SOHO - Earnings call transcript Q2 2024

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Unknown Executive

[Audio Gap] expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that these expectations will be attained. Factors and risks that can cause actual results to differ materially from those expressed or implied by today's forward-looking statements are detailed in today's press release and from time to time in the company's filings with the SEC. The company does not undertake to update or revise any forward-looking statements. With that, I'll turn the call over to Scott.

Scott Kucinski

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

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

the relative RevPAR of ADR Looking XX.X%, growth rate. second portfolio while for period performance increased increase RevPAR same occupancy the results the XXXX, driven over and X.X%, X.X% X.X%. Year-to-date represents XXXX, of X.X% an in at increase composite in a declined by quarter to in driven by decrease X.X% a occupancy

second at Looking X.X%. gap for to moving normalized driven picture. The results our X.X%, results, quarter by portfolio characterized portfolio by composite occupancy ADR with the the for continued portfolio our prepandemic growth fundamentals growth portfolio occupancy line levels This relative occupancy well-balanced reflects and the expectations. additional revenue of to were a the of lodging upside more RevPAR our decline forward. Overall, up year-to-date in XXXX, was of growth, XX.X% strong with for signals occupancy have

was Florida, in travelers While occupancy a to decline partially in price gains sensitivity. ADR, increased showed Atlanta South isolated rate this offset the X.X% our and Houston decline where by were notable quarter's properties

in during year able share outperform nearly due the standout expense was property points XX% metrics year over XXX quarter, significant Looking mix XXXX. business helped catering than at RevPAR to during more well-balanced the to and a prior portfolio, set, was and Georgia its fair for and XXX for leisure profitability results performer competitive nearly hotel quarter. some growing of Tampa The in the budget share points profitable easily posted over The and by competitive gaining RevPAR be highlights XXXX. its able over quarter. set to across to our commendable prior gain the outperform RevPAR X.X% well-managed portfolio. group quarter revenue. Hotel Savannah, Alba over The DeSoto it during controls basis XX% basis its The continues in of DeSoto's growing over X.X% the

basis during business prospects California, from property's points The segment from strong an increased the forward. The by headquarters by segment recovery potential attributed Whitehall share. be While in the decline Georgian set growth Alba's fueled Hotel Atlanta despite encouraging during occupancy softening for by is its contract rate for predominantly with occupancy XX.X%, quarter. to growth RevPAR performance Houston of quarter. The predominantly which excellent in driven business quarter, transient over demand in perspective, Terrace bit more The concerts. appears building the robust included recent a rate X.X% while citywide by last calendar in to at travel from the locations in forward. gaining moving leisure, in and market the continued a breakthrough RevPAR driven mix the top prospects due by Whitehall year. of for grew line in to adjacent X.X%, the our growth to urban bottom rate. business relocation in improvement association corporate business the X.X% and industry Whitehall's additional during competitive outperformance the the The during growth at strong presents hotel sign Chevron Tampa a business occupancy increased RevPAR quarter hotel, Taylor was during moving prior grew second film growth QX led hotel's a The results the was The decrease XXX XX.X% Swift the multiple of and year,

allowed improving margin have The increased profitability stabilized, portfolio. a drive quarter. high-margin fully order flow-through. in offerings hotel the stable XX in basis the year clean along for we our of quarter Looking opened comparative occupancy revenue prior and our for and margins remain in staffed, additional decline to to advantage a EBITDA to Hotel despite rate second with over slight metrics points rate at EBITDA hotels with on the quarter stabilization improve take of scale non-room our during of forward. management margins economies amenity expect the going wage at costs, hotels, With teams relatively

the additional a soft-branded DoubleTree it available loan by at $X.X floating the million company plan Hotel Jacksonville, XX-year that corporate into $XX.XX also franchise [ interest in to with to company the Jacksonville Hilton hotel. improvement riverfront product announced the Bellamy relicense we principal under July, Worldwide as an X%, with which [ Hilton ]. ] carried SOFR In entered The agreement name a on The has based Turning our secured Hotel a initial to rate on by the new an fund plus DoubleTree executed Hilton activity. that of hotel million Florida. announced a Jacksonville loan, balance

existing and the the April based its quarter, Hotel. for loan renovation Airport million offerings on a during a its loan, floating will estimated exterior, riverfront the with As pool by DoubleTree plus rate announced relaunch dining been second beverage which a first carries will concept. Also of executed addition January new date the as well completion SOFR of and mortgage The interest-only $XX.X a matures rooms, reduced the on to extension the building plans hotel, Philadelphia as and an an part spaces, of X.X%. include a $X of for the food million of has interest efforts and cost XXXX. Renovation property complete the in its XXXX we company transformation company guest property for sundeck, complete undertake approximately public of $XX.X million,

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

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

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

Anthony Domalski

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

million, approximately was was last X.X% million over for approximately XXXX. X.X% last second quarter the in approximately of hotel over $XX.X million, representing the EBITDA quarter, an increase over same year. period. total Year-to-date, increase year. Total the the over of Year-to-date, approximately period increase period X.X% a quarter an representing increase million, same was the For an EBITDA prior quarter $XX.X representing revenue the was representing same $XX.X of total X.X% revenue same the $XX.X

For year-to-date provision corporate, aborted losses current for of administrative our the and items as items. as interest stock an other these as interest derivative $XX.X $X.X compensation to quarter, FFO losses same excludes additional offerings, detail. the adjusted FFO ESOP well. and realized portion note instruments, and Please to or well XXXX, the related other abandoned securities earnings an gains charges and instruments, last on income, of million, gains release on charges approximately debt, representing increase expense, refer tax year. Please expense early million and increase Hotel FFO the as approximately period X.X% excludes well that was related extinguishment derivative our quarter general charges adjusted income over to expenses, of over adjusted of same EBITDA was as representing and the X.X% unrealized our

million million, and principal interest of calendar $X weighted average XXXX. we The a our rate in routine cash $XX.X approximately company's interest fixed outstanding balance the equivalents when taking rate improvements furniture insurance, the cash of for equipment, Looking We million, quarter, balances unrestricted $XX.X XX.X% year as rate was company account had company's to which XX, real carried approximately $XXX.X June the approximately capital at of fixtures cash of for refurbishment other sheet the consisting and items. At and end of full well into of debt interest hedges. million capital estate of and of million expenditures approximately certain approximately as reserved $XX.X amount X.XX%. anticipate the debt XXXX, had a for replacement of as total at the taxes, of

we Philadelphia anticipated capital Airport approximately related improvement project with this to to announced, year. this product previously As year a expenditures total DoubleTree later beginning the Hilton the plan at $X for anticipate million

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

of to Our $X.XX full a share. Hotel represents prior FFO $XXX.X this $XX.X revenue guidance it million $XX.X midpoint of projected considers projecting market in to And million. turn million to million prior $XX.X decrease was the And over performance the guidance, current range of and increase over in I X.X% expected call the conditions million guidance, an a Dave. for and of guidance, the We're within for accounts At EBITDA the the $XX.X at year. And $XXX over prior the a in midpoint this projected represents increase or of X% million will range year. over year. the is XXXX. $X.XX of this to represents adjusted midpoint year this the range now to portfolio. At X.X% the total

David Folsom

everyone. in bottom morning, expectations. and portfolio's Thank the quarter, with and were second were results with our for line Tony, We you, top pleased generally good our line which

and driven especially slower by to urban Our of growth, portfolio's in year growth to Atlanta our recover prior which Houston, continue RevPAR was hotels X.X% stabilize. over strong at occupancy

are to decline Our while move rate competing also will more that optimistic led the group quarter, amongst our demand over the during the expense be and transient deliver exceptionally we managers' well rate by the quarter, to quarter. achieve softer-than-expected to solid of well prior group our into able demand, competitive for during strong drive results. revenue portfolio, continue leisure the were delivering also year flow-through we group-centric while ability business a as sets we months, slight which travel strong better are fall characterized properties controls, perform to that with Despite travel growth. Overall, during we growing leisure pleased traditionally

remarks, start we and second his quarter. hotels in our the in Atlanta the continued year to experienced recovery at the during urban mentioned Scott As Houston

levels. the for RevPAR one to by the progress XXX Terrace's the the contribution, As speaks assets ability of XX prior encouraging significant team story, strong a markets, to sales Georgian year-to-date such in made points is year, past largest with similar The and Georgian business the as improving gain transient these for urban relative tracking traction sign occupancy over has XXX as given nearly year-to-date exposure we in still to occupancy EBITDA Despite recovery portfolio points are months. The by portfolio. RevPAR slower sales performances, Atlanta, hotel our share basis Whitehall believe historical our points which basis Philadelphia, our Houston of continues outperformance, to positioned our our was share travelers. basis Atlanta gain recover below Houston staff groups to XXX in historic an Terrace citywide and of

signs hotel DoubleTree upside basis with Philadelphia market by its sign providing the The X.X%, continued still with recovery, over quarter the this quarter, by to be volume business Airport events. Group plenty during the While -- running such quarter the correlated is strong highly factors for our market-related considering second below of year. at portfolio quarter second occupancy second improvement positive growth important during occupancy, of prior the segment's improvement encouraging growing especially is an it an XXXX demand air story showed and X.X% X,XXX the traffic is growing for revenue Hotel citywide XXXX performance RevPAR Philadelphia as continued the during points of opportunity. second

business, year, rate, with commendable sales group streak XX.X% meanwhile, remarkable team. overall during year. grew an portfolio's in growth another effort our record-breaking growth The grew second The ADR, impressive Terrace which Georgian over continued group by delivered XX% over the group prior revenue which Savannah the quarter Importantly, with DeSoto rate X% X.X% in for its outpaced quarter. prior a

Looking year. last of the for group the portfolio, X.X% balance of at picture year. total with pacing the remains ahead solid full the revenue bookings year

funding all plans several meeting we have and improvement hotels. of successfully nearly at in On capital restructurings midyear, mortgage for and million the refinancings, cycle life needs extensions front, while sheet our $XXX our by concurrently addressed balance

with Scott to future. its the yield the Jacksonville We which, the Hilton of company. We in view lifestyle driving perfectly and the direct market's strategy the refinance strength will we As our believe success full-service first our of reservation repositioning strategy goal mentioned, outcome will the environment, system, the believe DoubleTree coupled is relicense we suited Florida, for of current foreseeable with a hotel by our July, lending that positive Hilton in hotel. for overall as position for rate, Jacksonville, riverfront hotel's the given the location completed Hotel

for evenly approach Looking maturities portfolio, ahead, the we will are several continue to which years. debt next over spread our conservatively upcoming

the for hotels, Full shareholders. And will year our strong forecasted to transient the trends. half of continue leisure driven We upscale call a believe XXX% the RevPAR at we our corporate and remain in market, Despite full growth fundamentals look economy, we lodging and by the we for and operator, portfolio XXXX to operating trends customers trial for to with fueled for are that, group more regarding trends lodging XXX% positive segments. Urban year the portfolio is are the and cautiously As can for perhaps price second up of forward RevPAR. range XXXX, questions. of segments and booking of group broad conscious well-positioned between year. that particularly upscale relatively expected upper slowing hotels our balance outperform optimistic strong, the results becoming XXXX by business open deliver

Operator

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

Connor Mitchell

the renovations the I project discussed improvement then sounds complete in just the expected the you us with call. plan, again, this quarter is talked guys bit more than repositioning a first like a it's starting more Philadelphia what the guess, remind it to the Jacksonville, to renovation, you Could when Philadelphia and and refinancing going on of with about plan? it's product

David Folsom

the Yes. It's for Dave Thanks here. question.

This new while a it is about a Philadelphia expansive Hilton hotel DoubleTree the the let is cycle the a I'll yes, the detailed create So to repositioning we're for really more asset. than of reservation still more This identity system. to Philadelphia. is maintain a tell life is in the simply repositioning, more Scott timeline. standards. renovation you

Scott Kucinski

repositioning reenvisioning. complete Yes, as a Dave it's and said,

that what cloth. opportunity a couple comes If we've evolve there's seen same you Alba it -- think think, big from the Hotel We the Jacksonville. stadium Four of done that market in the, The Jaguar bringing to Bowl stadium going has of that's in complete larger a built activity their Wilmington, since Hotel definitely that's it's been tidbits. the Super without really downtown the lot just Ballast and a over except we've transformation type to we've events, Seasons, or any some announced past a and development there XXXX, multibillion It's in going in at in look with of that downtown. be continue to in dollar future. There's from of market for I be in just really of right a it hotels, thing by coming Tampa

money position we're put good So more that some the asset for of excited in to and it some future. kind really into growth

that's timeline next And So in we $XX.X said give the it's X up going it think of that, food full beginning or reenvisioning, years. for take, repositioning, a beverage. early and comments, the be I to our new for year, last wrap XXXX. million, XXXX We'll and starting in

Connor Mitchell

like quarter. bit a go your in travel. you the know about hoping talked bit back the of and your sounds It second half appreciate opening remarks. I And maybe softened could I And guys just leisure of the ADR turning Okay. through consumer kind towards that. then in you outlook. just it a

it line, ] wondering of potentially of discussion and along of is. macro be think environment the we're leisure potential where on follow back dining, same of change And might level seeing steady kind you a travel, same there or guys pick travel kind with If then are so in and just stabilize back the both trend. up, will time, lot at recession, individual ], the may some of could [ a leisure maybe thinking consumer same cutting [ the you it if

David Folsom

highly get a of assessment I given trailing COVID, think see segment. We end travelers rate the so it's board. have few is Florida, we has been a I I travel going And correlated off industry to ADR rate I looked years a your several we the where the that of there's be think and little as more of where point correct. of our last earnings quarter. I've mean, think came you conditions, calls across to over you're leisure that -- the to economic different saw the of did And at I pronounced saw at our out towards mean lot conscious. releases. hotels. Well, a in

seeing at remarks. we're not as would -- That that some this I'm think booking We're it our in that environment trends won't we're the booking of that. But seeing not I call. the same in event seeing horizon. happen, time, looming corporate the sort up to group booking of mentioned sort anything prepared mean trends not as that's on slack but we of take out and correlate doesn't seeing we're recessionary the

So how quality amongst We manage all our react to all we extract different how can try we that conditions. our our recessions the revenue react to expenses manage or that, and down hotels. we come to We flow. it's to segments highest market we the

Scott Kucinski

really And Dave Yes. mean that. reliant solely luckily, a don't add said. the I And that have is tell. rate leisure our that just is can sensitivity from individual we to what what portfolio from -- we on lot leisure whole traveler coming I'll in Connor,

hotel and most that Hollywood. South DoubleTree is leisure in probably ] the we have, individual Florida true [ travel the

of great, very strong contrary, booking on things, rate group group very and [ the the of side -- We're On ] rates strong. the the group bookings. the is is our pace out seeing

It's So it's really segment. really rate a from the not just that sensitivity one board. across

Connor Mitchell

still the It's pricing are potentially. some it the main that seems it's pandemic. levels combining the better than slightly on, of now out coming ADR in improve guys of and of [ like focused thoughts and occupancy been has steady changes seems it headwinds But to in of kind ADR sensitivity the facing below ] the to while occupancy kind pre-pandemic. really you Is continued then metric pre-pandemic has And Okay. the ADR.

So believe or has those is emphasis getting occupancy about outlook you you ADR more still on on or guys it much? of in focused upside Or more are that confused I too really not am the your metric worried one the putting and slipping terms maybe as and what other?

David Folsom

No.

I grown at but industry room only a is our occupancy I to XXXX the Rate The respect since think of recovered -- occupancy, the to rate to been there with has problem looking in hasn't portfolio, correctly. industry-wide. run has not tremendously lot mean yet. levels you're pandemic.

think I rate, rate we're and profitable on a point well the as I mean, we the in is week-to-week, be going still focus flow-through same levels, know what occupancy -- whether the going more to as where long at I line. it achieve as forever, we at to be that rate bottom efficiencies, you are drives our we or know, to if would with could Obviously, really may it's operating take grow breather. to a mean, hotels we drives fantastic, but managers is time, historic can't. successful the correct we and rate increasing not is be dollars flowing which month-to-month profitability. But

on we upside We there's correctly. it have to manage occupancy. think just So do

Connor Mitchell

maybe you're Appreciate one pretty Okay. quick much you and guys for same FFO the that. that up And like prior then expecting guidance, year, maybe of have it timeline. On looks just from like looks kind question. more matched it

shouldn't about or Just we some forgetting high end -- there's end of 'XX the that over maybe expected be into wondering any above that end. or you're result the high range ADR onetime of in the talking improvements, there's items any And half like were towards bottom of that then carry we reach back if just be maybe the to might 'XX. if might might headwinds the the other just thinking anything we

David Folsom

through broader some did concerned weather-related of but time the always impact we're this portfolio. which it's got just bookings, in the about lost events. really Well, not not one We any of the cause hurricane, year, We material picture.

through of of other guidance to add updating concerned do time you portfolio, this given that? move September. And about nature coastal and of the to the nature our Tony, we're the items kind year, always have until any the So of we end Florida

Anthony Domalski

close We look we're we're where X very and first at No, the along that's this I we money months think what similar to make for to tracking That's of quarter, are Pretty we're on third year. if adjusted the we we -- think at I year, some we we've did year. I something the similar And did be you our quarter the path think breakeven what make historically. for perspective expecting year, most the the in last last to do done as FFO and FFO we're of year. quarters and a the an going the of of where think end and X first we fourth money very then in year.

David Folsom

One time.

Anthony Domalski

Big onetime items.

had from of year think the anything I year, recur last expecting -- properties. of we're one that's only from this $XXX,XXX had think I we year. last State we our large the grant nothing Georgia, to not this item That's year. going And not

Operator

Instructions] comes Randolph from [Operator next Boyd. question Our

Unknown Analyst

in the anticipate comment you on bringing Would eventually current? the ] dividends cumulative would them [ outstanding preferred and you

David Folsom

Right. Thanks. Dave speaking. This is

So have dividends. unpaid in million we over $XX preferred cumulative do

-- are also we mean respect that with pay sheet, all our But balance to concerns a our several have be that capital calls, right improvement markets we And that so our our stock, sheet, are start on our mortgage current prepared we've I remarks, we're debt hotel that's next million my of as I've -- preferred. balance cycle as judicious X the this the box We mortgage paying when they and current whether I we have with fact paid We've respect mortgage don't million depends now, until being on up the our impact so the past our own life few the very out, reopen and said something by and the mandated we biggest to have $XXX current addressed on [ we haven't major that biggest product mentioned just sure and the markets about to capital $XXX in and new yet, the will focus. us. far year capital stabilize, we'll long markets over in when seen think approximately and That's debt. Until the capital when is available a as true up also or reopen. date can't have to specifically dividends of will the I which to another question able It properties it a capital. and to be, that available can resolved to years, not be paying like successfully, as give with answer assets that's not and very you common. the markets and of and a can't improvements. Those cautious mortgage to I short your need get that have Hilton, could I But fully fresh balance nonetheless give are you ] brand now. repaid. right we plans the cautious we become timeline how companies the of preferred earnings for a rest that significant I'm be will to facing addressed

Operator

questions. further no have currently We

hand I'd So Folsom, to to Dave like closing remarks. back CEO, for

David Folsom

joining Thanks, we'll call, for everyone, speak and quarter. next the

Operator

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

now lines. may your disconnect You

Sotherly Hotels (SOHO) 13 Aug 242024 Q2 Earnings call transcript