Sotherly Hotels (SOHO) Q1 2025 earnings summary

Executive summary

• First quarter 2025 results exceeded expectations, with strong occupancy and RevPAR growth, especially in urban markets and group segments, aided by special events and urban property recovery.

• Sotherly Hotels Inc. is a self-managed lodging REIT focused on upscale and upper-upscale hotels in the southern U.S., operating ten hotels (2,786 rooms) and interests in two condo hotels as of March 31, 2025.

• The company operates primarily through Sotherly Hotels LP, with hotels managed by Our Town Hospitality under long-term agreements.

• Q1 2025 saw strong year-over-year growth in revenue and net income, driven by higher occupancy, improved group and corporate travel demand, and one-time events.

Financial highlights

• Q1 2025 total revenue was $48.3 million, up 3.8% year-over-year, with room revenue up 5.2% to $31.3 million.

• Net income for Q1 2025 was $4.7 million, compared to $1.3 million in Q1 2024, reflecting improved operations and a $3.9 million insurance gain; net income attributable to common stockholders was $2.7 million.

• Hotel EBITDA reached $12.9 million, up from $12.4 million year-over-year.

• Adjusted FFO was $4.5 million, down from $5.2 million year-over-year.

• Portfolio RevPAR increased 5.0% to $129.74, driven by a 3.9% occupancy increase to 68.8%.

Outlook and guidance

• Full-year 2025 revenue guidance: $183.4–$188.2 million; Hotel EBITDA: $48.8–$49.6 million; Adjusted FFO: $11.5–$12.3 million.

• RevPAR for 2025 expected to be $119.77–$122.89, or 103%–105% of 2024 levels.

• Management expects continued strong demand from leisure, small group, and corporate travel, but notes increased caution due to moderating demand and booking volatility.

• Major renovations planned for Philadelphia and Jacksonville, funded by reserves and new debt.