Sotherly Hotels Inc. reported its financial results for the second quarter and first half of 2024, highlighting a modest increase in revenue but a decline in net income compared to the previous year. For the three months ended June 30, 2024, total revenue reached approximately $50.7 million, a 3.4% increase from $49.0 million in the same period of 2023. For the six months, revenue rose by 5.1% to $97.2 million from $92.5 million year-over-year. This growth was attributed to a 5.8% increase in room occupancy and higher food and beverage revenues.

Despite the revenue growth, net income for the second quarter decreased to $4.7 million from $5.3 million in 2023, while net income for the first half fell to $6.0 million from $6.6 million. The decline in net income was influenced by increased operating expenses, which rose to $41.4 million for the quarter and $82.3 million for the half-year, up from $40.7 million and $78.7 million, respectively. Notably, interest expenses surged by 16.6% to $5.0 million for the quarter, primarily due to the termination of interest rate swaps and refinancing activities.

Sotherly Hotels' operating metrics showed improvement, with the RevPAR (Revenue per Available Room) for wholly-owned properties increasing to $136.38 for the second quarter, up from $131.16 in 2023. The company’s portfolio consisted of 10 hotel properties with 2,786 rooms, operating under brands such as Hilton and Hyatt.

Strategically, Sotherly Hotels engaged in several significant transactions, including securing a $35 million mortgage loan for the Hotel Alba Tampa and amending the mortgage on the DoubleTree by Hilton Philadelphia Airport. The company also faced challenges, including covenant defaults on certain loans, which it addressed through waivers and cash collateral arrangements.

As of June 30, 2024, Sotherly Hotels reported total assets of $401.7 million and total liabilities of $351.5 million, resulting in stockholders' equity of $51.5 million. The company had approximately $18.9 million in cash and cash equivalents, alongside $18.4 million in restricted cash. The total undeclared cumulative preferred dividends amounted to approximately $21.9 million, reflecting ongoing financial obligations to preferred stockholders.

Overall, while Sotherly Hotels experienced revenue growth, rising expenses and interest costs impacted profitability, necessitating careful management of its financial structure and obligations moving forward.