Tag: Hotel Lending

Why Hospitality Lending Risk Is Increasing

Hospitality Lending Risk

We are not sure why the hotel staff can’t just put those small bottles of shampoo and conditioner inside the shower, so we don’t have to step out and get them all the time, but that is one of our few complaints when it comes to the state of hotel operations these days. Hotel lending continues to be one of the best performing loan sectors for banks, but our concern is that this run could be coming to an end.

If You Lend On Hotels, Read This

Hotel Lending Risk

Hotel lending has been one of the best performing loan sectors for banks. Both property prices and net operating cash flow have outperformed almost every other bank lending class over the last two years, yet loan pricing has stayed consistently in the 250 to 350 spread range. Moreover, if done correctly, hospitality customers tend to be some of the most profitable with an average risk-adjusted return on equity well over 30%.

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