According to sources, the failure of Silicon Valley Bank and Signature Bank last weekend will have ramifications for the hotel industry, primarily tightening underwriting criteria. This will most likely result in "difficulties obtaining hotel construction loans and a slowdown in recovery of the already difficult lending environment."
The unknown for the industry, according to Michael Bellisario, senior hotel research analyst and director at Baird, is the near- to intermediate-term effects on financing availability and how banks may adjust their risk tolerance and allocations to hotel real estate.
"More broadly, the bigger concern is the impact on overall economic growth and potential second-order effects down the road," he explained.
