DiamondRock expects 3Q revpar to be better than 2Q

BETHESDA, Md. (AP) — DiamondRock Hospitality Co. said Monday that it expects third-quarter revenue per available room to drop about 17 percent from a year earlier, which is a smaller decline than the previous quarter.

The lodging real estate investment trust predicts revenue per available room of approximately $107.50 for the period ended Sept. 11. Revenue per available room, also known as revpar, is a key gauge of a lodging company's performance.

Stifel Nicolaus&Co.'s Rod Petrik said in a client note that the results are encouraging, as Bethesda, Md.-based DiamondRock reported a bigger revpar decline of 22.9 percent in the second quarter.

The company's stock gained 33 cents, or 4.3 percent, to $8.04 in afternoon trading. Over the past year, the stock has traded in a range of $2.30 to $8.49.

DiamondRock also said that it prepaid $28 million due on the mortgage of the Louisville, Ky.-based Griffin Gate Marriott. The company also plans to repay a $5 million loan for the Bethesda Marriott in Bethesda, Md., by the end of the year.

Petrik said the repayments bolster DiamondRock's liquidity position, as it now has more than $100 million of unrestricted cash available and will not have any debt maturing until 2014.

He raised the company's price target to $10 from $8.