Sotherly Hotels (SOHO) Q2 2024 earnings summary

Executive summary

• Q2 2024 results met expectations, with RevPAR up 4.3% year-over-year, driven by strong occupancy growth, especially in urban markets like Atlanta and Houston, and supported by group and business travel offsetting leisure softness.

• Portfolio includes ten full-service hotels (2,786 rooms) and interests in two condo hotels, primarily in the southern U.S., with a focus on upscale and upper-upscale properties under major brands and independent flags.

• Operations are conducted through an operating partnership, with the company as the sole general partner holding a 98.2% interest.

• Management contracts are with a related party, Our Town Hospitality, which manages all properties and rental programs.

• Portfolio hotels like The DeSoto (Savannah), Hotel Alba (Tampa), and The Whitehall (Houston) delivered standout performances, gaining significant RevPAR share over competitors.

Financial highlights

• Q2 2024 total revenue was $50.7 million, up 3.4% year-over-year; year-to-date revenue reached $97.2 million, up 5.1%.

• Q2 2024 hotel EBITDA was $15.7 million, up from $14.8 million in Q2 2023; year-to-date hotel EBITDA was $28.1 million, up from $26.9 million.

• Adjusted FFO for Q2 2024 was $7.5 million ($0.38/share), up from $7.0 million ($0.36/share) in Q2 2023; year-to-date adjusted FFO was $12.7 million (up from $11.7 million).

• Q2 2024 net income attributable to common stockholders was $2.6 million (down from $3.1 million); six-month net income was $2.0 million (down from $2.6 million).

• Q2 2024 occupancy rose to 74.0%, with RevPAR up 4.3% to $137.67.

Outlook and guidance

• Full-year 2024 revenue guidance is $179–$182.6 million.

• Hotel EBITDA projected at $46.1–$46.9 million; adjusted FFO guidance is $12.8–$13.8 million, or $0.64–$0.69/share.

• 2024 net income guidance: $1.6–$2.6 million.

• RevPAR for 2024 expected to be 104–106% of 2023 levels, with urban hotels forecasted to outperform.

• Management remains cautiously optimistic for H2 2024, citing economic, interest rate, weather, and election uncertainties.