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More than 50% of hotels profitable in '92.

Limited-service hotels continue to outpace their full-service rivals. While both types of hotels experienced a similar percentage point decline in losses from 1991, Coopers & Lybrand found that the percentage of limited-service hotels with losses (28.5 percent) was only half the rate for full-service hotels (57.1 percent).

According to Dr. Bjorn Hanson, hospitality industry consulting chairman: "The improvement in hotel profitability in 1992 can be attributed to market factors, such as higher occupancy rates and the decline in hotels' interest rate burden due to the widespread restructuring of delinquent loans," explains Hanson. "Other factors are specific cost-containment measures undertaken by the industry, including payroll reductions, negotiation of lower management fees, reduced taxes resulting from property tax appeals, and other economizing changes."

Supporting data on hotel loan delinquencies confirm this positive performance trend. The percentage of delinquent hotel loan principal reported by the American Council of Life Insurance (ACLI) peaked at 15.89 percent during the second quarter of 1992, and had declined to 14.29 percent by the end of 1992.
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Title Annotation:Coopers and Lybrand reports on hospitality industry for 1992
Publication:Real Estate Weekly
Date:Jun 9, 1993
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