Document and Entity Information (USD $) In Millions, except Share data, unless otherwise specified	6 Months Ended
	Jun. 18, 2010	Jul. 27, 2010	Jun. 19, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	DiamondRock Hospitality Co
Entity Central Index Key	0001298946
Document Type	10-Q
Document Period End Date	Jun. 18, 2010
Amendment Flag	false
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 697.7
Entity Common Stock, Shares Outstanding		154,570,543

Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified

Jun. 18, 2010

Dec. 31, 2009

ASSETS

Property and equipment, at cost

$ 2,337,163

^[1]

$ 2,171,311

Less: accumulated depreciation

(347,336)

^[1]

(309,224)

Property and equipment, net

1,989,827

^[1]

1,862,087

Deferred financing costs, net

3,365

^[1]

3,624

Restricted cash

40,817

^[1]

31,274

Due from hotel managers

66,243

^[1]

45,200

Note receivable

60,482

^[1]

Favorable lease assets, net

36,970

^[1]

37,319

Prepaid and other assets

60,275

^[1]

58,607

Cash and cash equivalents

155,418

^[1]

177,380

Total assets

2,413,397

^[1]

2,215,491

Liabilities:

Mortgage debt

783,844

^[1]

786,777

Senior unsecured credit facility

^[1]

Total debt

783,844

^[1]

786,777

Deferred income related to key money, net

19,503

^[1]

19,763

Unfavorable contract liabilities, net

81,890

^[1]

82,684

Due to hotel managers

39,319

^[1]

29,847

Dividends declared and unpaid

^[1]

41,810

Accounts payable and accrued expenses

75,536

^[1]

79,104

Total other liabilities

216,248

^[1]

253,208

Stockholders' Equity:

Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares issued and outstanding

^[1]

Common stock, $.01 par value; 200,000,000 shares authorized; 154,570,543 and 124,299,423 shares issued and outstanding at June 18, 2010 and December 31, 2009, respectively

1,546

^[1]

1,243

Additional paid-in capital

1,556,169

^[1]

1,311,053

Accumulated deficit

(144,410)

^[1]

(136,790)

Total stockholders' equity

1,413,305

^[1]

1,175,506

Total liabilities and stockholders' equity

$ 2,413,397

^[1]

$ 2,215,491

[1]

Unaudited

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)

Jun. 18, 2010

Dec. 31, 2009

Stockholders' Equity:

Preferred stock, par value

$ 0.01

^[1]

$ 0.01

Preferred stock, shares authorized

10,000,000

^[1]

10,000,000

Preferred stock, shares issued

^[1]

Preferred stock, shares outstanding

^[1]

Common stock, par value

$ 0.01

^[1]

$ 0.01

Common stock, shares authorized

200,000,000

^[1]

200,000,000

Common stock, shares issued

154,570,543

^[1]

124,299,423

Common stock, shares outstanding

154,570,543

^[1]

124,299,423

[1]

Unaudited

Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 18, 2010	Jun. 19, 2009	Jun. 18, 2010	Jun. 19, 2009
Revenues:
Rooms	$ 95,730	$ 90,228	$ 167,378	$ 165,343
Food and beverage	47,699	44,697	83,250	81,587
Other	7,696	8,682	13,324	15,221
Total revenues	151,125	143,607	263,952	262,151
Operating Expenses:
Rooms	24,458	22,974	44,530	42,956
Food and beverage	31,490	30,320	56,215	56,901
Management fees	5,482	5,008	8,554	8,336
Other hotel expenses	51,990	50,516	96,619	96,540
Impairment of favorable lease asset		1,286		1,286
Depreciation and amortization	19,074	19,729	37,981	38,446
Corporate expenses	3,897	3,651	7,248	7,419
Total operating expenses	136,391	133,484	251,147	251,884
Operating profit	14,734	10,123	12,805	10,267
Other Expenses (Income):
Interest income	(286)	(101)	(367)	(183)
Interest expense	11,089	11,086	19,215	22,584
Total other expenses	10,803	10,985	18,848	22,401
Income (loss) before income taxes	3,931	(862)	(6,043)	(12,134)
Income tax (expense) benefit	(3,092)	3,319	(1,462)	9,297
Net income (loss)	$ 839	$ 2,457	$ (7,505)	$ (2,837)
Earnings (loss) per share:
Basic and diluted earnings (loss) per share	$ 0.01	$ 0.02	$ (0.06)	$ (0.03)

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified

6 Months Ended

Jun. 18, 2010

Jun. 19, 2009

Cash flows from operating activities:

Net loss

$ (7,505)

$ (2,837)

Adjustments to reconcile net loss to net cash provided by operating activities:

Real estate depreciation

37,981

38,446

Corporate asset depreciation as corporate expenses

Non-cash ground rent

3,566

3,570

Non-cash financing costs as interest

457

386

Non-cash reversal of penalty interest

(3,134)

Impairment of favorable lease asset

1,286

Amortization of unfavorable contract liabilities

(794)

Amortization of deferred income

(260)

Stock-based compensation

1,915

2,532

Changes in assets and liabilities:

Prepaid expenses and other assets

(1,368)

(3,565)

Restricted cash

(2,546)

123

Due to/from hotel managers

(11,538)

4,754

Accounts payable and accrued expenses

(3,083)

(13,457)

Net cash provided by operating activities

13,761

30,251

Cash flows from investing activities:

Hotel capital expenditures

(10,391)

(13,265)

Hotel acquisition

(156,501)

Purchase of mortgage loan

(60,282)

Change in restricted cash

(6,997)

(970)

Net cash used in investing activities

(234,171)

(14,235)

Cash flows from financing activities:

Repayments of credit facility

(57,000)

Scheduled mortgage debt principal payments

(2,934)

(1,968)

Repurchase of common stock

(3,961)

(159)

Proceeds from sale of common stock, net

209,864

82,158

Payment of financing costs

(198)

(1,240)

Payment of cash dividends

(4,323)

(80)

Net cash provided by financing activities

198,448

21,711

Net (decrease) increase in cash and cash equivalents

(21,962)

37,727

Cash and cash equivalents, beginning of period

177,380

13,830

Cash and cash equivalents, end of period

155,418

^[1]

51,557

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest

23,484

23,819

Cash paid for income taxes

$ 642

$ 868

[1]

Unaudited

Organization	6 Months Ended
Organization	Jun. 18, 2010
Organization [Abstract]
Organization	1. Organization DiamondRock Hospitality Company (the “Company” or “we”) is a lodging-focused real estate company that owns a portfolio of 21 premium hotels and resorts as well as the senior loan securing another hotel. Our hotels are concentrated in key gateway cities and in destination resort locations and are all operated under a brand owned by one of the leading global lodging brand companies (Marriott International, Inc. (“Marriott”), Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”) or Hilton Worldwide (“Hilton”)). We are an owner, as opposed to an operator, of hotels. As an owner, we receive all of the operating profits or losses generated by our hotels, after we pay fees to the hotel managers, which are based on the revenues and profitability of the hotels. As of June 18, 2010, we owned 21 hotels, comprising 10,407 rooms, located in the following markets: Atlanta, Georgia (3); Austin, Texas; Boston, Massachusetts; Chicago, Illinois (2); Fort Worth, Texas; Lexington, Kentucky; Los Angeles, California (2); Minneapolis, Minnesota; New York, New York (2); Northern California; Oak Brook, Illinois; Orlando, Florida; Salt Lake City, Utah; Washington D.C.; St. Thomas, U.S. Virgin Islands; and Vail, Colorado, and we also own the senior loan secured by a 443-room hotel located in Chicago, Illinois. We conduct our business through a traditional umbrella partnership REIT, or UPREIT, in which our hotel properties are owned by our operating partnership, DiamondRock Hospitality Limited Partnership, or subsidiaries of our operating partnership. The Company is the sole general partner of the operating partnership and currently owns, either directly or indirectly, all of the limited partnership units of the operating partnership.

- Definition

Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References+ Details

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jun. 18, 2010
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made are adequate to prevent the information presented from being misleading. However, the unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 31, 2009, included in our Annual Report on Form 10-K dated February 26, 2010. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of June 18, 2010; the results of our operations for the fiscal quarters ended June 18, 2010 and June 19, 2009 and the periods from January 1, 2010 to June 18, 2010 and January 1, 2009 to June 19, 2009; and cash flows for the periods from January 1, 2010 to June 18, 2010 and January 1, 2009 to June 19, 2009. Interim results are not necessarily indicative of full-year performance because of the impact of seasonal and short-term variations. Our financial statements include all of the accounts of the Company and its subsidiaries in accordance with U.S. GAAP. All intercompany accounts and transactions have been eliminated in consolidation. Reporting Periods The results we report in our condensed consolidated statements of operations are based on results of our hotels reported to us by our hotel managers. Our hotel managers use different reporting periods. Marriott, the manager of most of our properties, uses a fiscal year ending on the Friday closest to December 31 and reports twelve weeks of operations for each of the first three quarters and 16 or 17 weeks for the fourth quarter of the year for its domestic managed hotels. In contrast, Marriott, for its non-domestic hotels (including Frenchman’s Reef), Vail Resorts, manager of the Vail Marriott, Davidson Hotel Company, manager of the Westin Atlanta North at Perimeter, Hilton Hotels Corporation, manager of the Conrad Chicago and the Hilton Minneapolis, and Westin Hotel Management, L.P., manager of the Westin Boston Waterfront Hotel report results on a monthly basis. Additionally, as a REIT, we are required by U.S. federal tax laws to report results on a calendar year basis. As a result, we have adopted the reporting periods used by Marriott for its domestic hotels, except that the fiscal year always ends on December 31 to comply with REIT rules. The first three fiscal quarters end on the same day as Marriott’s fiscal quarters but the fourth quarter ends on December 31 and the full year results, as reported in the statement of operations, always include the same number of days as the calendar year. Two consequences of the reporting cycle we have adopted are: (1) quarterly start dates will usually differ between years, except for the first quarter which always commences on January 1, and (2) the first and fourth quarters of operations and year-to-date operations may not include the same number of days as reflected in prior years. While the reporting calendar we adopted is more closely aligned with the reporting calendar used by the manager of most of our properties, one final consequence of the calendar is we are unable to report any results for Frenchman’s Reef, Vail Marriott, Westin Atlanta North at Perimeter, Conrad Chicago, Westin Boston Waterfront Hotel or Hilton Minneapolis for the month of operations that ends after its fiscal quarter-end because none of Westin Hotel Management, L.P., Hilton Hotels Corporation, Davidson Hotel Company, Vail Resorts nor Marriott make mid-month results available to us. As a result, our quarterly results of operations include results from Frenchman’s Reef, the Vail Marriott, the Westin Atlanta North at Perimeter, the Conrad Chicago, the Westin Boston Waterfront Hotel and the Hilton Minneapolis as follows: first quarter (January and February), second quarter (March to May), third quarter (June to August) and fourth quarter (September to December). While this does not affect full-year results, it does affect the reporting of quarterly results. Investment in Hotels Acquired hotels, land improvements, building and furniture, fixtures and equipment and identifiable intangible assets are initially recorded at fair value. Additions to property and equipment, including current buildings, improvements, furniture, fixtures and equipment are recorded at cost. Property and equipment are depreciated using the straight-line method over an estimated useful life of 15 to 40 years for buildings and land improvements and one to ten years for furniture and equipment. Identifiable intangible assets are typically related to contracts, including ground lease agreements and hotel management agreements, which are recorded at fair value. Above-market and below-market contract values are based on the present value of the difference between contractual amounts to be paid pursuant to the contracts acquired and our estimate of the fair market contract rates for corresponding contracts. Contracts acquired that are at market do not have significant value. We typically enter into a new hotel management agreement based on market terms at the time of acquisition. Intangible assets are amortized using the straight-line method over the remaining non-cancelable term of the related agreements. In making estimates of fair values for purposes of allocating purchase price, we may utilize a number of sources that may be obtained in connection with the acquisition or financing of a property and other market data. Management also considers information obtained about each property as a result of its pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired. We review our investments in hotels for impairment whenever events or changes in circumstances indicate that the carrying value of the investments in hotels may not be recoverable. Events or circumstances that may cause us to perform a review include, but are not limited to, adverse changes in the demand for lodging at our properties due to declining national or local economic conditions and/or new hotel construction in markets where our hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of an investment in a hotel exceed the hotel’s carrying value. If the estimated undiscounted future cash flows are less than the carrying amount of the asset, an adjustment to reduce the carrying value to the estimated fair market value is recorded and an impairment loss recognized. Note Receivable We initially record acquired notes receivable at cost. Notes receivable are evaluated for collectability and if collectability of the original amounts due is in doubt, the value is adjusted for impairment. If collectability is in doubt, the note is placed in non-accrual status. No interest is recorded on such notes until the timing and amounts of cash receipts can be reasonably estimated. We record cash payments received on non-accrual notes receivable as a reduction in basis. Revenue Recognition Revenues from operations of the hotels are recognized when the services are provided. Revenues consist of room sales, golf sales, food and beverage sales, and other hotel department revenues, such as telephone and gift shop sales. Additionally, our operators collect sales, use, occupancy and similar taxes at our hotels which are excluded from revenue in our consolidated statements of operations (revenue is recorded net of such taxes). Earnings (Loss) Per Share Basic earnings (loss) per share is calculated by dividing net income (loss), adjusted for dividends on unvested stock grants, by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing net income (loss), adjusted for dividends on unvested stock grants, by the weighted-average number of common shares outstanding during the period plus other potentially dilutive securities such as stock grants or shares issuable in the event of conversion of operating partnership units. No adjustment is made for shares that are anti-dilutive during a period. Stock-based Compensation We account for stock-based employee compensation using the fair value based method of accounting. We record the cost of awards with service conditions and market conditions based on the grant-date fair value of the award. For awards based on market conditions, the grant-date fair value is derived using an open form valuation model. The cost of the award is recognized over the period during which an employee is required to provide service in exchange for the award. No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Income Taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. We have elected to be treated as a REIT under the provisions of the Internal Revenue Code and, as such, are not subject to federal income tax, provided we distribute all of our taxable income annually to our stockholders and comply with certain other requirements. In addition to paying federal and state income tax on any retained income, we are subject to taxes on “built-in-gains” on sales of certain assets. Additionally, our taxable REIT subsidiaries are subject to federal, state and foreign income tax. Intangible Assets and Liabilities Intangible assets and liabilities are recorded on non-market contracts assumed as part of the acquisition of certain hotels. We review the terms of agreements assumed in conjunction with the purchase of a hotel to determine if the terms are favorable or unfavorable compared to an estimated market agreement at the acquisition date. Favorable lease assets or unfavorable contract liabilities are recorded at the acquisition date and amortized using the straight-line method over the term of the agreement. We do not amortize intangible assets with indefinite useful lives, but review these assets for impairment annually and if events or circumstances indicate that the asset may be impaired. Straight-Line Rent We record rent expense on leases that provide for minimum rental payments that increase in pre-established amounts over the remaining term of the lease on a straight-line basis as required by U.S. GAAP. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. We maintain cash and cash equivalents with various high credit-quality financial institutions. We perform periodic evaluations of the relative credit standing of these financial institutions and limit the amount of credit exposure with any one institution. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Risks and Uncertainties The state of the overall economy can significantly impact hotel operational performance and thus, impact our financial position. Should any of our hotels experience a significant decline in operational performance, it may affect our ability to make distributions to our stockholders and service debt or meet other financial obligations.

Property and Equipment

6 Months Ended

Jun. 18, 2010

Property and Equipment [Abstract]

Property and Equipment

3. Property and Equipment

Property and equipment as of June 18, 2010 (unaudited) and December 31, 2009 consists of the following (in thousands):


	June 18, 2010			December 31, 2009
Land	$	220,445		$	220,445
Land improvements		7,994			7,994
Buildings		1,811,002			1,671,821
Furniture, fixtures and equipment		296,635			270,042
CIP and corporate office equipment		1,087			1,009

		2,337,163			2,171,311
Less: accumulated depreciation		(347,336	)		(309,224	)

	$	1,989,827		$	1,862,087

Favorable Lease Assets	6 Months Ended
Favorable Lease Assets	Jun. 18, 2010
Favorable Lease Assets [Abstract]
Favorable Lease Assets	4. Favorable Lease Assets In connection with the acquisition of certain hotels, we have recognized intangible assets for favorable ground leases. The favorable lease assets are recorded at the acquisition date and amortized using the straight-line method over the term of the non-cancelable term of the lease agreement. We also own a favorable lease asset related to the right to acquire a leasehold interest in a parcel of land adjacent to the Westin Boston Waterfront Hotel for the development of a 320 to 350 room hotel (the “lease right”). We do not amortize the lease right but review the asset for impairment if events or circumstances indicate that the asset may be impaired. We have not recorded an impairment loss related to the lease right during 2010. As of June 18, 2010, the carrying amount of the lease right is $9.5 million. The U.S. GAAP fair value hierarchy assigns a level to fair value measurements based on inputs used: Level 1 inputs are quoted prices in active markets for identical assets and liabilities; Level 2 inputs are inputs other than quoted market prices that are observable for the asset or liability, either directly or indirectly; or Level 3 inputs are unobservable inputs. The fair value of the lease right is a Level 3 measurement and is derived from a discounted cash flow model using the favorable difference between the estimated participating rents in accordance with the lease terms and the estimated market rents. The discount rate was estimated using a risk adjusted rate of return, the estimated participating rents were estimated based on a hypothetical completed 327-room hotel comparable to our Westin Boston Waterfront Hotel, and market rents were based on comparable long-term ground leases in the City of Boston. The methodology used to determine the fair value of the lease right is consistent with the methodology used since acquisition of the lease right.

Note Receivable	6 Months Ended
Note Receivable	Jun. 18, 2010
Note Receivable [Abstract]
Note Receivable	5. Note Receivable On May 24, 2010, we acquired the $69.0 million senior mortgage loan secured by the 443-room Allerton Hotel in Chicago, Illinois (the “Allerton Loan”) for approximately $60.5 million. The Allerton Loan earns a blended interest rate of LIBOR plus 692 basis points, which includes 5 percentage points of default interest. The Allerton Loan matured in January 2010 and is currently in default. As of June 18, 2010, the Allerton Loan had a principal balance of $69.0 million and unrecorded accrued interest (including default interest) of approximately $1.8 million. We continue to pursue the foreclosure proceedings initially filed in April 2010, which, if successful, would result in the Company owning the hotel. The matter may be resolved without foreclosure if the borrower repays the Allerton Loan in full. Recognition of interest income on the Allerton Loan is dependent upon having a reasonable expectation about the timing and amount of cash payments expected to be collected from the borrower. Due to the uncertainty surrounding the timing and amount of cash payments expected, we placed the Allerton Loan on non-accrual status and have not recorded any interest income during the fiscal quarter ended June 18, 2010. Subsequent to the end of the quarter, we received default interest payments from the borrower of approximately $0.8 million, which will be recorded as a reduction of our basis in the Allerton Loan.

Capital Stock	6 Months Ended
Capital Stock	Jun. 18, 2010
Capital Stock [Abstract]
Capital Stock	6. Capital Stock *Common Shares* We are authorized to issue up to 200,000,000 shares of common stock, $.01 par value per share. Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Holders of our common stock are entitled to receive dividends out of assets legally available for the payment of dividends when authorized by our board of directors. Follow-On Public Offering. On May 28, 2010, we completed a follow-on public offering of our common stock. We sold 23,000,000 shares of common stock, including the underwriters’ overallotment of 3,000,000 shares, at an offering price of $8.40 per share. The net proceeds to us, after deduction of offering costs, were approximately $184.8 million. Stock Dividend. On January 29, 2010, we paid a dividend to stockholders of record as of December 28, 2009 in the amount of $0.33 per share. We relied on the Internal Revenue Service’s Revenue Procedure 2009-15, as amplified and superseded by Revenue Procedure 2010-12, that allowed us to pay up to 90% of that dividend in shares of common stock and the remainder in cash. Based on stockholder elections, we paid the dividend in the form of approximately 3.9 million shares of common stock and $4.3 million of cash. Controlled Equity Offering Program. During the first quarter ended March 26, 2010, we completed our previously announced $75 million controlled equity offering program by selling 2.8 million shares at an average price of $9.13 per share, raising net proceeds of $25.1 million. Of the shares sold during the first quarter, 0.2 million shares, representing net proceeds of $2.3 million, settled subsequent to March 26, 2010. *Preferred Shares* We are authorized to issue up to 10,000,000 shares of preferred stock, $.01 par value per share. Our board of directors is required to set for each class or series of preferred stock the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, and terms or conditions of redemption. As of June 18, 2010 and December 31, 2009, there were no shares of preferred stock outstanding. *Operating Partnership Units* Holders of operating partnership units have certain redemption rights, which enable them to cause our operating partnership to redeem their units in exchange for cash per unit equal to the market price of our common stock, at the time of redemption, or, at our option for shares of our common stock on a one-for-one basis. The number of shares issuable upon exercise of the redemption rights will be adjusted upon the occurrence of stock splits, mergers, consolidations or similar pro-rata share transactions, which otherwise would have the effect of diluting the ownership interests of the limited partners or our stockholders. As of June 18, 2010 and December 31, 2009, there were no operating partnership units held by unaffiliated third parties.

Stock Incentive Plans

6 Months Ended

Jun. 18, 2010

Stock Incentive Plans [Abstract]

Stock Incentive Plans

7. Stock Incentive Plans

We are authorized to issue up to 8,000,000 shares of our common stock under our 2004 Stock Option and Incentive Plan, as amended (the “Incentive Plan”), of which we have issued or committed to issue 3,119,288 shares as of June 18, 2010. In addition to these shares, additional shares could be issued related to the Stock Appreciation Rights and Market Stock Unit awards as further described below.

In April 2010, our board of directors approved an amendment to the Incentive Plan primarily to add a deferred compensation program, which will permit non-employee directors to elect to defer the receipt of the annual unrestricted stock award under the Incentive Plan that is generally made to non-employee directors following the Company’s annual stockholders’ meeting. Those non-employee directors who elect to defer such awards will instead be granted an award of deferred stock units under the Incentive Plan. The deferred stock units will be settled in shares of stock in a lump sum six months after the director ceases to be a member of our board of directors.

Restricted Stock Awards

Restricted stock awards issued to our officers and employees vest over a three-year period from the date of the grant based on continued employment. We measure compensation expense for the restricted stock awards based upon the fair market value of our common stock at the date of grant. Compensation expense is recognized on a straight-line basis over the vesting period and is included in corporate expenses in the accompanying condensed consolidated statements of operations.

A summary of our restricted stock awards from January 1, 2010 to June 18, 2010 is as follows:


				Weighted-
				Average
	Number of			Grant Date
	Shares			Fair Value
Unvested balance at January 1, 2010		1,719,376		$	4.76
Granted		356,425			8.41
Vested		(573,848	)		5.19
Additional shares from dividends		46,206			9.57

Unvested balance at June 18, 2010		1,548,159		$	5.49

The remaining share awards are expected to vest as follows: 848,428 shares during 2011, 580,918 shares during 2012 and 118,813 during 2013. As of June 18, 2010, the unrecognized compensation cost related to restricted stock awards was $5.7 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 25 months. For the fiscal quarters ended June 18, 2010 and June 19, 2009, we recorded $0.7 million and $1.2 million, respectively, of compensation expense related to restricted stock awards. For the periods from January 1, 2010 to June 18, 2010 and January 1, 2009 to June 19, 2009, we recorded $1.4 million and $2.2 million, respectively, of compensation expense related to restricted stock awards.

Market Stock Units

We have awarded our executive officers market stock units (“MSUs”). MSUs are restricted stock units that vest three years from the date of grant, subject to the achievement of certain levels of total stockholder return over the vesting period (the “Performance Period”). We do not pay dividends on the shares of common stock underlying the MSUs; instead, the dividends are effectively reinvested as each of the executive officers is credited with an additional number of MSUs that have a fair market value (based on the closing stock price on the day the dividend is paid) equal to the amount of the dividend that would have been awarded for those shares.

Each executive officer was granted a target number of MSUs (the “Target Award”). The actual number of MSUs that will be earned, if any, and converted to common stock at the end of the Performance Period is equal to the Target Award plus an additional number of shares of common stock to reflect dividends that would have been paid during the Performance Period on the Target Award multiplied by the percentage of total stockholder return over the Performance Period. The total stockholder return is based on the 30-trading day average closing price of our common stock calculated on the vesting date plus dividends paid and the 30-trading day average closing price of our common stock on the date of grant. There will be no payout of shares of our common stock if the total stockholder return percentage on the vesting date is less than negative 50%. The maximum payout to an executive officer under an MSU award is equal to 150% of the Target Award.

On March 3, 2010, we issued 84,854 MSUs to our executive officers with an aggregate fair value of $0.8 million, or $9.87 per share. We used a Monte Carlo simulation model to determine the grant-date fair value of the awards using the following assumptions: expected volatility of 68% and a risk-free rate of 1.33%. For the fiscal quarter ended June 18, 2010 we recorded approximately $0.1 million of compensation expense related to the MSUs. For the period from January 1, 2009 to June 18, 2010 we recorded approximately $0.1 million of compensation expense related to the MSUs. As of June 18, 2010, the unrecognized compensations costs related to the MSU awards was $0.8 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 33 months.

Deferred Stock Awards

At the time of our initial public offering, we made a commitment to issue 382,500 shares of deferred stock units to our senior executive officers. At issuance, these deferred stock units were fully vested and represented the promise to issue a number of shares of our common stock to each senior executive officer upon the earlier of (i) a change of control or (ii) five years after the date of grant, which was the initial public offering completion date (the “Deferral Period”). On June 1, 2010, the last day of the Deferral Period, we issued 268,657 shares of our common stock pursuant to this commitment, net of shares repurchased for employee income taxes.

Stock Appreciation Rights and Dividend Equivalent Rights

In 2008, we awarded our executive officers stock-settled Stock Appreciation Rights (“SARs”) and Dividend Equivalent Rights (“DERs”). For the fiscal quarters ended June 18, 2010 and June 19, 2009, we recorded approximately $0.1 million and $0.2 million, respectively, of compensation expense related to the SARs/DERs. For the periods from January 1, 2010 to June 18, 2010 and January 1, 2009 to June 19, 2009, we recorded approximately $0.2 million and $0.3 million, respectively, of compensation expense related to the SARs/DERs. A summary of our SARs/DERs from January 1, 2010 to June 18, 2010 is as follows:


				Weighted-
				Average
	Number of			Grant Date
	SARs/DERs			Fair Value
Balance at January 1, 2010		300,225		$	6.62
Granted		—			—
Exercised		—			—
Expired		(37,764	)		6.62

Balance at June 18, 2010		262,461		$	6.62

As of June 18, 2010, approximately two-thirds of the outstanding SAR/DER awards were vested. The remainder will vest in March 2011. As of June 18, 2010, the unrecognized compensation cost related to the SAR/DER awards was $0.3 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately nine months.

Earnings (Loss) Per Share

6 Months Ended

Jun. 18, 2010

Earnings (Loss) Per Share [Abstract]

Earnings (Loss) Per Share

8. Earnings (Loss) Per Share

Basic loss per share is calculated by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding. Diluted loss per share is calculated by dividing net loss available to common stockholders that has been adjusted for dilutive securities, by the weighted-average number of common shares outstanding including dilutive securities. Our unvested restricted stock, unexercised SARs and unvested MSUs are anti-dilutive for the periods from January 1, 2010 to June 18, 2010 and January 1, 2009 to June 19, 2009. Our unexercised SARs are anti-dilutive for the quarters ending June 18, 2010 and June 19, 2009.

The following is a reconciliation of the calculation of basic and diluted earnings (loss) per share (in thousands, except share and per share data):


	Fiscal Quarter		Fiscal Quarter		Period from			Period from
	Ended		Ended		January 1, 2010 to			January 1, 2009 to
	June 18, 2010		June 19, 2009		June 18, 2010			June 19, 2009
Basic Earnings (Loss) per Share Calculation:
Numerator:
Net income (loss)	$	839	$	2,457	$	(7,505	)	$	(2,837	)
Less: dividends on unvested restricted common stock		—		—		—			—

Net income (loss) after dividends on unvested restricted common stock	$	839	$	2,457	$	(7,505	)	$	(2,837	)


Weighted-average number of common shares outstanding—basic		137,759,886		104,194,871		132,724,158			97,292,933


Basic earnings (loss) per share	$	0.01	$	0.02	$	(0.06	)	$	(0.03	)


Diluted Earnings (Loss) per Share Calculation:
Numerator:
Net income (loss)	$	839	$	2,457	$	(7,505	)	$	(2,837	)
Less: dividends on unvested restricted common stock		—		—		—			—

Net income (loss) after dividends on unvested restricted common stock	$	839	$	2,457	$	(7,505	)	$	(2,837	)


Weighted-average number of common shares outstanding—basic		137,759,886		104,194,871		132,724,158			97,292,933
Unvested restricted common stock		953,594		666,921		—			—
Unvested MSUs		92,830		—		—			—


Weighted-average number of common shares outstanding—diluted		138,806,310		104,861,792		132,724,158			97,292,933


Diluted earnings (loss) per share	$	0.01	$	0.02	$	(0.06	)	$	(0.03	)

Debt

6 Months Ended

Jun. 18, 2010

Debt [Abstract]

Debt

9. Debt

We have incurred limited recourse, property specific mortgage debt in conjunction with certain of our hotels. In the event of default, the lender may only foreclose on the pledged assets; however, in the event of fraud, misapplication of funds and other customary recourse provisions, the lender may seek payment from us. As of June 18, 2010, ten of our 21 hotel properties were secured by mortgage debt. Our mortgage debt contains certain property specific covenants and restrictions, including minimum debt service coverage ratios that trigger “cash trap” provisions as well as restrictions on incurring additional debt without lender consent. During the fiscal quarter ended June 18, 2010, the cash trap provision was triggered on our Courtyard Manhattan/Midtown East mortgage. As of June 18, 2010, the lender held approximately $1.1 million under this cash trap for purposes of debt service, which is reflected in restricted cash on the accompanying consolidated balance sheet. As of June 18, 2010, we were in compliance with the financial covenants of our mortgage debt.

The following table sets forth information regarding the Company’s debt as of June 18, 2010 (unaudited), in thousands:


	Principal
Property	Balance		Interest Rate

Courtyard Manhattan / Midtown East	$	42,799		8.81	%
Marriott Salt Lake City Downtown		32,411		5.50	%
Courtyard Manhattan / Fifth Avenue		51,000		6.48	%
Renaissance Worthington		56,724		5.40	%
Frenchman’s Reef & Morning Star Marriott Beach Resort		60,992		5.44	%
Marriott Los Angeles Airport		82,600		5.30	%
Orlando Airport Marriott		59,000		5.68	%
Chicago Marriott Downtown Magnificent Mile		218,318		5.975	%
Renaissance Austin		83,000		5.507	%
Renaissance Waverly		97,000		5.503	%
Senior unsecured credit facility		—	LIBOR + 0.95


Total debt	$	783,844

Weighted-Average Interest Rate				5.86	%

Senior Unsecured Credit Facility

We are party to a four-year, $200.0 million unsecured credit facility (the “Facility”) expiring in February 2011. The maturity date of the Facility may be extended for an additional year upon the payment of applicable fees and the satisfaction of certain other customary conditions. Interest is paid on the periodic advances under the Facility at varying rates, based upon either LIBOR or the alternate base rate, plus an agreed upon additional margin amount. The interest rate depends upon our level of outstanding indebtedness in relation to the value of our assets from time to time, as follows:


	Leverage Ratio
	60% or			55% to			50% to			Less Than
	Greater			60%			55%			50%
Alternate base rate margin		0.65	%		0.45	%		0.25	%		0.00	%
LIBOR margin		1.55	%		1.45	%		1.25	%		0.95	%

The Facility contains various corporate financial covenants. A summary of the most restrictive covenants is as follows:


				Actual at
	Covenant			June 18, 2010
Maximum leverage ratio(1)		65	%		44.2	%
Minimum fixed charge coverage ratio(2)		1.60	x		1.84	x
Minimum tangible net worth(3)	$	1,050 million		$	1.8 billion
Unhedged floating rate debt as a percentage of total indebtedness		35	%		0.0	%


(1)		“Maximum leverage ratio” is determined by dividing the total debt outstanding by the net asset value of our corporate assets and hotels. Hotel level net asset values are calculated based on the application of a contractual capitalization rate (which range from 7.5% to 8.0%) to the trailing twelve month hotel net operating income.

(2)		“Minimum fixed charge ratio” is calculated based on the trailing four quarters.

(3)		“Tangible net worth” is defined as the gross book value of the Company’s real estate assets and other corporate assets less our total debt and all other corporate liabilities.

The Facility requires that we maintain a specific pool of unencumbered borrowing base properties. The unencumbered borrowing base assets are subject to the following limitations and covenants:


				Actual at
	Covenant			June 18, 2010
Minimum implied debt service ratio		1.5	x		N/A
Maximum unencumbered leverage ratio		65	%		0	%
Minimum number of unencumbered borrowing base properties		4			11
Minimum unencumbered borrowing base value	$150 million			$690.9 million
Percentage of total asset value owned by borrowers or guarantors		90	%		100	%

In addition to the interest payable on amounts outstanding under the Facility, we are required to pay unused credit facility fees equal to 0.20% of the unused portion of the Facility if the unused portion of the Facility is greater than 50% or 0.125% of the unused portion of the Facility if the unused portion of the Facility is less than 50%. We incurred interest and unused credit facility fees on the Facility of $0.1 million for the fiscal quarters ended June 18, 2010 and June 19, 2009 and $0.2 million and $0.4 million for the periods from January 1, 2010 to June 18, 2010 and January 1, 2009 to June 19, 2009, respectively. As of June 18, 2010, we had no outstanding borrowings under the Facility.

We have amended our term sheet with Wells Fargo Bank, N.A. and Bank of America, N.A., serving as co-lead arrangers, for a new $200 million senior unsecured revolving credit facility. The significant terms of the proposed credit facility, as amended, are as follows:

•

Term: Term of 36 months, which may be extended for an additional year upon the payment of applicable fees and satisfaction of certain customary conditions.

•

Accordion Feature: Amount of the borrowing capacity can increase to a maximum amount of $275 million with the lenders’ approval.

•

Financial Covenants: The proposed financial covenants including a maximum leverage ratio of 60%, a minimum fixed charge coverage ratio that will range from 1.3x to 1.5x during the term of the agreement and a minimum tangible net worth covenant.

•

Interest Rate: Interest rate spread based on a pricing grid depending on our leverage ratio. The LIBOR spread ranges from 275 to 375 basis points over LIBOR, with a LIBOR floor of 1.00%.

•

Unused Fee: The unused facility fee ranges from 50 to 40 basis points depending on the amount drawn on the facility.

The proposed new credit facility, which would replace our existing credit facility, is subject to lender due diligence, definitive documentation and closing requirements; accordingly, no assurance can be given that this proposed facility will be procured on the terms, including the amount available to be borrowed, described above, or at all.

Mortgage Loan Modification

As of December 31, 2009, we had not completed certain capital projects at Frenchman’s Reef & Morning Star Marriott Beach Resort (“Frenchman’s Reef”) as required by the mortgage loan secured by the hotel (the “Loan”). As a result, we had accrued $3.1 million of penalty interest as of December 31, 2009. During the fiscal quarter ended March 26, 2010, we amended certain provisions of the Loan. The lender provided us with a waiver for any penalty interest and an extension to December 31, 2010 and December 31, 2011, respectively, for the completion date of certain lender required capital projects. In conjunction with the Loan modification, we pre-funded $5.0 million for the capital projects into an escrow account and paid the lender a $150,000 modification fee. As a result of the modification, we reversed the $3.1 million accrual for penalty interest during the fiscal quarter ended March 26, 2010, which was recorded as an offset to interest expense in the accompanying condensed consolidated statement of operations.

Acquisition

6 Months Ended

Jun. 18, 2010

Acquisition [Abstract]

Acquisition

10. Acquisition

On June 17, 2010, we acquired a leasehold interest in the 821-room Hilton Minneapolis in Minneapolis, Minnesota, for total cash consideration of approximately $156 million. The hotel will remain a Hilton-branded and managed property. The management agreement provides for a base management fee of 3% of the hotel’s gross revenues and an incentive management fee of 15% of hotel operating profit above an owner’s priority determined in accordance with the terms of the management agreement. The hotel is subject to a ground lease with an agency of the city of Minneapolis that expires in 2091 and provides for fixed payments of ground rent and real estate taxes through 2018. Beginning in 2019, the payments are equal to the annual market real estate taxes for the hotel. We are evaluating the terms of the ground lease in conjunction with the hotel purchase accounting to assess whether the lease terms are consistent with current market and will record a purchase accounting adjustment as appropriate.

The preliminary allocation of fair value to the acquired assets and liabilities, which may be adjusted upon receipt of all information necessary for the finalization of appraisals is as follows (in thousands):


	Hilton
	Minneapolis
Land	$	—
Building		136,230
Furniture, fixtures and equipment		19,700

Total fixed assets		155,930
FF&E escrow		1,028
Accrued liabilities and other assets, net		272

Purchase Price	$	157,230

The acquisition is included in our results of operations from the date of acquisition. The following unaudited pro forma results of operations reflect the transaction as if it had occurred on January 1, 2009. In our opinion, all significant adjustments necessary to reflect the effects of the acquisitions have been made; however, a preliminary allocation of the fair value was made, and we will finalize the allocation after all information is obtained. The pro forma information is not necessarily indicative of the results that actually would have occurred nor does it intend to indicate future operating results.


	Fiscal Quarter		Fiscal Quarter		Period from			Period from
	Ended June 18,		Ended June 19,		January 1, 2010 to			January 1, 2009 to
	2010		2009		June 18, 2010			June 19, 2009
	(in thousands)
Revenues	$	163,054	$	154,363	$	281,460		$	278,244

Net income (loss)		2,907		5,137		(5,823	)		(2,055	)


Earnings (loss) per share — Basic and Diluted	$	0.02	$	0.05	$	(0.04	)	$	(0.02	)

Fair Value of Financial Instruments

6 Months Ended

Jun. 18, 2010

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

11. Fair Value of Financial Instruments

The fair value of certain financial assets and liabilities and other financial instruments as of June 18, 2010 and December 31, 2009, in thousands, are as follows:


	As of June 18,				As of December 31,
	2010				2009
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value

Note receivable	$	60,482	$	60,482	$	—	$	—
Debt	$	783,844	$	776,817	$	786,777	$	670,936

We estimate the fair value of our mortgage debt by discounting the future cash flows of each instrument at estimated market rates. Based on the recent timing of our acquisition of the Allerton Loan, we estimate the fair value of the note receivable to equal our carrying amount. The carrying value of our other financial instruments approximates fair value due to the short-term nature of these financial instruments.

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 18, 2010
Commitments and Contingencies [Abstract]
Commitments and Contingencies	12. Commitments and Contingencies Litigation Except as described below with respect to the Loan secured by the Allerton Hotel, we are not involved in any material litigation nor, to our knowledge, is any material litigation threatened against us. We are involved in routine litigation arising out of the ordinary course of business, all of which is expected to be covered by insurance and none of which is expected to have a material impact on our financial condition or results of operations. We are involved in foreclosure proceedings against the borrower under the Loan secured by the Allerton Hotel in Chicago, Illinois. The proceedings were initiated in April 2010 and, if successful, would result in the Company owning the Allerton Hotel. Foreclosure proceedings in Cook County are expected to take 8 to 10 months from inception and no assurances can be given that the proceedings will be completed in this time frame or will be successful. Income Taxes We had no accruals for tax uncertainties as of June 18, 2010 and December 31, 2009. As of June 18, 2010, all of our federal income tax returns and state tax returns for the jurisdictions in which our hotels are located remain subject to examination by the respective jurisdiction tax authorities. The Frenchman’s Reef & Morning Star Marriott Beach Resort is owned by a subsidiary that has elected to be treated as a taxable REIT subsidiary (“TRS”), and is subject to U.S. Virgin Island (“USVI”) income taxes. We were party to a tax agreement with the USVI that reduced the income tax rate to approximately 4%. This agreement expired in February 2010. We are working to extend this agreement, which, if extended, would be effective as of the date of expiration, but we may not be successful. If the agreement is not extended, the TRS that owns Frenchman’s Reef & Morning Star Marriott Beach Resort is subject to an income tax rate of 37.4%.

Subsequent Event	6 Months Ended
Subsequent Event	Jun. 18, 2010
Subsequent Event [Abstract]
Subsequent Event	13. Subsequent Event On July 1, 2010, we signed a definitive purchase and sale agreement to acquire the 166-room Renaissance Charleston Historic District Hotel located in Charleston, South Carolina for a contractual purchase price of $39 million plus customary closing costs. The acquisition is expected to close in the third quarter, subject to the satisfaction of customary closing conditions.