Sotherly Hotels(US:SOHO)2024-03-06 18:43Financial Data and Key Metrics Changes - In Q4 2023, total revenue was approximately $42.1 million, a 1.9% increase year-over-year, while year-to-date total revenue reached approximately $173.8 million, representing a 4.7% increase over 2022 [13] - Hotel EBITDA for Q4 was $10.3 million, a decrease of 13.4% compared to the same quarter in 2022, while year-to-date Hotel EBITDA was about $44.8 million, reflecting a decrease of 3.6% over the full year 2022 [13] - Adjusted FFO for the quarter was approximately $2.8 million, down about $5.2 million from the same quarter last year [13] - The company projected total revenue for 2024 in the range of $179 million to $182.6 million, indicating a 4% increase over 2023 [15] Business Line Data and Key Metrics Changes - RevPAR for the same store portfolio increased by 3% in Q4 2023, driven by a 4.1% increase in occupancy and a 1.2% decrease in ADR [3] - For the full year, RevPAR increased by 7%, supported by a 3.8% increase in occupancy and a 3.2% increase in rate [3] - The Hyatt Centric Arlington outperformed pre-pandemic levels by 33% in group business, with a RevPAR growth of 6.7% compared to the previous year [10] Market Data and Key Metrics Changes - The company noted that urban markets, particularly Philadelphia, Atlanta, and Houston, are expected to drive growth in both transient and group business travel [17] - Group revenue for 2023 was 12% above 2022, although still 10% below 2019 levels, indicating significant growth potential [17] Company Strategy and Development Direction - The company is focusing on increasing group bookings and has shifted strategies to enhance group business, particularly in light of the recent settlement of film industry strikes [4][36] - Management emphasized the importance of maintaining competitive service levels and investing in hotel amenities to support strong rate growth [11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the long-term growth prospects, anticipating that urban hotels will outperform the total lodging market [19] - The company expects Q1 2024 group revenue to be 20% ahead of the previous year, with full-year booking pace 14% ahead [19] - Management acknowledged ongoing economic uncertainties but noted that the threat of a major recession appears to be diminishing [19] Other Important Information - The company successfully refinanced the mortgage loan for its Tampa hotel, resulting in cash proceeds of over $10 million [18] - As of December 31, the company had total cash of approximately $26.2 million, with $17.1 million in unrestricted cash [14] Q&A Session Summary Question: What strategies are in place to drive more group business to hotels? - Management highlighted a robust group sales effort at both individual properties and corporate levels, focusing on group bookings rather than individual business travel [21][22] Question: What is the estimated free cash flow for 2024? - Management estimated free cash flow to be around $5 million to $6 million, excluding nonrecurring capital expenditures [26][51] Question: What are the plans regarding deferred preferred stock dividends? - Management stated that repayment of deferred preferred dividends is a goal, but it is contingent on the movement of debt markets and interest rates [56][64]