Reposted from 3.5.21 Bloomberg article:

Distressed hotel owners may need to wait until 2024 to see a full rebound.

“Hospitality property values are forecast to see swift improvements after 2022 though a full rebound for all types of hotels is years away, according to real estate data firm CoStar Group Inc. The sector has a lot of ground to cover as valuations on hotels tied to defaulted or distressed loans securitized in commercial mortgage-backed securities fell more than 20% last year from origination appraisals.”

Recoveries will be especially mixed for the hotel sector, depending on chain, location, and type of hotel.

“As the vaccine is rolled out to a larger portion of the population and as air travel picks up again, we do expect an uneven recovery,” analysts led by Gunes Kulaligil said in a Wednesday research note from Methodical Valuation and Advisory, a securitization-focused valuation firm. “Business travel is unlikely to return to pre-pandemic levels soon, so drive-to type hotels and destination hotels are likely to fare better than hotels in business districts in the short term.”

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