DiamondRock Reports Q4 and Full 2008 Results

The Company's same-store RevPAR decreased 9.4 percent compared to the same period in 2007

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. March 02, 2009

MARCH 2, 2009 - DiamondRock Hospitality Company (the "Company") (NYSE:DRH) today announced results of operations for its fourth fiscal quarter and the full fiscal year ended December 31, 2008. The Company is a lodging focused real estate investment trust that owns twenty premium hotels in North America.

"Our results reflect an increasingly challenging operating environment. Although we expect that 2009 will be difficult, our Company has the attributes to weather the downturn and is poised to deliver long-term growth once the economy begins to recover. Our hotels are high quality, extensively renovated, and in desirable markets," stated Mark Brugger, Chief Executive Officer of DiamondRock Hospitality Company.

He added, "In response to the current environment, we are focused on two goals: preserving profits and increasing liquidity. We are diligently working with our operators to take significant, and in some cases unprecedented, action to control hotel operating costs and to preserve profits in a declining revenue environment. In addition, we are fortunate to have entered the downturn with among the strongest and best structured balance sheets in the industry. We have over $140 million available on our $200 million credit facility and manageable debt maturities between now and 2015, however, we believe that we can make our balance sheet even stronger. In 2009, we are maximizing our liquidity in a number of ways, including reducing our capital expenditures, controlling expenses and reducing our dividend. We remain committed to our longstanding goal of distinguishing DiamondRock from our peers with the strongest balance sheet of any lodging real estate investment trust."

Fourth Quarter 2008 Highlights

o RevPAR: The Company's same-store RevPAR decreased 9.4 percent compared to the same period in 2007.

o Hotel Adjusted EBITDA Margins: The Company's same-store Hotel Adjusted EBITDA margins decreased 327 basis points compared to the same period in 2007.

o Adjusted EBITDA: The Company's Adjusted EBITDA was $54.6 million.

o Adjusted FFO: The Company's Adjusted FFO was $41.5 million and Adjusted FFO per diluted share was $0.46.

Full Year 2008 Highlights

o RevPAR: The Company's same-store RevPAR decreased 3.3 percent compared to the same period in 2007.

o Hotel Adjusted EBITDA Margins: The Company's same-store Hotel Adjusted EBITDA margins decreased 201 basis points compared to the same period in 2007.

o Adjusted EBITDA: The Company's Adjusted EBITDA was $178.8 million.

o Adjusted FFO: The Company's Adjusted FFO was $137.8 million and Adjusted FFO per diluted share was $1.48.

Operating Results

For the fourth quarter ended December 31, 2008, the Company reported the following:

o Revenues of $218.0 million compared to $236.1 million for the comparable period in 2007.

o Adjusted EBITDA of $54.6 million compared to $67.7 million for the comparable period in 2007.

o Adjusted FFO and Adjusted FFO per diluted share of $41.5 million and $0.46, respectively, compared to $47.6 million and $0.50, respectively, for the comparable period in 2007.

o Net income of $13.8 million (or $0.15 per diluted share) compared to $25.1 million (or $0.26 per diluted share) for the comparable period in 2007.

Same-store RevPAR for the fourth quarter decreased 9.4 percent from $132.87 to $120.33 for the comparable period in 2007, driven by a 3.6 percentage point decrease in occupancy (from 71.4 percent to 67.8 percent) and a 4.6 percent decrease in the average daily rate (from $186.04 to $177.56). Same-store Hotel Adjusted EBITDA margins for its hotels decreased 327 basis points from the comparable period in the prior year.

For the full year 2008, the Company reported the following:

o Revenues of $693.2 million compared to $717.4 million for the comparable period in 2007.

o Adjusted EBITDA of $178.8 million compared to $202.2 million for the comparable period in 2007.

o Adjusted FFO and Adjusted FFO per diluted share of $137.8 million and $1.48, respectively, compared to $145.8 million and $1.55, respectively, for the comparable period in 2007.

o Net income of $52.9 million (or $0.56 per diluted share) compared to $68.3 million (or $0.72 per diluted share) for the comparable period in 2007.

Same-store RevPAR for the full year 2008 decreased 3.3 percent from $131.33 to $126.95 for the comparable period in 2007, driven by a 2.2 percentage point decrease in occupancy (from 74.0 percent to 71.8 percent) and a 0.4 percent decrease in the average daily rate (from $177.49 to $176.73). Full year 2008 same-store Hotel Adjusted EBITDA margins for its hotels decreased 201 basis points from the comparable period in the prior year.