Hotel Feasibility Study in the Cincinnati, OH-KY-IN Metro Area

Hotels at franchise scale

Hotel and motel lending around Cincinnati is overwhelmingly franchised: 86.3% of the 80 loans SBA approved from FY2017 to FY2026 carry a franchise flag. The loans total $219.6 million, with a median of $2.6 million that is 1.20x the class's national median and a middle half between $1.5 million and $3.9 million. The location quotient of 0.76x says hotels weigh somewhat less here than in the national book, while the area stands 17 of 807 for hotels and motels, and the class is fifth (5 of 39) on the local list.

Program mix and geography

Hotels used 7(a) for 65 loans and 504 for 15. Hamilton County, OH, supplies 33 loans, Warren County, OH, 11, Boone County, KY, 10, Kenton County, KY, 7 and Butler County, OH, 6. Printed years show 17 loans and $22.9 million in FY2017, 14 loans and $39.6 million in FY2019 and 6 loans in each of FY2018 and FY2023. Loan Analytics withholds FY2020 and FY2024 to FY2026 on too few loans, so recent activity is hidden, without any suggestion there was none.

One named lender

GBank is the one 7(a) holder with enough loans to be listed, 25 loans worth $61.7 million, a large average that fits hotel tickets. No other 7(a) or 504 holder reaches the listing threshold. SBA's holder is the current one, which may differ from the first holder, and the listing says nothing about GBank's practices or those of any other lender.

Cancellation figures that agree

A 10.3% floor marks Cincinnati hotel cancellations, and counting undisbursed loans as cancelled, the ceiling also lands on 10.3%. The charge-off rate is the value Loan Analytics withholds here, on too few loans; it is not zero and carries no estimate.

Testing a Cincinnati-area hotel

A hotel study must begin with the brand and its standards: the franchisor's property improvement and fee requirements are part of cost and operating expense. Demand has to be built from the segments the site serves, such as business travel, leisure or airport traffic, with a market study of existing supply, occupancy and average rate for comparable properties. At a $2.6 million median, real estate belongs in the request, so construction or acquisition cost, debt service coverage and the appraisal of the going concern all matter. Coverage should be tested in a downturn. The industry code groups hotels and motels, so independent motels are inside these totals. Counties are placed by July 2023 areas.