Why DiamondRock Hospitality Shares Fell Sharply for a Second Day Tuesday
Shares of hotel real estate investment trust (REIT) DiamondRock Hospitality (NYSE: DRH) fell 8.9% Tuesday. That decline followed similarly steep losses the day before, as investors took a dim view of the hotel landlord's future following a weak earnings report from peer Park Hotels & Resorts. DiamondRock's own first-quarter earnings, released after the close on Monday, were obviously more disappointing to investors than expected.
DiamondRock's funds from operations -- which for a REIT is the rough equivalent to earnings -- came in at just $0.04 per share in Q1. That was down 80% from $0.21 per share in Q1 2019. There's no particular need to get into the gritty details -- the core problem was the same one that many businesses are having: As broad swaths of the economy shut down and Americans practiced social distancing in an effort to stem the spread of COVID-19, DiamondRock closed 20 of its 31 hotel properties in March, and occupancy rates for those it kept open plunged.
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Source Fool.com
