Sotherly Hotels Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, showing a mixed performance in revenue and profitability compared to the previous fiscal period. Total revenue for Q3 2024 reached approximately $40.7 million, a 3.9% increase from $39.2 million in Q3 2023. For the nine months ended September 30, 2024, total revenue rose by 4.7% to approximately $137.9 million, up from $131.7 million in the same period last year. This growth was driven by a 4.8% increase in room occupancy and higher food and beverage revenues.

Room department revenue for Q3 2024 was approximately $27.2 million, reflecting a 3.4% increase from $26.3 million in Q3 2023. The revenue per available room (RevPAR) for wholly-owned properties improved to $105.98, up from $102.46 in the prior year. However, the company reported a net loss of approximately $3.7 million for Q3 2024, compared to a net loss of $2.1 million in Q3 2023. For the nine-month period, net income decreased to approximately $2.3 million from $4.6 million in the previous year.

Operating expenses increased, with hotel operating expenses for Q3 2024 rising by 3.2% to approximately $32.6 million. Interest expenses also saw a significant increase of 19.6%, totaling approximately $5.3 million, attributed to the ending of interest rate swaps on certain mortgage loans. The company’s net cash provided by operating activities for the nine months ended September 30, 2024, was approximately $21.4 million, an increase from $18.5 million in the same period last year.

Strategically, Sotherly Hotels has been active in securing financing for its properties. Notable transactions include a $35 million mortgage loan secured for the Hotel Alba Tampa and an amendment to the mortgage on the DoubleTree by Hilton Philadelphia Airport, which increased the principal balance and extended the maturity. As of September 30, 2024, the company had total assets of approximately $414.9 million and total liabilities of approximately $370.4 million, resulting in stockholders' equity of approximately $45.9 million.

The company continues to face challenges, including a covenant default under the mortgage on the DoubleTree by Hilton Jacksonville Riverfront, which may require a prepayment if a waiver is not received. Additionally, cumulative unpaid dividends on preferred stock have reached approximately $21.9 million as of September 30, 2024.