Hospitality Consulting Update from the Mgmt Experts at PGI 03-15-11

Stories this past week that we follow as part of our hospitality consulting had a theme of money, money, money. Or, better said as the economy heats up so is the possibility of hotel lending, franchisor pips and now is the time to buy beginning to mount. This was largely the talk recently at the annual Hunter Hotel Investment Conference held in Atlanta each year. Here is some of that commentary and our take on it: Hospitality Consulting- According to Lodging Hospitality Magazine, “attendance or speaking on panels said they’re providing financing for a wide range of lodging transactions: acquisitions, portfolio deals, refinancing, renovations, CMBS and SBA loans and, believe it or not, new construction. If you are a hotel real investor or hotel consultant evaluating a potential acquisition and need financing, various lenders held different viewpoints at the conference. Some say don’t expect new development to see financing hotel construction projects until the next 12-15 months. Others stated that the current government regulating environment has bankers not doing anything. – On the franchise side, product improvement plans (called PIPs) are in demand again by the franchisor. This is because the industry has seen a lot of deferred maintenance on brand standards due to the economy the last 3-4 years and the franchisors were more lenient. However, from a hospitality consulting perspective, the article in Real Estate Investor Magazine “The Economy Is Back, And So Are Hotel PIPs” covers it best. – More and more focus will be on the buying of hotels of you are a hotel asset manager or advisor working with investors and now is the time to act as reported in Hotel-Interactive online. This will be contributed to in part as the distressed portfolio of many banks and special servicers come available in 2011 and industry fundamentals such as occupancy and average room rates continue to improve. If lenders are showing an interest in the hotel sector again, who are they and what can share with our readers? Coupled with that same question and if you are an hotel owner or operator, where will the funds come from to pay for the franchisor upgrades?? Lastly, what from a hospitality consulting standpoint in your opinion makes this a better time to buy lodging properties???