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August 21, 2020

During the Covid 19 pandemic, hoteliers have faced an unprecedented period of challenged cash flows amid restricted operations. The American Hotel and Lodging Association is now saying 1 in 4 hoteliers in the U.S. cannot make their monthly mortgage payments. While there is some relief from government programs here in Canada, the situation is not much better.

Western Hotelier caught up with Mark Kay, president of CFO Capital to discuss what options are out there for hoteliers in today’s challenging climate.

CFO Capital, incorporated in 2004, is a national commercial mortgage brokerage firm with head office in Markham Ontario housing housing a team of former Commercial Real Estate Bankers comprising of analysts and business developers.The company also has an office in Vancouver led by Trevor Scott and has a presence in East Coast led by Ian Hurst.

“CFO's mission” says Kay, “has always been providing a consistent flow of competitive capital to all industry sectors with a focus and passion to the Hotel sector. In early 2000 there were under 10 lenders supporting hotel industry and prior to Pandemic we have reached over 50 active institutional partners”.

The key problem hoteliers face today, says Kay, is that two-thirds of hospitality lending is on a moratorium while only one third of lenders are still active providing financing for construction, term and refinance.

Right now, hoteliers can get construction loans up to 65% Loan to Cost (LTC), the loan amount divided by the construction cost, with values stabilizing over a 3-4yr period to get over the COVID bump.

For new loans, Term/Refinance up to 65% loan-to-value (LTV), the loan amount compared to the expected market value of the completed project (values defined as 3-4 yrs stabilized) with inclusion of working capital to cover the burn rate.

“There's lot of frustration to the lack of access to working capital from EDC/BDC programs which hoteliers nation wide desperately need due to the forced shut down of provincial and international travel that has an obvious direct correlation to revenue. The wage subsidy programs definitely assist but not nearly sufficient enough to cover bank principal and interest payments, taxes and so on... once the bank deferrals come to a halt”.

This liquidity crisis is an industry wide issue for a broad segment of owners.  “2020 demand is not anticipated to return to levels where owners can sustain a cash flow positive position. In the absence of financial support from government sponsored programs through the financial institutions, hotel owners will not be able to sustain operations”. 

Hopefully, says Kay, as an alternative or in collaboration with the fed program, institutional regulators may allow for the further extension of principal and interest until the provinces fully open which will assist in the liquidity.

There are some other measures, however, that hoteliers can take such as the temporary solution of a bridge loan.

“In anticipation for a demand of bridge capital required for the hotel industry we have been working with lending partners to provide first and second mortgages, 6-18 months as well as alternative security structures in lieu of registered 2nd mortgages for those that require immediate relief. It comes at a higher cost of capital but it's an avenue to help bridge the working capital”.

Despite the liquidity crisis brought on by the Covid 19 pandemic, CFO Capital has been very active securing new financing deals in the hotel sector. So while these are clearly challenging times, there is some light on the horizon.

 
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August 19, 2020

Tourism HR Canada would like to extend its thanks to the Honourable Mélanie Joly, Minister of Economic Development and Official Languages, and the Government of Canada on their appointment of Marsha Walden as President and CEO of Destination Canada.

The Tourism HR Canada team offers its sincere congratulations to Marsha on her new role leading Canada's national tourism marketing organization. Tourism HR Canada is eager to build on its longstanding relationship with Destination Canada and support the agency as the tourism community navigates the challenges brought about by the current global pandemic.

"I am excited by today’s announcement and warmly wish Marsha the best in this well-deserved appointment,” stated Philip Mondor, President and CEO of Tourism HR Canada. “Marsha brings a wealth of experience and a passion for the tourism sector, as demonstrated through her successes during her recent tenure as President and CEO of Destination British Columbia. We look forward to working more closely with her and the Destination Canada team as our entire sector collaborates to reopen Canada’s vibrant tourism businesses and boost the resiliency of its world-class workforce.”

Tourism HR Canada will continue to provide the latest labour market insights to complement Destination Canada’s robust marketing research, as well as offer resources, tools, and training to ensure Canada’s tourism workforce is equipped to deliver on the incredible experiences promoted by Destination Canada—whether locally while restrictions remain in place or internationally as we once again welcome visitors from around the globe.

Tourism HR Canada is a pan-Canadian organization with a mandate aimed at building a world-leading tourism workforce. Tourism HR Canada facilitates, coordinates, and enables human resource development activities that support a globally competitive and sustainable industry and foster the development of a dynamic and resilient workforce.

Tourism HR Canada is your source for current human resources issues and solutions, and works with the industry to attract, train, and retain valuable tourism professionals by giving them the tools and resources they need to succeed in their careers and entrepreneurial endeavours.

Look for timely, relevant labour market intelligence, industry success stories, news and event details, surveys, and articles on HR themes impacting tourism’s current and future success.

Performance Matters—and in tourism, performance is powered by people.

 
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TORONTO, August 18, 2020 – Realstar Hospitality is thrilled to announce that Motel 6 has been named the “Best Budget-Friendly Hotel Brand ” by USA TODAY’s 10Best Readers’ Choice Awards. As founders of economy lodging, Motel 6 has been best known for cleanliness, affordability, friendliness and dependability over the past 58 years.

Easily recognized by those travelling the wide-open road, Motel 6 focuses on providing guests with everything they need and nothing they don’t. Hotels feature complimentary Wi-Fi, expanded cable TV and pet-friendly rooms at no extra cost, while many also boast indoor/outdoor pools, free parking and guest laundry facilities*.

“It is no surprise that travellers voted Motel 6 the Best Budget-Friendly Hotel Brand in the United States,” said Irwin Prince, President & COO, Realstar Hospitality. “It is a true testament of the hard work and dedication Motel 6 team members showcase every day.”

To ensure guests feel confident when staying at any of the brand’s locations across the U.S. and Canada, Motel 6 recently announced the “Clean@6 ” initiative. Since the onset of the global health crisis, Motel 6 has partnered with medical experts and franchise owners to adopt a thoughtful and proactive approach to serve guests and protect against the spread of viruses. The approach includes enhanced cleaning and sanitization protocols, as well as physical distancing in all common areas of hotels.

A panel of travel experts and 10Best.com editors select USA TODAY’s 10Best Readers’ Choice Award nominees, and the final top 10 winners are then chosen by the readers’ popular vote.

To book a stay at one of the nearly 1,400 Motel 6 or Studio 6 properties across the U.S. and Canada, visit www.motel6.com or www.staystudio6.com .

*Due to the global health pandemic, some amenities may be suspended. Contact your destination directly to find the latest information.

 
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WASHINGTON (August 18, 2020) – A new national report shows  that the hotel industry is facing a historic wave of foreclosures as the COVID-19 pandemic continues to devastate small business hotel owners and its workforce. Since the beginning of the pandemic the hotel segment has faced a historic number of delinquencies and is the most heavily hit sector of the commercial mortgage-backed securities (CMBS) market. Nearly 4,000 hotel industry leaders sent an urgent letter to Congress urging immediate action to help hotels avoid foreclosure and the loss of tens of thousands of jobs.

The report, compiled by Trepp, shows that the percentage of loans that is 30 or more days delinquent is 23.4 percent as of last month—the highest percentage on record. By comparison, the percentage of hotel loans that were 30 or more days delinquent at the end of 2019 was 1.3 percent.

From a financial perspective, the report shows that $20.6 billion in hotel CMBS loans were 30 or more days delinquent as of July, compared to $1.15 billion as of December 2019. The highest volume of delinquent hotel loans during the Great Financial Crisis was $13.5 billion. The current percentage of loans that are delinquent now exceeds the highest level during the Great Financial Crisis by 53 percent.

In the letter sent to Congress today, nearly 4,000 hotel industry leaders implored Congress to swiftly enact the HOPE Act, bipartisan legislation introduced by Representatives Van Taylor (R-Texas), Al Lawson (D-Fla.), and Andy Barr (R-Ky.), intended to provide assistance to small businesses that operate in the ailing commercial real estate market.

“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. Tens of thousands of hotel employees will lose their jobs and small business industries that depend on these hotels to drive local tourism and economic activity will likely face a similar fate,” stated Chip Rogers, President and CEO of the American Hotel & Lodging Association (AHLA). “The hotel industry strongly supports The HOPE Act to give struggling small business hotels an opportunity to keep their doors open and avoid foreclosure. We urge the immediate passage of this legislation so America’s tourism industry can survive and recover when the public health crisis subsides.”

Rogers said the HOPE Act would address the unique challenges of commercial real estate.  It would provide commercial property owners the temporary liquidity they need to keep their doors open in exchange for a preferred equity interest in the property. The legislation would not require any new funding and would utilize existing appropriations from the CARES Act Economic Stabilization Fund.

Other major hotel industry leaders expressed an urgency for Congress to step up to help struggling hotel businesses before it is too late. 

“The economic fallout from the COVID-19 pandemic is decimating the travel and tourism sector - especially small businesses like hotels. That’s why we need Congress to provide hotel owners with real relief that addresses the needs of small businesses with commercial real estate assets,” said Cecil Staton, President and CEO of AAHOA. “Hoteliers are responsible for millions of jobs in communities across the nation, but unless Congress acts, there may not be businesses left for those workers to return to at the end of this pandemic. We are optimistic that the HOPE Act will help hoteliers to address the debt crisis facing the lodging industry, and save good American jobs and small businesses.”

“Our hotel industry has been devastated by the effects of COVID-19. The financial assistance through the HOPE Preferred Equity lending facility would provide relief and could help stimulate the economic situation in communities throughout the United States,” said Lynette Montoya, President and CEO of the Latino Hotel Association (LHA).

“The HOPE Act is essential in helping provide hotel owners with liquidity when we need it most and will serve to help keep businesses open, thus saving local jobs,” said Andy Ingraham, President and CEO of the National Association of Black Hotel Owners, Operators, and Developers (NABHOOD).

 

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