News for the Hospitality Executive |
Hotel Lawyers in Los Angeles at the ALIS Hotel Investment Conference with Good News - A Lot of Good News |
For the most
recent update on this topic, click here By Jim Butler and the Global Hospitality Group® Hotel Lawyers | Authors of www.HotelLawBlog.com January 29, 2013 Hotel Lawyer with the mood of the hotel industry from the ALIS conference If you didn't
attend the ALIS hotel conference in Los Angeles this year, you really
missed
something! But industry fundamentals also backup this optimism. And there was more consensus than we have seen for many years that things are good and continuing to get better - - with at least a five-year run of improving economics and values. (5 years!) But there is
more good news . . . A
lot of good news Here are some
bytes of good news to consider:
Despite all the good news, many challenges will remain. Hotel industry leaders say that controlling expenses will be one of the top issues. Costs are rising for employee benefits, taxes (income, real estate, personal property, TOT, etc), insurance, franchise fees, PIPs, software costs, and chain services. Some point out that with all the cost-cutting done since the Great Recession it is hard to cut costs any further. They have already been cut. Our "fixed costs" (as the Uniform System calls them) are not fixed anymore. They are skyrocketing. Others point out that the impact of Hurricane Sandy is still coming. There'll be a huge increase in insurance and issues of availability when renewals come up on May 1, 2013. Competitive financing for existing, cash-flowing hotels Hotel financing continues to be a "Tale of Two Cities." Hotel development continues to be done by a select few with deep cash reserves, long established relationships, and EB-5 financing. But for stabilized hotels with good cash flow, debt financing is plentiful, competitive and cheap. For instance, Phil Ribolow of Deutsche Bank thinks the debt markets are maybe back to 2005 or 2006 levels, with 10 year, fixed-rate debt available at about 4% interest. Loans are now being underwritten at a 10-11% debt yield instead of on a debt service coverage ratio basis. __________________________ This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We've done more than $60 billion of hotel transactions and have developed innovative solutions to unlock value from hotels. Who's your hotel lawyer? __________________________ Our Perspective. We
represent hotel lenders,
owners and investors. We have helped our clients find business and
legal
solutions for more than $60 billion of hotel transactions, involving
more than
1,300 properties all over the world. For more information, please
contact Jim
Butler at [email protected] or
+1
(310) 201-3526.
Jim Butler is a founding partner of JMBM, and Chairman of its Global Hospitality Group® and Chinese Investment Group™. Jim is one of the top hospitality attorneys in the world. GOOGLE "hotel lawyer" and you will see why. Jim and his team are more than "just" great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. |
Contact: [email protected] 310.201.3526 |
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