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How Millennials Are Impacting the Hotel Financing Hospitality Industry

Millennials have had a definite impact on the modern workforce and the consumer marketplace. The millennial demographic is defined as those born in the 1980s and 1990s and is expected to constitute the largest segment of consumers within the next few years. The expectations of millennials traveling for business or pleasure are likely to differ sharply from those of previous generations. This could affect the types of hotel financing available for hospitality companies now and in the future.

Seeking Exclusive Experiences

Although they lack the disposable income currently available to older generations, millennials have demonstrated a willingness to shell out some of their cold hard cash to enjoy experiences outside their daily routine. Creating a unique atmosphere and tying interior décor to the local community can help hospitality companies attract their fair share of the millennial demographic. In some cases, working with a private equity real estate firm can provide the added hotel financing resources needed to update and upgrade accommodations for millennial guests.

Maintaining Connectivity

The modern business world and millennials demand constant access to the internet. Upgrading your hotel’s internet options can attract millennials and other business travelers who require reliable Wi-Fi connections to perform their work and to stay in touch with family and friends online. Making sure that your internet connectivity is dependable and capable of taking on the challenges of online business can be a major selling point for millennials and other tech-savvy individuals in the hospitality marketplace.

Providing the Right Amenities

Thanks to the immense popularity of social media sites among millennials, both good and bad news travels quickly. Making sure your guests receive the most practical amenities can help you to improve your online reputation and can ensure that you attract your fair share of guests and good reviews:

  • An office center can allow millennials to achieve greater productivity without leaving your hotel.
  • Room service or an on-site restaurant can also be valuable amenities that can transform a so-so stay into something truly memorable for your millennial clientele.
  • An elegant lobby with plenty of seating space can serve as an impromptu meeting spot for your guests and their colleagues.

By tracking the most-wanted amenities and providing them for your clients, you can stand out in the social media environment and can snag the best reviews for your hotel and your services.

At Stonehill Strategic Capital, we specialize in providing bridge, mezzanine and permanent hotel loans to help your hospitality company renovate existing properties and expand into new areas. Our team will work with you to ensure that you receive the most practical hotel financing solutions for debt service and new acquisitions. Give us a call today at 713-666-2544 to discuss your hotel lending needs with our expert staff. We look forward to the opportunity to serve you.

Why the Real Estate Private Equity Firm Industry Is Focused on the Hospitality Industry

Courtyard-Grenta-LAA newfound interest in the hospitality industry is fueling growth in private equity firms across the U.S. This reflects the relatively conservative approach still in effect at many banks and major lending institutions, which provides openings for a savvy real estate private equity firm to supply capital for hotels and other hospitality businesses. Here are some of the most important reasons for the current resurgence in private equity investments in the hospitality industry.

A Wide Range of Investment Options

Along with top-end performers in the U.S. and around the world, private equity investors are also able to access opportunities in the low-budget hotel marketplace. This can allow a more measured approach to investments in this volatile sector of the real estate investment field. By opting for the appropriate level of risk and choosing their hotel lending investments wisely, investors can optimize their returns while maintaining a healthy portfolio of balanced risks.

Partnership Opportunities

One of the best options for a smaller private equity real estate firm is to partner with companies already in the hospitality investment business. This can provide a valuable buffer against downturns in this marketplace while ensuring that investors can participate fully in this side of the commercial real estate marketplace.

Increased Prospects for Profitability

Real estate private equity firm investors can also access increased opportunities for profit taking and, in some cases, added control over the direction of the hotels in which they invest. By expanding their real estate investment portfolio to include hotels, motels and long-term lodging providers, these investors can often boost their overall profitability while enjoying a more diversified array of investments.

Benefits for the Hospitality Industry

For hotels and businesses that offer lodgings for travelers, acquiring new streams of capital investment can allow for expansions, renovations and debt restructuring to ensure greater profitability for their ongoing operations. This could represent a win-win scenario for investors and for hotel owners and managers alike. Improved cash flow and access to necessary capital resources from a real estate private equity firm can help hotels compete more effectively in today’s diverse hospitality marketplace.

At Stonehill Strategic Capital, we specialize in providing lending solutions for hotels across the country. We work with large hotel corporations and chains as well as smaller enterprises with a personalized approach to the hospitality industry. We can restructure, recapitalize and reposition your company for maximum financial flexibility and increased power in the hotel world. Whether you need bridge loans, mezzanine loans or permanent hotel loans, we can create a lending solution that is just right for your needs. Give us a call today at 713-666-2544 to discuss your needs with our financial experts. We look forward to the opportunity to do business with you.

Underwriting Basics of Hotel Lending

westinFinding the right hotel lending solutions can boost your profitability in the competitive marketplace. Understanding the complex hotel underwriting process can be a good first step toward qualifying for the funding you need to expand or to refinance your hotel. Here are some key points to remember about your hotel financing options and the best ways to qualify for underwriting for your hotels and other commercial properties.

Flags and Franchises

Hotels with recognizable names are more likely to attract customers and achieve profitability than comparable properties not affiliated with a franchise. Known as flagged hotels, these franchise enterprises offer added assurances to your guests of consistent quality and reliable service. Your chances of achieving favorable terms for your hotel financing arrangements are greater as part of a well-known chain or national franchise. If your franchise agreement is up for renegotiation in the near future, you may be best served to extend your franchise agreement early or to discuss terms with your lender to determine the best course of action for refinancing your hotel.

Location

A desirable location can also help you qualify for hotel refinancing arrangements. Your underwriter will look at the real value of the property as well as its revenue-generating potential. This can significantly affect your ability to achieve refinancing on reasonable terms and could increase your opportunity for success in this complex process.

Historical Performance

Traditional hotel underwriters also look at the current and historical performance of the hotel to determine whether hotel lending options are a risk-appropriate choice for the lending company. In some cases, working with a real estate private equity firm can provide greater flexibility and added options for hotel owners. These investment companies can typically accept greater risk and may be more likely to approve your hotel refinancing application.

Equity

The amount of equity you have accrued may also play a role in the ease with which you can obtain underwriter approval for your hotel refinancing application. Providing your lender with complete documentation on the status of your current loan can ensure that your application receives the consideration it deserves.

At Stonehill, we specialize in providing creative lending solutions for the hospitality industry. We offer debt financing, refinancing, funds for acquisitions and for renovations and all your other hotel lending needs. Our extensive experience and flexibility make us an excellent choice for refinancing debt or accessing cash for needed renovations to your hotels. If you need permanent, mezzanine, bridge or preferred equity loans, give our team members a call today at 713-666-2544 to discuss your situation with us. We look forward to the opportunity to provide the financing your hospitality business requires.

Stonehill Projects Record Year in Transaction Activity

Stonehill hit a record high in the first quarter, closing approximately $190 million in hotel financing. That follows a strong 2015, in which the Atlanta-based direct lender executed on 23 transactions. With a substantial number of projects already in the pipeline, the company is actively funding acquisitions and recapitalizations for both stabilized and transitional assets with strong flags in secondary and tertiary markets.

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