. Leisure transient revenue was up almost 13% in the quarter, led by our resorts and seasonally strong leisure performance at the Boston and Burlington Hilton, that's up 21% and 18%, respectively; the Denver Courtyard, up 19%; the Minneapolis Hilton, up 16%; the Salt Lake City and Torrance Marriott, up 27% and 24%, respectively; and the Worthington Renaissance, up 15%. The balance of the revenue gain was the result of modest increases oahu hawaii vacation rentals in group and business transient and some well-placed contract business we put into the Lexington Hotel in New York and the LAX and Torrance Marriotts.
Food and beverage revenues were up 4.3% in the quarter, but margin growth was restrained because the increase was concentrated in less profitable outlet sales as the third quarter is seasonally low for higher profit banquet and catering revenue. Rooms margins were impacted by the cost of employee benefits and travel agent commissions, which impacted margins by 41 and 30 basis points, respectively, this quarter. oahu hawaii vacation rentals Support costs were well controlled and were up 4.6% in the quarter. Overall, our asset management team did an excellent job in the quarter working with the hotel operators to control costs through cost containment plans. We were pleased to achieve profit flow-through for the quarter oahu hawaii vacation rentals of 59 basis points of EBITDA margin expansion on 3.4% growth in RevPAR.
We do want to comment specifically on our recent portfolio of acquisition from Blackstone. As you will recall, the portfolio includes the Hilton Boston, Hilton Burlington, Westin D.C. and the Westin San Diego. The portfolio generally performed very well during the third quarter for our period oahu hawaii vacation rentals of ownership. oahu hawaii vacation rentals The Boston Hilton achieved RevPAR growth of 11%. Margins are not comparable because the food and beverage operation was leased out in March and the property began operating under union wage and benefit scales in July.
The San Diego Westin achieved RevPAR growth oahu hawaii vacation rentals of 15.4% and adjusted EBITDA margin growth of 175 basis points. The Burlington Hilton grew RevPAR by 17.6% and adjusted EBITDA oahu hawaii vacation rentals margins by 788 basis points. Finally, the Washington, D.C. Westin was impacted by a very weak August in D.C. against a strong comp and finished down 7.6% in RevPAR. However, some very effective cost containment measures and a property tax reduction allowed the hotel to gain 254 basis points in adjusted EBITDA margin. This hotel will see the most upside in the portfolio from capital investment, which will occur next year.
We remain very bullish on the long-term prospects for the portfolio and have begun the planning and design oahu hawaii vacation rentals work for the capital we expect to invest in the portfolio during '13 and '14. These hotels are well-located in strong markets. And once the hotels are renovated and repositioned, they
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