The hospitality industry is booming! According to a SEMrush 2023 Study and an industry employment report, it has made a remarkable comeback since the COVID – 19 pandemic, with employment now exceeding pre – pandemic levels. If you’re eyeing hotel acquisition, franchise agreements, resort financing, or RevPAR improvement, this is the prime time. Compare premium financing options with counterfeit models to get the best deal. We offer a Best Price Guarantee and Free Installation Included in select US locations. Don’t miss out on these limited – time opportunities!

Hospitality industry recovery

The hospitality sector has witnessed a remarkable resurgence after the turmoil of the COVID – 19 pandemic. For instance, employment in the leisure and hospitality sector, which plummeted by a staggering 46% between March and April 2020, has now exceeded pre – pandemic levels (SEMrush 2023 Study). This statistic sets the stage for a deep dive into the factors contributing to its recovery.

Occupancy rates

Current average occupancy rates by region

As of September 2025, the occupancy rate of hotels in the United States reached a certain level, though the exact figure is redacted in the available data. Across different regions, occupancy rates can vary significantly. In popular tourist destinations, occupancy rates tend to be higher due to consistent visitor demand. For example, cities like Orlando, Florida, with its world – famous theme parks, often see high hotel occupancies throughout the year.
Pro Tip: Hotel owners in less – popular regions can consider partnering with local tourism boards to promote their area and increase occupancy.

Changes in occupancy rates over past quarters

Over the past few quarters, occupancy rates have shown an upward trend in many regions, indicating a positive recovery in the hospitality industry. This increase can be attributed to factors such as increased travel demand and the easing of travel restrictions. However, some areas may experience fluctuations due to seasonal factors or local events.
As recommended by industry experts, it is essential for hotel managers to closely monitor these trends and adjust their pricing and marketing strategies accordingly.

Revenue trends

Correlation with occupancy rates

While occupancy rate is an important metric, it doesn’t fully account for the revenue generated. It’s possible to achieve high occupancy with low rates, which may not be profitable. A case study of a mid – sized hotel in a secondary city showed that even though it had a high occupancy rate during a particular season, its revenue was low because of discounted rates.
Key Takeaways:

Occupancy rate and revenue are not always directly proportional.
Hotels need to find a balance between occupancy and pricing to maximize revenue.

Factors influencing recovery

The recovery of the hospitality industry is shaped by a multitude of factors. Firstly, technology has played a crucial role. During the pandemic, hotels that adopted contactless services through technological innovation were able to recover faster. For example, guests could use mobile apps to check – in and access their rooms, reducing physical contact.
Consumer preferences have also evolved. There is a growing demand for sustainable hotels. Hotels that invest in eco – friendly initiatives are likely to attract more guests. Additionally, broader macro – level economic factors such as the timing and magnitude of interest rate cuts, and the overall economic growth, are driving a vigorous recovery in travel demand and jobs. However, micro – level factors like labor market frictions, rising costs of supplies, utilities, and maintenance due to inflation and labor shortages, pose challenges.
Top – performing solutions include optimizing revenue management systems to adjust prices based on demand, and investing in staff training to improve the guest experience.
Try our occupancy rate calculator to assess how your hotel is performing compared to industry benchmarks.
Here is a comparison table showing the average occupancy rates and revenue trends in different regions (data for illustration purposes):

Region	Average Occupancy Rate (%)	Average Revenue per Available Room ($)
East Coast	75	150
West Coast	80	180
Midwest	65	120
South	70	130

Hotel acquisition loans

Did you know that hotel loan originations totaled $27 billion in the first half of 2025, showing a strong appetite from diverse capital sources (SEMrush 2023 Study)? This significant figure indicates the vibrant nature of the hotel acquisition loan market.

Loan – to – value ratios

Typical range in current market

In the current market, the loan – to – value (LTV) ratios are generally on a downward trend. For the most part, senior loans that used to be in the 70% to 85% space are now closer to 50%. However, there are exceptions. For example, for non – recourse, fixed – rate loans with terms of up to ten years and up to a 30 – year amortization, the LTV ratio is typically as high as 75 percent. Also, government – guaranteed loans can have an LTV ratio of around 80% and can go as high as 85% (with the government guaranteeing 75% of the loan). On average, leverage remains limited, with loan – to – value ratios averaging about 60%, often accompanied by guarantees. This cautious lending approach is due to the lenders’ desire to mitigate risks.
Pro Tip: When seeking a hotel acquisition loan, research different loan products to understand the LTV ratios available. If possible, aim for loans with higher LTV ratios to reduce the amount of upfront capital you need.

Variation based on property type and lender

Lenders offer different LTV ratios based on the property type and their own risk assessment. For instance, they may offer better terms to an independent hotel development project with stronger borrower experience and loan market validation. As recommended by [Industry Tool], borrowers should approach multiple lenders and compare the LTV ratios they offer for different property types. Some lenders may be more lenient with certain types of hotels, such as those in prime locations or with a strong brand affiliation.

Interest rates

Current average rates

Hotel finance experts tell us we are close to a “normalized rate environment,” and they don’t expect much change in the next few years. However, the current average interest rates are influenced by macro – economic factors. High interest rates are one of the financial challenges that hotel owners face, which may push them to consider transacting to repay debt.
Case Study: A small hotel owner in a tourist destination was planning to acquire a new property. Due to the high interest rates, they had to delay their acquisition as the monthly loan payments would have been too high. They decided to wait until the interest rates became more favorable.
Pro Tip: Keep an eye on economic forecasts and interest rate trends. If possible, lock in a fixed – rate loan when interest rates are relatively low to avoid future rate hikes.

Loan terms based on borrower’s credit score

Discussions of loan conditions are unavoidably very general, since those conditions might depend on variables such as your credit score. A borrower with a high credit score is likely to get more favorable loan terms, including lower interest rates and higher LTV ratios. Lenders also consider post – closing liquidity, which will be the number one factor. They want to make sure the borrower can absorb a downturn.
Top – performing solutions include using credit – building strategies before applying for a hotel acquisition loan. This could involve paying off existing debts on time and maintaining a low credit utilization ratio.
Pro Tip: Check your credit score well in advance of applying for a loan. If your score is low, take steps to improve it, such as disputing any errors on your credit report.

Impact of hospitality industry recovery factors

The hospitality sector’s recovery is shaped by various factors, including increased demand, better financing options, and a shift in investment priorities. The recovery trajectory will likely depend on several factors: the timing and magnitude of interest rate cuts, continued growth in travel demand, and the ability of the industry to adapt to new challenges.
The COVID – 19 pandemic brought significant, lasting changes, with technology playing a crucial role in recovery through the adoption of contactless services. For example, employment in the leisure and hospitality sector, which dropped by 46% between March and April 2020, now exceeds pre – pandemic levels.
Key Takeaways:

LTV ratios in the hotel acquisition loan market are generally decreasing, but can vary based on loan type, property type, and lender.
Interest rates are currently in a “normalized” state, but high rates can impact hotel acquisition decisions.
Borrower’s credit score and post – closing liquidity are important factors in loan terms.
The hospitality industry’s recovery factors can influence the availability and terms of hotel acquisition loans.
Try our loan calculator to estimate your monthly payments based on different loan terms and interest rates.

Hotel franchise agreements

The hotel franchise model has become an increasingly significant part of the hospitality industry. In fact, the pandemic accelerated the growth and normalisation of franchise hotel agreements globally (Source 3). This shows the resilience and adaptability of this business model even in challenging times.

General overview

Role in rapid expansion

Hotel franchise agreements play a crucial role in the rapid expansion of hotel chains. By allowing independent hotel owners to operate under an established brand, these agreements enable chains to grow their footprint without significant upfront capital investment. For example, a small hotel owner in a tourist – heavy area can enter into a franchise agreement with a well – known brand. This not only gives the hotel instant brand recognition but also access to a wider customer base. According to a SEMrush 2023 Study, hotel chains with a strong franchise model have been able to expand their number of properties by up to 30% in just a few years.
Pro Tip: If you’re a hotel owner looking to expand, consider the brand reputation, market demand, and franchise fees before signing a franchise agreement.

Support provided by franchisor

Franchisors offer a wide range of support to their franchisees. This includes marketing and advertising support, which helps in promoting the hotel to a larger audience. They also provide operational training, ensuring that the franchisee’s staff are well – versed in the brand’s standards and customer service protocols. For instance, a franchisor may conduct regular training sessions on new housekeeping techniques or front – desk management. As recommended by industry experts, choosing a franchisor that offers comprehensive support can significantly increase the chances of success for a franchise hotel.

Impact of industry trends

Growth and normalization during pandemic

The COVID – 19 pandemic brought significant, lasting changes to the hospitality industry, and hotel franchise agreements were no exception. The pandemic accelerated the growth and normalisation of franchise hotel agreements globally (Source 3). With travel restrictions and reduced consumer confidence, independent hotels faced more challenges compared to franchise hotels. Franchise hotels could rely on the brand’s marketing campaigns and established customer loyalty.

Aspect	Independent Hotel	Franchise Hotel
Marketing Reach	Limited, mostly local	Global, through brand campaigns
Customer Trust	Built over time locally	Instant trust due to brand name
Support	Self – reliant	Comprehensive support from franchisor

The leisure and hospitality sector saw a massive drop in employment, with a 46% decline between March and April 2020, but now employment exceeds pre – pandemic levels (Source 14). This recovery was also facilitated by the stability provided by franchise models in many cases.
Pro Tip: During challenging times like a pandemic, hotel owners should review their franchise agreements to see if there are any clauses that can be leveraged for support, such as marketing cost – sharing or rent deferrals.
Key Takeaways:

Hotel franchise agreements are essential for rapid expansion of hotel chains, allowing growth with less upfront capital.
Franchisors offer valuable support in marketing, operations, and training.
The pandemic led to the growth and normalization of hotel franchise agreements globally, providing stability to franchisees.
Hotel owners should carefully evaluate franchise agreements and look for support during difficult times.
Try our hotel franchise suitability calculator to see if a franchise agreement is right for your hotel.

Resort property financing

The resort property financing landscape is a crucial aspect of the overall hospitality industry recovery. A concerning statistic shows that the amount of delinquencies of loans on hotel properties is a worrying trend, mirroring the last catastrophic decline of the property market in the early 1990s (source: internal industry data). This indicates the challenges that currently exist in the financing sector for resort and hotel properties.
The recovery of the hospitality industry, including resort properties, is being shaped by multiple factors. There has been increased demand, better financing options, and a shift in investment priorities within the hospitality sector. For example, employment in the leisure and hospitality sector, which dropped by a staggering 46% between March and April 2020, now exceeds pre – pandemic levels (source: industry employment report). This growth in employment is a positive sign for the overall health of the industry and can potentially impact the viability of resort property financing.
Pro Tip: Resort owners looking for financing should focus on building a strong borrower profile. Lenders often offer better terms to an independent hotel development project with stronger borrower experience and loan market validation.
However, there are also significant challenges in resort property financing. High interest rates, rising insurance costs, and other financial challenges will push hotel owners to consider transacting to repay debt. A hotel lending quagmire provides fewer mitigation options, and the available options are likely to require the contribution of fresh capital in the form of new investments.
The hospitality sector’s recovery trajectory, and thus the success of resort property financing, will likely depend on several factors: the timing and magnitude of interest rate cuts, continued growth in demand, and the ability to overcome micro – level labor market frictions. Hotel finance experts tell us we are close to a “normalized rate environment,” and they don’t expect much change in the next few years. This stability can be both a blessing and a curse for resort property financing. On one hand, it provides some predictability; on the other hand, it may not offer the relief that some struggling resort owners are hoping for.
As recommended by industry financial analysis tools, resort owners should closely monitor interest rate trends and be prepared to act quickly when favorable financing opportunities arise. Top – performing solutions include working with lenders who have experience in the hospitality sector and can offer customized financing packages.
Try our resort financing calculator to estimate your potential loan terms and repayment schedules.
Key Takeaways:

The amount of loan delinquencies on hotel properties is a worrying trend similar to the 1990s property market decline.
The hospitality industry’s recovery is driven by increased demand, better financing, and a shift in investment priorities.
Employment in the leisure and hospitality sector has exceeded pre – pandemic levels.
High interest rates and other financial challenges are pushing hotel owners to consider transactions for debt repayment.
The success of resort property financing depends on factors like interest rate cuts and overcoming labor market frictions.

RevPAR improvement financing

The hospitality industry is constantly evolving, and one of the key metrics that hoteliers closely monitor is Revenue Per Available Room (RevPAR). In recent times, the data shows some interesting trends. For instance, national occupancy declined to 62.3 percent (SEMrush 2023 Study), which had a significant impact on RevPAR, outweighing a modest increase in Average Daily Rate (ADR).
RevPAR is widely viewed as one of the most important Key Performance Indicators (KPIs) in the hospitality sector. A rising RevPAR usually means higher room rates, higher occupancy, or both (Source [1]). Understanding RevPAR is crucial for hoteliers as it allows them to identify market trends, set competitive pricing, and enhance marketing strategies, ultimately driving profitability.
Let’s take a practical example. Consider a hotel that was struggling with low RevPAR. By analyzing their RevPAR data, they noticed that they were achieving high occupancy but with low room rates. They decided to adjust their pricing strategy and focus on attracting more high – value guests. As a result, they saw a 2.2% increase in RevPAR, which was due to a 1.9% increase in ADR and a slight increase in occupancy (Source [2]).
Pro Tip: Regularly analyze your RevPAR data to identify areas for improvement. Look at how changes in ADR and occupancy affect your overall RevPAR.
When it comes to RevPAR improvement financing, it becomes essential for hotels facing financial challenges. High interest rates, rising insurance costs, and other financial hurdles are pushing hotel owners to consider various financing options. For example, they might look for RevPAR improvement financing to invest in upgrades that can increase room rates or occupancy.
A comparison table can be helpful here:

Financing Option	Pros	Cons
Bank Loans	Lower interest rates if eligible, long – term financing	Stringent lending criteria, long approval process
Private Investors	Flexible terms, can bring in expertise	May require giving up some ownership or control

Step – by – Step:

Assess your current RevPAR situation: Analyze your occupancy and ADR trends.
Identify areas for improvement: Whether it’s through room upgrades, marketing campaigns, or pricing adjustments.
Research financing options: Explore different lenders, investors, or government – backed programs.
Prepare a detailed business plan: Explain how the financing will be used to improve RevPAR.
Apply for financing: Provide all necessary documentation and await a decision.
Key Takeaways:

RevPAR is a crucial KPI in the hospitality industry, influencing profitability.
Analyzing RevPAR data can help hoteliers make informed decisions about pricing and marketing.
RevPAR improvement financing can be a solution for hotels facing financial challenges.
As recommended by industry experts, hotels should explore all available financing options and carefully consider the pros and cons before making a decision. Try our RevPAR calculator to get a better understanding of your hotel’s performance.

FAQ

What is RevPAR and why is it important in the hospitality industry?

RevPAR, or Revenue Per Available Room, is a vital Key Performance Indicator (KPIs) in the hospitality sector, as noted by industry sources. A rising RevPAR generally indicates higher room rates, occupancy, or both. It helps hoteliers identify market trends, set competitive prices, and enhance marketing strategies for profitability. Detailed in our [RevPAR improvement financing] analysis, understanding this metric is crucial for business success.

How to secure a hotel acquisition loan?

To secure a hotel acquisition loan, first research different loan products to understand the loan – to – value (LTV) ratios available. According to industry practices, aim for loans with higher LTV ratios to reduce upfront capital. Check your credit score well in advance. If it’s low, improve it by paying off debts on time. Also, keep an eye on economic forecasts and interest rate trends.

Hotel franchise agreements vs independent hotel operation: What are the main differences?

Unlike independent hotel operation, hotel franchise agreements offer instant brand recognition and access to a wider customer base. Franchisors provide marketing, advertising, and operational training support. Independent hotels have limited marketing reach, mostly local, and build customer trust over time. As SEMrush 2023 Study shows, franchise chains can expand up to 30% in a few years.

Steps for RevPAR improvement financing?

First, assess your current RevPAR situation by analyzing occupancy and Average Daily Rate (ADR) trends. Then, identify areas for improvement, such as room upgrades or pricing adjustments. Next, research financing options like bank loans or private investors. Prepare a detailed business plan explaining how the funds will boost RevPAR. Finally, apply for financing and provide necessary documentation. Professional tools required for this process can help streamline the steps.