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Diamondrock Hospitality's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Turning to operating results. Today, we are pleased to report strong results for the fourth quarter and full year 2011, a continued evidence of substantial recovery in lodging fundamentals. For the full year, pro forma RevPAR increased 6.3%, and adjusted EBITDA was $162.1 million, which resulted in adjusted FFO per share of $0.62. Results would have been even higher except for the impact of 2 one-time items, the $10 million in total renovation disruption at our Caribbean resort, and we recorded an unexpected write-off of approximately $1 million in receivables related to the American Airlines bankruptcy. We saw exceptional performance from a number of our hotels in 2011. Particularly noteworthy, we experienced double-digit RevPAR growth at the Chicago Conrad, the Sonoma Renaissance, the Alpharetta Marriott and the Chicago Oak Brook Hills Marriott.

Additionally, the Hilton Minneapolis, a 2010 acquisition, turned in a RevPAR gain of almost 9%. Results were more challenged at the Griffin Gate Marriott due to a difficult comp and the Austin Renaissance. Both of these hotels are included in the 3-pact sales transaction, which is expected to close in short order. We wanted to quickly touch on the much publicized snowfall out west and its impact in our Vail Resort. We're happy to report that the snowfall has been considerable better over the last 7 weeks. In addition, one of our asset management initiatives last year was to implement a 45-day cancellation policy at the hotel. This policy allowed us to preserve our December reservations and report a 6% RevPAR increase for December at our Vail resort. We'd also like to take this opportunity to update on some particular events in the company. First, the Lexington Hotel in New York City. As John will discuss in more detail, we are planning to rebrand the Lexington Hotel and invest capital to allow this asset to reach its full potential. While the hotel already runs over 90% occupancy, we're convinced that implementing a strategy of rebranding the hotel will result in significant rate upside. We are also close to finalizing a $170 million loan on this hotel at an attractive rate. This loan allows us to completely pay off our corporate revolver and further positions us to be opportunistic on acquisitions.

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