Diamondrock Hospitality Co. (NYSE:DRH) Q3 2019 Earnings Conference Call - Final Transcript

[Operator Instructions] Our first question or comment comes from the line of Anthony Powell from Barclays, your line is open.

Hi, good morning, everyone. Welcome, Jeff.

Hi, Anthony. Thank you.

No problem. Question on leisure versus corporate, you mentioned that you're resorts were up over 4%, but you also said business transient was good in the quarter. What's really the stronger segment right now. if there is any kind of difference? And can you continue to see resort RevPAR growth at this level, if we keep seeing kind of softer overall trends next year?

This Mark. So the destination resorts outperformed and it's really going to track consumer sentiment. So the consumer is doing well, which means the resort business is doing well. So we expect that trend as soon as the consumer sentiment index is up. We would expect that our leisure at the destination resorts to continue to outperform the industry averages. Business transient did look good in the third quarter, but I would say that's less about business transient being good than mix shift. We had a good group quarter, we were able to fill fair amount of available rooms with group, leaving less rooms to sell for business transient, which meant we were able to put in higher quality business transient. So we were able to flush out the lower rated business transient put in some higher rated. It wasn't true that we were getting more rate from the same BT customer, we were just mix shifting because of the group power in the third quarter.

Got it, thanks. And a lot of your Marriott properties seem to gain share in some of the urban markets. Are you seeing kind of better traction on the Bonvoy program and how is that going to impact your RevPAR you think next year?

Yeah, we're encouraged overall by the changes that Marriott is making. There are some lapping effect of some things that happened last year and there are some changes coming as well that we think are going to allow them to continue to gain share in the marketplace going into 2020.

Got it. And you mentioned that the Vail Marriott, are you talking about the off peak -- on peak redemption changes there that can impact the quarter?

We don't -- we -- it started -- we don't anticipate it to have an impact, but it's hard to know. No one really can tell how that the shift from off peak and peak how it'll affect festive in the fourth quarter. But for the third quarter, it was consistent to prior year.

Another thing I would say we're excited about the concept of the high low demand periods and having a flexible redemption rate. We think that makes a lot of sense for the points, we think it will get ultimately capture more business, but we don't have a history of how it will play out and I understand the algorithms and making sure we get that right.