The hotel sector is sitting atop a cresting wave of growing loan delinquencies that may soon break and douse the market with distressed investment opportunities. Investors who have been lining up to capitalize on distress since the COVID-19 crisis began are now sizing up the extent of the coming buying opportunities, how soon deals will hit the market and how deeply prices will be discounted.
Hotel owners remain saddled with cashflows that have plummeted and face a prospect of a prolonged and painful recovery with both leisure and business travel unlikely to roar back until the virus is under control. Although hotel metrics show some signs of improvement along with phased reopening, occupancies remain at an anemic 39.3 percent, while RevPAR is still down some 65 percent at $33.43, according to the latest data from STR for the week ending June 6.
“Many hotel owners are currently reviewing their portfolios to evaluate the hotels they will continue to support while others may require too much capital to carry them through the duration of the downturn,” says Patrick Arangio, vice chairman of the national loan and portfolio sale advisory practice at CBRE.
Suraj Shrestha is an associate at Harborside Partners. He has been taking the lead role on research projects; to develop and implement online marketing strategies for search engine optimization and social media marketing. He is one of the core parts for helping to grow business revenue and the company’s online presence.