Report: Hotel Industry Faces Historic Wave of Foreclosures

The hotel industry is facing a historic wave of foreclosures due to the ongoing COVID-19 pandemic, according to a recent report commissioned by the American Hotel & Lodging Association (AHLA).

Since the start of the pandemic, the hotel sector has faced a historic number of delinquencies and is the most heavily hit sector of the commercial mortgage-backed securities (CMBS) market. The report, which was compiled by Trepp, showed that the percentage of loans that are 30 days or more delinquent is 23.4% as of July. That number is the highest percentage on record. For comparison, the percentage of hotel loans that were 30 days or more delinquent at the end of 2019 was 1.3%.

“With record low travel demand, thousands of hotels can’t afford to pay their commercial mortgages and are facing foreclosure with the harsh reality of having to close their doors permanently. Tens of thousands of hotel employees will lose their jobs and small business industries that depend on these hotels to drive local tourism and economic activity will likely face a similar fate,” said Chip Rogers, president and CEO at the AHLA. “The hotel industry strongly supports The HOPE Act to give struggling small business hotels an opportunity to keep their doors open and avoid foreclosure. We urge the immediate passage of this legislation so America’s tourism industry can survive and recover when the public health crisis subsides.”

Read full AHLA Report.

For comments, questions or concerns, please contact David Cohen