Thursday December 11th, 2008 - 9:20AM
TAMPA, FL—A hotel foreclosure environment will exist in 2009 if negative RevPAR trends continue, according to the Plasencia Group and several analysts’ declining RevPAR forecasts.
Analysts who cover Marriott International and Starwood Hotels & Resorts have moved those firms’ 2009 RevPAR forecasts from negative 5% to negative 8% and negative 5% to negative 10%, respectively, according to the Plasencia Group.
Consequently, the investment advisory firm noted that a 10% drop in RevPAR can result in a 25% to 50% decline of many properties’ net operating income. If that comes to fruition, it will result in many hotels defaulting on their debt, which will create the foreclosure environment.