|By Kimberly Pierceall, The
Press-Enterprise, Riverside, Calif.McClatchy-Tribune Regional News
January 8, 2010 - The Inland region led the state in hotel foreclosures last year, according to a year-end study by hotel brokerage and research firm Atlas Hospitality Group in Irvine.
In Riverside County, there were 10 hotel foreclosures and 22 defaults. In San Bernardino County, there were seven hotel foreclosures and 29 defaults. Some properties remain open.
Statewide, there were 62 foreclosures and 306 defaults, according to Atlas Hospitality Group.
"Anything that was really built within the last two years is in trouble," said Alan Reay, president of Atlas Hospitality Group.
The amount of distressed hotels is only expected to rise this year as more hotel owners earn less and have difficulty making debt payments, Reay said.
A travel slump has sent revenue earned per available room in California down 19 percent to $67.47 compared to 2008, according to Smith Travel Research, a hotel data firm based in Hendersonville, Tenn.
According to Atlas, the number of hotels in default in California -- an initial stage in the foreclosure process -- rose from 53 properties statewide to 306 by the end of 2009. Of those, 81 percent were bought or built with loans acquired in 2006 and 2007 when hotel values accelerated, according to the firm.
A hotel's worth has since plummeted 50 to 80 percent in some cases.
The Block at Big Bear was a 50-room hotel worth $4 million in 2006. The bank's asking price since the hotel closed in early 2009 has been $2.04 million, and it remains unsold.
Extended Stay America filed for Chapter 11 bankruptcy last year putting the brand's hotels in Palm Springs and Temecula among Inland hotels in default.
Reay said a notice of trustee's sale for the Four Points by Sheraton Rancho Cucamonga was filed in November. In the same month, the Hotel Indigo in Ontario fell into foreclosure after an individual bought the delinquent loan from the bank and allowed it to go through the foreclosure process, he said. Both properties remain open.
Hotel Indigo opened in mid-2008.
The revenue-per-available-room dropped 23.6 percent to $42.65 in the first 11 months of 2009 in Ontario, compared to the same time in 2008, according to Smith Travel Research.
Reach Kimberly Pierceall at 951-368-9552 or kpierceall@PE.com
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