- U.S. hotel owners could see greater pressure on their ability to service the loans backing their properties, as a decline in leisure stays coupled with rising costs are expected to pinch their profits.
But as the surge in travel after the pandemic wears off, demand is shifting away from pricey leisure stays and towards lower-rated group business travel, according to a Wednesday report from ratings agency Fitch. "If there’s a recession, hospitality is the first-in and the first-out of any downward trend," said Willy Walker, CEO of commercial real estate lender Walker & Dunlop.
According to a Thursday Moody's report, nine of the 19 commercial mortgage-backed security loans that liquidated in the second quarter of 2023 were hotel loans that initially defaulted in 2020, selling at a loss after the borrowers failed to work out a solution to avoid default.