Sotherly Hotels Inc.

in accordance with Reggie's 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 that 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 fourth quarter. Looking at the fourth quarter results for the actual portfolio compared to 2023, RevPAR increased 2.9%, driven by a 7% increase in occupancy and a 3.7% decrease in ADR. Stripping out Tampa from the results due to hurricane impact, the fourth quarter's actual portfolio RevPAR increased a healthy 5.8% compared to prior year. Looking at the fourth quarter results for the actual same-store portfolio relative to 2019, RevPAR increased 3.8%. driven by ADR growth of 7.9%, while occupancy was down 3%. For the full year 2024, REVPAR performance represents an increase of 3.5% over the same period in 2023, driven by a 6.1% increase in occupancy and a 2.5% decrease in rate. Again, stripping out Tampa from the results due to hurricane impact, the annual actual portfolio REVPAR increased 3.9% compared to 2023 levels. Looking at the annual results for the same store actual portfolio relative to 2019, REVPAR was up 1.3%, driven by ADR growth of 8.6% and occupancy decline of 6.8%. Overall, our portfolio's fourth quarter results, driven by strong year-over-year occupancy growth, were ahead of our budgeted expectations. Occupancy growth was especially strong in our slower-to-recover urban markets, a positive indicator that lodging fundamentals have normalized following the uneven recovery period following the pandemic. As part of this normalization of lodging fundamentals, rates have settled down a bit following the revenge travel trends of the prior two years, with an ADR decline of 2.5%, partially offsetting the quarter's 6.1% gain in occupancy. Hurricane Helene was struck during the third quarter, contributed to significant operational impact during the fourth quarter of 2024. As a result of the hurricane storm surge, Hotel Alba sustained water intrusion on the first floor of the hotel, causing damage to furniture, finishes, and equipment in public areas and guest rooms, as well as some building systems. Due to our operating team's expeditious restoration efforts following the storm, the hotel remained fully operational. To date, the work associated with this fully insured casualty has been efficiently executed, and only final FF&E replacements and elevator work remain to be accomplished. We anticipate the impact of operations at Hotel Alba as a result of Hurricane Helene to continue through the second quarter of this year. From an accounting perspective, the company's headline quarterly operating metrics, including Occupancy, ADR, and REVPAR, reflect the impact of Hurricane Helene on Hotel Albus operations prior to business interruption insurance proceeds, while the company's revenue and profitability metrics include business interruption insurance credits. Looking at some highlights across the portfolio, The Doubletree Resort in Hollywood, Florida posted strong year-over-year results during the quarter, improving REVPAR by 13.8%, fueled by a 13.4% increase in occupancy and a slight increase in rate. The hotel's improvement in occupancy, which led to greater ancillary revenue capture, was a result of stronger-than-expected weekend demand, as well as improved bookings. Driven by a 13% increase in occupancy share, the Doubletree easily outperformed its competitive set during the quarter, growing its REVPAR index by 8.5%. The Whitehall in Houston continued to build momentum during the fourth quarter, growing REVPAR by nearly 50%, driven by occupancy growth of 46.1% and rate growth of 2.7%. The hotel's improved performance was predominantly driven by growth in the leisure transient segment. The Whitehall easily outperformed its competitive set during the quarter, gaining more than 30% REVPAR share, fueled by strong occupancy share improvement of nearly 34%. Our Doubletree Hotel in Philadelphia continued its streak of improved performance during the fourth quarter, posting a 9.4% increase in rev far, driven by a 16.2% increase in occupancy. The hotel's sub-market continues to trend positively during the quarter, benefiting from increased demand from special events, as well as improved airport traffic. Meanwhile, the hotel's strong occupancy growth, which is driven by increased business and group travel, contributed to a 5.2% rev far share gain during the fourth quarter. Hotel Ballast in Wilmington posted strong year-over-year results, growing RevFar by 7.1%, which was fueled by a 1.9% increase in occupancy and a 5% increase in rate. Hotel Ballast's well-balanced approach, highlighted by group with strong banquet and catering contribution, continues to drive the hotel's revenue picture. Looking at profitability metrics for the portfolio, while hotel EBITDA margin experienced a slight year-over-year decline, The prior year included a $700,000 grant payment at the Georgia Terrace. Stripping out this one-time event, fourth quarter hotel EBITDA margin improved by 150 basis points over prior year, a commendable effort considering the portfolio's moderate rate decline during the quarter. The portfolio's occupancy growth trend has allowed our managers to drive additional ancillary revenue while also taking advantage of economies of scale, especially in our slower-to-recover markets, in order to drive flow-through. Moving forward, we expect normalized staffing and amenity levels along with stabilized wage costs to result in relatively stable margins for the portfolio. Turning to corporate activity, the company continues planning and preparation for two upcoming PIP renovations. In Philadelphia, we have executed a new 10-year franchise agreement with Hilton for the Doubletree flag. The acquired PIP renovation has an $11.5 million budget with an expected completion date of May 1, 2026. In Jacksonville, the company executed a new 10-year franchise agreement with Hilton to convert the hotel to a soft branded concept under the name Hotel Bellamy. This $14.6 million renovation has an expected completion date of January 1st, 2027. I will now turn the call over to Tony.

Thank you, Scott. Reviewing performance for the period ended December 31st, 2024. The fourth quarter total revenue was approximately $44 million, representing an increase of 4.3% over the same quarter of 2023. Year to date, total revenue was approximately $182 million, representing an increase of 4.6% over full year 2023. Hotel EBITDA for the quarter was approximately $10.7 million, representing an increase of 3.6% from the same quarter last year. Year to date, hotel EBITDA was approximately $46.8 million, representing an increase of 4.5% over full year 2023. For the quarter, adjusted FFO was approximately $2 million, representing a decrease of about $850,000 from the same quarter in 2023. Year to date, adjusted FFO was approximately $14.3 million, representing a decrease of approximately $250,000 from the prior year. Please note that our adjusted FFO excludes charges related to the early extinguishment of debt, unrelated gains and losses on derivative instruments, charges related to aborted or abandoned securities offerings, ESOP and stock compensation expense, as well as other items. Hotel EBITDA excludes these charges, as well as interest expense, interest income, corporate, general, and administrative expenses, realized gains and losses on derivative instruments, and the current portion of our tax provision as well. Please refer to the earnings released for additional detail.