Sotherly Hotels Inc. Provides Additional Strategic Updates On Operations Related to COVID-19 Impact
May 01 2020 - 5:00PM
Sotherly Hotels Inc.
(NASDAQ: SOHO)
(the “Company”) today announced that it has undertaken
additional actions at both the property and corporate levels to
mitigate the financial impact of the COVID-19 pandemic, while at
the same time has increased its focus on maintaining a clean and
safe environment for its employees and guests.
At the property-level, the Company and its hotel
managers have implemented stringent cost control measures designed
to minimize impact to profitability. Action steps include the
closure of food and beverage outlets and other non-essential guest
amenities in order to shrink the footprint of the properties; the
downsizing of staffing levels and benefits, including the layoff of
over 90% of hotel staff with reductions in salary for staff not
subject to layoff; and the deferral of all non-vital capital
expenditures. While the Company’s wholly owned properties remain in
operation in a limited-service capacity, the Company has suspended
rental program operations at its two condominium properties: The
Hyde Resort & Residences and The Hyde Beach House Resort &
Residences. The Company is also working with its management
partners to seek out alternative sources of revenue, including
pursuing contracts with medical personnel and government
authorities to provide accommodations for individuals responding to
the pandemic.
At the corporate-level, the Company has
implemented several cost-containment initiatives, which include the
furlough of over 20% of staff, a reduction in salaries and benefits
for all staff not subject to furlough, and the waiving of Q1
director’s fees by the Company’s board of directors. As part of the
change, Dave Folsom, President and CEO, has volunteered to reduce
his salary by approximately 25%. The Company has also negotiated
three months of rental deferral for its corporate office.
The Company is taking additional measures
designed to strengthen its balance sheet, including working with
its lenders on forbearance agreements for each of its mortgage
loans. To date, the Company has been successful in completing a
variety of modifications with a majority of its lenders which will
provide immediate financial relief and we expect that modifications
for the remaining mortgage loans are nearing completion.
Additionally, the Company is applying for applicable federally
funded assistance programs under the CARES Act. The Company and its
affiliates have received proceeds from two separate applications
for the Paycheck Protection Program (PPP) totaling approximately
$9.8 million. Pursuant to the terms of the CARES Act, the proceeds
of each PPP Loan may be used for payroll costs, mortgage interest,
rent or utility costs.
Dave Folsom, President and CEO commented, “The
Company continues to monitor all governmental directives and is
prioritizing the safety of its loyal guests and staff during this
pandemic, which has created unprecedented challenges in our
industry. We believe the additional strategic actions taken by the
Company to reduce corporate costs, pursue alternative sources of
income, and strengthen its balance sheet have improved the
Company’s overall ability to weather the disruption caused by
COVID-19. We will continue to serve our communities and look
forward to delivering on our ‘stay open’ strategy, which we believe
will enable a swifter ramp-up process once concerns surrounding the
global pandemic have lessened and consumer confidence has
improved.”
About Sotherly
Hotels Inc.
Sotherly Hotels Inc. is a self-managed and
self-administered lodging REIT focused on the acquisition,
renovation, upbranding and repositioning of upscale to
upper-upscale full-service hotels in the Southern United States.
Currently, the Company’s portfolio consists of investments in
twelve hotel properties, comprising 3,156 rooms, as well as
interests in two condominium hotels and their associated rental
programs. The Company owns hotels that operate under the Hilton
Worldwide, Marriott International, Inc., and Hyatt Hotels
Corporation brands, as well as independent hotels. Sotherly Hotels
Inc. was organized in 2004 and is headquartered in Williamsburg,
Virginia. For more information, please visit
www.sotherlyhotels.com.
Contact at the Company:
Mack SimsSotherly Hotels Inc.306 South Henry
Street, Suite 100Williamsburg, Virginia 23185(757) 229-5648
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