DiamondRock Raises 2026 Guidance After Comparable RevPAR Grows 6.6% in Third Quarter
Key Facts
DiamondRock Hospitality reported results on November 3 for the third quarter ended September 30 and raised its annual 2026 guidance for the second time, citing quarterly performance stronger than expected and improved bookings for the coming period. The company said comparable revenue per available room rose 6.6% year over year to $226.01. Total comparable revenue per available room also increased 6.5% to $344.13. These metrics show improvement in room revenue and total hotel revenue per available room compared with the third quarter of 2025. The company said healthy demand and higher rates in both the transient and group segments supported performance.
Net income attributable to common shareholders was $33.3 million, or $0.16 per diluted share, up 65.7% and 60.0%, respectively, compared with the third quarter of 2025. Adjusted EBITDA reached $84.8 million, an annual increase of 7.2%. Adjusted funds from operations per diluted share were $0.32, up 10.3% from the year-earlier period. The results reflect growth in net income and adjusted operating earnings measures during the quarter. The company attributed performance to strong demand and higher rates, alongside operating efficiencies that supported growth in hotel earnings and free cash flow.
DiamondRock raised its 2026 forecast for growth in comparable revenue per available room to 4.75%–5.25%, from a previous range of 2.5% to 4.0%. It also raised its forecast for growth in total comparable revenue per available room to 4.75%–5.25%, versus 2.75%–4.25% previously. This represents a 175-basis-point increase at the midpoint for room revenue and a 150-basis-point increase for total revenue per available room. The higher ranges reflect an improvement in the company’s estimates for comparable hotel performance during the year. The company linked the guidance revisions to third-quarter results that were stronger than expected and improved booking pace for the fourth quarter.
The company raised its 2026 forecast for adjusted EBITDA to $322–$327 million, from $310–$320 million, an increase of $9.5 million at the midpoint. It also raised its forecast for adjusted funds from operations to $256.5–$261.5 million, from $245.5–$255.5 million, an increase of $8.5 million at the midpoint. The range for adjusted funds from operations per diluted share rose to $1.24–$1.26, compared with $1.18–$1.23 previously, an increase of $0.04 at the midpoint. The forecast includes a contribution from The Bellmoor Inn & Spa resort, which the company acquired in October. DiamondRock said its estimates assume no additional acquisitions, asset sales or share repurchases.
In the second quarter of 2026, the company recorded net income attributable to common shareholders of $90.5 million, while adjusted EBITDA was $107.9 million. That period included a contribution of about $6.9 million to adjusted comparable hotel earnings from the settlement of multiyear tax appeals for the company’s two Chicago hotels. Earlier, the company said free cash flow rose 30% over the previous twelve months and demand was broadly strong in both the group and transient segments. These figures provide context for the period before the third-quarter results, with a different period and factors affecting performance. DiamondRock owns 35 luxury hotels with 9,479 rooms, according to its November 3 statement.
DiamondRock completed its acquisition of The Bellmoor Inn & Spa, a 79-room resort, on October 1 for $31 million. The company said the purchase price equates to 10.4 times the hotel’s EBITDA for the twelve months ended August 2026, and a capitalization rate of 8.6% on net operating income. The company expects the resort to generate a stabilized net operating income yield of about 9.5% after planned asset management initiatives and capital improvements. The updated guidance includes Bellmoor’s expected contribution in the annual estimates. The company also had $1.1 billion of outstanding debt as of September 30, with $400 million of available capacity under an undrawn revolving credit facility and about $140 million in unrestricted cash.
The company said its third-quarter distribution was $0.11 per share, up 22% from the previous quarterly distribution, and was paid on October 14. It expected to announce additional distributions in the fourth quarter alongside the regular $0.11 per-share distribution, based on its estimate of taxable income for 2026. DiamondRock scheduled a call to discuss its third-quarter results for November 4, 2026, at 10:00 a.m. Eastern time. Participants can access the call by phone or webcast. The call is expected to give management an opportunity to discuss results and guidance with investors.