Jones Lang LaSalle reports from Thailand that hotels across the region are under extreme financial stress as they face operating with reduced occupancies for the foreseeable future
BANGKOK: Hotel property owners across Asia are increasingly turning to creative financing solutions to ride out near-term turbulence. Owners are seeking greater access to debt financing to bolster cash flows as they face an unprecedented period of historically low occupancy rates, closed borders and severe limitations on air travel due to the ongoing COVID-19 pandemic, says JLL. The impact of the virus on the hospitality industry across Asia continues to be significant, with many hotels and investors witnessing an unparalleled cash crunch as much reduced revenues struggle to offset fixed costs.
According to JLL’s Hotels & Hospitality Group executive vice president Adam Bury, and senior vice president Corey Hamabata, travel restrictions are forcing owners to look at an array of short-term financing options, this temporary dislocation is expected to also create new opportunities.
They warned that hotels are struggling to break even, much less cover their debt service obligations, leaving owners to fill the gaps. As the hotel industry is typically the fastest to react to demand shocks and also the quickest to recover, certain owners are looking for near-term solutions to bridge cash flow until travel, hotel demand and revenues return.