Hotel owners, like home owners, behind on payments

[marmar]

via Yahoo:



Hotel owners, like home owners, behind on payments
Return to lender: US hotel owners, like home owners, going delinquent on debt

By Travis Reed, Associated Press Writer
On 10:05 am EST, Saturday November 28, 2009


MIAMI (AP) -- Like many home owners, hotels are starting to drown in debt.

They have been enticing travelers all year with sweet deals: credits for in-house spas and restaurants, up to 50 percent off five-star rooms, even free nights.

But all that discounting hasn't stopped occupancy from dropping an average of 10 percent. The result? Hotel loans have begun falling into delinquency faster than any other kind of commercial real estate debt.

The rising defaults paint a grim picture for an industry with increasingly more rooms than guests, and more hotels still opening every day. It's a problem that could get worse before it gets better, with demand expected to remain weak and ambitious new projects planned before the meltdown worsening the room glut.

The oversupply means room rates should stay low for at least another year, good news for consumers but not so great for hotel owners and the banks that lent them the cash to build or buy.

The rise in delinquencies is sharp. Five times more hotel loans are behind on payments this year than in 2008, according to mortgage data firm Trepp LLC, which tracks those traded by investors. In October, 8.7 percent were distressed, compared with 1.5 percent last year. ...........(more)

The complete piece is at: http://finance.yahoo.com/news/Hotel-owners-like-home-owners-apf-1306733990.html?x=0

[Atman]

1. If taxpayers are going to wind up owning them anyone, how about new affordable housing?

Silly me. What am I thinking? If someone can't make a handsome profit off them, then NO ONE should be able to live there.

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