Document and Entity Information (USD $) In Billions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 25, 2011	May 03, 2011	Jun. 18, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	DiamondRock Hospitality Co
Entity Central Index Key	0001298946
Document Type	10-Q
Document Period End Date	Mar. 25, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q1
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			$ 1.4
Entity Common Stock, Shares Outstanding		167,373,785

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 25, 2011	Dec. 31, 2010
ASSETS
Property and equipment, at cost	$ 2,474,573	$ 2,468,289
Less: accumulated depreciation	(417,981)	(396,686)
Property and equipment, net	2,056,592	2,071,603
Deferred financing costs, net	5,099	5,492
Restricted cash	78,621	51,936
Due from hotel managers	51,228	50,715
Note receivable	57,851	57,951
Favorable lease assets, net	42,430	42,622
Prepaid and other assets	70,544	50,089
Cash and cash equivalents	186,422	84,201
Total assets	2,548,787	2,414,609
Liabilities:
Mortgage debt	779,143	780,880
Senior unsecured credit facility	0	0
Total debt	779,143	780,880
Deferred income related to key money, net	19,124	19,199
Unfavorable contract liabilities, net	83,188	83,613
Due to hotel managers	36,626	36,168
Dividends declared and unpaid	13,522	0
Accounts payable and accrued expenses	80,628	81,232
Total other liabilities	233,088	220,212
Stockholders' Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized; no shares issued and outstanding	0	0
Common stock, $0.01 par value; 200,000,000 shares authorized; 167,373,785 and 154,570,543 shares issued and outstanding at March 25, 2011 and December 31, 2010, respectively	1,674	1,546
Additional paid-in capital	1,705,618	1,558,047
Accumulated deficit	(170,736)	(146,076)
Total stockholders' equity	1,536,556	1,413,517
Total liabilities and stockholders' equity	$ 2,548,787	$ 2,414,609

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 25, 2011	Dec. 31, 2010
Stockholders' Equity:
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	167,373,785	154,570,543
Common stock, shares outstanding	167,373,785	154,570,543

Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 25, 2011	Mar. 26, 2010
Revenues:
Rooms	$ 79,318	$ 71,648
Food and beverage	37,033	35,552
Other	5,915	5,628
Total revenues	122,266	112,828
Operating Expenses:
Rooms	22,709	20,073
Food and beverage	27,042	24,725
Management fees	3,402	3,072
Other hotel expenses	47,720	44,629
Depreciation and amortization	21,352	18,907
Hotel acquisition costs	256
Corporate expenses	4,075	3,351
Total operating expenses	126,556	114,757
Operating loss	(4,290)	(1,929)
Other Expenses (Income):
Interest income	(298)	(81)
Interest expense	11,143	8,126
Total other expenses	10,845	8,045
Loss before income taxes	(15,135)	(9,974)
Income tax benefit	4,091	1,628
Net loss	$ (11,044)	$ (8,346)
Loss per share:
Basic and diluted loss per share	$ (0.07)	$ (0.07)

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 25, 2011	Mar. 26, 2010
Cash flows from operating activities:
Net loss	$ (11,044)	$ (8,346)
Adjustments to reconcile net loss to net cash provided by operating activities:
Real estate depreciation	21,352	18,907
Corporate asset depreciation as corporate expenses	19	34
Non-cash ground rent	1,566	1,789
Non-cash financing costs as interest	393	227
Non-cash reversal of penalty interest		(3,134)
Amortization of unfavorable contract liabilities	(426)	(397)
Amortization of deferred income	(130)	(130)
Stock-based compensation	936	786
Changes in assets and liabilities:
Prepaid expenses and other assets	666	1,377
Restricted cash	75	917
Due to/from hotel managers	(57)	(4,676)
Accounts payable and accrued expenses	(5,694)	(6,769)
Net cash provided by operating activities	7,656	585
Cash flows from investing activities:
Hotel capital expenditures	(7,882)	(4,604)
Change in restricted cash	(21,460)	(6,763)
Cash received from mortgage loan	100
Purchase deposits	(20,000)
Net cash used in investing activities	(49,242)	(11,367)
Cash flows from financing activities:
Scheduled mortgage debt principal payments	(1,737)	(1,513)
Repurchase of common stock	(3,095)	(2,023)
Proceeds from sale of common stock, net	149,841	22,816
Deposit on mortgage loan financing	(1,125)
Payment of financing costs		(153)
Payment of cash dividends	(77)	(4,323)
Net cash provided by financing activities	143,807	14,804
Net increase in cash and cash equivalents	102,221	4,022
Cash and cash equivalents, beginning of period	84,201	177,380
Cash and cash equivalents, end of period	186,422	181,402
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	11,725	11,633
Cash paid for income taxes	96	30
Capitalized interest	$ 215

Organization	3 Months Ended
Organization	Mar. 25, 2011
Organization [Abstract]
Organization	1. Organization DiamondRock Hospitality Company (the “Company” or “we”) is a lodging-focused real estate company that owns a portfolio of 23 premium hotels and resorts as well as a senior mortgage loan secured by 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 the 23 hotels in our portfolio. 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 March 25, 2011, we owned 23 hotels that contained 10,743 rooms, located in the following markets: Atlanta, Georgia (3); Austin, Texas; Boston, Massachusetts; Charleston, South Carolina; Chicago, Illinois (2); Fort Worth, Texas; Lexington, Kentucky; Los Angeles, California (2); Minneapolis, Minnesota; New York, New York (3); Oak Brook, Illinois; Orlando, Florida; Salt Lake City, Utah; Sonoma, California; Washington D.C.; St. Thomas, U.S. Virgin Islands; and Vail, Colorado, and we also own a senior mortgage 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	3 Months Ended
Summary of Significant Accounting Policies	Mar. 25, 2011
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, 2010, included in our Annual Report on Form 10-K filed on March 1, 2011. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary to present fairly our financial position as of March 25, 2011 and the results of our operations and cash flows for our fiscal quarters ended March 25, 2011 and March 26, 2010. 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 12 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 Atlanta Westin North at Perimeter, Hilton Hotels Corporation, manager of the Conrad Chicago and Hilton Minneapolis, Westin Hotel Management, L.P., manager of the Westin Boston Waterfront Hotel and Alliance Hospitality Management, manager of the Hilton Garden Inn Chelsea/New York City, 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 our fiscal year always ends on December 31 to comply with REIT rules. Our first three fiscal quarters end on the same day as Marriott’s fiscal quarters but our 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, Atlanta Westin North at Perimeter, Conrad Chicago, Westin Boston Waterfront Hotel, Hilton Minneapolis or Hilton Garden Inn Chelsea/New York City 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, Alliance Hospitality Management, Vail Resorts nor Marriott (with respect to Frenchman’s Reef) 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 Atlanta Westin North at Perimeter, the Conrad Chicago, the Westin Boston Waterfront Hotel, the Hilton Minneapolis and the Hilton Garden Inn Chelsea/New York City 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. Property and Equipment Investments in hotel properties, land, land improvements, building and furniture, fixtures and equipment and identifiable intangible assets are recorded at fair value upon acquisition. Property and equipment purchased after the hotel acquisition date is recorded at cost. Replacements and improvements are capitalized, while repairs and maintenance are expensed as incurred. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation is removed from the Company’s accounts and any resulting gain or loss is included in the statements of operations. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 15 to 40 years for buildings, land improvements, and building improvements and one to ten years for furniture, fixtures and equipment. Leasehold improvements are amortized over the shorter of the lease term or the useful lives of the related assets. We review our investments in hotel properties for impairment whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the 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 a hotel exceed its carrying value. If the estimated undiscounted future cash flows are less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel’s estimated fair market value is recorded and an impairment loss recognized. We will classify a hotel as held for sale in the period that we have made the decision to dispose of the hotel, a binding agreement to purchase the property has been signed under which the buyer has committed a significant amount of nonrefundable cash and no significant financing contingencies exist which could cause the transaction to not be completed in a timely manner. If these criteria are met, we will record an impairment loss if the fair value less costs to sell is lower than the carrying amount of the hotel and will cease recording depreciation expense. We will classify the loss, together with the related operating results, as discontinued operations on the statements of operations and classify the assets and related liabilities as held for sale on the balance sheet. 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. Our impairment analysis considers the anticipated cash receipts as well as the underlying value of the collateral. 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. We continually assess the current facts and circumstances to determine whether we can reasonably estimate cash flows. If we can reasonably estimate the timing and amount of cash flows to be collected, then income recognition becomes possible. 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. Earnings (Loss) Per Share Basic earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income 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 or market conditions based on the grant-date fair value of the award. That cost 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 We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the 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, which requires that we distribute at least 90% of our taxable income annually to our stockholders and comply with certain other requirements. In addition to paying federal and state taxes on any retained income, we may be subject to taxes on “built in gains” on sales of certain assets. Our taxable REIT subsidiaries will generally be subject to federal, state, local, and/or foreign income taxes. In order for the income from our hotel property investments to constitute “rents from real properties” for purposes of the gross income tests required for REIT qualification, the income we earn cannot be derived from the operation of any of our hotels. Therefore, we lease each of our hotel properties to a wholly-owned subsidiary of Bloodstone TRS, Inc., our existing taxable REIT subsidiary, or TRS, except for the Frenchman’s Reef & Morning Star Marriott Beach Resort, which is owned by a Virgin Islands corporation, which we have elected to be treated as a TRS. We had no accruals for tax uncertainties as of March 25, 2011 and December 31, 2010. Intangible Assets and Liabilities Intangible assets or 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 we review these assets for impairment annually or at interim periods 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. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of our note receivable and cash and cash equivalents. We perform periodic evaluations of the underlying hotel property securing the note receivable. While the note receivable is currently in default, the value of the underlying hotel exceeds our carrying value of the note. See further discussion in Note 5. We maintain cash and cash equivalents with various 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 the 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

3 Months Ended

Mar. 25, 2011

Property and Equipment [Abstract]

Property and Equipment

3. Property and Equipment

Property and equipment as of March 25, 2011 (unaudited) and December 31, 2010 consists of the following (in thousands):


	March 25, 2011			December 31, 2010
Land	$	241,145		$	241,145
Land improvements		7,994			7,994
Buildings		1,904,417			1,903,782
Furniture, fixtures and equipment		312,890			309,976
CIP and corporate office equipment		8,127			5,392

		2,474,573			2,468,289
Less: accumulated depreciation		(417,981	)		(396,686	)

	$	2,056,592		$	2,071,603

As of March 25, 2011 we had no accrued capital expenditures. As of December 31, 2010, we had accrued capital expenditures of $2.0 million.

Favorable Lease Assets

3 Months Ended

Mar. 25, 2011

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 remaining non-cancelable term of the lease agreement. Amortization expense for our fiscal quarter ended March 25, 2011, was approximately $0.2 million. Our net favorable lease assets as of March 25, 2011 (unaudited) and December 31, 2010 consist of the following (in thousands):


	March 25, 2011		December 31, 2010
Boston Westin Waterfront	$	19,106	$	19,156
Boston Westin Waterfront — Lease Right		9,513		9,513
Minneapolis Hilton		6,042		6,059
Oak Brook Hills Marriott Resort		7,769		7,894

	$	42,430	$	42,622

We 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”). The option expires in 2099. We do not amortize the lease right but review the asset for impairment annually or at interim periods if events or circumstances indicate that the asset may be impaired. No impairment loss was recorded in our fiscal quarters ended March 25, 2011 or March 26, 2010. As of March 25, 2011 and December 31, 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	3 Months Ended
Note Receivable	Mar. 25, 2011
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 for approximately $60.6 million. The Allerton loan matured in January 2010 and is currently in default. The Allerton loan accrues at an interest rate of LIBOR plus 692 basis points, which includes five percentage points of default interest. As of March 25, 2011, the Allerton loan had a principal balance of $69.0 million and unrecorded accrued interest (including default interest) of approximately $3.2 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. We evaluate the potential impairment of the carrying value of the Allerton loan based on the underlying value of the hotel and as of March 25, 2011, there is no impairment. 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. As of March 25, 2011, we have received default interest payments from the borrower of approximately $2.8 million, of which $0.1 million was received during our fiscal quarter ended March 25, 2011. These payments have been recorded as a reduction of our basis in the Allerton loan.

Capital Stock	3 Months Ended
Capital Stock	Mar. 25, 2011
Capital Stock [Abstract]
Capital Stock	6. Capital Stock *Common Shares* We are authorized to issue up to 200,000,000 shares of common stock, $0.01 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. We completed a follow-on public offering of our common stock during the quarter ended March 25, 2011. We sold 12,418,662 shares of our common stock, including the underwriter’s option to purchase 1,418,662 additional shares, at an offering price of $12.07 per share. The net proceeds to us, after deduction of offering costs, were approximately $149.8 million. Dividend. The Company’s board of directors declared a quarterly cash dividend of $0.08 per share to record holders of our common stock as of March 25, 2011. The dividend was paid on April 7, 2011. *Preferred Shares* We are authorized to issue up to 10,000,000 shares of preferred stock, $0.01 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 March 25, 2011 and December 31, 2010, 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 March 25, 2011 and December 31, 2010, there were no operating partnership units held by unaffiliated third parties.

Stock Incentive Plans

3 Months Ended

Mar. 25, 2011

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 3,167,777 shares as of March 25, 2011. In addition to these shares, additional shares of common stock could be issued related to the Market Stock Unit awards as further described below and the Stock Appreciation Rights issued in 2008.

Restricted Stock Awards

Restricted stock awards issued to our officers and employees generally 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, 2011 to March 25, 2011 is as follows:


				Weighted-
				Average Grant
	Number of			Date Fair
	Shares			Value
Unvested balance at January 1, 2011		1,548,698		$	5.49
Granted		302,153			11.60
Forfeited		(1,818	)		4.80
Vested		(635,033	)		4.87

Unvested balance at March 25, 2011		1,214,000		$	7.34

The remaining share awards are expected to vest as follows: 212,766 shares during 2011, 681,008 shares during 2012, 219,513 during 2013, and 100,713 during 2014. As of March 25, 2011, the unrecognized compensation cost related to restricted stock awards was $6.7 million and the weighted-average period over which the unrecognized compensation expense will be recorded is approximately 27 months. For our fiscal quarters ended March 25, 2011 and March 26, 2010, we recorded $0.8 million and $0.7 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. Each executive officer is granted a target number of MSUs (the “Target Award”). The actual number of shares of common stock issued to each executive officer at the vesting date 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 50%. The maximum payout to an executive officer under an MSU award is equal to 150% of the Target Award. A summary of our MSUs from January 1, 2011 to March 25, 2011 is as follows:


			Weighted-
			Average Grant
	Number of		Date Fair
	Units		Value
Unvested balance at January 1, 2011		84,854	$	9.87
Granted		72,599		13.43

Unvested balance at March 25, 2011		157,453	$	11.51

The fair values were determined using a Monte Carlo simulation. As of March 25, 2011, the unrecognized compensation cost related to the MSUs was $1.5 million and is expected to be recognized on a straight-line basis over a weighted average period of 31 months. We recorded approximately $89,000 and $21,000 of compensation expense, respectively, related to the MSUs during the fiscal quarters ended March 25, 2011 and March 26, 2010.

Earnings (Loss) Per Share

3 Months Ended

Mar. 25, 2011

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.

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


	Fiscal Quarter Ended
	March 25, 2011			March 26, 2010
Basic Loss per Share Calculation:

Net loss	$	(11,044	)	$	(8,346	)

Weighted-average number of common shares outstanding—basic		163,997,743			127,747,674

Basic loss per share	$	(0.07	)	$	(0.07	)


Diluted Loss per Share Calculation:

Net loss	$	(11,044	)	$	(8,346	)

Weighted-average number of common shares outstanding—basic		163,997,743			127,747,674
Unvested restricted common stock		—			—
Unexercised SARs		—			—
Unvested MSUs		—			—

Weighted-average number of common shares outstanding—diluted		163,997,743			127,747,674

Diluted loss per share	$	(0.07	)	$	(0.07	)

We did not include the following shares in our calculation of diluted earnings per share as they would be anti-dilutive:


	Fiscal Quarter Ended
	March 25, 2011		March 26, 2010
Unvested restricted common stock		825,151		1,024,243
Unexercised SARs		—		—
Shares related to unvested MSUs		182,743		89,503

Total		1,007,894		1,113,746

Debt

3 Months Ended

Mar. 25, 2011

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 March 25, 2011, ten of our 23 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. As of March 25, 2011, the lender held approximately $0.8 million under the cash trap on our Courtyard Manhattan/Midtown East mortgage, which is reflected in restricted cash on the accompanying consolidated balance sheet. As of March 25, 2011, we were in compliance with the financial covenants of our mortgage debt.

In connection with the ongoing renovation and repositioning project at the Frenchman’s Reef & Morning Star Marriott Beach Resort, we expect, in due course, to obtain the consent of the master servicer and the special servicer under the mortgage loan secured by this hotel.

The following table sets forth information regarding the Company’s debt as of March 25, 2011 (unaudited), in thousands:


	Principal
Property	Balance		Interest Rate

Courtyard Manhattan / Midtown East	$	42,559		8.81	%
Marriott Salt Lake City Downtown		31,328		5.50	%
Courtyard Manhattan / Fifth Avenue		51,000		6.48	%
Renaissance Worthington		56,136		5.40	%
Frenchman’s Reef & Morning Star Marriott Beach Resort		60,323		5.44	%
Marriott Los Angeles Airport		82,600		5.30	%
Orlando Airport Marriott		58,866		5.68	%
Chicago Marriott Downtown Magnificent Mile		216,331		5.975	%
Renaissance Austin		83,000		5.507	%
Renaissance Waverly		97,000		5.503	%
Senior unsecured credit facility		—	LIBOR + 3.00%


Total debt	$	779,143

Weighted-Average Interest Rate				5.86	%

On April 15, 2011, we closed on a $100 million loan secured by a mortgage on the Hilton Minneapolis. The loan has a 10-year term, bears interest at an annual fixed interest rate of 5.464%, amortizes on a 25-year schedule and is non-recourse, subject only to standard recourse exceptions.

Senior Unsecured Credit Facility

We are party to a three-year, $200.0 million unsecured credit facility expiring in August 2013. 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. We also have the right to increase the amount of the facility to $275 million with lender approval. Interest is paid on the periodic advances under the facility at varying rates, based upon LIBOR, plus an agreed upon additional margin amount. The applicable margin depends upon our leverage, as defined in the credit agreement, as follows:


Leverage	Applicable Margin
Less than or equal to 35%		2.75	%
Greater than 35% but less than 45%		3.00	%
Greater than or equal 45% but less than 50%		3.25	%
Greater than or equal to 50% but less than 55%		3.50	%
Greater than or equal to 55%		3.75	%

The facility includes a LIBOR floor of 100 basis points. In addition to the interest payable on amounts outstanding under the facility, we are required to pay an amount equal to 0.50% of the unused portion of the facility if the unused portion of the facility is greater than 50% or 0.40% if the unused portion of the facility is less than 50%. We incurred interest and unused credit facility fees on the facility of $0.2 million and $0.1 million for our fiscal quarters ended March 25, 2011 and March 26, 2010. As of March 25, 2011, we had no outstanding borrowings under the facility.

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


		Actual at
		March 25,
	Covenant	2011
Maximum leverage ratio(1)	60%		38.9	%
Minimum fixed charge coverage ratio(2)	1.3x — on or before June 29, 2012		2.2x
	1.4x — on or after June 30, 2012 and on or before June 29, 2013
	1.5x — on or after June 30, 2013
Minimum tangible net worth(3)	$1.585 billion	$1.954 billion


(1)		Leverage ratio is total indebtedness, as defined in the credit agreement, divided by total asset value, defined in the credit agreement as a) total cash and cash equivalents plus b) the value of our owned hotels based on (i) until March 31, 2012, appraised values and (ii) after March 31, 2012, hotel net operating income divided by an 8.5% capitalization rate, and (c) the book value of the Allerton loan.

(2)		Fixed charge coverage ratio is Adjusted EBITDA, defined in the credit agreement as EBITDA less FF&E reserves, for the most recently ending 12 fiscal months, to fixed charges, defined in the credit agreement as interest expense, all regularly scheduled principal payments and payments on capitalized lease obligations, for the same most recently ending 12 fiscal month period.

(3)		Tangible net worth, as defined in the credit agreement, is (i) total gross book value of all assets, exclusive of depreciation and amortization, less intangible assets, total indebtedness, and all other liabilities, plus (ii) 85% of net proceeds from future equity issuances.

The facility requires us to maintain a specific pool of unencumbered borrowing base properties. The unencumbered borrowing base assets are subject, among other restrictions, to the following limitations and covenants:

•

A minimum of five properties with an unencumbered borrowing base value, as defined, of not less than $250 million.

•

The unencumbered borrowing base must include the Westin Boston Waterfront, the Conrad Chicago and the Vail Marriott Mountain Resort and Spa. The Conrad Chicago and the Vail Marriott Mountain Resort and Spa may be released from the unencumbered borrowing base upon lender approval and certain conditions.

In connection with the closing of the Hilton Minneapolis mortgage loan in April 2011, we received lender approval to release the Company’s subsidiaries owning the Hilton Minneapolis as guarantors under the facility.

Acquisitions	3 Months Ended
Acquisitions	Mar. 25, 2011
Acquisitions [Abstract]
Acquisitions	10. Acquisitions On January 18, 2011, we entered into a purchase and sale agreement to acquire, upon completion, a hotel property under development on West 42nd Street in Times Square, New York City. Upon completion by the third party developer, the hotel is expected to contain approximately 285 guest rooms and the contractual purchase price is approximately $128 million, or approximately $450,000 per guest room. If certain required permits, approvals and consents are obtained, the number of guest rooms could be increased to approximately 400 guest rooms, which would result in the contractual purchase price increasing to approximately $178 million, or $445,000 per guest room. The purchase and sale agreement is for a fixed-price, which varies only by total guest rooms built and the completion date for the hotel, and we are not assuming any construction risk (including not assuming the risk of construction cost overruns). We currently expect that the development of the hotel will take approximately 24 to 30 months with an anticipated opening date in 2013. Upon entering into the purchase and sale agreement, we made a $20.0 million deposit with a third-party escrow agent. Upon the completion of certain construction milestones, we will be required to make an additional deposit of $5.0 million. If certain permits, approvals and consents necessary for the hotel to contain more than 250 guest rooms are obtained, we will be required to make an additional deposit equal to $45,000 per guest room for each guest room in excess of 250. All deposits will be interest bearing. We will forfeit our deposits if we do not close on the acquisition of the hotel upon substantial completion of construction, unless we do not close as a result of the seller failing to meet certain conditions, including substantial completion of the hotel within a specified time frame and construction of the hotel within the contractual scope.

Fair Value of Financial Instruments

3 Months Ended

Mar. 25, 2011

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 March 25, 2011 (unaudited) and December 31, 2010, in thousands, are as follows:


	As of March 25,				As of December 31,
	2011				2010
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value

Note receivable	$	57,851	$	40,500	$	57,951	$	40,500
Debt	$	779,143	$	794,483	$	780,880	$	794,900

We estimate the fair value of our mortgage debt by discounting the future cash flows of each instrument at estimated market rates. We estimate the fair value of our note receivable by discounting the future cash flows related to the note at estimated market rates. 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	3 Months Ended
Commitments and Contingencies	Mar. 25, 2011
Commitments and Contingencies [Abstract]
Commitments and Contingencies	12. Commitments and Contingencies Litigation Except as described below, we are not involved in any material litigation nor, to our knowledge, is any material litigation pending or 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 is not expected to have a material adverse impact on our financial condition or results of operations. We are involved in foreclosure proceedings against the borrower under a senior mortgage loan we acquired in May 2010, which is secured by the Allerton Hotel. The proceedings were initiated in April 2010 and, if successful, would result in the Company owning the Allerton Hotel. The timing and completion of foreclosure proceedings in Cook County, Illinois is uncertain and depends on a variety of factors. No precise timeframe for completion of the foreclosure proceedings on the loan can be given and no assurances can be given that the proceedings will be successful. A junior lender which held debt subordinated to the Allerton loan intervened in the foreclosure proceedings and recently filed a counterclaim against the Company in the proceedings. This junior lender alleges in its counterclaim that certain press releases and public statements made by the Company in connection with its acquisition of the Allerton loan were intended to and did impair or destroy the value of the junior lender’s interest in its subordinated debt, which it was attempting to sell. The matter is in the early stages of litigation, and while the Company intends to vigorously defend this claim, no assurances can be given that we will be successful. We cannot presently determine the likelihood of the outcome or amount of potential loss, if any. In addition, certain employees at the Los Angeles Airport Marriott Hotel and certain employees at other hotels in the vicinity of the Los Angeles Airport, have brought a claim against the Company and Marriott and other LAX area hotel owners and operators alleging that these hotels did not comply with an ordinance adopted by the Los Angeles City Council governing payment of service charges to certain employees at these hotels. The litigation is in the discovery phase. We cannot presently determine the likelihood of the outcome or amount of potential loss, if any. Performance Termination Provisions Under Management Agreements Our management agreements provide us with termination rights upon a hotel’s failure to meet certain financial performance criteria. Our termination rights may, in certain cases, be extinguished if the manager of the hotel elects to cure the failure by making a cure payment. Based on our forecasts and the hotels’ budgets, the Orlando Airport Marriott and Oak Brook Hills Marriott Resort are likely to fail to satisfy their performance termination criteria, which will give us the right to terminate the management agreements for these hotels, subject to the managers’ right to cure. If we elect to terminate a hotel manager under the performance termination provisions we will evaluate the most appropriate action plan for the hotel. This action plan could include disposition of the hotel, rebranding the hotel, or maintaining the existing hotel brand with an independent hotel manager. The Conrad Chicago has failed the performance criteria under our management agreement with Hilton. Hilton has the option to provide us with a cure payment to continue to manage the hotel. If Hilton does not make the cure payment, we have the right to terminate the management agreement. If we elect to terminate the management agreement, we are obligated to repay Hilton $1.0 million of key money provided to the previous owner of the hotel. Income Taxes We had no accruals for tax uncertainties as of March 25, 2011 and December 31, 2010. As of March 25, 2011, 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.