The U.S. hotel industry is experiencing an increasing number of hotel foreclosures and loan defaults as things seem to continue to go downhill.  In just the last 60 days, the number of hotels in default or foreclosure has increased by 125 percent in California, and other states seem to be following suit.

During the time period of mid-May through mid-June, 175 hotels are now in default with 31 being foreclosed on in California alone.  The county leading in these unfortunate events is San Bernandino, with 19.6% of the results.  Riverside County follows with 16.1%.

As the economy continues to decline, it seems that all hotels are being affected, not just the smaller ones.  A large percentage (87%) of foreclosures are accounted for by nonfranchised hotels, but franchised hotels seem to make up the largest portion of default properties at 59%.

According to Alan Reay, president of Atlas Hospitality, every hotel is struggling in the current economic situation unless they are debt-free.  Independent hotels as well as branded properties in primary locations are experiencing problems.  It appears that full-service hotels are getting hit exceptionally hard.

States that appear to be feeling the brunt of the economic downturn are Arizona, Florida, Nevada, the Caribbean and Texas.  In the Midwest where there was not a substantial increase in rates, it appears that hotels may not get hit as hard as the rest of the U.S.

This entry was posted on Friday, August 7th, 2009 at 10:14 am and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.