DiamondRock Hospitality Company reported financial results for the second quarter ended June 30, 2026, showing a 7% increase in comparable revenue per available room (RevPAR) and a 5.5% rise in total hotel revenue.
Quarterly Financial Performance and Margin Expansion
The company owns 34 premium hotels and resorts across the United States. During Q2 2026, hotel operating expenses increased by only 1.8%, while wage and benefit costs rose 2.2%. DiamondRock’s hotel adjusted EBITDA margin expanded by 240 basis points, excluding a one-time $6.9 million benefit from a favorable property tax appeal for two Chicago hotels.
Chief Executive Officer Jeffrey J. Donnelly highlighted broad-based strength in group and
transient demand and attributed the earnings growth to the company’s operational strategy. “Our second quarter demonstrated the earnings power of the DiamondRock portfolio. We delivered 7% RevPAR growth and held overall hotel expense growth to just 1.8%, driving exceptional margin expansion and earnings growth,” he said.
Key Transactions and Capital Investments
On May 1, 2026, DiamondRock completed the sale of its leasehold interest in the 189-room Courtyard New York Manhattan/Fifth Avenue for $33 million. The transaction reflected a 6.3 times multiple on 2025 hotel adjusted EBITDA and a 13.3% capitalization rate on 2025 net operating income. The company projects a stabilized capitalization rate of approximately
7.8% on the sale.
DiamondRock invested about $40.3 million in capital improvements during the first half of 2026 and expects total spending between $75 million and $85 million for the year. The company is assessing the future of its management and franchise agreements for Kimpton Shorebreak Huntington Beach and Courtyard Denver Downtown, the latter’s franchise agreement expiring in 2027.
Capital Structure and Shareholder Returns
As of June 30, 2026, the company’s total debt stood at $1.1 billion with a weighted average interest rate of 4.9%. It had $400 million available under its revolving credit facility and $106 million in unrestricted cash.
On April 28, 2026,
DiamondRock’s board authorized a new $300 million share repurchase program effective from May 1, 2026. During Q2, the company repurchased 0.2 million shares at an average price of $9.79, totaling $1.9 million, and still held $299.4 million in repurchase capacity as of June 30.
The board declared a second-quarter dividend of $0.09 per share, paid July 14, 2026. On July 30, 2026, a 22% increase was announced, raising the third-quarter dividend to $0.11 per share payable October 14, 2026 to shareholders of record on September 30. DiamondRock plans to maintain the $0.11 dividend through year-end 2026, with a possible additional
dividend depending on operating income.
Outlook and Market Conditions
DiamondRock raised its full-year 2026 guidance, citing better-than-expected Q2 results, an improved booking pace, and ongoing benefits from property tax settlements. It now forecasts comparable RevPAR growth between 2.5% and 4%, up from the previous 1.5% to 3.5% outlook.
Adjusted funds from operations per share guidance increased to $1.18 to $1.23 from $1.12 to $1.18, and adjusted EBITDA guidance rose to $310 million to $320 million. The company anticipates approximately 2.5% expense growth in the second half of 2026.
RevPAR growth at resort properties reached 7.9% and urban hotels grew by 6.6% in Q2, with
urban hotel growth accelerating to nearly 10% in June. Donnelly also noted increased hotel transaction activity and plans for acquisitions and disposals over the next 6 to 12 months amid rising competition from private equity and high-net-worth investors.
Executive Vice President and Chief Financial Officer Briony Quinn said: “We are pleased to report another quarter of strong operating performance. Our business model demonstrated its earnings power as RevPAR grew 7% while expenses increased just 1.8%, driving meaningful margin expansion. We announced a 22% increase in our quarterly common dividend and are also raising our 2026 outlook.”
