Orlando Airport Marriott Hotel for $70 million
|BETHESDA, Md., Nov. 29, 2005 - DiamondRock Hospitality Company (“DiamondRock”)
(NYSE: DRH) today announced that it has entered into a definitive, binding
agreement to acquire the 486-room Orlando Airport Marriott Hotel.
The purchase price for the hotel is $70 million.
DiamondRock plans to reposition the hotel with a $10 to $12 million capital improvement plan, replace the current independent manager with Marriott International, and increase room rates by adjusting customer segmentation.
As part of the transaction, Marriott International is providing financial support and is receiving a long-term management agreement. Although we anticipate some disruption in 2006 associated with the capital plan improvements and adjusting segmentation, the investment in the hotel represents a less than 9.5 multiple of projected 2007 earnings before interest expense, taxes, depreciation and amortization (“EBITDA”).
The Orlando International Airport is one of the fastest growing airports in the country. Forecasts indicate air traffic to increase 67% from 2005 through 2020 -- accommodating over 51,800,000 travelers per year. Additionally, the Orange County Convention Center is the second largest convention center in the country with over 2 million square feet.
“This off-market opportunity came to us through our ‘first look’ sourcing relationship with Marriott International. We are excited about the asset, the Orlando market, and our ability to drive returns with our repositioning strategy,” stated Bill McCarten, Chairman and Chief Executive Officer of DiamondRock. “By more closely aligning with Marriott’s dominant Orlando marketing engine and the repositioning of the asset through product investment, we feel confident with the hotel’s upside—particularly 2007 when the hotel’s repositioning is complete,” added John Williams, President and Chief Operating Officer of DiamondRock.
DiamondRock expects to close on this acquisition before the end of the year.
This press release contains “forward-looking statements” within the meaning of federal securities law, including statements concerning business strategies and their intended results and similar statements concerning anticipated future events and expectations that are not historical facts.
Reconciliation of Net Income to EBITDA
About DiamondRock Hospitality Company
DiamondRock Hospitality Company
|Also See:||DiamondRock Hospitality Acquires a 2,330 room Portfolio of Four Hotels for $315 million / June 2005|
|DiamondRock Hospitality Company Reports Quarterly Net Loss of $5.8 million for its Initial Portfolio of Seven Hotels / August 2005|