DiamondRock Hospitality Company Provides Update And Announces Steps To Mitigate COVID-19 Impact

DiamondRock Hospitality Company (NYSE: DRH), a lodging-focused real estate investment trust that owns a portfolio of 31 premium hotels in the United States, provided an update today on the impact of COVID-19 on its operations and announced the proactive steps management is taking to mitigate the financial impact.

The Company is withdrawing the guidance it issued on February 20, 2020, due to the uncertainty surrounding the impact of the COVID-19 pandemic.  As of March 14, 2020, the Company's total revenues have been negatively impacted by approximately $23 million of cancelled group business, excluding potential cancellation fees. Other highlights:

• Nearly 85% of the group cancellations are concentrated in March (55%) and April (30%).

• At this time, less than 3% of group business cancellations extend beyond June 2020.

• Cancellation fees are expected to mitigate a portion of the expected losses.

• Geographically, nearly 41% of the group business cancellations are in Boston, 8.5% are in Chicago, 8.0% are in Fort Worth and less than 3% are in New York.

  In coordination with its hotel operators, the Company has developed actions plans to significantly reduce costs at each of its hotels:

  • The Company has suspended operations at hotel restaurants and outlets where demand is insufficient or local prohibitions do not permit social gatherings.

  • The Company is proactively "right-sizing" hotels to current demand levels in order to aggressively reduce costs and maximize efficiency.

  • The Company has cancelled or deferred the vast majority of its capital expenditures.