With people cutting back on travel in the current recession, the hotel industry has struggled for business. Numerous hotels along the east coast are likely to be forced into bankruptcy or foreclosure in the upcoming months, if they have not already. Luxury hotels, which have larger staffs and higher operating costs, are in especially dire straits. In order to avert foreclosure, hotels are already cutting back on services and cutting corners to reduce costs. Companies like MGM Mirage and Harrah’s Entertainment in Las Vegas have been hard hit, as have hotels in Scottsdale Arizona and across the east coast.
first tuesday take: California’s hotel situation was not addressed in this article. Moreover, the unmentioned owners of vacation rentals fall into the “troubled hotel owner” category, since they are generally looking for the same type of people to fill their rooms and homes (although they are currently untroubled by the drastic decline in hotel convention-goers).
What will happen in California where there is a problem with falling hotel occupancy and the need to stave off bankruptcy/foreclosure? Destination locations and beachside resort hotels will probably go condominium or time share. In fact, they will make money in the process, and never need to look for a vacationing transient occupant again. Is it time to buy a waterfront hotel?
Re: “More Hotels Facing an Uncertain Future”, from New York Times