Hotel Feasibility Study in the Birmingham, AL Metro Area

Birmingham: hotels third in class, mostly branded

Over FY2017 to FY2026, SBA approved 44 hotel and motel loans in Birmingham, worth $114.2 million in all. For hotel and motel, Birmingham comes in at 42 of 807 nationwide; at home the class places 3 of 39. Birmingham leans hard on hotel and motel: the location quotient of 1.65x dwarfs a national-level share. Jefferson County, AL holds most of the loans, with Shelby County, AL next. County counts: Jefferson County, AL 28 and Shelby County, AL 9.

Birmingham loans center on $2.5 million, with an inner half from $1.8 million up to $3.6 million. Birmingham reads 1.15x of the national hotel and motel median, so tickets here run bigger. Counting programs, Birmingham has 36 7(a) loans and 8 504 loans. A share this high means brand standards and fees shape the economics. 72.7% of Birmingham borrowers operate under a franchise.

The only bank on the page

Peoples Bank (MS) is the only name listed, with a very high dollar total for five loans. Among 7(a) holders: $18.2 million across 5 loans at Peoples Bank (MS). Names in Birmingham are shown as SBA publishes them, without claiming what lenders require.

Cancellation and loss rates are absent for Birmingham, so outcomes cannot be ranked. Year by year, 7 loans worth $20.4 million in FY2017, 8 loans worth $17.1 million in FY2020, and 6 loans worth $17.4 million in FY2024. Birmingham years not shown stay suppressed. The code behind this class spans hotels and motels of every service level, so no figure isolates one level. Every Birmingham count passes through a county match, omitting counties that mismatch.

Questions for a Birmingham hotel and motel study

With loans in the millions and a franchise share of 72.7%, begin with the franchise agreement: required property improvement plans, brand fees and the standards that set cost after closing. Room demand should be split among leisure, business and group travel, with competing supply and any new construction in both counties checked for rate and occupancy effects. Staffing for housekeeping and the front desk scales loosely with occupancy. Stress tests should include a travel downturn and a soft shoulder season. A valuation has to separate real estate, furniture and equipment, and business value, and the income approach rests on forecasts the study should verify. Franchise agreements often include termination terms; the study should note what the agreement says about transfer and exit, because it affects both value and the lender's options.