Thursday, September 03, 2009

Upstate NY's rapidly expanding hotel inventory...

I don't have the official number but I'd guess that probably 400-600 new rooms have come online recently in Watertown area as several large hotel projects have completed.

Today's news that NYS was going to grant $2.5 million to develop a building in downtown Watertown seems interesting. While I welcome any efforts to restore downtown, I think we need to realistic with our expectations. Consider the consequences of overbuilding....

Portland's hotels face grim prospects

"Hilton's decision to shutter its original 23-story building for four weeks this winter frames a grim picture for a hotel industry battling corporate travel cuts and consumers' belt-tightening.

Hilton's original 1963 building is a local icon of the travel industry. The hotel has provided temporary shelter for famous faces from George W. Bush to former South Korean president Kim Dae-jung to boxer Muhammad Ali to celebrity sex doctor Dr. Ruth.

But for two weeks in November and one week each in December and January, the Hilton's presidential suite -- along with all other rooms in that building -- will go dark."

or at the high-end: Maui Prince Faces Foreclosure

Maui Prince Hotel is the target of foreclosure proceedings and the cancellation of a management contract just two years after a Morgan Stanley real-estate fund and local developers bought it for $575 million.

Mortgage-holders led by Wells Fargo Ba
nk sued last week to foreclose on the 310-room resort, following the owners' failure to pay the resort's $192.5 million mortgage when it came due in July. The foreclosure threatens to wipe out the $227.5 million in mezzanine debt held by a UBS fund and the $250 million in equity that Morgan Stanley and its partners put into the property.

This week, Prince Resorts Hawaii, which stayed on as the resort's manager after selling it to the Morgan Stanley group in 2007, disclosed it will stop managing the resort Sept. 16 due to a shortage of funds from the resort's owners and lenders. "We do not have funding for payroll, but we are getting some funding for our accounts payable and basic operating expenses," said Donn Takahashi, president of Prince Resorts Hawaii, which manages three other resorts on the islands. "We cannot operate a top-notch resort in this fashion."

Now clearly Maui is not nearly as upscale as downtown Watertown, but maybe there are some warning signs showing up in the hotel market.

1 comment:

Anonymous said...

Dig a hole, fill a hole up . Throw tar on a road with loose gravel on top. Our entire plan for economomic recovery is little more that a scene from Cool Hand Luke.