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Sotherly Hotels Inc. (SOHO - Free Report) provided a preliminary update on its operating trend for the second quarter of 2023. It noted that the continued momentum in leisure travel demand and sequential improvement in group and business travel have aided the company’s results so far.
The company’s average daily rate (ADR) of $187.49 for the 10 wholly-owned properties improved 3.3% from that recorded in the year-ago period.
The revenue per available room (RevPAR) and occupancy in the second quarter increased 5% and 1.5% to $131.16 and 70.6%, respectively, year over year.
Particularly, the ADR for April and May remained high at $193.84 and $190.02, indicating a year-over-year increase of 3.6% and 3.2%, respectively. Although the figure for June dipped to $178.46 sequentially, it improved 3.3% from the prior-year level.
The RevPAR for April, May and June increased 2.8%, 4.7% and 7.7%, respectively, from that recorded in the prior-year period.
The company’s portfolio occupancy for April witnessed a marginal year-over-year decline to 71.9%. However, occupancy for May and June was up 1.4% and 4.1%, respectively, on a year-over-year basis.
Amid the recovering lodging industry fundamentals in the wake of the pandemic, Sotherly Hotels’ portfolio of upscale to upper-upscale full-service hotels in the high-barrier to entry markets in southern United States remains promising.
Management expects strength in leisure transient travel demand, especially at its coastal leisure-focused markets like Savannah, Wilmington, Tampa and South Florida, to drive strong rates for the remainder of 2023. It also expects the continued urban market recovery to be fueled by growth in group and business travel, aiding booking trends.
This lodging real estate investment trust (REIT) has also made efforts to bolster its external growth through the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels focused on the top 25 markets of southern United States.
SOHO's healthy balance sheet positions it to capitalize on long-term growth opportunities.
Shares of this Zacks Rank #2 (Buy) company have risen 7.8% year to date against the industry’s decline of 0.5%.
Nonetheless, persistent macroeconomic uncertainty and a high interest rate environment pose concerns for SOHO.
Image: Bigstock
Sotherly Hotels' (SOHO) Q2 Operating Trend Reflects Solid Demand
Sotherly Hotels Inc. (SOHO - Free Report) provided a preliminary update on its operating trend for the second quarter of 2023. It noted that the continued momentum in leisure travel demand and sequential improvement in group and business travel have aided the company’s results so far.
The company’s average daily rate (ADR) of $187.49 for the 10 wholly-owned properties improved 3.3% from that recorded in the year-ago period.
The revenue per available room (RevPAR) and occupancy in the second quarter increased 5% and 1.5% to $131.16 and 70.6%, respectively, year over year.
Particularly, the ADR for April and May remained high at $193.84 and $190.02, indicating a year-over-year increase of 3.6% and 3.2%, respectively. Although the figure for June dipped to $178.46 sequentially, it improved 3.3% from the prior-year level.
The RevPAR for April, May and June increased 2.8%, 4.7% and 7.7%, respectively, from that recorded in the prior-year period.
The company’s portfolio occupancy for April witnessed a marginal year-over-year decline to 71.9%. However, occupancy for May and June was up 1.4% and 4.1%, respectively, on a year-over-year basis.
Amid the recovering lodging industry fundamentals in the wake of the pandemic, Sotherly Hotels’ portfolio of upscale to upper-upscale full-service hotels in the high-barrier to entry markets in southern United States remains promising.
Management expects strength in leisure transient travel demand, especially at its coastal leisure-focused markets like Savannah, Wilmington, Tampa and South Florida, to drive strong rates for the remainder of 2023. It also expects the continued urban market recovery to be fueled by growth in group and business travel, aiding booking trends.
This lodging real estate investment trust (REIT) has also made efforts to bolster its external growth through the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels focused on the top 25 markets of southern United States.
SOHO's healthy balance sheet positions it to capitalize on long-term growth opportunities.
Shares of this Zacks Rank #2 (Buy) company have risen 7.8% year to date against the industry’s decline of 0.5%.
Nonetheless, persistent macroeconomic uncertainty and a high interest rate environment pose concerns for SOHO.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the REIT sector are Ventas (VTR - Free Report) , Iron Mountain (IRM - Free Report) and W.P. Carey (WPC - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Ventas’ 2023 funds from operations (FFO) per share has risen marginally over the past two months to $2.98.
The consensus estimate for Iron Mountain’s 2023 FFO per share has moved up marginally in the past two months to $3.96.
The consensus mark for W.P. Carey’s 2023 FFO per share has increased marginally over the past month to $5.36.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.