Hotel loan defaults could double in two years

Defaults among hotel loans backing commercial mortgage-backed securities could nearly double by 2012, reaching a 30 percent default rate according to a report from Fitch ratings. This contributed to Fitch’s negative outlook rating for the industry, as the loans facing default comprise more than $8 billion in the total hotel loan balance. The report also showed that hotel property values are currently down about 50 percent from their peak level in 2007 and that hotel revenues have declined by 20 percent since 2008. TRD