The good news about the hotel industry is that rates are dropping like a rock, or maybe rocket! So it's a good time to go some were and enjoy the low hotel rates.
The bad news, if your an owner, investor or banker is that the average national US hotel vacancy rate was 54.6% according to today's NY Times.%
"Distress is rampant, with increasing numbers of hotel owners surrendering control of their properties to lenders." ( And we all know that bankers are just great at managing and operating real estate of any type!)
In Manhattan hotel operators have slashed room rates by nearly one-third to an average of just under $200. a night.
For years now I have though and pondered just how do all those new, modern and spiffy hotels that now cluster around the highway, do it?
In every business every-where there is a saturation point when too much of anything is just fatal. Where were the guru hotel wiz-kid specialists? Where were the City & Town planners? What were the bankers thinking? DI we all have collective amnesia?
A great many hotel owners, developers,investors and banks are going to take a major hit. This is smelling more and more like the mid 80's.
Mmaybe there is a silver lining in such a bleak cloud. "The Hotel-dex!" Yes, someone rush out and convert some these lovely empty rooms into "hotel room condos" and finance'em on Wall Street! Ya. But you first!
BIll McInerney
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