Good day, ladies and gentlemen, and welcome to the fourth quarter 2009 DiamondRock Hospitality Company earnings conference call. My name is Louisa and I will be your operator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator instructions) I would like to turn the call over to Mr. Mark Brugger, Chief Executive Officer. Please proceed.

Thanks, Louisa. Good morning, everyone, and welcome to DiamondRock Hospitality’s fourth quarter and full year 2009 earnings conference call. Today I’m joined by John Williams, our President and Chief Operating Officer, as well as Sean Mahoney, our Chief Financial Officer. Before we begin, I’d just like to remind everyone that many of our comments today are not historical facts and are considered forward-looking statements under Federal Securities laws and may not be updated in the future. These statements are subject to numerous risks and uncertainties described in our Securities filings. Moreover, as we discuss certain non-GAAP financial measures, it may be helpful for you review the reconciliation to GAAP in our earnings press release. The past year was the single most difficult year in the U.S. lodging industry since the Great Depression. As you know, beginning in late 2008, the prospect of a severe economic downturn and a concomitant negative outlook for fundamental resulted in a precipitous decline lodging companies’ share prices, including DiamondRock. The decisive actions of our management team and the forward-looking of the market contributed to the dramatic increase of our share price during 2009, resulting in a total return of more than 70%, albeit significantly below our peak share price in 2007. Having weathered what we hope is the worst of the recent economic storm, DiamondRock is well-positioned for future growth. We expect to achieve our growth objectives with a cyclical recovery of our existing portfolio and growth fueled by acquisitions as we deploy our investment capacity from our conservative balance sheet. As history has taught us, the lodging industry experience is a well documented cycle. Playing for the expected volatility during lodging downturns is an integral part of our fundamental business model. However, the breadth and depth of the recent recession was unprecedented in modern…

Thanks, Mark. For DiamondRock’s 20 hotel portfolio, the fourth quarter marked the sixth consecutive quarter of negative RevPAR with RevPAR for the industry projected to remain in negative territory [ph] at least the first two quarter of 2010, operating fundamentals promise to be challenging. Even when RevPAR returns to growth, cost pressures from salaries, wages, and benefits, and incremental cost from higher volumes will continue to pressure margins. As Mark said, the fourth quarter overall portfolio RevPAR was down 14.8% as a result of occupancy declining 2.4 percentage points and average rate down 11.7%. For the year, RevPAR decline 17.6% as occupancy across the portfolio was down 4.1 percentage points and ADR declined 12.6%. House profit margins for the portfolio were down 493 basis points for Q4 and 441 basis points for the year. RevPAR declines moderated significantly in a number of our hotels in the fourth quarter. Our New York City hotels went from down 30% in Q3 to mid teens in Q4. Frenchman’s Reef and St. Thomas had a RevPAR decline of just 5% in Q4 and 9% for the year. Our Chicago Marriott RevPAR declined 10.6% in Q4 and 14.8% for the year. In addition, the Boston Waterfront Westin RevPAR declined moderately in relation to the portfolio and the overall Boston market, down 8.6% in the quarter and 6% for the year, reflecting the ongoing benefit of the 32,000 square feet of meeting space we added and its location adjacent and attached to the BCEC. For the portfolio, all three major segments continue to be negative in the quarter. Business transient revenue was down 24% in the quarter, notably improvement to the 31% in Q3. Group revenue declined 22% in the quarter. Leisure transient fared better as has been the trend and was down about 10.5%. Lower…

Thanks, John. Although we are (inaudible) due to the continued lack of clarity in fundamentals, we do want to provide a general outlook. We expect negative RevPAR for 2010 and perhaps because of our conservative nature believe that current 2010 conservative number for the Company are too high. However, we remain very optimistic about the long term prospects for the lodging industry and specifically the prospects for DiamondRock. If history is a guide, the lodging segment should enter its growth phase over the next two years. Although demand recovery may take a little longer than a typical recovery, we expect new supply to remain constrained as a result of the lack of development financings and the fact that hotels appear to be trading at discounts replacement cost. Our portfolio is likely to be a prime beneficiary of the cyclical recovery and the long term growth of the lodging industry as our hotels are high quality, well-located and enhanced by global brands such as Marriott, Renaissance, Westin, and Conrad Hilton. Moreover, as John mentioned, we believe that we are entering an excellent hotel acquisition environment and we will be able to acquire high quality hotels that are additive to our portfolio quality and growth prospects going forward. With that, we would now like to open up the call for any questions that you might have. Louisa?

(Operator instructions) Your first question comes from the line of Chris Woronka with Deutsche Bank. Please proceed. Chris Woronka – Deutsche Bank: Hey, good morning guys.

Good morning. Chris Woronka – Deutsche Bank: Couple of questions, first one, can you give us a little bit of guidance on (inaudible) and how much of impact they were last year and how we speak about that this year and then maybe the margin impact fiscally?

Yes, Chris, this is John. They were both down significantly. Attrition down over 50% and cancellation fees I think were down about 30% I said. We anticipate that trend will continue to now basically at normalized levels. So we don’t think – probably in the early part of the year there will be a negative impact from fewer cancellation and attrition fees, but I would expect as we get into the third and fourth quarter they will be more normal. Chris Woronka – Deutsche Bank: Okay, great, and then on the visibility front, I know the (inaudible) is still a sort – probably across all of the segments, but can you maybe talk a little about how (inaudible) might have changed during the fourth quarter even into the first quarter so far, is anything lengthening and in which segment is it?

We are not seeing a lengthening, but it’s encouraging that the – in the quarter for the quarter for both the fourth quarter and so far in the first quarter are well above last year’s levels, prior year’s levels. That is at lower rates, but overall room nights and pickup is up dramatically year over year. Chris Woronka – Deutsche Bank: Okay great. And just on the acquisition front, you guys have mentioned and a few others have that it doesn’t look like there is going to be any real steal (inaudible) unfortunately, so how do you underwrite in this environment. It’s still a very I guess a lot of uncertainty with the recovery. How – when you are looking at assets, how are you underwriting them and how are expectations may be different versus what you might have thought or hoped for several months back.

Chris, this is Mark, for the acquisition underwriting, we are looking, we are taking a more macro view of the recovery. It depends on the specific market (inaudible) locate in, but we are anticipating that we get back close to these numbers, somewhere between 2014 and 2016 depending on the market generally. And then in underwriting a lot of the assets we are looking back over the last three years and seeing how they performed in the last peak going back to 2000 and looking how they performed then trying to benchmark that versus our macro view of the future of that particular market, that particular asset. We are also looking at things of price per pound and key versus comparable to the market discounts, replacement cost. And then we are also benchmarking all potential acquisition targets against our current portfolio to see if its additive to the quality and growth prospects of our existing portfolio. Chris Woronka – Deutsche Bank: Okay, very good, thanks guys.

Thanks, Chris.

The next question comes from the line of David Loeb with Baird. Please proceed. David Loeb – Baird: Hi guys. I wanted to just ask a little bit more about Frenchman’s Reef. Clearly that’s a hotel where you are getting a lot of cash flow well in excess of the interest expense. How do you think this ends up playing out. It seems like the servicer is acting like servicers often do and just doing the knee-jerk, okay, you are out of compliance, we charge more interest.

No. Let me just provide a little bit more facts on that just. Frenchman’s Reef loan, we made a mistake I think interpreting the loan. We realized that issue in January. We brought it to the servicer’s attention and said, “look, we have an issue and reviewing this loan document that looks like we may be out of compliance, non-monetary compliance with one of the covenants. We’d like to get an extension for another year or so to complete the work. We are well on the course to escrow [ph] because we are going to do the work. That’s our intention and would like you to waive any potential penalty interest that might be there.” Now, given the way the accounting rules work and dealing with that, we have to accrue for that because they haven’t approved that amendment. We’ve just really began the discussions in the last month with the servicer. And as you know, servicers it’s a process that you need to go through, and if it doesn’t – you don’t resolve everything in one week. So, we are in that process now. We are having discussion. They have to go through a number of levels of approval and committee reviews to assess our request. But that’s where we are. I mean the debt service coverage is 1.5 [ph] there. There is a lot of repositioning and capital needs at that hotel that we are analyzing now. So it’s a relatively complex hotel. But we are in discussions with the servicer and we have to resolve it as soon as possible. David Loeb – Baird: Okay. Well I guess we’ll wait for a resolution on that. In previous releases you’ve given interest, G&A, tax guidance. Is there a reason why you didn’t provide those this time?

Yes, we can – I mean if you want, we can provide those numbers. The only reason we were hesitant in providing in this release was that with the penalty interest at Frenchman’s it looked a little – you know we didn’t want to represent everything in two different ways. We thought it might add to the confusion. David Loeb – Baird: Yes. And can you give it to us without that and we can make our own assumptions about – with that?

Sure.

David, I will tell you. Well do back at the end of this call, the (inaudible) numbers. David Loeb – Baird: That would be great. Thank you very much.

The next question comes from the line of Will Marks with JMP Securities. Please proceed. Will Marks – JMP Securities: Thank you and good morning. I have just a question on in the guidance discussion you mentioned some markets where there is weakness. Can you elaborate a little bit on Chicago, Austin, and then give us your view on New York.

Sure, well this is John. In – we’ll start with Chicago. Chicago convention calendar in 2010 is down about 30% in terms of shows with greater than 6000 peak room nights, which are the important ones for us. So with that in mind, we anticipate a soft year in Chicago to the extent we can mitigate that with pick up. In transient, it’s going to be at somewhat lower rates. We also are anticipating impact from the opening of the J W Marriott in the loop, which is a 640 room property with significant meeting space. And we are factoring that into our projections. So Chicago could be a tough year in 2010. Again, we hope to be able to pickup short term bookings both in group and transient to offset that. In Los Angeles the convention calendar is much less meaningful at LAX, but in general they are flat from a show standpoint and down maybe 3% in a room night picture. And then Atlanta, it’s got to the point where basically the citywides are irrelevant because so much supply has gone into Midtown and Buckhead. So it’s really in the hotel group bookings that we are concerned with and they are showing the kind of the same kind of trends as the balance of the portfolio. So again there is hope that we can make up the deficit within the – in the year for the year sales activity. And Austin had a tough group year. They’ve had a lot of supply downtown. So there again it’s harder to get compression from citywides and then there is a Western opening in a pretty good location out in our submarket. And that I think is in the first or second quarter this year. So we are anticipating that impact as well. Will Marks – JMP Securities: Okay. And New York, did you mention New York?

Oh, I am sorry, New York, yes, that – we are relatively unimpacted by the citywides. I think the fullservices hotels, you’ve heard some numbers. I think they had a pretty tragic period last year and so I think some of their pick up reflects some of the increased group activity in the city. We are seeing generally positive trends. But it’s too short term to really put much stock in it. We are anticipating that New York is going to have a pickup. From our standpoint it’s more important on the special corporate and regular transient rate categories. Will Marks – JMP Securities: Great. Thank you very much.

The next question comes from the line of David Katz with Oppenheimer. Please proceed. David Katz – Oppenheimer: Hi, good morning. And my sense is there has been some commentary on this so far, but I just wanted to go back to the acquisition landscape because I think operating wise we sort of have your perspective on it, but what an you tell us about over the last quarter or so alright – and you’ve continued to raise some equity – about the prospect that you think you could actually close on an acquisition this year, probability wise or scale of one to ten or some form like that?

David, this is Mark. I think we are feeling a lot better in the last 90 days than we were previously. There is increased chatter. The – both the brokers seem to have an increasing although a very relatively low volume but they are having an increased number of offerings. In talking to some potential sellers, some potential off market transactions, there seems to be more of a willingness to entertain sales and that may be because pricing isn’t the (inaudible) there is expectation. Sellers part too, that pricing was only going to be at these incredibly depressed numbers and maybe somewhere between that and a reasonable number. So I think that we are feeling better. The chatter has simply improved. I would still say it’s a relative low volume of things that are on the marketplace. But it certainly feels better than it did 90 days ago.

And David, I would just add to that. The opportunities we are seeing now, and this is sort of typical in any cycle, are the more distressed properties and it’s coming in the form of debt offerings whether it’s the mez debt or a tranche of the form of first mortgage. And that’s a complicated and time consuming area to play in because as you know you have to pick the right tranche of debt to bet on. You are basically doing an over and under on the valuation. And it’s a tremendous amount of work from potential litigation and from negotiating standpoint. And that’s an area that we have chosen not to play in. Now what we have done is we have reached out for potential partners to play in that segment as I think many are doing. On the equity transaction side, as Mark said, we are hearing more but frankly we are not seeing more. We are seeing a kind of a reduction in the spread between the ask and the bid and have gotten fairly close on a couple but have not yet gotten to the finish line. David Katz – Oppenheimer: Okay, perfect, thank you very much.

Thank you, David.

The next question comes from the line of Bryan Maher with Collins Stewart. Please proceed. Bryan Maher – Collins Stewart: Good morning, Mark and John.

Good morning. Bryan Maher – Collins Stewart: Can you drill a little bit deeper on some of these properties, in particular I am interested in the (inaudible) at the Vail Marriott and then also the kind of odd numbers coming out of Chicago and in New York where your New York Courtyards, one is down 9%, the other is down 18%, and then in Chicago your Marriott is down 10%, your Conrad, which is a Hilton property, down 20%. Can you give a little more color on that.

Sure, starting with Vail, Vail had a kind of an anomaly, which hopefully won't continue, but their business in December is often and is almost always heavily influenced by state groups because the rates are attractive, the time frames are open. It’s – the transient business hasn’t picked up. So, historically, the hotel is marketed aggressively to state groups. The state budget this year was just devastated and so the state groups didn’t meet. And that was the fundamental problem in Vail. Add to that, the late snow that they got out there and December was a very, very tough month and it’s very impactful on the quarter. In Chicago, the Marriott was able to put some group on the books in the quarter for the quarter. Conrad does not have the meeting space to enable it to do that, so it’s more – much more reliant on transient and citywide activity, so that’s why they were down substantially more than the Marriott. The Marriott margins were impacted by some fairly – by some unexpected and fairly significant expenses that had to do with them being down event manager, two event managers, and they incorrectly forecasted some major group business in – particularly in December but also in November. And so their margins were negatively impacted by basically some poor planning on their part. In New York, the hotels are in slightly different locations with Fifth Avenue being closer to Times Square and I think Fifth Avenue probably benefited from the relevant strength of Times Square, whereas Third Avenue is much more contingent on business transient on the upper east side, which is showing strength in the first quarter, but did not show much strength in the fourth quarter. Bryan Maher – Collins Stewart: Okay. And just as an aside, over the last six to 12 months as you’ve seen trends unfold and how your certain portfolio assets have reacted and performed, and I am not asking you to say what you might do specifically, but has it given you any cause or change in part with respect to assets in the portfolio and possibly making some portfolio changes over the next year or two years?

Yes, this is Mark, Bryan. I think the kind of more macro perspective is now is a better time to be still be a buyer than a seller. Over the next five years, we are going to reallocate the portfolio in some of these markets and change it probably, but I think that the likelihood of selling some assets in the next year or so is relatively lower, well it could be acquisitive and just part of the cycle and I think our plan is to be a much more proactive recycler of capital as we move through the cycle, which will allow us to fine tune our market strategy. Bryan Maher – Collins Stewart: Okay, thanks.

Thank you.

The next question comes from the line of Joshua Attie with Citi. Please proceed. Joshua Attie – Citi: Thank you. I think you said at the end of your prepared remarks that you expect a slower demand recovery than in the past. May be if you could just kind of share with us some of the macroeconomic views you have or what’s kind of driving that view.

Okay, this is Mark. The thinking – are you a V person or a more of a U type recovery, we are planning for a slower demand recovery. And that’s what we are anticipating but that’s based on kind of a macro view that the economy is going to take a little longer to get out of this deep recession than in the prior two cycles. So that’s our thinking based on kind of a macro view that the economy is going to slowly pull [ph] out of this over the next 24 months. Joshua Attie – Citi: So when you look at – do you think that your view is more conservative than – just to kind of put it in perspective, so we can reach our assumptions, when you look at consensus GDP forecast, do you feel like you are below that?

Yes, I think our perspective is below that. And when I talk to some industry executives, I think our general thinking is more conservative on the recovery than other people. So, it’s just a world view more than anything specific. Joshua Attie – Citi: Okay, thanks a lot. That’s helpful.

The next question comes from the line of Ryan Meliker with Morgan Stanley. Please proceed. Ryan Meliker – Morgan Stanley: Hey guys, I am sorry if I missed this, but I was just hoping to get some color on where your group bookings stand right now. For 2010, are we looking at – what’s the pace, group demand, and pace of group rates? And if you have an idea of how much of your group demand that you are expecting to realize in 2010 you already have on the books that will be helpful as well? Thank you.

I didn’t hear that last part of the question. Ryan Meliker – Morgan Stanley: Just an idea if you have – what percentage of total group demand that you are expecting to realize in 2010 you currently have on the books and how much you still have yet to book?

Okay. The numbers I gave you ours as of period one, and again we adjusted the last year numbers to reflect actual cancellations and attrition. We are down 5.8% as of period one for the year 2010. 4% of that is room nights and 1.9% of that is rate. Now, as of period 13 or the fourth quarter last year, that 5.8% number was about 7.9%. And just to give you order of magnitude, unadjusted that same number is 17 and change, so it’s a significant difference when you adjust for last year’s actual cancellations and attrition. As of fourth quarter in 2008, 76% of ‘09’s total group business was on the books. That’s a revenue number. So we’ve picked up the balance of it in the year for the year. This year if we did the same thing, we theoretically would wind up 5.8% down. We anticipate, given the short term nature of group bookings right now that we’ll be able to pick those room nights up, albeit possibly at a lower rate and we are hoping that overall revenue we can at least close the deficit and hopefully turn into positive territory. Ryan Meliker – Morgan Stanley: That’s helpful. So it sound like you got about 70% of your group room nights on the books right now. May be you – yes, I am sure you don’t want to give guidance but maybe you can help me understand out of that remaining 30% that’s going to be booked in the year for the year, do you have an idea of where you think those rates might be versus the rates you currently have on the books or where were they in 2009 and will 2010 be different?

Yes, it’s a little hard to answer that because it’s such a fluid situation. To give an example, Marriott system wide group bookings in the first two weeks of January, not the business particularly impactful as a trend, but 33% of their total group bookings across their North America system in the first two weeks of January were 14 days from the day they were booked to the day they occupied the hotel. That’s an incredible number. So, it’s very hard to project but I can tell you that in the fourth quarter of 2009 our in the quarter for the quarter bookings were up 47% in room nights. The rate was up over last year’s pickup rate, i.e., in the quarter for the quarter in 2008, that rate was higher, but the rate was lower than the average rate for the quarter. So, the room nights you are picking up are lower rated, but they are better than they were in the same period a year before. So, all that tells you that there is an awful lot up in the air and it’s very hard to make accurate projections based on what we are seeing. Ryan Meliker – Morgan Stanley: Fair enough. Thanks for the color.

The next question comes from the line of Michael Salinsky with RBC Capital Markets. Please proceed. Michael Salinsky – RBC Capital Markets: Good morning guys.

Good morning.

Good morning. Michael Salinsky – RBC Capital Markets: You guys talked a decent amount market by market kind of talking about your expectations, gave a little bit of color in terms of revenue. Just curious. I know you guys aren’t giving guidance, but if you look at some of – whereas consensus forecasts are out there right now in terms of RevPAR, where would you think your margins would be down in 2010 at this point based upon what you are looking at the property level, personnel increase is gross tax [ph] of that nature.

Yes, Michael, this is Mark. I think that will be giving guidance, so we’ll probably stay away from that question. Michael Salinsky – RBC Capital Markets: Okay. Andy color you can provide on in terms of expenses–?

John can speak a little bit more about some of the trends we are the seeing and the expenses and what we expect overall for 2010, which I think is a more challenging expensive item.

Yes, it’s a situation where you’ve taken a lot of contingency in the second half of ’08 and all of ’09 so there is a certain amount of what I call balance of peak out there where some of the operators feel they’ve sort of given us much as they can give. The main pressure areas are going to be wages and benefits and increased volume and the cost associated – the incremental cost associated with increased volume. Where we are trying to have an impact are two areas, housekeeping and food and beverage. And then specifically in food and beverage, we’ve done a best practices. We have a couple of hotels that are clear leaders in terms of food cost and labor cost, man hours per cover, things like that. We’ve actually had those chefs go to other hotels and spend a week with their counterparts at those hotels and we are starting to see some results there. We’ve further challenged the properties by doing an in depth analysis per outlet in our portfolio and fully allocated costs and shown them what their real bottom line is in each of these outlets. And we’ve challenged them to tell us how they can make those outlets profitable because very few of them are when you fully allocate costs. And we are in the midst of that exercise. We anticipate we’ll get results, but of course we are going to run into brand standard issues as we go down that path, but we are not – we are not giving up and those are – that’s a big hit area if we are able to achieve something. On the housekeeping side, there are some opportunities in the way you allocate rooms, stay over rooms versus check out rooms, and there are ways to allocate those among housekeeper that allow the housekeepers to make more money and us to be more efficient. There are some roadblocks there that we have to work through and we are in the process of doing that. Michael Salinsky – RBC Capital Markets: Okay. That’s very helpful actually. Second, well I am just curious, do you guys have any business outstanding now on properties – and kind of what’s been the deal volume you are seeing kind of come across the desk as well as to the Marriott pipeline over the last couple of months.?

Okay, Michael, this is Mark. First part, the – number of bids we have put out a number of bids, I won't say a lot, we’ve put out a number of bids and we are in the process of booking up assets [ph] right now. As far as the Marriott pipeline we started those meetings. They are seeing what you would anticipate the early stages of a lot of deals that be coming over the next 12 months stuff that is more actionable in the near term. Our hotels, which I would refer to as potentially broken boxes, which many not be fixable. Yes, they have negative cash flow and some ways justify their very nature of design, make their apartment mixed use development and were ill-conceived from the get go, may never make any positive house profit. Those obviously wouldn’t be attractive to us. The stuff that probably is higher quality and more attractive is now in the early stages potentially being in trouble, but it’s still a number of (inaudible) away from becoming the actionable hotel transaction. Michael Salinsky – RBC Capital Markets: And just finally in light of Frenchman’s Reef, as you look at your projections for 2010, were there any properties that you’d – could come close to debt covenants or other CapEx covenants, things of that nature or is this kind of just really a one-off opportunity in the rest of the portfolios, could you – well-positioned at this point?

Well, I guess it’s kind of a two-part question. We’ve done a – in light of this, we’ve done a comprehensive review of all the non-financial covenants, non-monetary covenants in our other loan documents and we think we are – that won't be an issue anywhere – any of the other hotels. As far as coming close to covering debt service, last year we basically covered debt service in all of our ten hotels that still debt. I think we missed collectively by a $161,000 or something. This year there are more – depending on the kind of the specter of the economy and fundamental more that may not – make debt service but we’ll do a comprehensive analysis to make sure that there is equity value in the hotels if we continue to potentially feed those hotels. But there is nothing that we are in discussions with the servicer about at the moment.

The one thing – this is Sean, Michael – I will add to that. On a ample of our loans, we do have cash term provision, and we are expecting that we’ll likely get enter into cash term provisions on a couple of our loans based on 2009 numbers. Michael Salinsky – RBC Capital Markets: Okay, thanks guys.

Thanks, Michael.

Your next question comes from the line of Smedes Rose with KBW. Please proceed. Smedes Rose – KBW: Hi, its’ Smedes. I don’t know if you would be willing to do this, but could you provide what you think a one point change in RevPAR, what your sensitivity would be sort of on an EBITDA basis?

Yes, Smedes, this is Mark. It’s difficult because I think there is still not only the RevPAR, but it’s going to be a ton of F&B flow through depending on the mix shift, that’s going to really have a – Smedes Rose – KBW: Well, assuming kind of what you’ve talked about now, occupancies will be okay, but rate continues to decline, so the RevPAR, one point change in RevPAR would be that same kind of mix?

Smedes, this is John. If it’s 100% rate, then we assume about 80 to – about an 80% flow through – negative flow through, may be slightly less than that so that you can do the math on that. In terms of combination of occupancy and rate, it’s closer to 40% to 50% flow through, negative flow through. Again, you can do the math, but those are the parameters. Smedes Rose – KBW: Okay, thanks. And then can you just – any thoughts on your – the balance of your ATM program, would you expect to exhaust that over the course of the first quarter or – any color on that?

Yes, we’ve got – I think about $25 million left on that program. We are going to evaluate the stock price in the markets. It’s also a constant debate with our cash balance of how we are feeling about the acquisition opportunity that we are currently looking at. And we are feeling better about that. So, depending how both the stock price ends, we’ll talk about acquisitions, we’ll determine whether we execute on that program or not. Smedes Rose – KBW: Okay, thank you.

Thank you, Smedes.

(Operator instructions) And your next question comes from the line of Jeffrey Donnelly. Please proceed. Jeffrey Donnelly – Wells Fargo: Hey guys. Actually just two last questions. One on Frenchman’s, and I apologize if you touched on this in your comments, but what’s the magnitude of the capital working you can do there and when do you expect that will be completed?

The work that we are in discussions with the loan servicer in that regards correcting some balcony work, replacing a couple of balconies or a number of balconies in that hotel, that’s probably somewhere between $1.5 million and $2 million based on the – our current survey of work. And then it’s a number of different – if you’ve ever been in that property – it’s a lot of different buildings involved in that resort, so it will be staged over the next couple of years in the off season to minimize the disruption. Jeffrey Donnelly – Wells Fargo: Meaning just – you mean the balcony work will be staged; there is not additional work [ph] beyond that?

Well, we are looking at potentially repositioning in that hotel. So there may be other – we are looking at potentially making self-generated energy and running four five system, we are looking at repositioning the pool and the Trinity Edge [ph] pool and redoing the main pool. There is a lot of things that are under consideration with that property. So we are trying to work the balcony work in concert with thinking about an overall project to maximize our returns of resorts. Jeffrey Donnelly – Wells Fargo: Okay. But it’s just the balcony work that was required by the loan?

Correct. Jeffrey Donnelly – Wells Fargo: And then maybe a question for John around brand standards. I am just curious when you think about the brands. How do we think they begin to phase back in I guess I will call them brand standards and 2010, ‘’11, ’12 as profitability returns, not so much for labor aspect the capital investment side, because my concern is that the brand, I guess to say lay claim to the first few dollars of incremental cash flow for owners in the next few years. Do you have any sense of how that would work?

Yes, we are not – we are not really out of compliance with brand standards at any of the hotels from a capital standpoint. We went into this downturn with a great portfolio and great shape. There are a couple of hotels where I would say we’ve deferred capital to the point that we’ll have to maybe replenish it at a faster than run rate level, but only a couple. And I don’t – and I mean Marriott does not really hade to waive brand standards for us in any of our hotels. Hilton at the Conrad has not and we are certainly at compliance at the Boston Westin. We probably have some issues Atlanta with Starwood to deal with, but they are not major. Jeffrey Donnelly – Wells Fargo: But what about more broadly though, just the DiamondRock portfolio, do you think that could actually prove to be catalyst may be beyond 2010, where brand standards are imposed on I am not sure with specialty TVs and new soft goods, two years from now we see the new, the next new amenity war if you will. Do you think that that could be somewhat of a catalyst for owners out there who aren’t able to fund those investments or do you just not think brands are going to be that aggressive in the next two to three years?

Well I think in general the brands have a history – a recent history of working with owners and so I don’t think there is going to be an appetite among the ownership franchise community to basically allow the brands to get out of control, if you will. I think the brands do run the risk of – always of getting into amenity creep, amenity wars, but I think each of the brands, certainly in our experience have a pretty active owner and franchise group that are listened to and so again, I don’t anticipate that they are going to do anything that’s detrimental to the owners in any sense. And keep in mind you’ve got a – you’ve got one of the major brands that’s owned by Blackstone and basically that certainly is a level of logic that may be hasn’t existed before.

Jeff, this is Mark, just to add on to that, I think as far as a catalyst for transaction, well we’ve talked to Marriott about in their pipeline meeting, isn’t so much the properties that the brand manage because generally those are in pretty good shape as far as brand standards, but some of the franchise properties, where a franchise may have 20 hotels, they may have three or four in the red zone, if you will and they don’t have the capital to reposition those and may be its in everyone’s best interest to figure out how they can sell those three or four hotels so they can afford to put the capital in to reposition them and do what’s right for the properties, which would also give that franchise owner proceed to potentially plough into other assets in these capital. So that could be a potential way to generate transactions. And we are currently looking at that. Jeffrey Donnelly – Wells Fargo: And that’s what I was thinking about. Do you think that’s a sort of a deep well or is it just kind of only now being formed?

Unfortunately I think the – it’s a deep well if you are willing to go into very tertiary markets. When you start talking about the prime markets that we want to be in I think there are limited opportunities. Jeffrey Donnelly – Wells Fargo: Thanks guys.

The next question comes from the line of David Loeb with Baird. Please proceed. David Loeb – Baird: I just have one more for you. You probably saw that LaSalle acquired – is acquiring a hotel in D.C. at six cap on ’09, we calculate may be 5.7 cap without the inauguration benefit. Is that market for fullservice hotels in major market?

I think – David, this is Mark – I think everyone is still trying to figure out what market is and it will defined over the next ten major transactions that kind of trade. So I think every one is grasping – is that a rich valuation or is that going to be the new market valuation of what things are going to trade for. So I think it’s – we are still early to that show. We’ll figure it our as we go over the next few transactions. But before we leave you, I did want to allude back on your prior question about 2010 expense category projections. And Sean’s got the number probably now.

Hey David, how are you, it’s Sean? For 2010 interest you should expect a range from anywhere from $48 million to $49 million. On the G&A, I am going to break this up between cash and non-cash. Our cash G&A of 2010 will range from $10.5 million to $11 million. And our non-cash G&A between $4 million to $4.5 million. And then with respect to capital expenditures, John mentioned $30 million as our 2010 estimated capital expenditures and that can get broken out between $6 million of owner funded capital expenditures and $24 million of escrow funded capital expenditure. David Loeb – Baird: Okay, and how about tax?

Tax is I think – or probably I am not in a position right now to give guidance on taxes only because where we are vis-à-vis our loss – the operating losses from a tax basis perspective, we are pumping up against requiring valuation allowance and going forward and I really can't look that far ahead with respect to whether we are going to need evaluation allowance next year or not, so I am going to decline right now. David Loeb – Baird: Got it. And Mark, just to come back on the whether it’s rich or not, what’s your impression for that asset, was that one that you guys looked at and if six is the new reality, where does that put you relative to your desire to make acquisitions, and in other words is that the satisfactory going in cap rate to get you the kind long term returns that you want.

We did take a look at the assets. I think on the kind of $400,000 key range, it’s a great market. We love to be in D.C. so it’s a great asset. Sofitel is not a brand that we are familiar with or have – we haven’t done a lot of business or have done no business with them before. So I think we have some lack of understanding or hesitation entering into a long term management agreement with them. As far as valuations, the stock trades at higher multiple than us and so it’s probably more accretive for them to do a transaction like that than it would be for us. And we are clear, we enter into the best deal we can do in the marketplace and I thought to come back with the deals that has a better cap rate than that when we announce our first transaction after three years of being out in the market.

David, this is John. Am I just add to that because we did look at this hotel. I don’t think it was in the cap rate that we didn’t get to that number, but I don’t think it was the cap rate that was our biggest concern. We like the location. We like the asset, it’s a good physical assets. The management contractor with the brand like Sofitel, while they are doing a great job in the marketplace and I am sure LaSalle is going to be able to do a great job managing them. We were a little concerned about the terms of the encumbrance and the potential downside associated with that. So I would say from a valuation standpoint while it appears a bit rich, given the market, given the location, given the tragic cash flows that you are applying the cap rate to. I don’t think that was our principal problem with the deal. David Loeb – Baird: Great, that’s very helpful. Thank you both and Sean.

Your next question comes from the line of Will Marks with JMP Securities. Please proceed. Will Marks – JMP Securities: Thank you. You mentioned that consensus numbers were too high. I assume you were referring to FFO per share.

Correct. Will Marks – JMP Securities: And any thoughts on – it looks like, I am sure a consensus number of EBITDA for 2010 of $108 million, do you care to comment on that, same view perhaps, if I can put words in your mouth?

Yes, that sort of consensus EBITDA number that you are showing, we believe that number we believe that number is too high as well. Will Marks – JMP Securities: Great. Thank you.

At this time, we have no more questions in the queue. I would like to turn the call back over to Mr. Mark Brugger for any closing remarks. Sir?

Thank you, Louisa. To everyone on this call we would like to express our continued appreciation for you interest in DiamondRock and look forward to updating you next quarter.

Thank you for your participation in today’s conference. This concludes your participation. You may now disconnect and have a great day.