Hotel operating fundamentals remain strong, with robust demand returning to 2019 levels. Despite predictions of a mild recession in the second half of 2023, hotel demand is projected to continue growing. However, the hotel capital markets face challenges due to the limited availability and high cost of capital. These challenges will likely persist until the Federal Open Market Committee signals a reduction in interest rates. Hotel sponsors are exploring alternative financing sources, including EB-5, and are advised to work with experts experienced with alternative capital sources.
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