DiamondRock Hospitality Company Provides Dividend Guidance

BETHESDA, Md., Dec. 18 /PRNewswire-FirstCall/ -- DiamondRock Hospitality Company (the "Company") (NYSE: DRH) today announced that it will not issue any further dividends in 2008 and intends to issue its next dividend to its shareholders of record as of December 31, 2009. The 2009 dividend will be an amount equal to 100% of the Company's 2009 taxable income. Moreover, the Company plans to take advantage of Internal Revenue Service's Revenue Procedure 2008-68 in order to pay a portion of that dividend in shares of common stock and the remainder in cash.

(Logo: http://www.newscom.com/cgi-bin/prnh/20040708/DCTH028 )

Although the Company has one of the strongest balance sheets among the public lodging REITs with 2008 cash flow almost 3 times as much as its annual debt service, the Board of Directors is taking this action to provide additional liquidity to the Company over the next year. The Company anticipates that the incremental increase in liquidity from the changes to its dividend alone is sufficient to allow the Company to pay off its two debt maturities (totaling approximately $70 million and 8% of the Company's total debt) the Company has between now and 2012.

Mark W. Brugger, Chief Executive Officer, added, "We are clearly in a negative economic environment that will put pressure on hotel earnings in 2009. While we believe that a significant dividend is an important part of the return to our shareholders, the macro environment leads us to conclude that the alternative uses of that cash will ultimately provide a higher return for our shareholders. In short, the action taken by our Board will allow the Company to achieve its twin aims of improving liquidity and positioning DiamondRock to potentially take advantage of attractive hotel investments that may emerge in the future."

About the Company

DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of premium hotel properties. DiamondRock owns 20 hotels with approximately 9,600 guestrooms. For further information, please visit DiamondRock Hospitality Company's website at www.drhc.com.

This press release contains forward-looking statements within the meaning of federal securities laws and regulations. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. In particular, the Company cannot predict the actions that might be taken by the Internal Revenue Service in approving or not approving any requested private letter ruling. All information in this release is as of the date of this release, and we undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.

SOURCE  DiamondRock Hospitality Company

    -0-                           12/18/2008
    /CONTACT:  Chris King for DiamondRock, +1-240-744-1150/
    /Photo:  http://www.newscom.com/cgi-bin/prnh/20040708/DCTH028/
    /Web Site:  http://www.drhc.com /
    (DRH)

CO:  DiamondRock Hospitality Company

ST:  Maryland
IN:  FIN RLT
SU:

PR
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7154 12/18/200808:30 ESThttp://www.prnewswire.com