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Sotherly Hotels(SOHO) - 2024 Q2 - Quarterly Report
SOHOSotherly Hotels(SOHO)2024-11-12 14:37
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Revenue Performance - Total revenue for Q2 2024 increased by approximately 1.7million,or3.41.7 million, or 3.4%, to approximately 50.7 million compared to Q2 2023 revenue of approximately 49.0million[170].−RoomrevenueforQ22024increasedbyapproximately49.0 million[170]. - Room revenue for Q2 2024 increased by approximately 1.3 million, or 4.0%, to approximately 34.6millioncomparedtoQ22023roomrevenueofapproximately34.6 million compared to Q2 2023 room revenue of approximately 33.3 million[171]. - RevPAR for Q2 2024 increased by 4.3% to 137.67,drivenbya4.0137.67, driven by a 4.0% increase in occupancy[171]. - Food and beverage revenues for Q2 2024 increased by approximately 0.4 million, or 4.2%, to approximately 9.9millioncomparedtoQ22023revenuesofapproximately9.9 million compared to Q2 2023 revenues of approximately 9.5 million[172]. - Total revenue for the six months ended June 30, 2024, increased by approximately 4.7million,or5.14.7 million, or 5.1%, to approximately 97.2 million compared to 92.5millionforthesameperiodin2023[184].−Roomrevenueincreasedbyapproximately92.5 million for the same period in 2023[184]. - Room revenue increased by approximately 2.6 million, or 4.3%, to approximately 64.3millionforthesixmonthsendedJune30,2024,comparedto64.3 million for the six months ended June 30, 2024, compared to 61.7 million for the same period in 2023[185]. - Food and beverage revenues increased by approximately 1.4million,or7.71.4 million, or 7.7%, to approximately 19.6 million for the six months ended June 30, 2024, compared to 18.2millionforthesameperiodin2023[186].OperatingExpenses−HoteloperatingexpensesforQ22024increasedbyapproximately18.2 million for the same period in 2023[186]. Operating Expenses - Hotel operating expenses for Q2 2024 increased by approximately 0.8 million, or 2.4%, to approximately 35.0millioncomparedtoQ22023expensesofapproximately35.0 million compared to Q2 2023 expenses of approximately 34.2 million[174]. - Room expenses for Q2 2024 increased by approximately 0.4million,or6.20.4 million, or 6.2%, to approximately 7.4 million compared to Q2 2023 room expenses of approximately 7.0million[175].−FoodandbeverageexpensesforthethreemonthsendedJune30,2024,increasedbyapproximately7.0 million[175]. - Food and beverage expenses for the three months ended June 30, 2024, increased by approximately 0.1 million, or 2.4%, to approximately 6.5millioncomparedto6.5 million compared to 6.4 million for the same period in 2023[176]. - Expenses from other operating departments for the three months ended June 30, 2024, increased by approximately 0.2million,or8.70.2 million, or 8.7%, to approximately 2.5 million compared to 2.3millionforthesameperiodin2023[177].−Hoteloperatingexpensesincreasedbyapproximately2.3 million for the same period in 2023[177]. - Hotel operating expenses increased by approximately 3.6 million, or 5.5%, to approximately 69.2millionforthesixmonthsendedJune30,2024,comparedto69.2 million for the six months ended June 30, 2024, compared to 65.6 million for the same period in 2023[188]. Interest and Income - Interest expense for the three months ended June 30, 2024, increased by approximately 0.7million,or16.60.7 million, or 16.6%, to approximately 5.0 million compared to 4.3millionforthesameperiodin2023[180].−InterestexpenseforthesixmonthsendedJune30,2024,increasedbyapproximately4.3 million for the same period in 2023[180]. - Interest expense for the six months ended June 30, 2024, increased by approximately 1.5 million, or 17.7%, to approximately 9.9millioncomparedto9.9 million compared to 8.4 million for the same period in 2023[195]. - Net income for the six months ended June 30, 2024, was approximately 6.0million,comparedtoapproximately6.0 million, compared to approximately 6.6 million for the same period in 2023[199]. - Net income for the three months ended June 30, 2024, was 4,664,232,adecreaseof11.34,664,232, a decrease of 11.3% compared to 5,257,670 for the same period in 2023[206]. - FFO (Funds From Operations) for the three months ended June 30, 2024, was 9,349,904,slightlyupfrom9,349,904, slightly up from 9,244,823 in 2023, indicating a 1.1% increase[206]. - Adjusted FFO attributable to common stockholders for the three months ended June 30, 2024, was 7,503,096,comparedto7,503,096, compared to 7,031,038 in 2023, reflecting a 6.7% increase[206]. - Hotel EBITDA for the three months ended June 30, 2024, was 15,697,679,anincreaseof5.815,697,679, an increase of 5.8% from 14,842,036 in the same period of 2023[210]. Cash Flow and Capital Expenditures - Cash flow from operating activities for the six months ended June 30, 2024, was approximately 16.7million,attributedtoincreasedoccupancyrates[212].−Totalcapitalexpendituresfor2024areexpectedtobeapproximately16.7 million, attributed to increased occupancy rates[212]. - Total capital expenditures for 2024 are expected to be approximately 7.0 million, maintaining a historical target of 4.0% of gross revenue[216]. - Cash used in investing activities for the six months ended June 30, 2024, was approximately 5.0million,primarilyforcapitalimprovements[213].−Thecompanyexpectstoincurapproximately5.0 million, primarily for capital improvements[213]. - The company expects to incur approximately 11.5 million in capital expenditures for renovations in Philadelphia, funded through reserve accounts and working capital[219]. Debt and Liquidity - As of June 30, 2024, the company had approximately 18.9millioninunrestrictedcashand18.9 million in unrestricted cash and 18.4 million in restricted cash, ensuring adequate liquidity for operations[221]. - The company secured a 35.0millionmortgageontheHotelAlbainTampa,Florida,withafixedinterestrateof8.4935.0 million mortgage on the Hotel Alba in Tampa, Florida, with a fixed interest rate of 8.49%[222]. - The company amended the mortgage loan agreement on the DoubleTree by Hilton Philadelphia Airport, extending the maturity to April 29, 2026, requiring interest-only payments at a floating rate of SOFR plus 3.50%, and a principal reduction of 3.0 million[223]. - A 26.25millionmortgageloanwassecuredfortheDoubleTreebyHiltonJacksonvilleRiverfront,withanadditional26.25 million mortgage loan was secured for the DoubleTree by Hilton Jacksonville Riverfront, with an additional 9.49 million available for a product improvement plan, maturing on July 8, 2029[224][225]. - A 5.0millionsecondmortgageloanwassecuredontheDeSotohotelinSavannah,GA,withafixedinterestrateof7.505.0 million second mortgage loan was secured on the DeSoto hotel in Savannah, GA, with a fixed interest rate of 7.50% and a maturity date of July 1, 2026[226]. - As of June 30, 2024, the company was in compliance with all debt covenants except for a covenant default under the mortgage on the DoubleTree by Hilton Philadelphia Airport, for which waivers were obtained[232]. - As of September 30, 2024, the company failed to maintain compliance with financial covenants under the mortgage on the DoubleTree by Hilton Jacksonville Riverfront, potentially requiring a prepayment of approximately 1.2 million[233]. - The company plans to continue investing in hotel properties as opportunities arise, but access to additional capital may be limited due to economic changes in the travel industry post-COVID-19[229]. - The company expects to meet long-term liquidity requirements through various means, including additional issuances of common and preferred shares, secured and unsecured borrowings, and selective disposition of non-core assets[230]. - As of June 30, 2024, cumulative unpaid dividends on outstanding preferred shares were approximately 21.9million,withfuturedistributionssubjecttoboardapproval[240].−Thecompanyhadapproximately21.9 million, with future distributions subject to board approval[240]. - The company had approximately 273.4 million of fixed-rate debt as of June 30, 2024, with a weighted-average interest rate of 5.28%[251]. - A one percent increase in SOFR and the Prime Rate would impact annual interest incurred and cash flows by approximately $0.3 million based on the variable-rate debt outstanding[251].