Real Estate
DiamondRock Lifts 2026 Forecast as Hotel Margins Expand
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DiamondRock Hospitality Company raised its full-year 2026 outlook on November 3, 2026, after reporting results for the quarter ended September 30, 2026. Net income attributable to common stockholders climbed 65.7% year over year to $33.3 million, and the lodging REIT lifted its forecasts for Comparable RevPAR, Adjusted EBITDA and Adjusted FFO.
The operating story behind the increase was margin expansion. Comparable total revenue grew 6.4%, while comparable hotel operating expenses rose a slower 3.9% to $205.9 million. That gap helped lift Comparable Hotel Adjusted EBITDA 12.5% to $91.7 million and expand its margin by 166 basis points to 30.81%.
Company-wide Adjusted EBITDA increased 7.2% to $84.8 million, and Adjusted FFO per diluted share rose 10.3% to $0.32. Management attributed the higher full-year forecast to stronger-than-expected third-quarter results and an improved fourth-quarter booking pace.
The revised outlook compares with the previous forecast as follows:
| Metric | Prior Guidance | Updated Guidance |
|---|---|---|
| Comparable RevPAR Growth | 2.5% to 4.0% | 4.75% to 5.25% |
| Adjusted EBITDA (in millions) | $310.0 to $320.0 | $322.0 to $327.0 |
| Adjusted FFO (in millions) | $245.5 to $255.5 | $256.5 to $261.5 |
| Adjusted FFO per Diluted Share | $1.18 to $1.23 | $1.24 to $1.26 |
The forecast includes The Bellmoor Inn & Spa but assumes no additional acquisitions, dispositions or share repurchases.
Rates and Occupancy Support Revenue Growth
Actual total revenue increased 4.3% to $297.6 million from $285.4 million a year earlier. Comparable average daily rate rose 3.8% to $290.46, and occupancy increased to 77.8% from 75.8%. Those gains combined to raise comparable RevPAR 6.6% to $226.01, while comparable Total RevPAR increased 6.5% to $344.13.
Chief Executive Officer Jeffrey J. Donnelly said the quarter reflected “healthy demand and higher rates across both transient and group segments,” alongside operating efficiencies across the portfolio.
Net income also benefited from lower financing costs. Interest expense declined to $14.6 million from $17.1 million, and the 2025 quarter included a $5.85 million loss on debt extinguishment that did not recur. Those comparisons help explain why bottom-line earnings grew substantially faster than Adjusted EBITDA.
Bellmoor Acquisition and Capital Spending
On October 1, 2026, DiamondRock acquired the 79-room Bellmoor Inn & Spa in Rehoboth Beach, Delaware, for $31.0 million. The independent resort was acquired fee simple and is third-party managed. The price represented 10.4 times trailing 12-month August 2026 Hotel Adjusted EBITDA and an 8.6% capitalization rate on Hotel Net Operating Income.
DiamondRock expects the property to reach a stabilized Hotel NOI yield of approximately 9.5% after asset-management initiatives and planned off-season capital improvements, and to contribute approximately $0.2 million to both Adjusted EBITDA and Adjusted FFO in the fourth quarter.
The REIT invested $59.2 million in capital improvements during the first nine months of 2026 and expects full-year spending of $75 million to $80 million. At September 30, it had $1.1 billion of debt across three unsecured term loans at a weighted-average interest rate of 5.1%, approximately $140 million of unrestricted cash and $400 million available on its undrawn revolver. Reported net debt to EBITDA was 3.0 times.
The quarterly common dividend increased 22% to $0.11 per share and was paid on October 14, 2026. The company expects to declare a fourth-quarter stub dividend in addition to its regular quarterly payment, depending on estimated 2026 taxable income.
The quarter shows DiamondRock turning rate and occupancy gains into faster property-level profit growth while continuing to spend on renovations and acquisitions. Sustaining that margin performance now rests on the fourth-quarter demand and booking trends behind the higher forecast; Bellmoor’s expected initial contribution is modest compared with the earnings generated by the existing portfolio.
