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1 September 2009

This is one of many articles on the subject of “troubled hotel loans – workouts, bankruptcies & receiverships” in the rich library at www.HotelLawBlog.com.

Do the math yourself! Run a present value analysis of likely cash flows on 3 alternate scenarios. Decide whether you have the stamina and capital for a long haul if you intend to hold.

Hotel Lawyer. As a hotel owner or lender with a distressed property in the worst business environment for more than 70 years, you have a decision to make. Do you sell the hotel now at a deep discount, or do you hold on for things to get better? How long does it take to market a property in this environment?

Owners and lenders of thousands of hotels in the United States and abroad are confronted with this decision. Here are a few thoughts from the pros.

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9 August 2009

Please see “troubled hotel loans – workouts, bankruptcies & receiverships” for the latest articles on troubled hotels.

Hotel closings: Hotel Lawyer with another look at alternatives to closing that hotel.

We have gotten a lot of feedback on our recent article about the precipitous drop in value that accompanies a hotel closing, or as some say, when the hotel is “put in mothballs” or “goes dark”. See Closing that hotel may be the worst money-saving idea you ever had! Lenders, here’s why mothballing a hotel can be a very bad idea.

In that recent article, we talked about 8 bad things that happen when you close a hotel, and suggested that a hotel should never be closed without first running a careful analysis of cash flows and holding costs. That is not to say, a hotel should never be closed, but a hotel closing deserves close scrutiny, and full exploration of the alternatives.

Today, we will focus on one of those.

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3 August 2009

Please see “troubled hotel loans – workouts, bankruptcies & receiverships” for the latest articles on troubled hotels.

Hotel lawyer with another perspective on closing a money-losing hotel. Sometimes there seem to be no alternatives. You can’t beg, borrow or steal more capital to advance in order to meet operating costs to keep a hotel open. A stubborn union won’t relent of ruinous work rules, or an operator won’t reduce staffing and facilities to reflect depressed occupancies.

And initially it seems like a fire sale liquidation of a failed hotel is a poor alternative to suspending operations until the hotel market returns to some sense or normalcy. Many lenders will be shocked to learn how dramatically hotel values can crash — literally over night — once a hotel is closed. Here is some food for thought.

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