Sotherly Hotels Inc. Reports Preliminary Operating Results for the First Quarter Ended March 31, 2022

Rhea-AI Summary

Sotherly Hotels Inc. (NASDAQ: SOHO) reported preliminary Q1 2022 operating results for its eleven wholly-owned properties. Key metrics included an occupancy rate of 38.9% in January, increasing to 69.5% by March, reflecting a 41% year-over-year growth. Average Daily Rate (ADR) rose from $152.83 in January to $184.65 in March (+23%), while Revenue Per Available Room (RevPAR) improved from $58.67 to $127.51 (+33.1%). The company noted strong recovery trends despite challenges from the Omicron variant, driven by increased business and group travel. Currently, they operate 2,976 rooms across the Southern U.S.

Positive

• Occupancy rose from 38.9% in January to 69.5% in March, reflecting strong demand recovery.
• ADR increased from $152.83 in January to $184.65 in March, indicating effective rate growth.
• RevPAR improved significantly from $58.67 to $127.51, showcasing enhanced operational performance.

Negative

• Occupancy remains significantly lower than pre-pandemic levels, down 35.4% compared to 2019.
• Revenue metrics still show a decline compared to 2021, with RevPAR down 38.6% year-over-year in January.

WILLIAMSBURG, Va., April 01, 2022 (GLOBE NEWSWIRE) -- Sotherly Hotels Inc. (NASDAQ: SOHO), (“Sotherly” or the “Company”), a self-managed and self-administered lodging real estate investment trust (a “REIT”), today reported preliminary operating results for the Company’s eleven wholly-owned properties, (“same-store” portfolio metrics). Accordingly, the actual data does not include the participating condominium hotel rooms of the Hyde Resort & Residences and the Hyde Beach House or the Sheraton Louisville Riverside which was sold on February 11, 2022. Preliminary same-store portfolio metrics for the first quarter 2022 were as follows:

January Results									March Results
	January 2022			% Variance to 2021		% Variance to 2019				March 2022			% Variance to 2021		% Variance to 2019
Occupancy		38.9	%	9.0	%	-35.4	%		Occupancy		69.5	%	41.0	%	-12.6	%
ADR	$	152.83		23.0	%	-4.8	%		ADR	$	184.65		33.1	%	6.8	%
RevPAR	$	58.67		33.1	%	-38.6	%		RevPAR	$	127.51		88.3	%	-6.5	%
February Results									Q1 Results
	February 2022			% Variance to 2021		% Variance to 2019				Q1 2022			% Variance to 2021		% Variance to 2019
Occupancy		53.2	%	45.4	%	-27.4	%		Occupancy		53.9	%	32.4	%	-24.1	%
ADR	$	167.46		13.2	%	-3.7	%		ADR	$	171.45		25.2	%	1.1	%
RevPAR	$	88.38		64.5	%	-30.1	%		RevPAR	$	91.62		65.9	%	-23.1	%

"We’re encouraged with these preliminary results for the first quarter, which reflect the Company’s continued improvement in performance and the sustained recovery of the industry," commented Dave Folsom, the Company’s President and Chief Executive Officer. "Despite moderate headwinds faced during January due to the Omicron variant, lodging fundamentals exhibited strong quarter-over-quarter improvement, fueled by rate growth as well as the return of business and group travel, particularly during the latter half of the quarter.”

About Sotherly Hotels Inc.

Sotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Sotherly may also opportunistically acquire hotels throughout the United States. Currently, the Company’s portfolio consists of investments in eleven hotel properties, comprising 2,976 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide and Hyatt Hotels Corporation brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia. For more information, please visit www.sotherlyhotels.com.Contact at the Company:

Forward-Looking Statements

This news release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe our current strategies, expectations, and future plans are generally identified by our use of words, such as “intend,” “plan,” “may,” “should,” “will,” “project,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “opportunity,” and similar expressions, whether in the negative or affirmative, but the absence of these words does not necessarily mean that a statement is not forward-looking. All statements regarding our expected financial position, business and financing plans are forward-looking statements.

Currently, one of the most significant factors that could cause actual outcomes to differ materially from the Company’s forward-looking statements is the adverse effect of the novel coronavirus (COVID-19) on the Company’s business, financial performance and condition, operating results and cash flows, the real estate market and the hospitality industry specifically, and the global economy and financial markets. The significance, extent and duration of the impacts caused by the COVID-19 outbreak on the Company will depend on future developments, which are uncertain and cannot be predicted with confidence at this time, including the scope, severity and duration of the pandemic, the extent and effectiveness of the actions mandated and taken to contain the pandemic or mitigate its impact, the Company’s ability to negotiate forbearance and/or modifications agreements with its lenders on acceptable terms, or at all, and the direct and indirect economic effects of the pandemic and containment measures, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19. Such additional factors include, but are not limited to, the ability of the Company to effectively acquire and dispose of properties; the ability of the Company to implement its operating strategy; changes in general political, economic and competitive conditions and specific market conditions; reduced business and leisure travel due to travel-related health concerns, including the widespread outbreak of COVID-19 or any other infectious or contagious diseases in the U.S. or abroad; adverse changes in the real estate and real estate capital markets; financing risks; litigation risks; regulatory proceedings or inquiries; and changes in laws or regulations or interpretations of current laws and regulations that impact the Company’s business, assets or classification as a REIT. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements included in this report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or the objectives and plans of the Company will be achieved. Additional factors which could have a material adverse effect on our operations and future prospects include, but are not limited to: national and local economic and business conditions that affect occupancy rates and revenues at our hotels and the demand for hotel products and services; risks associated with the hotel industry, including competition and new supply of hotel rooms, increases in wages, energy costs and other operating costs; risks associated with the level of our indebtedness and our ability to meet covenants in our debt agreements, including our recently negotiated forbearance agreements and loan modifications and, as necessary, to refinance or seek an extension of the maturity of such indebtedness or further modification of such debt agreements; risks associated with adverse weather conditions, including hurricanes; impacts on the travel industry from pandemic diseases, including COVID-19; the availability and terms of financing and capital and the general volatility of the securities markets; management and performance of our hotels; risks associated with maintaining our system of internal controls; risks associated with the conflicts of interest of the Company’s officers and directors; risks associated with redevelopment and repositioning projects, including delays and cost overruns; supply and demand for hotel rooms in our current and proposed market areas; risks associated with our ability to maintain our franchise agreements with our third party franchisors; our ability to acquire additional properties and the risk that potential acquisitions may not perform in accordance with expectations; our ability to successfully expand into new markets; legislative/regulatory changes, including changes to laws governing taxation of real estate investment trusts (“REITs”); the Company’s ability to maintain its qualification as a REIT; and our ability to maintain adequate insurance coverage.

Additional factors that could cause actual results to vary from our forward-looking statements are set forth under the section titled “Risk Factors” in our Annual Report on Form 10-K, in this report and subsequent reports filed with the Securities and Exchange Commission.   The Company undertakes no obligation to and does not intend to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although the Company believes its current expectations to be based upon reasonable assumptions, it can give no assurance that its expectations will be attained or that actual results will not differ materially.

FAQ

What were Sotherly Hotels Inc.'s preliminary operating results for Q1 2022?

Sotherly Hotels reported an occupancy increase from 38.9% in January to 69.5% in March 2022, with ADR rising from $152.83 to $184.65.

How did the occupancy rates change for SOHO in the first quarter of 2022?

Occupancy rates improved from 38.9% in January to 69.5% in March, marking a significant upward trend.

What is the current average daily rate (ADR) for Sotherly Hotels Inc. in March 2022?

In March 2022, the ADR for Sotherly Hotels Inc. was $184.65, up from $152.83 in January.

How does Sotherly Hotels Inc.'s Q1 2022 RevPAR compare to previous years?

The RevPAR for Q1 2022 was $127.51, reflecting a strong recovery but still down 38.6% compared to January 2021.