Financing is available for new hotel construction and refinancing; you just need to know where to look, according to IHG’s Chief Capital Markets Officer for the Americas Mark Gerstein.
ATLANTA—Tighter regulations may be limiting some hotel financing opportunities, but hoteliers interested in financing new projects or refinancing current ones do have options, said Mark Gerstein, chief capital markets officer for the Americas region for IHG.
In terms of concerns he’s heard expressed from hotel owners, construction financing is No. 1 these days. “The market has gotten tighter for deals over $20-million-dollar loans,” he said in an interview during the Hunter Hotel Investment Conference. “(Owners are) concerned … if they don’t have strong relationships with one or two banks, where else can they go to get that access to capital?”
Gerstein said that while it is easier to get less-than-$20-million loans, it’s still helpful to have a good relationship with a bank and be prepared for some higher costs.
For larger loans, it’s all about having a compelling story, he said.
Opportunities are out there, he said.
“There is some upside. We have a new government in right now that’s supposedly going to be taking down regulations and spending on infrastructure,” he said, which all helps contribute to revenue per available room growth.
For more of Gerstein’s take on the opportunities and challenges in today’s hotel financing environment, watch the video below.