On September 6, 2018, the American Hotel & Lodging Association (AHLA) announced its 5-Star Promise initiative. Finding the right hotel construction financing options will help you upgrade security measures as a part of this program. Also, it can create the best outcomes for your hospitality company and the safest environment for your guests and your staff members.
What Is the 5-Star Promise?
The AHLA announced the 5-Star Promise initiative as part of its ongoing efforts to promote the safest possible settings for employees in the hospitality industry. Some of the most important elements of this voluntary program include:
- Establishing policies banning sexual harassment and posting those policies in multiple languages for employees
- Training and educating employees about sexual harassment
- AHLA training programs for safety, security and diversity in the workplace
- Partnerships between AHLA and the National Alliance to End Sexual Violence, Polaris, End Child Prostitution and Trafficking and other agencies and organizations to focus on workplace safety and the end of sexual violence and child abuse
The AHLA also recommends that employees are given safety devices as part of participation in the 5-Star Promise initiative. Surely you want to promote safety for your employees. However, depending on the how big your staff s and the types of security devices needed, hotel financing solutions may be necessary to create a safe environment in line with AHLA’s suggestions.
Participation on the Rise
Since it was announced, participation in the 5-Star Promise program has increased by 230%. Currently, about 20,000 properties have committed to the principles of the 5-Star Promise. They are putting the safety and well-being of their employees at the top of their priorities. The right hotel loans can provide financial support for these and other activities in the hospitality industry.
Finding the Right Hotel Construction Financing Solutions
Renovating, upgrading, and adjusting safety in your properties is an ongoing process. These projects mean you want the most practical hotel construction financing options available. Working with a company that specializes in hotel financing is the best way to manage expenses of this nature. Your hotel lending company will provide you with the right solutions for short-term and long-term lending arrangements in the hospitality industry.
If your company needs the best and most practical options for hotel funding, Stonehill is the best and most practical solution for your needs. We are direct lenders with a commitment to quality and customized arrangements for our customers. Call us today at 713-666-2544. Our team will be happy to work with you to create the most practical financing solutions for your needs.
Making sure that your hotel appeals to your target audience is critical to your ongoing success in the hospitality industry. The right hotel financing options can help you to update and upgrade your amenities to align with the preferences of your guests. Mobile innovation is one of the most important areas in which improvements may be overlooked by hotel owners and managers. Using hotel loans and financing to upgrade technologies for booking, messaging and requesting special services will often pay off in increased guest loyalty and recommendations for your facilities and customer service.
The Most Wanted List for Hotel Guests
According to recent studies and surveys, most hotel guests would prefer to use their mobile device to conduct a wide range of activities in the hospitality marketplace:
- Oracle Research found that 88 percent of the guests they surveyed would be interested in a mobile app that would allow them to personalize their hotel experience.
- SmithMicro’s research indicated that 83 percent of respondents wanted promotions for hotel services and amenities to be sent directly to their mobile device.
- A YouGov poll found that 58 percent of those responding to the survey wanted to be able to book hotel restaurant reservations by using their mobile devices.
- More than half of all those responding to the Hospitality Technology magazine’s 2018 Customer Engagement Technology Study indicated that they would like the ability to pay using a mobile device. Only 28 percent of hotels, however, said they had that capability.
While about 80 percent of hotels allow the use of mobile devices and smartphones to book room reservations, only 30 percent are equipped to allow changes and management of reservations through the same smartphone or device.
Adding the Amenities That Matter to Guests
The right hotel financing options will make it much easier for your hotel to upgrade its mobile and technological services to accommodate the wishes of your guests. Implementing mobile pay options, for instance, is usually a relatively low-cost process that will pay off in improved customer satisfaction. Changing workflows and adding systems that allow for mobile bookings at your hotel restaurant or alterations of existing reservations will usually pay off in an improved reputation for customer service that can increase your profitability in the competitive marketplace.
At Stonehill Strategic Capital, we offer the most advanced and practical options for hotel construction financing, bridge loans, permanent loans, mezzanine financing, preferred equity lending arrangements and PACE lending options. We work with our clients to provide the most appropriate hotel financing options for a wide array of renovation and acquisition requirements. Call our team today at 713-666-2544 to schedule a consultation. We look forward to the opportunity to serve you now and in the future.
Finding the right hotel loans is essential to maintain growth and to stay competitive in the hospitality industry. Airbnb is a serious threat to many hotels in urban areas or resort destinations. Developing strategies that differentiate your hotel in a positive way from these hit-or-miss accommodations will provide you with added visibility and increased interest in your properties. There are a few ways to set yourself apart from Airbnb accommodations in your area.
Focus on Your Amenities
Your hotel offers many practical amenities that Airbnb properties cannot. From swimming pools to business centers and high-speed Wi-Fi, your establishment caters to every part of the travel experience. Hotel construction financing is a great way to fund new amenities and additions to your lineup of services. By offering guests the best experience, your hotel will improve its reputation and will set itself apart from bare-bones Airbnb arrangements with little amenities.
Make Booking Easier
Upgrading your booking processes with new equipment and increased staffing is a great use of hotel financing resources. Especially for hotels that are not part of a chain, making sure the booking process is easy and transparent will ensure that guests can make arrangements for a stay online or on the telephone. This strategy will help your hotel to stay competitive in the modern hospitality industry.
Target Your Primary Audience
Understanding the differences between your hotel’s target customers and those who prefer Airbnb accommodations will allow you to position yourself correctly in the industry. Hotel construction financing arrangements are designed to help you modernize your current hotel properties and acquire new ones that will appeal to your specific niche. A luxury hotel and resort, for example, is not in direct competition with Airbnb and its bargain-hunting customers. If you offer affordable accommodations, you may want to target your potential customers with ads that focus on the services you offer and that Airbnb accommodations do not.
Build on Your Successes
Taking a hard look at your guest data to determine the primary reasons your customers choose your hotel will allow you to focus your financial efforts where they will do the most good. For example, if your facility primarily caters to business travelers, upgrading your connectivity and equipment with the help of customized hotel loans could promote your appeal among this niche of the hospitality marketplace.
At Stonehill, we offer hotel loans designed with your needs and your hotel in mind. We go the extra mile to ensure that your financial arrangements suit your needs perfectly. Call us today at 713-666-2544 to schedule a consultation. We are here to serve you.
The right approach to refinance your hotel loans will provide you with the best options for your financial needs. Understanding the criteria used by lenders is essential to ensure the best possible results. Keep in mind a few key points when planning to refinance loans in the hospitality industry.
Timing Is Critical
Taking a good look at the terms of your loan and assessing the best time to refinance is essential to protect the financial health of your company.
- Checking to see if commercial interest rates are increasing or decreasing can determine the right timing for your refinance application.
- If you have a balloon payment scheduled for your current hotel financing arrangement, be sure to leave adequate time before this payment is due. This can ensure that your refinancing options and loan is in place before this payment comes due.
Making sure the timing is right for your application will help you achieve the most favorable terms for your refinancing arrangement.
Check the Terms Carefully
A hotel loan is a long-term financial arrangement. Making sure that all the terms are manageable and that they suit your needs is critical to your ongoing financial stability. Working with an established lending company is the best way to find the right hotel loans. Your loan advisor has the experience and knowledge to help you determine refinancing arrangements that best fit for your needs and current financial situation.
Stonehill is a direct hospitality lender with a proven track record for delivering the right hotel loans for our customers. We offer hotel lending solutions that include mezzanine loans, bridge loans, preferred equity and permanent loans ideal for your company’s specific needs. Call us today at 713-666-2544 to schedule a consultation with us. We look forward to the opportunity to serve you.
An accurate valuation of your hotel’s worth is often necessary to obtain hotel financing arrangements and provide added information for owners, investors and stakeholders. Understanding the valuation methods used to determine this figure can help assess the current value of your hotel more effectively. This can allow you to make practical business decisions regarding acquisitions, renovations and hotel financing options.
Three Primary Valuation Methods
Real estate appraisers and hotel valuation firms typically use one of three methods to determine the actual value of a particular property. These three methods may be tweaked to produce accurate information about the hotel’s value in the market.
- The income approach for valuation looks at cash flows and uses a predictive method to determine the likely revenue streams for the hotel. This can help in determining hotel loans based on valuation of an existing property. Past results are not a guarantee of future performance. However, lenders often request historical data on occupancy rates, profits and revenue streams when applying the income approach to property valuation.
- The cost approach is based on the idea that the hotel is worth as much as it would cost to rebuild less any depreciation. The value of the land on which the hotel sits will also be factored into this valuation.
- The market comparison approach uses comparable properties in similar markets to determine the most accurate selling price for a specific hotel. The amenities, physical characteristics, size and capacity of the hotel will be taken into consideration. Special features or distinctive advantages or disadvantages of the property will also be considered.
Each of these methods can provide valuable information on the actual worth of your hotel investments. With accurate information, the likelihood of success in acquiring hotel construction financing for new projects or acquisitions increases.
At Stonehill, we offer many hotel financing options for investors. We work with our clients to ensure the best lending solutions for every need. Our commitment to going above and beyond for those we serve is demonstrated in every transaction we handle. If you need hotel financing, call Stonehill today at 713-666-2544. We look forward to the chance to serve you.
Acquiring the right hotel construction financing is essential to achieve solid returns on your financial investment. A thorough approach will help your company secure the best loan options for an acquisition, construction or renovation project. A few key strategies are required to bolster your chance of obtaining competitive loans and terms.
Know What You Want
The first step in your loan acquisition process is to determine the amount of funding needed and terms that will be most favorable. Achieving a clear idea of what is needed helps tailor the loan application to your own specific set of needs.
Organize Your Documentation
Before applying for hotel financing, be sure to organize data and documentation in a clear and easy-to-understand way. Preparation and organization give a positive impression on potential lenders, which will increase the likelihood of acquiring hotel loans on the terms you prefer.
Create an Executive Summary
An executive summary is a condensed version of the details of your project plan and loan proposal. This document is designed to streamline the evaluation process for lenders. An executive summary makes it easy for lending companies to assess your financing proposal quickly. This may increase the odds of success in acquiring preferable hotel construction financing.
Perform the Necessary Research
A competitive set is a list of properties that are comparable with the hotel property your company intends to develop. Obtaining historical data and details on available amenities with competition will help your company compare market trends to support your lending request. Market research on average rates, revenue and occupancy levels ensures a profitable investment and supports the funding requests to lenders.
At Stonehill Strategic Capital, we specialize in providing lending options for companies throughout the hospitality industry. We offer bridge, mezzanine, permanent, preferred equity and Small Business Administration lending options tailored to the precise needs of our clients. As a leading direct hotel lending institution, Stonehill provides the best solutions and the proven experience for your next project. Call us today at 713-666-2544 to discuss hotel construction financing with our knowledgeable loan originators. We are here to serve you.
Finding the right hotel loans help you make the most profitable investments in the hospitality industry. By monitoring current trends in the financial marketplace, you gain the understanding of right funding options for your upcoming acquisitions, renovations or expansions. There were many trends in the hotel lending marketplace for 2018 and 2019.
Increased Fluidity in the Hotel Financing Marketplace
While values and sales have remained strong throughout 2018, the hotel financing market has been booming for investors and hotel owners. Private equity arrangements are gaining in popularity for acquiring and financing larger chain hotels and franchises. For smaller hotels, alternative lending options are developing into the traditional financing marketplace.
A Slowdown in New Construction
Demand for hotel accommodations and new properties in many areas are strong. However, most experts believe that hotel construction financing will continue to see a downturn in 2019. At least part of the recent slowdown in new construction is associated with tariffs on building materials coming from overseas. This has led to slower growth in the hotel construction field and reduced the need for funding.
Increased Renovation and Refinancing
In 2018, lenders saw a marked increase in the refinance market. This trend is expected to continue through 2019, as hotel owners and investors hang on to properties rather than attempting to sell them. Rising interest rates also make accessing equity in existing properties more appealing than acquire financing for new hotel acquisitions. Finding the right hotel loans and solutions allow for flexibility in managing upgrades to existing hotel properties.
Shopping for the Right Lenders
For most real estate investors, the right lending has a significant impact on the profitability of their hospitality investments. For 2019, these investors are likely to be particular about the lenders they work with for their financing needs. Working with a leading company in hotel lending helps investors to obtain the right arrangements for their funding requirements.
As an established leader in the hotel lending marketplace, Stonehill provides a wide range of financial options for investors in need of solutions. We offer a variety of loans designed to suit the needs of our clients perfectly. Call us today at 713-666-2544 to discuss your hotel loans and financing requirements and to schedule a consultation with us. We look forward to the opportunity to serve you.
Selecting the right hotel financing can have a real impact on the success of your investment in these facilities. Determining whether equity or debt financing is the right choice for you can be a challenging task. Here are some tips on choosing the most practical loans and hotel financing options for your renovations, constructions or acquisitions in the hospitality industry.
Cost Advantage: Equity Financing
In most cases, equity financing can be obtained at a much lower cost than other hotel loans. By selling shares in your property, you can take advantage of your existing equity to access the funding you need to manage renovations and new acquisitions while keeping the costs as low as possible for you and your company. In some cases, the only out-of-pocket costs you will incur will involve the legal process necessary to transfer ownership interests in your company and the fees associated with that process.
Control Advantage: Debt Financing
While taking on additional debt may not be especially appealing for your business operations, equity financing arrangements may limit your ability to make unilateral decisions about your hotels and the ways in which they are managed and renovated. Taking on partners is always a balancing act between acquiring necessary capital and retaining control over your projects. Determining exactly how much control you are willing to surrender to access the funding available through equity financing is an essential step in determining whether debt financing or equity financing is the right choice for your project.
Convenience Advantage: Debt Financing
Opting for debt financing can provide you with added convenience when managing your hotel construction financing requirements. In many cases, you will have a greater range of options to choose from when selecting debt financing over equity financing. The process for debt financing is typically faster than that associated with equity finance arrangements, which can sometimes drag on for months while the various stakeholders and investors in your project provide the required information and funding needed to complete this process.
Access Advantage: Equity Financing
Business loans acquired through debt financing typically require an unblemished credit record and solid collateral for approval. By contrast, equity financing can be acquired through private investors who may not be as particular about the track record of the other investors. Because they are making an investment in a property rather than a borrower, equity investors can often overlook minor problems with cash flow and credit problems in the past.
At Stonehill, we offer practical financial solutions for the hospitality industry. We can provide access to debt and equity financing solutions that work for your business and your ongoing needs. Call us today at 713-666-2544 to discuss your hotel financing requirements with our experts. We look forward to the opportunity to serve you.
First impressions can have a lasting impact. Ensuring that your hotel makes the most positive impression on guests is essential to stay profitable and relevant in the modern hospitality industry. Regular updates and renovations may even be required by your franchise through a property improvement plan (PIP) agreement signed at the time of acquisition. Renovating your hotel can be an expensive process, however. Finding the right hotel loans can help you to manage the expense and disruption of these activities more easily to maintain greater productivity now and well into the future.
Hotel Financing for Renovation Projects
The U.S. Small Business Administration (SBA) offers loan programs for small to medium-sized businesses in the hospitality industry:
- SBA 7a loans are designed specifically for the acquisition of commercial real estate and are available in amounts up to $5 million and for terms of up to 25 years.
- SBA 504 loans work in a similar way but offer larger loan amounts of up to $20 million. The loan terms are shorter and range between 10 and 20 years.
The restrictions and paperwork associated with these government-backed loans, however, can be a significant deterrent for hotel owners and managers looking for the right hotel construction financing options. There are other options for financing hotel renovations in the lending marketplace:
- Refinancing your hotel can provide you with cash on hand to manage upgrades to furniture, fixtures and equipment or to fund structural improvements. This approach typically requires that you already have significant equity in your hotel and may require you to provide a detailed plan outlining what the funds will be used for during your renovation project.
- Business lines of credit can be used to fund smaller renovations, including updating signage and replacing flooring in selected areas.
- Conventional bank loans are often available for companies that have an existing relationship with the lending institution and a clean credit record.
- Bridge loans, as their name suggests, are designed to bridge the gap between necessary funding and the acquisition of longer-term or more favorable financing terms and arrangements.
Finding the right hotel loan for your planned renovations can help you manage these necessary tasks to keep your facilities looking their best for your guests.
Stonehill offers hotel loans designed specifically to suit the needs of the hospitality industry. We can design a renovation loan that is tailor-made to supply the cash you need for your upcoming renovation project. Our expert loan originators can provide you with the right guidance and financial solutions for your hotel. Call us today at 713-666-2544 to discuss your funding requirements with us. We look forward to the chance to serve you.
The right hotel financing arrangements can make a significant difference in the profitability of your investment. In some cases, however, obstacles may arise that could prevent you from obtaining the financing you need for your hotel acquisition or renovation. Here are some of the most common obstacles you may encounter when seeking financing for your hotel investment.
Past Credit Issues
Recent economic downturns have left many investors with credit issues in their past. This can reduce your chance of qualifying for hotel loans for acquiring new properties or renovating your current ones. Working with a financial company with solid and relevant experience in the hotel lending marketplace can ensure the best possible outcomes for your loan application.
Franchising Agreement Concerns
For investments in franchise properties, banks will often take a hard look at the agreements in place before agreeing to longer-term financing. Most franchise agreements are written to cover 10 years or less. Lending institutions may be unwilling to approve finance arrangements that extend beyond the length of the franchise agreement. They may also require a comfort letter from the franchisor that outlines the rights of the bank if the borrower defaults on the loan. The information provided by the franchisor can have a significant impact on your chance of approval for these loans.
Property Improvement Plans
Most hotel franchises require periodic updates and improvements to the hotels that operate under their name. Your lender may request information on upcoming property improvement plans (PIPs) and the cost of these renovations before making a decision about your loan application. Making sure you can provide the required information in a timely way can increase your chances of success in obtaining the funds needed for your acquisition or renovation project.
High Occupancy Rates and Projected Demand
It may seem counterintuitive, but occupancy rates that are perceived to be too high may reduce your chance of acquiring financing for your hotel investment. Occupancy rates of 80 percent or over may serve as an indication to lenders that the market is primed for additional development that could significantly reduce future returns on these investments. This long-term approach to lending could limit your ability to acquire the funds needed for your hotel investment.
Stonehill is a direct hospitality lender with proven experience and knowledge of the hotel lending marketplace. We work with investors to create the most practical and effective solutions for a wide range of lending needs, including permanent, bridge and mezzanine loans. Call us today at 713-666-2544 to discuss your requirements with an experienced and qualified advisor. At Stonehill, we look forward to serving you.