Q4 2023 Sotherly Hotels Inc Earnings Call

Yes.

Hello, everyone and welcome to the suddenly hotels fourth quarter 2023 earnings call and webcast my.

My name is Bruno and it'll be operating your call today.

During this presentation you can register to ask a question by pressing star followed by one on your telephone keypad.

I will now hand over to your host and Vice President of operations Maxim. Please go ahead.

Thank you and good morning, everyone.

You did not receive a copy of the earnings you may access it on our website at southern really hotels Dot com.

In the release the company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Greg G requirements and.

Any statements made during this conference call, which are not historical may constitute forward looking statements. Although we believe the 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 forward. Looking statements are detailed in today's press release and from time to time in the Companys filings with the SEC.

Company does not undertake a duty to update or revise any forward looking statements with that I will turn the call over to Scott.

Thanks, Mac good morning, everyone I'll start off today's call to review of our portfolio's key operating metrics for the quarter and for the year.

Looking at the fourth quarter results for the same store portfolio compared to 2022, Revpar increased 3% driven by a four 1% increase in occupancy and a one 2% decrease in ADR for.

For the full year Revpar increased 7% over 2022, driven by a three 8% increase in occupancy and a three 2% increase in rate.

Looking at the fourth quarter results for the same store portfolio relative to 2019 fourth quarter Revpar was up six 6% driven by ADR growth of 17, 7% and occupancy down nine 4% for the full year Revpar was up five 5% over 2019, driven by a 17% any.

Greece in rate and a nine 8% decrease in occupancy the.

This occupancy gap reflects a significant upside for the portfolio moving forward.

Overall, our portfolio is fourth quarter top line results were generally in line with expectations. These results were characterized by occupancy growth, particularly in markets, where the group segment makes it makes up a larger proportion of our revenue.

Our hotels in Savannah, and Wilmington, both of which possess large group components continue to grow occupancy through substantial group bookings during the quarter certain leisure focused markets also experienced improved results during the quarter highlighted by our Doubletree hotel in South, Florida, we saw a significant bounce in occupancy of nearly 4500 basis points during the quarter contributing to year over.

Year Revpar growth of 22%.

Despite the improvement in occupancy during the quarter, our portfolio's overall occupancy is still well below the comparable period in 2019, demonstrating their significant organic growth potential.

While showing steady improvement our urban markets generally have the most room for growth within our portfolio. For example, although the Whitehall in Houston improved its occupancy more than 10% year over year, primarily through its meeting and banquet business. It has significant opportunity for growth, especially in the business transient and group segments. The.

The Georgia tariffs. Meanwhile, is showing positive signs of improvement.

Due to the significant impact of the writers and actors Union strikes last year on the hotel's film production industry business.

Management shifted the strategy towards growing group bookings as a result of these efforts the hotel groups combined corporate Association and social group business by 42% during 2023 managements renewed focus on group bookings coupled with the settlement of the actors strike should dramatically improve the Georgia terraces growth prospects moving forward.

Looking at some highlights across the portfolio the Hyatt centric Arlington driven by year over year growth in the group and corporate segments continued its exceptional performance during the fourth quarter group.

Group business in particular has rapidly surpassed pre pandemic levels outperforming the fourth quarter of 2019 by 33%.

The property outpaced prior year's Revpar by 8% driven by a 2% increase in occupancy and a 6% increase in risk.

The property is six 7% revpar growth versus the comparable period in 2019 demonstrates this hotels reached stabilization while the gaps pre pandemic occupancy provides plenty of upside opportunity for this hotel moving forward.

The property continues to be the leader in its competitive set achieving a revpar index of over 124% for the quarter.

The Desoto Savannah continued to outperform.