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During the early part of February 2020, LW Hospitality Advisors released its Year End 2019 Major U.S. Hotel Sales Survey with the following conclusion:

"While the near‐term outlook for the US lodging industry remains positive fundamentals, given the myriad of global and domestic issues that can rapidly develop into full blown crises, short term future industry performance is fragile. With this said, so long as the US economic expansion endures, the outlook for lodging fundamentals will remain positive resulting in continued deployment of domestic and foreign investment, and institutional capital into single assets and portfolios of all types and locations of US hotels."

We have all experienced dramatic change over the past several weeks, as citizens around the world are unfortunately now experiencing a full‐blown crisis relating to a deadly pandemic sweeping across the globe. Reports that indicate upwards of half the world's population under lockdown are shocking and difficult to comprehend. Everyone is being inundated with troves of data and opinions, including US lodging industry metrics reflective of an unprecedented, sudden, and significant decline, all within just days of all‐time highs, and after a ten‐year rally. The reality is that no one knows how the effects of this crisis will evolve, as they continue to do on an hour by hour basis, and how and when they will ultimately sunset.

During the near term, market participants will wait on the sidelines for clarity relative to the width and depth of the present crisis, resulting in debt maturities, constrained liquidity, technical default and/or the inability to make debt payments. Depending upon how long the global shutdown endures, most consumer and corporate debt will end up in technical default and/or monetary nonpayment. Most borrowers are currently in discussions with lenders regarding loan modifications and forbearance agreements.

A pillar of every democratic nations' foundation is a fluid capital market. In order to avoid the collapse of free enterprise capitalism, governments around the world should (not necessarily will) soon agree to a moratorium on technical default and/or monetary nonpayment of all types of credit instruments. The fact is most individuals and companies (private and public) are simultaneously debtors and creditors. Without an orderly roadmap for recovery once the crisis passes, enterprises and people will foreclose and/or bankrupt each other resulting in a debacle that could take years to work through while contributing little if anything to total global Gross Domestic Product.

The LWHA Q1 2020 Major US Hotel Sales Survey includes 30 single asset sale transactions over $10 million, none of which are part of a portfolio. The survey data reflects hotel sale price data prior to any impact of the COVID‐19 spread across the US. Q1 2020 transactions totaled $1.97 billion and included approximately 7,600 hotel rooms with an average sale price per room of $259,000. By comparison, the LWHA Q1 2019 Major US Hotel Sales Survey identified 39 transactions totaling roughly $2.7 billion including 7,900 hotel rooms with an average sale price per room of $339,000.

Although the world is currently in unchartered territory, having recovered from prior economic and demand shocks, America's hotel industry has a proven track record of resiliency.

In closing, a big shout out to all the doctors, nurses and healthcare professionals who are risking their own well‐being helping so many people, as well as all those that are keeping the supply chain moving.

Daniel H. Lesser is president & CEO of LW Hospitality Advisors