Can DRH sustain its positive earnings surprises in 2025?

**DiamondRock Hospitality's (DRH) ability to sustain positive earnings surprises in 2025 is uncertain and depends on several factors.** Here's an analysis to support this view: 1. **Strategic Moves and Portfolio Management**: DRH has been actively managing its portfolio by acquiring and disposing of properties to align with strategic objectives. The company's ability to execute these strategies could positively impact earnings if they lead to improved property performance and higher revenues. 2. **Urban Hotel Performance**: DRH has reported robust growth in urban markets, which is a positive indicator, especially considering the post-pandemic recovery of urban travel. If this trend continues, it could contribute to sustained earnings growth. 3. **Revenue and Profitability Expectations**: The company expects full-year 2024 results with a comparable RevPAR growth of 2.0% to 4.0% and adjusted EBITDA of $260 million. Achieving these expectations would indicate a strong performance, which could be a good indicator of sustaining positive surprises in 2025. 4. **Market Conditions and Challenges**: DRH faces general market uncertainty, including inflation and unemployment pressures, which affect consumer spending and leisure travel. These factors could impact hotel occupancy rates and revenue, posing challenges for sustaining positive earnings surprises. 5. **Financial Health and Debt**: The company's level of indebtedness and ability to satisfy obligations under debt agreements pose risks. Managing debt and maintaining financial flexibility will be crucial for DRH to sustain earnings surprises in the face of potential economic headwinds. In conclusion, while DRH has shown strategic initiatives and positive performance in certain areas, the sustainability of positive earnings surprises in 2025 will depend on executing these strategies effectively, maintaining profitability in a challenging market, and managing financial health amidst uncertain economic conditions.