By Jim Butler and the Global Hospitality Group®
Hospitality Lawyers | Authors of www.HotelLawBlog.com
24 June 2009
Hospitality Lawyer with some grim predictions and observations for hotel lenders and owners.
On June 24, 2009 the Federal Reserve left interest rates and its policies unchanged. Government forecasters predicted that unemployment will continue to rise from its already high level of 9.4% and will not begin a reverse trend until "some time next year." And today in CNBC and Bloomberg interviews, Warren Buffett said he sees unemployment continuing to rise. He does not seem to see "green shoots" of economic recovery in the United States.
Unfortunately this is all consistent with a much delayed recovery for the hotel industry, likely in 2011 or beyond. In today's Bloomberg article, Morgan Stanley analysts are quoted as saying "The hotel loan delinquency rate is currently 4.7 percent and is likely to reach 8.2 percent -- the peak rate in the 2001 economic downturn -- by the end of the year."
Here is some more information on the continuing crisis in the hospitality industry.
Continue reading "Hotel delinquencies predicted to exceed 8% by year end. Red Roof defaults on $361 million in loans. Are there lessons for hotel lenders and investors in the latest California market report?" »
Posted In: Outlook and Trends
