SOHO - Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to the Sotherly Hotels Q1 2020 Earnings Call and Webcast. My name is Lauren, and I will be coordinating your call today. [Operator Instructions]

I will now hand you over to your host, Mack Sims, Vice President, Operations, to begin. Please go ahead.

Mack Sims

morning, good and you, everyone. Thank

company not If Reg most earnings sotherlyhotels.com. directly copy non-GAAP G the the comparable GAAP accordance a you you In measures may with the release, at requirements. did release, website access of our all in receive it to reconciled has measure the financial on

not forward-looking statements. constitute statements during made may this Any conference historical, call, which are

assurance we that forward-looking Although expectations we statements any can believe give reasonable on in attained. no the be are assumptions, these will expectations based reflected

does or Factors from results update to and in risks to in SEC. differ that any not revise and by or company filings can to time cause materially undertake statements. actual from forward-looking company's a those implied release the the detailed duty are statements forward-looking time today's press with expressed The

that, Scott. over I'll call turn With to the

Scott Kucinski

start morning, the of operating portfolio's Good key everyone. Mack. Thanks, today's I'll review a call our quarter. for with metrics off first

quarter ADR. composite X.X% increase for first a and X.X% a Looking the occupancy by to in decrease portfolio XXXX, increased driven in at results RevPAR X.X%, compared

Looking quarter at down X.X%, gap was for the pre-pandemic quarter the by forward. composite and driven RevPAR X.X% growth levels ADR of up the X.X%. to XXXX, This for significant upside portfolio occupancy the relative first occupancy reflects first to results portfolio moving

growth expectations. portfolio the notable by growth our outperformed occupancy normalization The following were occupancy both fundamentals strong portfolio's bottom recovery our uneven driven results, and line quarter period. nearing Overall, budget which first indicates are top post-pandemic across in lodging

our Florida this drop a by partially properties. entirely ADR, occupancy in isolated in impressive almost the Although were decline offset gains rate South was to X.X%

prior XX% outperforming growth portfolio first was to The nearly RevPAR, year noteworthy and by key year outperforming DeSoto quarter. quarter catalyst our QX for outperformed Savannah led and of both group-focused properties by Wilmington be which segment this XX%. RevPAR the a easily prior Our during our continued Savannah hotels, particularly as XXXX of with

rate. segments, Hyatt RevPAR fire The The all growth increase during year-over-year corporate by cylinders by continued to by a period's group flat in XX.X% and the achieving and of a quarter. driven occupancy X.X%, ADR The driven RevPAR property Arlington, X.X% on a up comparable prior first Centric XXXX, set, in to strong index improved the leader competitive property increase outpaced in the the by period XXX% with X.X% in in over first quarter. and Versus continues during be the occupancy its RevPAR XX.X%.

the Atlanta association XX% than and of to performance long-awaited strength urban at during team's occupancy transient as the Georgian proved hotels continued business quarter. the over Atlanta successful the more slow-to-recover The to The has during our management Terrace breakthrough hotels coupled with drive increased year. hotel quarter in efforts prior improved in was our business in group-focused and Houston first corporate

the In addition, business industry moving additional the potential for presents recovery segment film prospects in forward. growth

in prior the in hotel XX% improved a the recovery Whitehall Whitehall's Houston improvement growth nearly transient by driven predominantly XX% by downtown was fueled XX%, from was prior submarket. nearly occupancy. RevPAR of segment, The up sign occupancy The year, over year nearly gain its which an was and business which encouraging for by by the in Houston

Atlanta upside in will remains in opportunity. hotels momentum as gap pre-pandemic recent that the significant that forward occupancy optimistic are We and these Houston carry presents

the at metrics profitability portfolio. Looking for

normalize XXXX in XXX for April costs, With decline going XXXX first margins been and points staffing were reduced. and fully insurance costs amenity X, our and the insurance versus stabilized to that basis insurance reduction prior markets costs quarter have softened the have QX bit expect our insurance Although pleased year, and open, solely forward. wages renewal year. margins prior offerings in we increased property are to hotel our say to occurred With tied the EBITDA a was below now we

the extension Last an April interest-only we million million, been Philadelphia reduced $XX.X corporate activity. based and loan, week, to DoubleTree interest XXXX announced Hotel. plus on which company by a loan X.X%. its Turning has Airport $X The executing floating rate to matures on to SOFR first the in carries mortgage

part As of at SOFR cap, purchased we the a of rate transaction, an portion for X%. loan capping interest the

the agreement we In Hilton flag. XX-year a Hilton franchise the company hotel addition, that to with entered into under announced relicense DoubleTree Worldwide the by

an and of the of property beverage the and rooms, public with of Hilton, renovation the Renovation food the spaces upgrades will part of $XX.X spaces, completion estimated will new building's the exterior. a approximately XXXX. agreement date include to and April undertake an company cost As estimated million with for property plans guest

Lastly, a refinancing creates with which Florida. The value the a $XX our interest-only and Tampa, April, Real of over company This we the for cash secured represents executed of a in carries repositioning the interest March a company. of $XX announced Hotel XXXX of Citi million the and hotel fixed culmination X.XX%. on Funding substantial Estate proceeds resulting Alba in loan million for matures rate strategy, loan

turn over to Tony. the call I'll that, With

Anthony Domalski

Thank Scott. Reviewing March you, XX, for performance XXXX. ended period the

was of last quarter approximately FFO approximately X% prior first quarter, year. adjusted For same same the for year. the an representing last $XX.X of in EBITDA the million, the the over was quarter And over million, year. quarter revenue increase same the representing for $X.X an million, was approximately increase total the XX.X% X.X% over approximately quarter, of Hotel an representing $XX.X quarter increase

offerings, expenses, losses and as well unrealized early extinguishment well charges and these other aborted income as refer as for Please excludes our EBITDA tax instruments our interest well. derivative stock and to note on expense, corporate debt, items our or gains earnings G&A income, abandoned Hotel release FFO compensation as losses expense adjusted detail. interest realized gains Please that ESOP as other related to additional provision excludes instruments, related and securities to items. charges and charges on derivative the of

sheet. Looking at our balance

other which of estate the unrestricted cash of and for total $XX.X as was reserved XXXX, capital approximately As At of in approximately improvements had interest. principal taxes, XX.X% $XX.X rate end of well we debt consisting a the Approximately million million, debt outstanding average carried of as and $XX.X real had March of million, certain at million X.XX%. company's quarter, cash equivalents items. fixed interest of of the of $XXX cash approximately approximately XX, company weighted the rate a balances

for million approximately calendar normalized for a estimate will expenditures And the be these enter operating anticipate more capital we furniture, As and historical in we XXXX. and replacement routine equipment norms. expenditures fixtures with capital year we of refurbishment line environment, more $X amount to to

total $X week, product DoubleTree plan million anticipate a capital fiscal last beginning year. to anticipate project at approximately We Philadelphia announced As Airport. we this related the improvement by to this Hilton expenditures

We a are with March. anticipated reiterating of results forecast for guidance in disclosed full the previously year

at represents projected of the year. of X% over portfolio. market $XX.X increase accounts midpoint revenue $XXX within And over expected XXXX. and for year. this At range full projecting $XXX.X the We're conditions the that the a considers prior current in of increase guidance, X.X% $XX.X range is this this million. represents of a prior to Hotel guidance, midpoint in the million year performance for guidance Our total million to the EBITDA million the

year-over-year increased in year one-time $X.XX decrease in is benefits our expense and the this tax decrease year. of At represents the in $X.XX Adjusted projected interest a XXXX prior million the in share. FFO The mainly over guidance, Savannah prior to FFO in of $XX.X an X.X% $XX.X real is range midpoint successful adjusted properties to million, due estate to Hollywood. the and of for appeals or

the turn to call now over will I Dave.

David Folsom

Thank year. first results with our to second the portfolio, especially Easter These weekend quarter growth shifting strong year-over-year quarter morning, year. Tony, were from the encouraging, good which and prior given We were X.X% composite of the this everyone. achieved you, over RevPAR pleased quarter timing the results the first holiday for

Houston RevPAR as coupled two the travel was The during quarter. reached these slower-to-recover Wilmington, diverse Arlington performed more group experienced operating transient positive historically generators. environment, was The urban of a range hotels a return by properties Atlanta. driven of our excellent travel at strength corporate our and performance a we well hotels in hotels of which the is with demand Savannah, normalized sign continued have significant markets, at we at in improvements these and group and Occupancy of of in growth that driver

improvement pre-pandemic our is our forward. during having growth, portfolio for recover. especially tracking in have occupancy for that we is the still below levels to hotels More still and portfolio been Philadelphia year-over-year half markets strong there for Atlanta, the with to improvement opportunity moving Houston opportunity quarter, the our occupancy several most exposure of urban believe than given Despite organic significant our slower

Houston, in of two markets and corporate and quarter Georgian during transient, headway, hotels, are their significant driving the Whitehall these respective penetrating the business. association mentioned, making The by Terrace group As

historical following sustainable improvement that demonstrating will of of in the this produce hotel casualties, is contribution, As market, in of one coming a Georgian sign the we on After strategy Whitehall, success. coming encouraging The terms pandemic. Similarly, assets out is track of Houston progress by our right EBITDA out located growth market and Terrace's challenges believe property which the with is signs of downtown the a the future slow trajectory staffing COVID for significant company. challenges headwinds, an largest is

market continues in against DoubleTree Philadelphia at Airport be start challenged to air well and with its Our set the Hotel the traffic events year. is less Philadelphia that competitive this lower But of than anticipated submarket. citywide competing

we improved will Although lodging this taking market, supported longer recovery. travel, business than expected, demand in by make gradual a believe

first drive of with strong and during continued our portfolio significant all performances highs achieved historical which the growth revenue from Arlington to group our quarter Savannah, for the in business to Group Wilmington first especially quarter. hotels,

The Savannah, Our grew the year-over-year the XX% the the during prior growth XX% XXXX. and by group XX% in year over team XXXX and its produced Arlington over at sales first Centric XXX% DeSoto growth group quarter. over for in segment Hyatt meanwhile,

strategy portfolio, total the management quarter, successful group a at our during improved the to the by by team. sales Looking business testament XX%

underwriting continues sector. for lending the current by environment, characterized in tight present The challenges standards, to logic borrowers

unique maturity approaching last loan executed After Philadelphia maturities the on we each with of for are the loan loan. portfolio. our we an successfully debt on negotiations hotel, presents months week, upcoming existing that conservatively extension in our several As obstacles, lender

as headwinds a Given the outcome the the terms positive for loan view company. Philadelphia, current environment market-related and lending we in

for tandem into ourselves Hilton, foreseeable in mentioned, positioning the with hotel Scott brand entered agreement franchise future. with strong a and loan the a extension, DoubleTree this new As XX-year for with success aligning we

in the Looking loan Jacksonville ahead, evenly hotel our maturity several over with next for for schedule maturity upcoming years spread our portfolio the is XXXX. only loan the

portfolio our changing expected persistent the with positive uncertainty represent economic trends, to fundamentals corporate upscale year. expectations continued anticipated the of have by well as the the upper-upscale and additional broader resilience to Urban balance the as rate demonstrated group for related for driven outperform cuts growth lodging lodging regarding segments travel are Despite the and timing of market. inflation, that hotels,

Looking our specifically at portfolio.

of XXXX year. Full RevPAR. year last group approximately to quarter As second and between XXXX full our May for bookings the is and X% are XXX% for pacing XXX% year the of full ahead range X, year RevPAR forecasted of

cautiously trends remain and growth by portfolio that our shareholders. continue results strong we optimistic So our of segments, group in fueled hotels, business to will deliver transient the for well-positioned

And with that, the operator. call questions, open we'll for

Operator

question Sandler. first Mitchell from Instructions] comes Our Piper from [Operator Connor

Connor Mitchell

the taking pre-pandemic levels occupancy, ADR, little bit mentioned urban guys You recover the cetera. longer be et to for a may markets

fully improving. of couple activity bit catalysts But catalysts? specific from more maybe it takes any I a markets urban and general think a just think I'm time markets or they're in just recapture the there for how specific Or wondering, specific more you you for on the to is levels? pre-pandemic them touched

David Folsom

Yes.

general comment these latter of think each a I bit It's a markets simply of And some is part taking time of in a on, it's these of of got has recovery longer whether these markets. some true. a just dynamic at different the or markets set markets. of your little Atlanta time, Philadelphia larger Houston. we're probably that same of going return-to-work in dynamics and, place seeing one is in of in some impacting just business kind I is travel But or the these eventually, think a what

group markets. time, the but large tackling business. the side I seen of mean, We're back all the at individual same hotels. the more and there's business what no business urban Atlanta Houston and catalyst, we've just and fairly and Philadelphia basic just to getting at coming are blocking hotel is the travelers And

got anything Scott? to You add,

Scott Kucinski

compression larger lot market in for And to Yes. see the we to those coming compression to what and really we're Philadelphia. out events a just But it the larger besides to of urban in I'll We're office, the say catalyst key at Atlanta. downtown the the dynamics. less a overall in I in to BT in being Philly, of format which Houston back in to also is seeing think a again, airport. and a just the start starting marketplace. citywide lot events markets airport in create that's citywide return need to we're the us seeing market helps come push out these markets, back And

Connor Mitchell

of Okay, kind sense other of yes. Philly, and a to what going the whole place. process are is to repositioning then a for just like. the refresh Or maybe And is some more sticking in a take to talked be Just the of rooms broad about that going that kind you some get with a to going on Is items? more better transformation? trying of to that look it external market be improvements going of

Scott Kucinski

Yes, the relicense not so of it's DoubleTree. flag. We're a changing

over more that course the than bit period. it's I in be whole-scale building hotel of repositioning. But FF&E much say replaced of will it. the the refresh So need pretty XX-month is is a full a in renovation, will every a And of of a it

fairly it transformation out So will in has there. FF&E product certainly once a get dated. we its new been be cycle. fairly life ridden The dramatic It's the

we're will to DoubleTree there's done. to sense. of a transformative going once be newly major not So kind that it in refreshed happening, But it's product a repositioning going be be

Connor Mitchell

ADR fluctuation Florida in that. earlier little then Okay, occupancy. or you bit properties there South mentioned comments, if you in mostly what see drop a the the those into to you maybe wondering may the I going I some just could to on wrong, I'm with going me detail more in guys was that think ADR, the Correct go occurred was there's And due be forward appreciate more properties. increase along in if regarding or what whether have some expected but

Scott Kucinski

Florida. Yes. I South And commentary. not think It really was solely we're in in that tied alone

think COVID I very traveler markets market same to first the in ties And really those occurred Florida coming lot the the seeing right? thing that South COVID, what our out of peers out to coming I Florida. and it a leisure U.S. lodging recover in was in mean, are South of the market, essentially of quickly.

as Florida good in ready of leisure Obviously, market. the as to the job a soon just government And people travel, travel were opening to did of doors. saw a we that massive influx

period starting a high had we So And that's high very demand, now rates. off. taper very of to

people as much leisure. on seeing travel not quite You're

go predominantly seeing travel opportunity the You're overseas leisure else. start or make people to traveling, taking and their somewhere

of to a of have just X-plus in bit seeing marketplace we the for been where a we're in compared coming cooling-off past years out So demand that COVID.

see But back sensitivity to So from COVID. That's some a rates we of bolts certainly pricing seeing rate it. perspective to and don't from of from here. we're But it's We're we are see it's taking those stabilized. nuts declining it coming the step fairly a compared out where just consumers. were -- starting leisure substantially

Operator

Okay, we questions have [Operator no Instructions] further registered.

it So over Folsom, remarks. will now Executive I to Officer, for Chief hand back Dave closing

David Folsom

Thank speaking and Thank you, everyone we you, call to the everyone, with in today, operator. us joining look on for next quarter. our forward

Operator

everyone. joining, call. Thank This you for concludes today's

now may You disconnect your lines.

Sotherly Hotels (SOHO) 9 May 242024 Q1 Earnings call transcript