Sotherly Hotels (SOHO) Q3 2024 earnings summary

Executive summary

• RevPAR increased 4.1% year-over-year in Q3 2024, driven by a 7.8% occupancy gain despite a 3.4% ADR decline, with urban markets like Houston and Philadelphia showing strong recovery and group business growth.

• Major storms, including Hurricane Helene, caused operational disruptions and physical damage, particularly at Hotel Alba Tampa, but business interruption is expected to be covered by insurance.

• Portfolio performance was in line with expectations, with continued stabilization in lodging fundamentals and increased group and corporate travel demand.

• The company operates as a self-managed REIT focused on upscale and upper-upscale hotels in the southern U.S., with a portfolio of ten hotels and interests in two condo hotels as of June 30, 2024.

• Net loss attributable to common stockholders widened to $5.6 million in Q3 2024 from $3.9 million in Q3 2023.

Financial highlights

• Q3 2024 total revenue was $40.7 million, up 3.9% year-over-year; nine-month revenue reached $137.9 million, up 4.7%.

• Q3 2024 hotel EBITDA was $8.1 million, up from $7.6 million in Q3 2023; nine-month hotel EBITDA was $36.1 million, up from $34.5 million.

• Adjusted FFO for Q3 2024 was $(0.3) million, down from $0.1 million in Q3 2023; nine-month Adjusted FFO increased 5.1% to $12.3 million.

• Q3 2024 EBITDA was $6.4 million, slightly down from $6.5 million in Q3 2023; nine-month EBITDA reached $31.5 million, up from $30.6 million.

• Net loss per diluted share was $(0.29) in Q3 2024 versus $(0.20) in Q3 2023.

Outlook and guidance

• Full-year 2024 revenue guidance is $177.8–$180.1 million, a 3% increase at midpoint over prior year, but revised down from previous guidance.

• Hotel EBITDA guidance is $45–$45.6 million, a 1.1% increase at midpoint.

• Adjusted FFO guidance is $12.8–$13.4 million, or $0.65–$0.68 per share, a 9.8% decrease at midpoint.

• Net loss attributable to common stockholders and unitholders expected between $(8.5) million and $(7.9) million for 2024.

• Portfolio RevPAR for 2024 is forecast at 102%–104% of 2023 levels, with RevPAR projected at $115.51–$117.03.