Debt yield, or the cash-on-cash return a lender could get on an asset if it foreclosed on day one, is becoming an increasingly important metric for lenders as the hotel sector continues to regain its footing, writes HotelNewsNow.com’s Shawn A. Turner.
“I think debt yield is the metric as far as sizing up a loan is concerned,” said D.J. Effler, senior VP at Bellwether Enterprise Real Estate Capital LLC. “In hotel financing, it’s all about cash flow, and debt yield is a measure of this.”
Six months ago, lenders were looking for debt yield of approximately 12%. Today, that number has narrowed to 11%, Effler said. “You could get below 11 with the best deals,” he said.
According to the second-quarter Hotel Investors Gauge survey, lenders reported requiring an average debt coverage ratio of 1.3, though responses fell in a range of 1.2 to 1.4. (The Hotel Investors Gauge survey is available to paid subscribers of The Hotel Investment Barometer, a sister publication of HotelNewsNow.com.)
Hoteliers in New Orleans are preparing their hotels and staffs as Tropical Storm Isaac bears down on the city seven years after Hurricane Katrina, writes HotelNewsNow.com’s Patrick Mayock. Since the devastating hurricane, hoteliers learned a wealth of lessons learned that now have put the city’s hotel industry is a much better place, sources said.
Top on the list is frequently updated, thorough communications plans. Hoteliers also are turning their attention to guests, providing as much information as needed while keeping a sense of calm to ensure visitors are as safe and comfortable as possible.
Isaac is expected to make landfall early Wednesday morning as a Category 1 hurricane.
With the Republican National Convention now underway, the party’s platform is on full display. Among the policy items catching its share of the spotlight: A potential crackdown on pornography.
“Current laws on all forms of pornography and obscenity need to be vigorously enforced,” the platform says, according to a draft obtained by Reuters. Republicans are planning a Tuesday vote on the document.
The move, which could pit social conservatives against hotel operators, is not unfamiliar. The presumptive Republican presidential candidate Mitt Romney was criticized during his 2008 bid for having served on the board of directors of hotel operator Marriott International, which sold sexually explicit content in its hotel rooms. Marriott announced last year that it would gradually stop providing pay-per-view “adult” material.
Hoteliers looking to boost leisure travel this fall need look no further than the 55-and-older crowd. According to a survey of U.S. travelers by D.K. Shifflet & Associates, the demographic plans to travel more days and spend more on leisure travel during the next few months than any other group, Younger travelers plan to travel fewer days and spend less on leisure travel, the survey found.
Older travelers have a more flexible schedule because they are no longer tied to the school year calendar as they become empty nesters and retirement provides plenty of free time to travel. This older group represents about one-third of all travelers.
Everyone seems to be caught up in the social-media game these days, and seemingly everyone is making the same old mistakes. Fortunately, MediaPost was not shy in pointing out one of the most common pitfalls by travel brands. Among them:
- assigning the task of social-media management to someone who has no training, experience or social-media affinity;
- trying to sell with every post;
- posting as frequently as possible;
- talking only about your organization; and
- ignoring customer questions.
Compiled by Patrick Mayock.