U.S. Hotel Owners Eyeing Interest Coverage

Bill Grice and Robert Mandelbaum | June 1, 2023

By Bill Grice, Robert Mandelbaum According to CBRE’s February 2023 Investment Performance forecast, total revenues for the average U.S. hotel returned to 2019 levels in 2022, but the recovery of hotel profits will be delayed until later this year.  Hotel franchise and management companies have benefited the most from the ongoing revenue recovery because the fees they receive are frequently earned as a percent of revenue.  However, for many hotel owners, along with their lenders and investors, the lag in the return of profits has been a hardship.  Afterall, it is the profits of hotel operations that enable owners to pay their debt obli...