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Mid-Price Hotels Facing Multiple Challenges

NEW YORK CITY-Not only is this market sector populated by older properties and tired brands, the new limited-service hotels that compete against them are attracting travelers who are opting for less-expensive accommodations.

By John Howe | Updated on July 30, 2001

NEW YORK CITY-Stronger competition and lower demand during a time of negative supply growth are among the factors that have caused full-service, mid-price hotels to rack up most of the delinquent hotel loans within the CMBS pools rated by Standard & Poor’s, according to a new report from the company.

This segment of the market is made up of two groups: those that offer food and beverages (full service) and those that don’t (limited service). Although hotels with loans that are over 60 days past due represent a minuscule 1.4% of the CMBS-rated hotel collateral, full-service facilities account for approximately 55% of that total, according to the report, “CMBS Quarterly Insights: Property Market Trends Parallel Those of the US Economy.”

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