CORONAVIRUS
278 | CMBS Distress: Thousands of hotel owners seek relief from billions of dollars in debt
CORONAVIRUS
Since the beginning of March, the hotel industry has lost more than $40 billion in room revenue. Hotels continue to lose $400 million every day, according to STR and Tourism Economics.
The historic loss of income caused by the coronavirus pandemic is rendering hotel owners unable to pay their property mortgages.
While many have worked out payment deferments with their local and regional lenders, thousands of other owners indebted with commercial mortgage backed securities or CMBS loans have no such recourse to stave off financial ruin.
Out of the $300 billion in CMBS loans in the U.S., hotels comprise $86 billion in debt.
Trepp reports that at the end of June the overall CMBS delinquency rate was more than 10 percent. Hotel loans account for one quarter of that and most of those are in the hands of special servicers, agents who manage delinquencies on behalf of the CMBS bond holders.
Negotiating relief is not an option in the CMBS world. This means thousands of hotels may soon go into mortgage default and the industry may experience a record level of foreclosures this year.
In this episode of Lodging Leaders podcast, we update the status of the hotel industry’s efforts to come up with a rescue plan for CMBS debtors. We talk to Ash Patel, CEO of Southwest Hospitality Management who is a partner in a new venture to manage distressed hotels. Also featured are Vimal Patel of Q Hotels in Louisiana who has two properties financed with CMBS loans, and Girish Patel, principal and managing director at NewGen Worldwide, and Kyle Walker, CEO at NewGen, who are among those in the industry actively lobbying Congress for a solution to the CMBS puzzle.
Resources and Links
CORONAVIRUS
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341 | One Big Happy: Travel survey reveals how hotels can attract families
Rainer Jenss of Nyack, New York, founded the Family Travel Association seven years ago to help parents and caregivers introduce children to the world through travel, whether that’s a yearlong trip around the world that Jenss and his family took or a weekend getaway to a nearby destination. To help the travel industry gauge what parents want when they take their kids on vacation, FTA conducts an annual study. The U.S. Family Travel Survey 2021 reveals the shift in mindset the COVID-19 pandemic has created in families planning a trip over the next 12 months. Hoteliers use can use the information to generate business and boost their strategies to recover and sustain business now and other the coming months.
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340 | New Glass Ceiling: Industry leaders work to shatter barriers for women hotel owners and investors
Whether they’re new to the concept or they’ve worked in lodging for years, women are an emerging force in hotel development, investment and ownership. Several industry leaders are making significant strides in building programs that encourage and support women interested in becoming hotel owners and investors. This report examines new projects and updates the status of existing efforts by industry leaders to recruit women as owners and help them hurdle barriers such as critical access to capital.