Room Rates Trump Occupancy In Latest Hotel Loan Deals

Law360, New York (January 29, 2014, 6:16 PM EST) -- Prompted by concerns that a limited supply of lodging may be skewing occupancy rates across the country, lenders are putting a new focus on whether a hotel can pull in a higher average daily room rate than its rivals before signing off on a loan deal, experts say.

Traditionally, occupancy rates would shoulder more of the weight when calculating a good candidate for a loan. But with hotel room supply still limited after years of a dry construction pipeline, lenders and creditors believe most occupancy levels could be skewed and are instead placing more emphasis on ADR, experts said.

"Lenders would rather see you...

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