DiamondRock Hospitality Company (www.drhc.com) posted third-quarter 2026 net income of $33.3 million — a 65.7% jump over the year-ago period — and immediately raised its full-year Adjusted EBITDA guidance to a range of $322 million to $327 million, up from $310 million to $320 million previously.
Comparable RevPAR hit $226.01 for the quarter, a 6.6% increase versus Q3 2025, driven by occupancy rising to 77.8% and average daily rate climbing 3.8% to $290.46. Total RevPAR reached $344.13, up 6.5%, reflecting meaningful contribution from non-rooms revenue streams including food and beverage, which generated $72.2 million in the quarter — up from $67.4 million in the prior-year period. For hospitality operators tracking ancillary revenue trends, that 7% F&B gain on a comparable basis underscores continued guest spending strength beyond the room rate.
Margin Expansion
Comparable Hotel Adjusted EBITDA reached $91.7 million, a 12.5% improvement over Q3 2025, while the Hotel Adjusted EBITDA margin expanded 166 basis points to 30.81%. Operating expenses grew only 3.9% against a 6.4% revenue gain, demonstrating the operating leverage the company has engineered into its portfolio. Jeffrey J. Donnelly, Chief Executive Officer of DiamondRock Hospitality Company, attributed the outperformance to healthy demand across both transient and group segments combined with portfolio-wide efficiency initiatives. For the nine months ended September 30, 2026, Adjusted EBITDA reached $253.3 million, up 12.2% versus the same period in 2025.
Resort Acquisition and Capital Deployment
On October 1, 2026, DiamondRock acquired The Bellmoor Inn & Spa, a 79-room independent resort in Rehoboth Beach, Delaware, for $31.0 million. The purchase price represents a 10.4x multiple of trailing 12-month Hotel Adjusted EBITDA and an 8.6% capitalization rate on Hotel Net Operating Income. Following planned off-season capital improvements and asset management initiatives, the company expects the property to generate a stabilized Hotel NOI yield of approximately 9.5%. The acquisition adds a supply-constrained leisure destination to a portfolio already weighted toward premium resort and lifestyle hotel assets, which include independent boutique properties alongside branded flags from Marriott, Hilton, and IHG.
DiamondRock also continued reinvesting in its existing portfolio, spending $59.2 million on capital improvements through September 30, 2026, with full-year capex guidance set at $75 million to $80 million. Active projects include lobby and entrance renovations at the Westin San Diego Bayview and a guestroom renovation at the Atlanta Marriott Alpharetta, both slated for completion in Q1 2027.
The company's balance sheet remains conservative, with $1.1 billion in total debt across three unsecured term loans at a weighted average interest rate of 5.1%, $400 million of undrawn revolving credit capacity, and approximately $140 million of unrestricted cash. Net debt to EBITDA stood at 3.0x. The board also raised the quarterly common dividend 22% to $0.11 per share, signaling confidence in sustained free cash flow generation. Updated full-year 2026 guidance now projects Adjusted FFO of $256.5 million to $261.5 million, or $1.24 to $1.26 per diluted share.
Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.
