DiamondRock Hospitality Company Reports Second Quarter 2013 Results

Capital Expenditures

As previously announced, the Company is investing approximately $140 million for capital improvements at its hotels in 2013 and early 2014. As of June 30, 2013, the Company has spent approximately $42.6 million on these capital improvements. The Company currently expects renovation disruption of $12 to $15 million of Hotel Adjusted EBITDA during the year ended December 31, 2013, which has been factored into its outlook for 2013. The Company does not expect meaningful disruption during 2014. The following is an update on the most significant capital projects.

Lexington Hotel New York: The Company made significant progress on its comprehensive renovation of the Lexington Hotel during the second quarter, essentially completing the hotel's public spaces and returning approximately 365 renovated rooms to available inventory, with the balance of the rooms all under renovation. The remaining rooms will be substantially complete by the end of the third quarter and the hotel is now integrated with the Marriott reservation system. The upgrade to Marriott's Autograph Collection is expected to occur during the month of August 2013.

The Company will create 15 new rooms at the hotel by splitting several underutilized junior suites and converting an underutilized lounge into two new rooms. After renovation, the Lexington Hotel will include 725 guestrooms. The incremental rooms will cost less than $1 million, or less than $70,000 per key. The Company believes that the addition of 15 new rooms will increase the net asset value of the hotel by approximately $8 million. The total estimated renovation cost is expected to be approximately $46 million, after including the cost of the new rooms.

Manhattan Courtyards: The Company completed the renovation of the guest rooms, corridors and guest bathrooms at the Courtyard Manhattan/Midtown East and Courtyard Manhattan/Fifth Avenue. The renovation at the Courtyard Midtown East included the addition of 5 new guest rooms that the Company believes will add approximately $2.5 million to the net asset value of the hotel.

The Company has other significant renovation projects planned for later in 2013 and early 2014, which are not expected to cause material disruption. The Company has finalized the scope and timing of the following projects:

• Westin Washington D.C.: A comprehensive $16.5 million renovation is expected to start during the fourth quarter of 2013 and to be completed in early 2014. After renovation, the hotel will be well positioned to regain market share and capture higher-rated business, leisure and group customers. The renovation scope will enhance every aspect of the guest experience, including the guest rooms, corridors, meeting space and the lobby.
• Westin San Diego: A comprehensive $14.5 million renovation is expected to start during the fourth quarter of 2013 and be completed in early 2014. The renovation scope will include the guestrooms, corridors, lobby, public areas, and meeting space at the hotel.
• Hilton Minneapolis: A $13 million renovation of the guest rooms, guest bathrooms and corridors is expected to commence in late 2013. The renovated hotel is expected to allow the hotel to further penetrate the group segment.
• Hilton Boston Downtown: A $7 million renovation of the guest rooms, corridors, public areas, and meeting space is expected to commence during the fourth quarter of 2013 and be completed in early 2014. The Company is also evaluating the feasibility of converting more than 20 of the 66 existing suites into additional rooms at the hotel.
• Hilton Burlington: A $6 million renovation of the lobby, corridors, guest rooms and outdoor space is expected to commence during the fourth quarter of 2013 and be completed in early 2014.

Hilton Garden Inn Times Square Update

The Company is under contract to purchase the 282-room hotel being constructed in Times Square for a fixed price of approximately $127 million, or $450,000 per key. Construction is progressing on schedule and the Company expects to close on the acquisition of the hotel in mid-2014. The hotel has recently completed vertical construction at 37 stories, and the Company made its final $5 million deposit in July, bringing the total deposit to $27 million. The hotel will be branded a Hilton Garden Inn and be operated by Highgate Hotels, the largest operator of hotels in New York City. At this time, the Company anticipates the balance of the acquisition price of approximately $100 million will be funded by corporate cash, a draw on its corporate credit facility, or proceeds from financing one of its unencumbered assets.

Balance Sheet

As of June 30, 2013, the Company had $54.3 million of unrestricted cash on hand and approximately $1.1 billion of total debt, which consists solely of property-specific mortgage debt. The Company has no outstanding borrowings on its $200 million senior unsecured credit facility.

Share Repurchase Program

The Company's Board of Directors voted to authorize the Company to purchase up to $100 million in shares of its common stock. Repurchases under this program will be made in open market or privately negotiated transactions. This authority may be exercised from time to time and in such amounts as market conditions warrant, and subject to regulatory considerations. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The share repurchase program may be suspended or terminated at any time without prior notice.

Dividends

The Company's Board of Directors declared a quarterly dividend of $0.085 per share to stockholders of record as of June 28, 2013. The dividend was paid on July 11, 2013.

Outlook and Guidance

The Company is providing annual guidance for 2013, 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 U.S. Securities and Exchange Commission. The Company's 2013 RevPAR guidance assumes all of the Company's 27 hotels were owned since January 1, 2012.

The Company is reaffirming its 2013 guidance. The current guidance reflects the outperformance of certain of the Company's hotels compared to previous expectations, specifically:

• Stronger group performance at the Westin Boston Waterfront and the Chicago Marriott Downtown
• Stronger transient demand at the San Diego Westin and Salt Lake City Marriott.

This outperformance is offset by an increase in estimated renovation disruption to a range of $12.0 million to $15.0 million. The increase is the result of additional displaced rooms at the Lexington Hotel as a result of a power interruption and construction of the 15 new rooms. The increase to the Company's disruption estimate will primarily impact the third quarter.

The Company expects the full year 2013 results to be as follows: