The weak US economy is impacting consumer and business spending worldwide, reducing leisure and business travel. [1] Hotels, resorts, airlines, and cruise lines are offering significant discounts to attract customers and maintain occupancy levels, but occupancy continues to decline across the industry. [2] Some hotels are facing foreclosure as the financial crisis limits financing options, and banks are ill-equipped to manage foreclosed hotels themselves. [3] Terra Asset Management offers hotel owners an alternative to expensive investment bankers for unloading financially troubled properties, taking on legal, operational, and sales tasks.

1. Travel Marketplace-
The weak US economy continues to impact virtually every segment of consumer and
business spending, worldwide. Clearly with consumer spending less day by day, leisure
travel is suffering. With travel being a high discretionary part of consumers’ budgets, it
is often the first things that Americans and the first world forgo.
Business travel may be even worse. It has been recently reported by Gannett News
Services that a whopping 71% of corporations will spend less on business travel in 2009
than in ’08 when there were also cutbacks. Only 8 percent of companies reported
traveling increasing this year. The cost to business travel alone? Over 8 billion dollars
in lost revenue.
Beyond traditional business travel, the import and export business is losing ground.
Miami, one of the United States’ busiest ports is down 6% in 2008 with no turnaround in
site.
The impact is dramatic. Hotels, resorts and cruise lines are offering bargain basement
deals to try and fill rooms and seats. Airlines have tried fare sales in Q4 of 2008 to try
and keep every seat filled. Although airlines can self correct their business by cutting
back on flights to save money and fuel. By cutting back on the number of seats available
they can eek every last ounce of profit with each flight.
It’s not the same with hotels however. An empty bed means no revenue and there is
nothing worse for hotels than a low occupancy level. So, hotels, cruise lines and even car
rental companies are offering low rates to fill rooms. According to Smith Travel
Research, occupancy in North American hotels was down 10% year over year last
November. PricewaterhouseCoopers predicts that overall occupancy in 2009 will
decrease by almost 4 %, which would be the highest decline since 2001. Further, hotel
and resort expansion is up 1.6% taking overall occupancy to 58.6% which is the lowest
since 1971. This can turn out to be a great deal for bargain hunting travelers and
companies like Priceline.com, but not for the large hotel and resort companies. One
salvation for hotels and resorts is by offering very low rates to get customers into beds
and hoping they’ll spend more in the hotel’s restaurants, bars and spas.
Could it mean hotels and resorts actually have to close their doors for good? Absolutely.
In Palm Springs California, a new Ritz Carlton development was put on hold as their
financing was through Lehman Brothers. Two East Bay hotels outside of San Francisco
are facing foreclosures on their mortgages. The Sheraton Pleasanton Hotel, a 170 room
hotel and the Coliseum Suites, a 293 room property, have defaulted on their mortgages
according to the Alameda County property records. There’s more: The Los Angeles
Hilton is in the hands of Security Pacific National Bank. The Westin Canal Place is now
owned by The Travelers. Morris Lasky is the Chief Executive of Lodging Unlimited in
PA, rescuing hotels in trouble. He says he used to get 4 or 5 calls a month about hotels in
financial trouble, but today receives that many in a day.

2. So what do banks do with hotels they have to take back? Traditionally banks don’t want
to be in the hotel business. But today there is a huge lack of buyers, because banks aren’t
loaning money and potential buyers don’t have the ability to pay 100% cash for these
properties. David Renton, who leads a hotel investment fund in Stamford, CT says “this
is the worst crisis for the industry since the Great Depression.”
With bankers not ready, willing or able to handle hotel foreclosures some are hanging on
for dear life. However the news gets worse- with banks not knowing how to run hotels
without bringing in expensive and experience hotel executives to save a property, often
times the hotels fall into far worse financial shape once it’s back in the hotel’s hands.
What should you do if you’re a hotel/resort owner and you don’t want to be? You can
call an expensive investment banker which will take a good deal of time and a good deal
of expense in unloading the property. Or, you can call on California foreclosure experts
at Terra Asset management.com. Operating in Palm Springs, Terra Asset Managers and
its partners have unique foreclosure expertise and are the leading foreclosure specialists
in Southern California. Terra Asset Management.com can cut your time of sale down.
Equally important, Terra can limit your liquidation risk and most importantly Terra has
the resources and the relationships to get your property sold quickly.
The 4 step process of Terra Asset Management takes the worry off your shoulders and
handles all aspects of selling the property.
Step 1: Terra takes over the property so you don’t have to be involved
Deals with local governments for you.
Step 2: They take the property and put in on the right path. They will handle all
repairs or other things that may keep you from selling it quickly.
Step 3: Terra handles all of the day to day operations of the property including
maintenance and upkeep.
Step 4: Terra disposes of your property in the quickly and easily and puts the most
money back into your pocket.
Terra Asset Management is a full services real estate firm and has contractors,
CPA’s, legal and other help that may be necessary for you to sell your property.
If you have a hotel or resort property and other brands and you need it sold, call Terra
Asset Management. com .. Charles Stewart can be reached at (760) 866-0021.