Closing a hotel sale in today’s market is like hiking a new trail you have never been on. You have all the hiking gear you have always used but now your boots are too small, your pants are too short, your shirt is too tight and the backpack you’ve had for 20 years has holes in it and all your food is falling out. ha

That is a visual image of what it us like closing a hotel transaction in today’s compressed, high interest rate environment. Numbers are still numbers and cash flow is still cash flow, but everything has changed on how you get there. The metrics you have used for years, no longer work the same. Its like the wolf is not only at the front door but there are others wolfs at the side door and back door. Needless to say, it is challenging.

The other day I ordered pickup from a well-known steak house (it ends with the word ‘Back’) and ordered two grilled chicken dinners with sides and salads. After tip, it was $65. I thought ‘come on, I know inflation is high, but this is ridiculous.’

I believe we are in a bubble that is leaking air as I type this. The stock market seems oblivious to the fact that 78% of Americans live paycheck to paycheck and have less than one thousand dollars saved in the bank.  Our national debt increases 5.2 billion dollars every 24 hours. Again, I believe we are in an inflated financial bubble that will pop at some point.

Back to the Hotel sales – It’s been a tough 18 months that I believe will last well into 2025 for hotel transactions. The only deals we are getting done are with the very wealth or all cash buyers. I am being forced to tell the buyer who wants to put 20% down and thinks he can close the deal – “just stay at home and eat another sandwich.” KT