Lodging Econometrics—A Snapshot of Distressed Hotel Assets in the United States

NATIONAL REPORT—As we press on through September and enter Q4 2020, distressed hotel assets seem to be at the forefront of investors’ minds. There are currently 1,113 distressed assets across the U.S. accounting for 186,954 rooms.

Of the 1,113 distressed assets in the U.S., there are 553 hotels that are mildly distressed, which includes assets that are in default or in the process of negotiations with the lender. There are another 560 hotels that are considered to be severely distressed. These include assets that are in special servicing, a foreclosure has been filed, in receivership, bankruptcy, are lender-owned, or an auction date has been scheduled. Of these severely distressed assets, 443 are currently in special servicing where the loan has been transferred to a special servicer for settlement.

According to LE’s research, there is not one particular area of the country that has been impacted more than another. Across the U.S., each region has close to or more than 200 hotels that are distressed. The most distressed assets can be found in the Southeast region with 266 hotels/45,237 rooms, followed by the Mountain Pacific region with 232 hotels/41,703 rooms, the South with 214 hotels/29,840 rooms, the Midwest with 204 hotels/33,824 rooms, and finally the Northeast with 197 hotels/36,350 rooms.

Collectively, 81% of the 1,113 distressed hotels in the U.S. are in the upper-upscale, upscale, and upper-midscale chain scales. Upscale accounts for 401 hotels, the upper-midscale segment has 342 hotels, and there are 161 upper-upscale hotels that are currently distressed.

LE is expecting the number of distressed assets to continue to increase over the coming months and into early 2021 as many hotel owners continue to review their portfolios to determine which assets to continue to support, which to reopen, and which to sell.

For more information on distressed assets or to receive LE’s database of distressed assets, please contact us for more information. We can provide you with the details for all of the hotel assets referenced above. +1 603.841.8740 or [email protected].

—JP Ford, ISHC, SVP, Director of Global Business Development, Lodging Econometrics

—Bruce Ford, SVP, Director of Global Business Development, Lodging Econometrics

—Tom O’Gorman, Vice President of Sales, Lodging Econometrics

—April Bedell, Sales Account Executive, Lodging Econometrics