I talk to hotel owners every day that still believe their hotel is valued the same as it was a year ago. Well, its not. I tell them very gently I can only deal with the market as it is today. Maybe it will come back and even exceed last year’s value but today this is what we have. They don’t like it, but they know it is the spoken truth.

I am sure business owners on October 25th 1929 felt the same way. Black Tuesday (as it was called) was the day before that started the great depression. It lasted for 10 years. I feel sure that people that owned horses and buggies felt the same way when they saw Henry Ford’s new invention coming down the street. Developers continued to build grand train stations even after they saw a passenger plane overhead. The day after the invention of the internet, I am sure people thought, “that won’t ever become anything important.”

It takes people a while to adjust to the new normal in business and in their personal lives.

With interest rates where they are today and reports of them going even higher, it has certainly changed our business model. The way we valued hotels a year ago no longer works today, and this high interest rate environment will probably last for several years. I don’t see the US getting back to the almost “free money” we had for the last 5-7 years. The 08-09 housing crash was caused by cheap money with no background checks. They called those “NINJA” loans. It meant “no income, no job and no assets.” Isn’t that the dumbest thing you ever heard? Back then you could walk into a bank with no money, no job and get almost a 100% home loan. It is no wonder we went through the housing crisis.

My point- Look at today and deal with the market we have today because you can’t ever go back, and you can’t fast forward to a better time. All we have is what we have today. KT