The Lodging Industry Investment Council (LIIC) has pulled together what have been identified as the “Top 10 Investment Challenges” facing those perusing opportunities in the hotel arena over the course of the next two years.

The Lodging Industry Investment Council (LIIC) has pulled together what have been identified as the “Top 10 Investment Challenges” facing those perusing opportunities in the hotel arena over the course of the next two years. The list—based on a survey of LIIC members, in combination with member roundtable discussions—includes:

? Finding first-mortgage debt capital at loan-to-value ratios and interest rates conducive to achieving targeted equity rates of return.
? Locating suitable, quality product at a viable price for acquisition and/or rehabilitation by narrowing the bid and ask prices between buyers and sellers.

? Predicting and quantifying the timing of the hotel industry`s rebound for specific lodging markets.

 

? Assessing and responding to the long-term impact of the recent recession and 9/11-related revenue and profit declines.

 

? Resolving problems encountered by lenders and borrowers with ambiguities and restrictions in conduit loans, REMIC rules and related pooling and servicing agreements.

 

? Accessing capital for renovations in light of profitability declines and tighter lending criteria.

 

? Credibly and reliably underwriting hotel deals in the current uncertain market.

 

? Determining the most reliable cash-flow basis (trailing 12, hybrid 1999 - 2000, pro forma) to determine appropriate asset-pricing strategies to consummate successful deals.

 

? Maintaining profit margins in the face of revenue declines and upward salary and wage pressures

 

? Coping with the medium- and long-term impact on asset values and product quality from the use of reserves to meet short-term operating needs.

 

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