Sotherly Hotels Inc.

My name is Alex, and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press star 1 on your telephone keypad. If you'd like to remove your question, you may press star 2. I'll now hand it over to Max Sims, Vice President of Operations. Please go ahead.

Thank you, and good morning, everyone. If you did not receive a copy of the earnings release, you may access it on our website at southerlyhotels.com. In the release, the company has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. 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 company's filings with the SEC. The company does not undertake a duty to update or revise any forward-looking statements. With that, I'll turn the call over to Scott.

Thanks, Mac. Good morning, everyone. I'll start off today's call with a review of our portfolio's key operating metrics for the quarter. Looking at the third quarter results for the same store portfolio, Relative to 2019, third quarter REVPAR was up 1.7%, driven by ADR growth of 15%. Third quarter occupancy was down to 2019 by 11.6%, reflecting the significant upside for the portfolio moving forward. Year-to-date REVPAR performance represents an increase of 1% over the same period in 2019, driven by a 13.9% increase in rate and an 11.3% decrease in occupancy. Looking at the third quarter results compared to 2022, REVPAR performance represents an increase of 0.6% over prior year, driven by a 1.5% increase in rate and a 0.9% decrease in occupancy. Year to date, REVPAR increased 8.3% over the same period in 2022, driven by a 3.5% increase in occupancy and a 4.6% increase in rate. Overall, our portfolio's third quarter top line results were generally in line with expectations. These results were characterized by further recovery of group and corporate demand, combined with the softening of leisure demand in certain markets. The softening of leisure demand was especially evident for South Florida properties, which underperformed in terms of both occupancy and ADR compared to prior year. Recall that last year, South Florida was still benefiting from the revenge travel demand following the pandemic, as well as the reduction of outbound international travel due to COVID testing policies. This year, outbound international travel has grown significantly, whereas inbound international travel has only seen moderate improvement, leading to a net negative in leisure demand for the South Florida market. While the leisure segment was not as strong as last year, our hotels in this market continue to shift to a more normalized mix of business, with rev-par growth from our group and corporate transient segments. Meanwhile, our Atlanta hotels' film and entertainment business contracts were heavily impacted during the third quarter by the entertainment industry strikes. The writer's strike was recently settled, and as of last night, the actor's strike was tentatively settled, which should dramatically improve the Georgian Terrace's growth prospects moving forward. Despite these market-related challenges, several of our hotels, driven by further improvement of group and business travel in the quarter, continue to perform historically well. Looking at some highlights across the portfolio, the DeSoto and Savannah continued its excellent performance during the quarter, outpacing both prior year and pre-pandemic levels, fueled by strong group business, which outpaced the comparable period in 2019 in by nearly 45%. The property's third quarter REVPAR outperformed prior year by 5.2%, driven by a strong 8.9% increase in occupancy. The DeSoto easily outpaced the comparable period in 2019, with REVPAR improving 43.5%, fueled by a significant rate growth of 23.6%. The property continues to improve its position among its competitive set, gaining 280 basis points in fair share during the quarter. The high at Central Arlington, fueled by continued recovery in group and corporate travel demand at the hotel, posted exceptional results for the third quarter. Group business has rapidly surpassed pre-pandemic levels, outperforming the third quarter of 2019 by 55%. Overall, the property outpaced prior year's REVPAR by nearly 19%, driven by an 11.7% increase in occupancy and a 6.6% increase in rate. The property's 7% increase in REVPAR versus the comparable period in 2019 demonstrates this hotel is fully recovered following a gradual post-pandemic ramp-up period. The property continued to be a standout among its competitive set, achieving a REVPAR index of over 130%, while gaining 550 basis points in share for the quarter. Hotel Ballast in Wilmington, North Carolina continued to record strong results during the quarter, as improved group demand was coupled with continued strength from leisure demand. The property outpaced prior-year REVPAR by 8.6%, fueled by a 3.6% increase in occupancy and a 4.8% increase in rate. The property achieved strong results versus competitive set, gaining 250 basis points in share during the quarter. And lastly, Hotel Alba in Tampa, fueled by a well-balanced mix of business, returned excellent results during the quarter. The hotel's rev par surpassed prior year by 11.6%, fueled by a 3.7% increase in occupancy and a 7.7% increase in rate. The Tampa market continues to be one of the top hotel markets in the country, and this hotel is a standout performer among its competitive set, achieving a REVPAR index of 116.5% during the quarter. I will now turn the call over to Tony.