Light at the end of the tunnel?
Many in the industry anticipated that the impact of the last fifteen months would lead to widespread distress in the hotel and hospitality industry with investors having dry powder to invest and take advantage of the anticipated opportunities. This has not yet been the case but there are some key issues that are keeping our clients (borrower and lender side) awake at night. With the stress of the pandemic coming to an end for the industry, does this mean that we will not see any of that stress turning into distress?
If the last fifteen months have been hard, the next fifteen may be harder, with pressures on cashflow both in terms of operations as well as capital expenditure requirements (whether because of maintenance or to adjust the model to support different trading models or the sustainability agenda).
Many hotels have been closed or operating on a very limited service model. It will take time for revenue and cashflow to rebuild and stabilise and there will be pressure on the latter: