Overview of Sotherly Hotels Inc. Financial Performance
Today, Sotherly Hotels Inc. (NASDAQ: SOHO) shared its financial results for the fourth quarter ending December 31, 2024. As a self-managed lodging real estate investment trust (REIT), Sotherly specializes in upscale accommodations, and its summary for this period showcases notable strides in revenue and operational success.
Financial Highlights
During the fourth quarter of 2024, total revenues surged to approximately $44.0 million, marking a significant increase from the previous year's $42.1 million. Additionally, the total revenue for the full year escalated to approximately $181.9 million from approximately $173.8 million, reflecting a robust growth trajectory.
Revenue per Available Room (RevPAR)
Quarterly Performance
RevPAR for Sotherly's composite portfolio increased by 2.6%, reaching $108.99 for the three months ending December 31, 2024. This growth is attributed to a notable rise in occupancy rates, which climbed 4.1% to 64.1%. However, it is worth noting a slight decrease in the average daily rate (ADR), which fell by 3.9% to $170.10.
Annual Performance
For the entire year, RevPAR saw a growth of 3.7%, arriving at $119.26. Occupancy rates improved from the previous year’s 62.8% to 67.2%, while the ADR decreased slightly to $177.56.
Net Income and Loss Evaluation
Despite the revenue increase, Sotherly reported a net loss attributable to common stockholders of approximately $3.0 million for the fourth quarter, which is an increase from a loss of $2.7 million during the same quarter in 2023. Furthermore, the yearly net loss attributable to common stockholders rose 65.4% to around $6.7 million from $4.0 million.
Highlights of Hotel EBITDA
Hotel EBITDA showed resilience with an increase to approximately $10.7 million during the fourth quarter, compared to $10.3 million in 2023. This reflects the company’s capacity to manage its operating costs effectively while driving revenue growth. Over the full year, Hotel EBITDA grew to about $46.8 million, up by approximately $2.0 million.
Funds from Operations (FFO)
For the three months ended December 31, 2024, FFO attributable to common stockholders decreased to approximately $1.57 million from $1.91 million the previous year. Adjusted FFO for the quarter reflected a similar trend, decreasing to about $1.95 million from $2.80 million year-over-year.
Dividend Announcements
Looking ahead, Sotherly Hotels plans to distribute quarterly cash dividends of $0.50 per share for its 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock on March 14, 2025, among others announced for Series C and Series D shares.
Management Statements
President and CEO Dave Folsom expressed optimism about the company’s performance, stating that the fourth quarter continued to demonstrate positive trends established throughout 2024. Sotherly has successfully maneuvered through mortgage market challenges, executing refinancings and improvements across multiple properties.
Future Outlook
As Sotherly Hotels heads into 2025, the company anticipates ongoing improvements in hotel demand across its portfolio. Properties in markets such as Houston and Atlanta are reportedly meeting enhanced revenue and profitability expectations, providing a promising outlook for sustained growth.
Balance Sheet Assessment
As of December 31, 2024, Sotherly Hotels had approximately $28.7 million in available cash, with about $21.4 million reserved for real estate taxes and other necessary operational expenses. The company’s outstanding debt was approximately $319.3 million at a weighted average interest rate of around 5.88%.
Frequently Asked Questions
What were Sotherly Hotels Inc.'s total revenues for Q4 2024?
Sotherly Hotels reported total revenues of approximately $44.0 million for Q4 2024.
How did RevPAR perform in Q4 2024?
RevPAR increased by 2.6% to $108.99 for the quarter.
What was Sotherly's net loss in Q4 2024?
The net loss attributable to common stockholders for Q4 2024 was approximately $3.0 million.
What are the company’s expected dividends for 2025?
Sotherly announced a quarterly cash dividend of $0.50 per share for its Series B preferred stock.
What guidance has Sotherly provided for 2025?
The company is optimistic about improved hotel demand and revenue growth across its properties into 2025.
