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Sotherly Hotels (SOHO) Q3 Earnings call transcript Nov 12, 2024

Daily EarningsTuesday, Nov 12, 2024 7:14 pm ET

1min read

HLT -- SOHO --

Sotherly Hotels Inc. recently held its Q3 2024 earnings call, highlighting a resilient performance in the face of challenges, including hurricanes and economic headwinds. With a focus on portfolio recovery and growth, the company demonstrated a strategic approach to navigating market conditions and capitalizing on opportunities.

Strong Operational Performance and Portfolio Recovery

Scott Kucinski, Sotherly Hotels' Executive Vice President and Chief Financial Officer, shared details of the company's operational performance, emphasizing the significant occupancy growth and RevPAR increases across the portfolio. Despite the impact of two major hurricanes, the company's portfolio showed encouraging signs of stabilization and recovery, particularly in urban markets.

The third quarter results for the Composite portfolio showed a 4.1% increase in RevPAR, driven by a 7.8% increase in occupancy and a 3.4% decrease in ADR. Year-to-date, the company's RevPAR performance represents an increase of 4.6% over the same period in 2023, indicating a steady recovery from the pandemic's impact on the hospitality sector.

Resilience in the Face of Hurricanes

The call highlighted the challenges posed by Hurricane Helene, which caused significant damage to Hotel Alba in Tampa and disrupted operations in Jacksonville and Savannah. Despite the hurricane's impact, the company's management team demonstrated quick response and effective mitigation strategies, ensuring minimal disruption to operations. The company expects to recover lost revenues through business interruption insurance.

Investment in Property Improvements and Expansion

The call also touched upon the company's strategic investments in property improvements and expansion. Sotherly Hotels announced the refinancing of the DoubleTree by Hilton Jacksonville Riverfront hotel, paving the way for a complete renovation and rebranding as Hotel Bellamy. The company's repositioning strategy aims to enhance competitiveness in the dynamic downtown Jacksonville market, showcasing its proactive approach to capitalizing on growth opportunities.

Looking Ahead: Cautious Optimism and Strategic Guidance

The call concluded with a cautiously optimistic outlook for the remainder of the year, with expectations for upscales and upper upscale hotels to outperform the broader lodging market. Sotherly Hotels' guidance for full year 2024 reflects a 3% increase in total revenue and a 1.1% increase in Hotel EBITDA, signaling a focus on strategic growth and financial stability.

Navigating Challenges and Seizing Opportunities

Sotherly Hotels' Q3 2024 earnings call underscored the company's ability to navigate challenges and seize opportunities in a dynamic market. With a focus on operational recovery, strategic investments, and a cautiously optimistic outlook, Sotherly Hotels is well-positioned to capitalize on growth opportunities in the hospitality sector. As the company continues to adapt and evolve, it remains a key player in the industry's recovery and future growth.

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