More California hotels, including several in Southern California, are being pushed into foreclosure as tourists and businesses alike scale back their travel plans and owners can't pay their mortgages, it was reported Wednesday.
Statewide, more than 300 hotels were in foreclosure or default on their loans as of Sept. 30 -- a nearly fivefold increase since the start of the year, according to an industry report cited by the Los Angeles Times.
The latest business news.
Most struggling hotels remain open, but industry experts believe many are likely to be closed down in the months ahead, even if they are not in foreclosure, because they are losing so much money, according to The Times.
In Southern California alone, there were at least 140 hotels in default or foreclosure in September, including 55 hotels in the Inland Empire, 33 in Los Angeles County and 30 in San Diego County, according to the report by Atlas Hospitality Group, The Times reported.
Statewide, 260 hotels were in default on their loans and 47 had been taken over by their lenders in foreclosure, the Atlas report said.
Joseph McInerney, chief executive of the American Hotel and Lodging Association, tried to put a positive spin on the news, telling The Times, "I think we've bottomed out."
But a leading hotel consulting firm, Smith Travel Research, recently issued a report that predicted no significant improvement for the hotel industry until 2011 at the earliest, according to the newspaper.