Many hotel owners are reportedly falling behind on loans and falling deeper into debt.
Miami, Florida (WiredPRNews.com) – Many hotel owners are beginning to fall deeper into debt. As reported by the Associated Press (AP), loan defaults for hotels have increased faster than other commercial real estate debt types, due to a dramatic decrease in hotel occupancy.
Ben Thypin, with market research firm Real Capital Analytics, is quoted in the report as stating of the industry, “Right now is an absolutely horrible time to be in the hotel business.”
Many suggest the luxury hotel industry has especially taken a hit as a result of a decrease in Wall Street executive vacations brought on by the recession. However, investors continue to construct new chains at all levels. Frits van Paasschen, CEO of Starwood Hotels & Resorts Worldwide Inc. is quoted by the AP as stating in response to those who remain critical of the sustainability of luxury hotels, “As you look back on the excesses of the 1980s, ‘The Bonfire of the Vanities,’ the run-up in prosperity around the Internet boom — even going to Pompeii and seeing the way people were being pampered 2,000 years ago…I think luxury, taking care of yourself, taking care of your family and those around you is so fundamental to the human experience.”
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