Hospitality Recovery Clouded by Underperforming Upscale Properties, Data Shows
Originally published on April 11, 2023, by Michael Tucker for The Mortgage Banker's Association.
U.S. hotels have performed well overall since the pandemic, but upscale properties report higher commercial mortgage-backed securities delinquencies than more modest hotels, reported KBRA, New York.
The hotel sector’s revenue per available room through February was 107% greater than the same period two years ago due to significantly higher average daily rates and occupancy, KBRA said in Lodging Loan Performance Clouded by Upper Upscale Chains.
“But there is a meaningful diversion in the delinquency figures by chain scale,” the report noted. It said the upper-upscale category had the highest delinquency rate at 8% and the highest delinquency amount at $806 million. In fact, without upper-upscale properties, the lodging sector delinquency rate would be 53 basis points lower than its overall 6.5% average.