Please join us for an afternoon of up-to-date hospitality lodging information from our distinguished panel of guest speakers.

As the industry starts to recover, investors, lenders, and hoteliers want to know…what’s next?

Attend our seminar to hear industry experts discuss issues like:
• Lending in today’s Environment
• Lender outlook on new construction hotel loans
• Lender hotel loans and workouts
• Hotel lending, gaining traction amongst small banks
• Industry outlook, 2012 and beyond
• Who is doing transactions now?
• Investing in hotels, what are my tax consequences and benefits?

REGISTRATION INFORMATION
Registration is $59 on-line; $69 at the door
Please click here to register

VENUE
Doubletree by Hilton Irvine Spectrum
90 Pacifica
Irvine, CA 92618
Phone: 949.471.8606

GUEST SPEAKERS
Click here to view guest speaker bio’s

SPONSOR

Join the industry’s leading experts as they explain:
Strategies and Solutions for the Hospitality Market
Get the best hospitality and legal advice from the experts in dealing with troubled assets.
Click to see Conference Brochure

When: November 3&4, 2010
Where: Hilton Garden Inn, San Diego/ Del Mar, 3939 Ocean Bluff Ave., San Diego, CA 92130
Schedule of events:
November 3, 7-8:30PM ~ Reception
November 4, 7:30-8AM ~ Light Breakfast ~ 8-10AM ~ Briefing

Check out the Youtube Regional Conference Preview

What to Expect in 2011: What does the hospitality forecast look like for the coming year? How will the booking pace perform? What are the trends in ADR and occupancy growth? What can you expect in transient vs. group business growth?
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The recovery is real, as we reported in our last update in Hospitality Innsights. Double-dip recession fears are just that – “fears.” It has become clear to forecasters that the bearish predictions for 2010 were a bit over the top. On a macro basis, gross domestic product grew 3 percent in the first quarter of 2010, down from the nearly six percent growth in Q4 of 2009. This growth seems to be more sustainable, and unemployment levels seem to inching back, albeit at a slower pace than all of us would like to see.

Tourism spending rose at an annual rate of 3.9 percent during the first quarter, led by increased spending on hotels and other accommodations, according to The Bureau of Economic Analysis. The increase is significant when compared with a 1.5 percent drop during the fourth quarter of 2009.  Spending on hotels and other accommodations rose at an annual rate of 11 percent in the first quarter, after falling at a rate of 7.9 percent in the fourth quarter. The BEA said accommodations were the largest contributor to the growth in travel and tourism spending.
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Mezzanine finance is that part of the capital structure between bank debt and equity. It has emerged as an enticing and in many cases “only” new finance option for hotel owners or buyers increasingly faced with a credit squeeze from banks. Market conditions have created an increasingly favorable climate for mezzanine debt financing, elevating it to critical component status.

This stems from the fact that Wall Street has a severely reduced appetite for large securitized, individual asset loans as well as development loans with inexperienced borrowers. Banks currently understand the local markets better and offer the best terms in many markets if they are still lending; however, they are not offering much leverage. This creates an opportunity for a “mezzanine debt fund.”

U.S. hospitality markets have begun to hit the bottom of the cycle and we are now in a period of slow growth. Banks have not yet assumed that an upturn is imminent. These banks will, however, eventually loan money again with tougher terms and conditions and increased spreads on existing or refinanced facilities when they do believe the cycle is coming back. Hoteliers will have the option of looking at new funding sources, including mezzanine finance.
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By: Robert A. Rauch, CHA

No, we’re not talking about former President Bush.  The “W” hotel is the talk du jour as they basically handed the keys back to their lender this past week.  Is this the first of many to come? While the underlying market value of hotels typically declines only 20-30 percent during a recession, there will be some distressed assets that will trade at an even deeper discount.  In the case of the “W,” the owners, Sunstone, made a strategic decision. They are a public company with a non-recourse loan, and the value of the asset as well as the cash flow no longer footed to the debt on the property.  Any hotel purchased or refinanced in the “go-go” years of 2006 and 2007 might find themselves in a similar loan default.

What is the proximate cause of the decline in values and subsequent defaults?  One is the hotel finance market and the other is declining net income (NOI).  (more…)