A survey of more than 40 lenders finds that the same cautious outlook which made borrowing tougher for hoteliers in 2016 is continuing into 2017.
HENDERSONVILLE, Tennessee—Caution will continue to tighten the hotel lending landscape in 2017, according to an annual survey of more than 40 lenders.
The predominant sentiment of survey participants—which included lenders that represented the majority of all hotel debt originating in the U.S. in 2016 (with loan balances in excess of $10 million)—is that investors should monitor hotel performance and macroeconomic trends. But lenders said they expect hotel lending volume to remain constant with 2016 levels over the next 12 months.
That’s consistent with what lenders told HNN for its year-end series of Lender Insight Q&As, which asked:
- How would you describe 2016 from a lending perspective?
- How will the election of Donald Trump as president affect the lending landscape?
- What advice can you give to borrowers looking to secure lending in 2017?
Those factors aside, location and quality of real estate remained the top “gating” criteria for financing a hotel development, with half of the surveyed lenders choosing that answer over cash flow metrics or the sponsor’s experience or track record.
Here’s five questions from the 2016 Hotel Lenders survey, and how lenders’ answers compared to surveys in previous years.