DiamondRock Hospitality Company Reports Results of Operations for Second Quarter 2005

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. October 14, 2008

MARYLAND, August 1, 2005. DiamondRock Hospitality Company (the "Company") an owner and acquirer of high quality premium branded hotels, today announced results of operations for the second quarter ended June 17, 2005.

Highlights * Successfully completed initial public offering of 29.8 million shares of common stock, including the exercise of an additional 3.7 million shares from the over-allotment option, for a total of $288.7 million in net proceeds. * For the seven hotels owned during the quarter, increased same-store revenue per available room ("RevPAR") by 14 percent from $105.73 to $120.53 over the comparable period in 2004. * Quarterly adjusted earnings before interest, income taxes, depreciation and amortization ("Adjusted EBITDA") of $8.0 million. * For the seven hotels owned during the quarter, increased same-store hotel adjusted EBITDA operating profit margin by 260 basis points over the comparable period in 2004. * Quarterly Funds from Operations ("FFO") per diluted share of ($0.05) and quarterly adjusted FFO per diluted share of $0.13. * Quarterly net loss of $5.8 million, or ($0.20) per diluted share. * Secured a $75 million line of credit. * Retired $64.0 million of debt associated with the Torrance Marriott and Sonoma Renaissance. * Closed on the acquisition of seven hotels subsequent to the quarter end for aggregate contractual purchase prices of $475.1 million. Operating Results

For the fiscal quarter ended June 17, 2005, the Company's total revenue was $33.5 million. Net loss totaled $5.8 million, or ($0.20) per diluted share, and adjusted EBITDA of $8.0 million. The Company reported FFO of ($1.5 million), or ($0.05) per diluted share and adjusted FFO of $3.8 million or $0.13 per diluted share for the second quarter.

For the period from January 1, 2005 to June 17, 2005, total revenue was $59.9 million, net loss was $11.1 million, and adjusted EBITDA was $11.6 million. FFO and adjusted FFO were ($2.4 million) and $4.5 million, respectively, for the two fiscal quarters ended June 17, 2005.

RevPAR for the initial portfolio of seven hotels increased 14.0 percent during the quarter as compared to the second quarter of 2004, driven by an 11.4 percent increase in average daily room rate and an increase in occupancy of 1.9 percentage points. Comparable hotel adjusted EBITDA operating profit margins for the quarter for these hotels increased 260 basis points, from 26.8 percent to 29.4 percent as compared to the second quarter of 2004.

For the period from January 1, 2005 to June 17, 2005, the Company's hotel RevPAR for the initial portfolio of seven hotels increased by 13.2% driven by an 11.4 percent increase in average daily room rate and an increase in occupancy of 1.2 percentage points. Hotel adjusted EBITDA operating profit margins for those hotels for the two fiscal quarters increased 370 basis points, from 21.7 percent to 25.4 percent.

William W. McCarten, chief executive officer, stated, "The second quarter was an exciting time for our company as we successfully completed our initial public offering and delivered strong performance from our high quality hotel portfolio. Favorable lodging industry fundamentals continue to benefit our portfolio, and our unique sourcing relationship with Marriott International has proven highly valuable. Despite the very competitive hotel acquisition market, we believe that we will continue to identify opportunities to rebrand and reposition hotels in strong markets with high barriers to entry."

Portfolio Update and Balance Sheet

On May 25, 2005, the Company completed its initial public offering, raising $288.7 million in net proceeds. During the second quarter, a portion of the proceeds from the offering was used to pay off outstanding loans, including the outstanding loan on the Torrance Marriott, which had a principal balance of $44.0 million. The Company also paid off the outstanding loan on the Lodge at Sonoma, a Renaissance Resort and Spa, which had a principal balance of $20.0 million.

As of June 17, 2005, the Company had $159.3 million of total debt and $273.1 million of cash and cash equivalents, a significant portion of which was utilized for the acquisitions during the period subsequent to June 17, 2005.

Recent Events

Subsequent to the end of the second quarter the Company completed several hotel acquisitions as follows:

• A portfolio of four hotels, including the Marriott Los Angeles Airport Hotel, the Worthington Renaissance Hotel (Fort Worth), the Atlanta Alpharetta Marriott Hotel, and the Marriott Frenchman's Reef and Morning Star Resort (USVI) for a contractual purchase price of $315 million. * The Vail Marriott Mountain Resort and Spa for the contractual purchase price of $62.0 million. * The Buckhead SpringHill Suites by Marriott in the Buckhead area of Atlanta, Georgia for a contractual purchase price of $34.1 million. * The Oak Brook Hills Resort & Conference Center in Oak Brook, Illinois for a contractual purchase price of $64.0 million. This hotel is being rebranded as the Oak Brook Hills Marriott Resort.

In connection with the above acquisitions, the Company placed secured loans on the Marriott Los Angeles Airport, the Worthington Renaissance Hotel and the Marriott Frenchman's Reef and Morning Star Resort. The loan on the Marriott Los Angeles Airport Hotel has a principal balance of $82.6 million, a term of 10 years, bears interest at 5.30 percent, and is interest only for the entire term. The loan on the Worthington Renaissance has a principal balance of $57.4 million, a term of 10 years, bears interest at 5.40 percent, and is interest only for the first four years and then amortizes on a 30-year schedule. The loan on the Marriott Frenchman's Reef and Morning Star Resort has a principal balance of $62.5 million, a term of 10 years, bears interest at 5.44 percent, and is interest only for the first three years and then amortizes on a 30-year schedule.

On July 8, 2005, the Company consummated its senior secured revolving credit facility. The facility has a three-year term and a $75 million limit, with an ability to increase the facility up to $250 million with lender approval. As long as the Company maintains a debt-to-asset value of less than 65 percent, outstanding funds on the credit facility will bear interest at LIBOR plus 1.45 percent. Wachovia Bank, Citigroup North America, and Bank of America participated in the credit facility. The Company made a $5 million draw under this credit facility subsequent to June 17, 2005.

2005 Outlook

The Company is introducing 2005 guidance, but does not undertake to update it for any developments in its business. Achievement of the anticipated results is subject to the risks disclosed in the Company's filings with the Securities and Exchange Commission.

For the full year 2005 the Company expects same store RevPAR to increase in the range of 8 percent to 10 percent. For the third quarter of 2005, same-store RevPAR will grow 6% to 8% as compared to the RevPAR in the comparable period in the prior year. The Company expects full year hotel adjusted EBITDA operating margins to increase by approximately 210 - 230 basis points. The RevPAR and adjusted hotel EBITDA margin guidance assumes that the Company owned twelve of our fourteen hotels on January 1, 2005. It excludes the historical and forecasted results for the Buckhead SpringHill Suites and Oak Brook Hills Marriott Resort. Buckhead SpringHill Suites is excluded as it was first opened on July 1, 2005 and has no historical results for any prior period. Oak Brook Hills Marriott Resort is excluded as we consummated the purchase of the hotel on July 29, 2005 and our financial audit will not be completed until the latter part of August.

For the ownership period of the portfolio of fourteen hotels, the Company estimates that for the full year 2005:

• Adjusted EBITDA will be between $43 million and $46 million. * FFO will be between $13.5 million and $16.5 million and adjusted FFO will be between $24.1 million and $27.1 million. The Company estimates that for the third quarter of 2005: * Adjusted EBITDA will be between $12 million and $14 million. * FFO will be between $5.4 million and $7.4 million and adjusted FFO will be between $7.0 million and $9.0 million. * Dividend per common share will be $0.1725. * We will substantially complete the $6 million renovation at the Courtyard New York Fifth Avenue.

Disclosure regarding the non-GAAP financial measures, including EBITDA, Adjusted EBITDA, FFO and Adjusted FFO is included as an attachment to this release, along with a reconciliation to the most relevant GAAP financial measures.

Ground Leases

Several hotels owned by the Company are subject to ground leases. These include Bethesda Suites Marriott, Courtyard New York Fifth Avenue, Salt Lake City Downtown Marriott, and Griffin Gate Marriott Resort. In the second quarter, the contractual cash rent payable on the ground leases totaled $417,000. In conformance with the requirements of GAAP, the Company records rent expense on a straight-line basis for ground leases that provide minimal rental payments that increase in pre-established amounts over the remaining term of the ground lease. Because of this, the Company incurred approximately $2.0 million in ground rent expense for the second quarter. The non-cash portion of ground rent expense recorded during the second quarter was $1.6 million.

Dividend Update

During the second quarter, the Company declared a dividend for the stub period between our IPO and the end of our second quarter of $0.0326 per share, payable to its common stockholders of record as of June 17, 2005. The dividend was paid on June 28, 2005. For the third quarter, the Company expects to pay a dividend of $0.1725 per share, subject to approval by the board of directors.

Earnings Call

The Company will host a conference call to discuss second quarter results on Monday, August 1, 2005, at 2:00 p.m. EDT. To participate in the live call, investors are invited to dial 1-800-218-4007 (for domestic callers) or 303- 262-2137 (for international callers). A live webcast of the call will be available via the investor relations section of DiamondRock Hospitality Company's website at http://www.drhc.com/. A replay of the webcast will also be archived on the website for 30 days.

In addition, the Company has produced a supplemental package that includes detailed financial information regarding the operating results, which is available via the investor relations section of the website at http://www.drhc.com/.

About the Company

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner and acquirer of upper upscale and upscale hotel properties located primarily in North America. To a lesser extent, it may invest, on a selective basis, in premium limited-service and extended-stay hotel properties in urban locations. As of August 1, 2005, the Company owns 14 hotels that comprise 5,637 rooms. The Company has a strategic acquisition sourcing relationship with Marriott International. For further information, please visit the Company's website at http://www.drhc.com/.

This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "should," "will," "continue" and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward- looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward- looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the potential for additional terrorist attacks, that will affect occupancy rates at our hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements; relationships with property managers; our ability to maintain our properties in a first-class manner, including meeting capital expenditure requirements; our ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; our ability to complete acquisitions; the performance of acquired properties after they are acquired; necessary capital expenditures on the acquired properties; and our ability to continue to satisfy complex rules in order for us to qualify as a REIT for federal income tax purposes; and other risks and uncertainties associated with our business described in the Company's filings with the SEC. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of August 1, 2005, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.