Hotels Are Hurting, We’re In A Deep Recession, But Thank God We’re In Texas
The Four Seasons San Francisco is in default on it’s loans to LNR Property Corp., and the Renaissance Stanford Court Hotel on Knob Hill (across from the Fairmont) is in default on it’s loans to the tune of $89 million. California’s a real financial mess, I know, so why do we care in Dallas? Well, things usually start getting bad on the coasts and then roll our way, like this thing called the housing crisis. Supposedly this is posturing to renegotiate debt, but note this quote:
“”We’re in a deep recession and hotels are suffering the most of any real estate class right now.”
A report by Atlas Hospitality estimates that room revenues in California are down 21.5 percent in 2009 and that values are 50 to 80 percent lower than they were at the market’s peak from 2005 to 2007.”
Over at Victory Park, home to the W Hotel, the financing has also made a major change, and I cannot help but wonder, if hotels are a sort of real estate barometer, how are we doing in Dallas?.
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If you follow what has been going on with these hotels, I don’t think they are in as dire straits as one would think.
Just like Tom Hicks, the hotel owners that financed 2-3 years ago are defaulting on purposes in order to send a renegotiation message to the lenders. If the hotel has lost 20% value they are underwater and know that the banks will rengotiate not more than ever before. It is like a chess move. A smart one at that.
I was just looking at hotel rates in SF on an August weekend and they were dirt cheap. Everyone is under $300/night, including the Ritz-Carlton & St. Regis. Four Seasons doesn’t own any of its hotels — it is just a management company — but several of its property owners are having major financial difficulties. There was a recent NY Times article about the struggle between FS owners trying to cut costs and how FS was resisting the compromised service quality due to those cuts.
And not one mention of our new taxpayer financed hotel?
Dirt cheap rates may not be so dirt cheap when some hotels are adding surcharges. The WSJ had a recent article about this.
Garage parking could be $50 a day, Internet charges $30 a day, and hotel cleaning $30 a day. So a cheap of rate of $300 a night at a five-star hotel may not be so cheap when you add the surcharges.
Before you book a hotel reservation, ask about any surcharges.
btw — It’s Nob Hill not Knob Hill
It is indeed — my apologizes and thanks for the correction!
I think this hotel is an ideal hotel to stay during your trip .Because,it has convenient location to visit the wonderful landscapes. And also the hotel provides various facilities for meet the travellers needs. Thanks for recommendation!
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