New York’s hotel industry has a whole lot of debt and none of it is getting paid.
There are $1.47 billion worth of commercial mortgage-backed securities loans on hotels that have gone unpaid, Crain’s reported. That’s the largest wave of hotel delinquencies in the country. It’s pushed the greater New York market’s delinquency rate to nearly 39 percent, compared to the usual 1 percent rate nationally.
“With record low travel demand, thousands of hotels can’t afford to pay their commercial mortgages and are facing foreclosure, with the harsh reality of having to close their doors permanently,” said Chip Rogers, president of the American Hotel and Lodging Association. The association is asking Washington for an industry bailout.
After months of sitting empty, hotels have only recently returned to some sense of normalcy. With overall occupancy rising for 17 of the last 18 weeks, the rate has finally hit the 50 percent mark for the first time since mid-March.
Still, in New York City, occupancy stands at 41 percent, a 54 percent decline from the same time last year. That could be in part a result of the state’s 14-day quarantine requirement for travelers from states where Covid-19 infections exceed 10 percent.
[Crain’s] — Sasha Jones