Company: DRH-PA
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001298946-25-000049
Chunk: 117

Company: DiamondRock Hospitality Co
Filing Date: 2025-05-02
Form: 10-Q
Item: Part II, Item 1A
Chunk 117
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Item 1A.Risk Factors

Except as set forth in the risk factors below, which reflects updates to certain previously disclosed risk factors, there have been no material changes to the risk factors disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. These updates should be read in conjunction with the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, which continue to apply.

Economic conditions and other factors beyond our control may adversely affect the lodging industry.

Our entire business is related to the lodging industry. The performance of the lodging industry is highly cyclical and has historically been linked to key macroeconomic indicators, such as U.S. GDP growth, employment, personal discretionary spending levels, corporate earnings and investment, foreign exchange rates and travel demand. 

Given that our hotels are concentrated in major urban markets and destination resort locations in the U.S., our business has historically attracted some international travelers, who may be particularly sensitive to changes in foreign exchange rates or any increase in negative international perception of the U.S. arising from its political or other positions, which may cause a negative decline in inbound international travel. Furthermore, other macroeconomic factors, such as consumer confidence and conditions which negatively shape public perception of travel, including travel-related disruptions or incidents, heightened uncertainty surrounding tariffs and their impact on the economy, visa restrictions, or other federal policy changes, may have a negative effect on the lodging industry and may adversely impact our revenues and profitability.

Many of our expenses, such as operating expenses, interest expense and acquisition and renovation costs, could be adversely impacted by periods of heightened inflation or heightened tariffs and/or a tight labor market.

During 2024, inflation began to moderate, but remained elevated relative to the years preceding 2021. Inflationary increases in certain of our operating expenses, including, but not limited to, labor costs, employee-related benefits, food, beverage and utility costs, repairs and maintenance expenses, property taxes and insurance premiums, have and may continue to negatively impact our business and results of operations. Changes in U.S. policies that discourage immigration, restrict the number of immigrants permitted into the U.S., or negatively impact certain types of work visas, may put further inflationary pressures on labor costs if there is a material decrease in available and/or willing workers. While, in general, operators of hotels possess the ability to adjust room rates daily to reflect the effects of inflation, competitive pressures, customer