Here are 1-3 brief analogies to describe Sotherly Hotels (SOHO):

• They are like the landlord for a portfolio of upscale Marriott and Hilton hotels in the Southern U.S.
• Think of them as the Simon Property Group of upscale hotels, but focused on properties in the Southern U.S.

• Hotel Room Accommodation: Providing temporary lodging in guest rooms and suites across their hotel properties.
• Food and Beverage Services: Offering a range of dining options, bar services, and catering within their hotels.
• Meeting and Event Hosting: Providing versatile spaces and support for business conferences, social gatherings, and other events.

• Leisure Travelers: This category includes individuals, couples, and families traveling for vacation, tourism, weekend getaways, or personal events. They seek amenities such as dining, recreation, and convenient access to local attractions.
• Business Travelers: These are individuals traveling for work-related purposes, including corporate meetings, conferences, training sessions, or transient business trips. They often prioritize amenities like high-speed internet, business centers, meeting facilities, and convenient locations.
• Group & Event Bookings: This encompasses customers who book multiple rooms or event spaces for organized gatherings. This can include:
  • Corporate Groups: For conferences, conventions, corporate retreats, or team meetings.
  • Social Groups: For weddings, family reunions, school trips, or other private events.
  • Tour Groups: Organized tours for leisure travelers.

• Hilton Worldwide Holdings Inc. (HLT)
• Marriott International, Inc. (MAR)
• InterContinental Hotels Group PLC (IHG)

David R. Folsom, President & CEO

Mr. Folsom joined Sotherly Hotels in 2006, serving as President & COO until assuming his current role as President & CEO in early 2020. Before joining Sotherly, he was Vice President of Paragon Real Estate, an early-stage commercial real estate venture specializing in the acquisition and renovation of multifamily assets. Previously, Mr. Folsom was an investment banker at BB&T Capital Markets, where he was part of the lead underwriting team for MHI's (Sotherly's predecessor) initial public offering in 2004. At BB&T, he participated in over 70 equity, debt, and preferred stock underwritings, as well as financial advisory transactions. He also served as a commissioned officer in the U.S. Marine Corps.

Anthony E. Domalski, Chief Financial Officer & Secretary

Mr. Domalski has served as Chief Financial Officer & Secretary of Sotherly Hotels, Inc. since 2013, having joined the company in 2005 as Chief Accounting Officer. Prior to Sotherly, he was Chief Financial Officer for SwissFone, Inc., a telecommunications company, where he assisted in a management-led buyout of the U.S.-based international wholesale division of Swisscom AG. He has held several other senior financial positions in the telecommunications and hospitality industries and spent nine years at a public accounting firm.

Andrew M. Sims, Chairman

Mr. Sims has served as Chairman of Sotherly Hotels Inc. Prior to this, he was the Company's Chief Executive Officer and Chairman of the Board from its initial public offering in 2004 as MHI Hospitality Corporation through 2019. He previously served as President of MHI Hotels Services (Sotherly's predecessor) from 1995, and for seven years before that as Vice President of Finance and Development, during which he was instrumental in the purchase and renovation of properties that fueled MHI Hotels Services' growth. His involvement with Sotherly Hotels continues a family tradition in the hotel industry, which began with his father, Edgar Sims Jr., who founded MHI Hotels Services in 1957.

Scott K. Kucinski, Executive Vice President & Chief Operating Officer

Mr. Kucinski joined Sotherly Hotels in 2004 and has held various positions, including Director of Construction Services and Vice President of Operations and Investor Relations.

Robert E. Kirkland IV, General Counsel

Mr. Kirkland has served as General Counsel for Sotherly Hotels, Inc. Before assuming this role, he was the Company's Compliance Officer from 2013 to 2019.

1. Debt and Liquidity Crisis: Sotherly Hotels has defaulted on a $49.3 million loan, an amount that exceeds its market capitalization, and a $17.75 million asset sale was terminated, signaling a severe liquidity crisis and substantial risk to the company's solvency. The company is actively managing upcoming debt maturities, but elevated interest rates and challenging debt markets are making refinancing difficult.
2. Macroeconomic Headwinds and Softening Demand: Sotherly Hotels is experiencing a modest reduction in hotel demand, with many of its competitors also reporting year-over-year RevPAR declines. This softening demand is attributed to broader macroeconomic headwinds, including growing economic uncertainty, elevated interest rates, persistent inflation, and cautious consumer behavior. Government-related travel has also seen a pullback due to spending cuts. These factors have led to declines in revenue and profitability, and the company has lowered its full-year 2025 guidance for total revenue, Hotel EBITDA, and adjusted FFO.
3. Operating Risks and Competition: The company's hotel properties are subject to various operating risks common to the lodging industry, many of which are beyond its control, including competition from other hotel properties in its markets.

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Sotherly Hotels Inc. (SOHO) primarily operates within the lodging industry, focusing on the ownership, acquisition, renovation, and repositioning of upscale to upper-upscale full-service hotel properties. Their main products and services include accommodation, room rentals, food and beverage sales, and other ancillary services offered at their hotels. These properties are predominantly located in the Mid-Atlantic and Southern United States.

The addressable market for Sotherly Hotels' main products and services can be measured by the size of the U.S. hotel market, specifically within the upscale and upper-upscale segments. In 2024, the U.S. hotels market was estimated at USD 263.21 billion. It is projected to grow to USD 280.63 billion in 2025 and reach USD 395.69 billion by 2030, with a compound annual growth rate (CAGR) of 7.1% from 2025 to 2030. Another estimate for the market size of Hotels & Motels in the US was $285.1 billion in 2024 and is projected to be $286.5 billion in 2025.

Regarding the specific segments Sotherly Hotels targets, the luxury and upscale segment accounted for approximately 61% of the U.S. hotel market in 2024. Additionally, the United States luxury hotel market alone was valued at USD 27.1 billion in 2024 and is estimated to reach USD 43.9 billion by 2033, growing at a CAGR of 5.5% from 2025 to 2033.

Considering Sotherly Hotels' focus on the Southern and Mid-Atlantic regions, the broader U.S. hospitality market provides a relevant, albeit not perfectly segmented, regional market size. The U.S. hospitality market, encompassing lodging, food and beverage services, and other related segments, is valued at USD 247.45 billion in 2025 and is forecast to reach USD 313.87 billion by 2030, advancing at a 4.9% CAGR during that period.

Sotherly Hotels (NASDAQ: SOHO) anticipates several key drivers for revenue growth over the next two to three years, primarily stemming from a continued rebound in travel demand, strategic property enhancements, and focused market performance.

Here are the expected drivers of future revenue growth:

1. Resurgence of Group and Business Travel: Sotherly Hotels expects a sustained recovery and growth in the group and business travel segments. Management commentary and recent performance data indicate that urban markets, which were slower to recover, are now experiencing strong occupancy gains driven by diverse demand drivers, including group and transient business travelers. Group revenue growth was a significant contributor in 2024, with additional upside projected for 2025.

2. Strategic Property Renovations and Repositioning: The company is undertaking significant capital projects aimed at enhancing its portfolio. A notable example is the $14.6 million renovation of the Jacksonville Riverfront hotel, slated to relaunch as Hotel Bellamy by January 2027. Such initiatives are designed to elevate the guest experience, attract a broader customer base, and ultimately command higher average daily rates (ADR).

3. Continued Strength in Leisure Travel and Pricing Power: Despite some noted price sensitivity among leisure travelers in Q3 2024, Sotherly Hotels anticipates continued robust leisure transient travel, particularly in its coastal and leisure-focused markets such as Savannah, Wilmington, Tampa, and South Florida. The company expects strong rate growth to persist in these key leisure destinations.

4. Occupancy Growth in Urban and Underperforming Markets: Management views increased occupancy as a primary growth opportunity, especially as urban markets continue their recovery trajectory. Recent earnings calls highlight impressive occupancy gains in previously challenged urban properties, signaling stabilized lodging fundamentals and potential for further guest volume expansion.

5. Growth in Ancillary Revenue Streams: Beyond room revenue, Sotherly Hotels is experiencing growth in other revenue categories. For instance, robust banquet and catering revenue has been identified as a contributor to the strong performance of properties like Hotel Ballast in Wilmington, suggesting that enhancing and leveraging these services will be a continued focus for overall revenue expansion.

Capital Allocation Decisions (2020-2025)

Inbound Investments

• Sotherly Hotels Inc. entered into a definitive merger agreement on October 27, 2025, to be acquired by KW Kingfisher LLC, a joint venture led by Kemmons Wilson Hospitality Partners and Ascendant Capital Partners.
• The all-cash transaction values Sotherly Hotels at approximately $46.1 million, with stockholders set to receive $2.25 per common share. This offer represents a 152.7% premium over the closing share price on October 24, 2025.
• Affiliates of Apollo and Ascendant are providing debt financing commitments for the acquisition, which is expected to close in the first quarter of 2026.

Capital Expenditures

• Routine capital expenditures for 2025 are projected to be $7.1 million.
• Of the anticipated 2025 capital expenditures, $5.6 million is specifically allocated to the DoubleTree Philadelphia Airport and DoubleTree Jacksonville Riverfront properties.
• In May 2020, Sotherly deferred all non-vital capital expenditures to mitigate the financial impact of the COVID-19 pandemic.