- with readers working within the Retail & Leisure industries
- within Wealth Management, International Law and Insolvency/Bankruptcy/Re-Structuring topic(s)
Pryor Cashman Partner Todd Soloway, Co-Chair of the firm's Litigation Group and Chair of the Hotel + Hospitality Group, was quoted in Mergers & Acquisitions discussing the increasing pressure on mid-market hotels and the emerging opportunities this creates for distressed investors.
In the article, "Stuck in the Middle," Todd highlighted the challenges facing this often-overlooked hotel segment.
"The luxury and super luxury areas are faring well, and the budget travelers are traveling and looking downwards for a better deal [.] However, the middle of the market is being squeezed. Margins are tighter, and they are struggling to keep up with high costs and the competition for labor, while juggling delivering quality service for their customers."
Todd also highlighted macroeconomic factors straining hotel finances, particularly the rising cost of debt as interest rates climb:
"The interest rate environment is affecting hotel owners, as low-interest rate debt comes due over the next 24 months and has to be replaced by higher-interest-rate debt. They need increased revenue to cover the accompanying rise in costs."
Lastly, he pointed to a growing volume of discounted loan sales as a clear signal of market stress:
"A lot of loan purchases [are] going on, which is an indication of stress and distress, as lenders sell off loans at a discount to get them off of their balance sheet."
Todd's observations reflect key legal and financial trends shaping the hospitality space, particularly for investors exploring distressed assets and middle-market opportunities.
Read the full Mergers & Acquisitions article below:
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