Highlights of the annual Hotel Lender Survey indicate that a growing number of lenders see room for hotel values to increase in 2018.
BROOMFIELD, Colorado—A new survey of hotel lenders indicates there is less caution about the short-term outlook of hotel lending than there was last year, and though the majority (61%) of respondents said they expect hotel values to be flat in 2018, a growing number (30%) see some room for slight growth.
Each year, STR, RobertDouglas and Hotel News Now conduct a survey of hotel lenders to gauge lender opinion of the current hotel lending environment. The results of the survey and historical trends are detailed in the annual Hotel Lender Survey report. (STR is the parent company of Hotel News Now.)
The survey was conducted during December 2017 and January 2018 and gathered responses from more than 50 hotel lenders.
Overall, where are hotel property values going over the next 12 months?
The majority of hotel lenders believe hotel values will remain flat during the next 12 months. However, lending optimism has improved this year, with 30% of lenders saying they believe hotel values will increase slightly. In last year’s survey, only 5% of lenders said they believed that would be the case.
How many years will it be before this current period of growth in hotel asset valuations peaks?
Nearly half of hotel lenders surveyed (46%) believe hotel values will peak in the next one to two years. Last year at this time, 47% of lenders surveyed believed hotel values would peak in 2017.
Where do you see financing risk generally, by price point, for the next 12 months?
Hotel lenders view the upscale and upper-midscale chain scales as having the least risk over the next 12 months. The most risky segments are considered to be the luxury, economy and independent chain scales.
This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to comment or contact an editor with any questions or concerns.