Good article today in the LA Times titled ‘Hotel defaults, foreclosures rise in California’. The article says that more than 300 hotels in California were in foreclosure or default as of September 30th, 2009. In Southern California alone, there are 140 hotels in default or foreclosure. The main problem is that many hotel loans were expected to be repaid within 5 or 10 years and were financed at the peak of the market. The author also blames loose lending and irrational exuberance.
Smith Travel Research is predicting no significant improvement for the hotel industry until 2011 at the earliest.