At Your Service May 2010

Lodging establishments, whether it’s the family owned bed and breakfast or the luxurious high-end hotel, are working hard to sustain revenue during the slumping economy.  With double-digit declines in RevPAR (revenue per available room) commonplace, the number of hotels defaulting on mortgage payments is unprecedented.  According to Trepp, LLC, a record 15.7% of securitized hotel mortgage loans were delinquent at the end of February, 2010, with many winding up in foreclosure or shutting down operations entirely.  Even the lavish Ritz-Carlton just outside Las Vegas will be closing its doors within the coming months.

With two quarters of economic growth in the books, most now agree that the recession is over. Although the sky no longer appears to be falling, one cannot yet declare that happy days are here again. The uptick in employment numbers is lagging and there is an understandable skittishness in consumer spending. So it comes as no surprise that many in the retail and hospitality industries are reluctant to invest the time and resources into a renovation or construction project.