10 Most Undervalued Hotel Stocks To Invest In Now

8. DiamondRock Hospitality Company (NYSE:DRH)

Forward P/E: 18.15

Analysts’ Upside Potential: 7.93%

DiamondRock Hospitality Company (NYSE:DRH) is a real estate investment trust (REIT) that ranks among the most undervalued hotel stocks to invest in. The company owns a portfolio of 36 premium hotels and resorts, totaling over 9,700 rooms across key gateway cities and destination resorts throughout the United States.

In the third quarter of 2024, DiamondRock Hospitality Company (NYSE:DRH) reported a net income of $26.6 million, or $0.11 per diluted share. Comparable revenues reached $285.1 million, marking a 2.5% increase from the same period in 2023. The company’s Comparable RevPAR (Revenue per Available Room) also increased by 2.8%, reaching $214.44.

While the DiamondRock Hospitality Company’s (NYSE:DRH) hotels in South Florida, New Orleans, and Charleston were unharmed by Hurricane Helene in September, the overall RevPAR growth was impacted by business interruptions from the storm.

DiamondRock Hospitality Company (NYSE:DRH) plans to invest approximately $85 million in capital improvements throughout 2024, having already spent about $58.4 million in the first nine months of the year. Key projects include the rebranding of Hilton Burlington to Hotel Champlain Burlington, a Curio Collection by Hilton in July 2024. During the second quarter of 2024, the company completed a comprehensive renovation at the Westin San Diego Bayview. In the third quarter, the company completed a renovation at the Bourbon Orleans Hotel.

Additionally, on November 1, 2024, DiamondRock Hospitality Company (NYSE:DRH) began repositioning Orchards Inn into Cliffs at L’Auberge. This project will connect the hotel with the nearby L’Auberge de Sedona and will feature a new pool linking both properties. The renovations will include updates to the guest rooms and the creation of a fresh arrival experience, along with new outdoor event spaces. The company anticipates completing this project in 2025.

With a strong financial performance and ongoing investments, DiamondRock Hospitality Company (NYSE:DRH) is well-positioned for future growth. It ranks 8th on our list of the undervalued stocks in the hotel industry.