When a hotel loan gets in trouble, a lender should immediately perform a Comprehensive Situation Analysis. Borrowers should do the same and be fast to approach lenders with candor and an actual plan demonstrating what is needed and how it will work.
Revenue of $61.1 million in Fiscal Year 2019 including $0.3 million from Legacy Hotels, Decreased 6.2% from $65.1 million of Revenue in Fiscal Year 2018 which included $4.4 million from Legacy Hotels.
The Comprehensive Situation Analysis should have gathered and considered all the relevant factors concerning the distressed hotel loan documents, the borrower, the hotel and their related considerations. Now it is time to consider these in light of the lenders goals and the available alternatives. Given the complexities of the typical Special Asset, it is sometimes helpful to boil it down to a summary form that may over-simplify, but at least provides a grid or framework for analysis.
Here is our time-tested list of Dos and Donts for distressed hotels and other special assets closely intertwined with operating businesses. There is a wealth of such materials available at HotelLawyer.com.
When Special Assets Teams and special servicers see troubled hotel loans coming onto their screens, they should quickly perform a 'Comprehensive Situation Analysis.' The Comprehensive Situation Analysis forms the critical foundation for a lender choosing among its alternative strategies of workout, receivership, deed in lieu or bankruptcy (seeking involuntary bankruptcy and appointment of a trustee).
Withdraws 2020 Guidance; Suspends Common Dividend
Wyndham Hotels & Resorts, Inc. (NYSE: WH) announced the withdrawal of its full-year 2020 outlook and earnings sensitivities due to the evolving impact of the novel coronavirus pandemic (COVID-19) on the global economy.
Choice Hotels International, Inc. (NYSE: CHH) today announced the withdrawal of its previously issued first quarter and full year 2020 guidance, which did not contemplate the impact of the worldwide spread of the coronavirus (COVID-19).
Company Suspends Guidance for 2020
Summit Hotel Properties, Inc. (NYSE: INN) (the “Company”) yesterday that it is withdrawing its full-year 2020 outlook due to the continued uncertainty and ongoing financial effect of reduced travel demand as a result of the global coronavirus (COVID-19) pandemic.