Sotherly Hotels, a self-managed and self-administered lodging real estate investment trust (REIT), has announced its consolidated financial results for the second quarter of 2024, ending June 30. The company’s performance during this period reflects a blend of stable revenue growth and slight fluctuations in key financial metrics.
For the second quarter ending June 30, 2024, Sotherly Hotels reported total revenue of approximately $50.7 million, an increase from $49.0 million in the same period in 2023. This upward trend continued for the first half of 2024, with total revenue reaching around $97.2 million, up from $92.5 million during the first half of 2023. However, net income attributable to common stockholders for the quarter was approximately $2.6 million, a decrease from $3.1 million reported in the same quarter last year. Over the first six months of 2024, net income decreased by 23.1%, amounting to approximately $2.0 million, compared to $2.6 million in the same period in 2023.
Despite the dip in net income, Hotel EBITDA saw growth, increasing to approximately $15.7 million for the quarter, compared to $14.8 million in Q2 2023. For the six months ending June 30, 2024, Hotel EBITDA increased to approximately $28.1 million, up from $26.9 million in the comparable period of 2023. Adjusted Funds From Operations (FFO) attributable to common stockholders and unitholders showed positive momentum, rising by 6.7% to approximately $7.5 million for the quarter, compared to $7.0 million in Q2 2023. For the first half of the year, adjusted FFO increased by 8.5%, reaching approximately $12.7 million.
RevPAR (Revenue per Available Room) for Sotherly’s composite portfolio, including rooms in the rental programs at Lyfe Resort & Residences and Hyde Beach House Resort & Residences, increased by 4.3% to $137.67 in Q2 2024 from $131.94 in Q2 2023. This was primarily driven by a 5.8% increase in occupancy, which rose to 73.4%, despite a 1.4% decrease in the average daily rate (ADR). For the first half of 2024, RevPAR increased to $130.64, up from $125.53 in the same period last year, due to a higher occupancy rate, although ADR saw a slight decline.
As of June 30, 2024, Sotherly Hotels had approximately $37.3 million in available cash and cash equivalents, with $18.4 million reserved for specific expenses, including real estate taxes, insurance, and capital improvements. The company’s outstanding debt, including mortgage and unsecured principal balances, totaled approximately $323.2 million, with a weighted average interest rate of 5.68%.
Sotherly Hotels made significant strides in refinancing and extending mortgage loans. On April 29, 2024, the company amended the existing mortgage on the DoubleTree by Hilton Philadelphia Airport hotel, extending the maturity date to April 29, 2026. Additionally, the company secured a new mortgage loan for the DoubleTree by Hilton Jacksonville Riverfront hotel on July 8, 2024, with favorable terms for future renovations.
Looking ahead, Sotherly Hotels provided guidance for the full year of 2024. The company expects total revenue to range between $178.95 million and $182.57 million. Net income is projected to be between $1.6 million and $2.6 million, while EBITDA is expected to fall between $39.86 million and $40.85 million. Adjusted FFO attributable to common stockholders and unitholders is anticipated to be in the range of $12.78 million to $13.77 million, with an expected RevPAR between $117.16 and $119.52.
Dave Folsom, President and CEO of Sotherly Hotels, noted that while second-quarter results generally met expectations, there was a slight softening in ADR, particularly in Florida markets. However, the company remains cautiously optimistic for the remainder of 2024, keeping an eye on potential economic challenges, interest rate changes, and weather-related events.
