Recent reports about the amount of distressed hotels on the horizon suggest that cheap hotel real estate deals will be very hard to find. It is also unlikely that lenders will foreclose or hold ORE hotel assets for very long. Both the rise in hotel industry income fundamentals and the ability for banks and special servicers to find creative solutions to restructure debt have all but mitigated any chance of fire sales any time soon. According to this story in HotelNewsNow.com: “Given the reluctance by banks to pursue foreclosures and the probability they won’t be much more eager to take control of hotels going forward, the market is unlikely to see wholesale liquidations in the sector. Instead, look for banks and special servicers to craft a variety of creative solutions for individual loans that will meet their needs along with the needs of property owners and the investors that will inject necessary capital.” Read more here about how “bad debt looms over hotel sector” and the issues that distressed hotels may face. In a separate report, Atlas Hospitality just released its Lender News. In their latest survey from a hotel real estate consultant perspective, hotel defaults actually declined approximately 12% in 2011. That number is also expected to drop 15% to 20% in 2012. At the same time, the U.S. Dept. of Commerce reported that “International visitors have spent an estimated $139.4 billion on U.S. travel and tourism-related goods and services year to date (January through November), an increase of 13percent when compared to the same period last year.” This is more good news for hotel investment advisors that tourism will certainly impact lodging industry rate growth and occupancies positively. It is also why distressed hotels and their lenders and investors are unlikely to face diminished income. And, more reasons for banks to avoid foreclosures and quick or low ball hotel real estate sales going forward.
Perry Group
Hotel & Restaurant Experts For The Hospitality Industry
