Ready, Willing and Able

In real estate, we were always taught that the most important thing is a ready, willing and able buyer. With commercial real estate / hotels it is the opposite. The most important thing is a ready, willing and able seller.

I am writing this blog post March 24, 2020, four weeks after the start of the COVID-19 crisis.

In terms of hospitality market value, the past four weeks have been breathtaking. The speed and severity of value decline in the hospitality industry has simply never happened before. After 30 years in the business, I have been through some downturns and recessions, but nothing prepared me for this. It’s a funny thing, in that when people can’t be around other people, the travel & tourism economy almost stops.

There are several good things that have come out of this downturn. First and foremost is that for the last several years, many owners were holding out for every,,,, last dollar of value. They have disappeared. There are no conversations about why a hotel should be worth more next year and why a buyer should be willing to ‘pay up’. In short, the reluctant seller is now an aggressive seller. They all recognize that maybe, they should have taken that offer last year.

Over the past couple of years, many sellers have been arrogant and unbending, thinking that the hospitality economy will just keep getting stronger the longer they own the hotels. Well, that ship has sailed and now we have a new normal.

Second thing that has happened is that the sellers no longer argue about our fees. Third and lastly, everyone now know we are clearly in a recession. There are no opposing opinions now.

Therefore, what we have today is a new world market and a new economy where if an owner wants to sell, he now knows he needs to be ready, willing and hopefully,,,, able. KT

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