Workouts & Restructuring

When hotels do not perform as expected, emotions of investors and operators are often frayed. In today's market, after a long period of sustained economic growth and strong hotel performance, many managers, lenders, loan servicers and owners are not experienced in sailing through troubled waters.  They have never had to deal with precipitous drops in demand, profits and values.  They are not experienced in working with brands and management companies to get the results needed to survive.

What is needed in such circumstances are decades of experience through many downturns in the market, together with objectivity and unbiased analysis of the situation. The tasks include assessment of the market in which the hotel operates, and the hotel's relative performance to that market; the hotel's marketing, pricing, and service strategies; the operating policies and controls being used; and a projection of the hotel's likely performance under various scenarios. A review of, and modifications to the management contract are sometimes appropriate.

These methods are used to identify strategic alternatives for the asset, and to implement a restructuring which maximizes the value of the asset. When a bankruptcy is involved, assistance with preparation or review of plans of reorganization and monitoring of the debtor's management is provided.

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