ATLANTA A rising tide of loan delinquencies may be the precursor of a sharp uptick in hotel defaults, and almost certainly will further toughen already-strict loan-underwriting standards for lodging industry borrowers, according to Dr. Jack Corgel of PKF Consulting s Hospitality Research Group here.
The international consulting and real estate organization s managing director of applied research told HOTEL BUSINESS. that he based his observation on information gleaned from the 2001 edition of PKF s Hospitality Investment Survey. Specifically, survey findings raised considerable question as to whether and for how long lenders can continue to issue debt to this industry in the face of rising hotel delinquencies.
Furthermore, it was Corgel s understanding that the majority of delinquencies involved older properties, thereby painting the grimmer picture for banks and other lending institutions that they might in the event of defaults ultimately be saddled with hotels that are less-than-attractive assets. (4/19/01) Michael Billig