Hotel Feasibility Study in Idaho

A mid-sized book with large loans

Idaho is not one of the country's big hotel states by count, but its hotel loans are substantial. The FY2017 to FY2026 record shows 78 hotel and motel approvals in Idaho, adding up to $169.5 million. The median loan is $1.8 million, with the middle half spanning $793,750 to $3.4 million, and that median is 0.83x the national median for the class. By rank the class sits 36 of 53 across the states and 9 of 39 across Idaho's own asset classes, and the location quotient of 0.66x shows lodging taking a smaller share of Idaho's SBA activity than of the national total. No one figure strays far from the national hotel pattern, so this cell mainly shows a state-sized version of it.

Program mix and lenders

SBA 7(a) accounts for 52 loans and SBA 504 for 26, and 56.4% of all loans carry a franchise flag, so brand affiliation is the norm rather than the exception. The 504 side is led by Capital Matrix, Inc. with 9 loans worth $19.2 million, followed by Region IV Development Corporation with 6 worth $6.8 million and Eastern Idaho Development Corporation with 5, also $6.8 million. Among 7(a) lenders, Celtic Bank Corporation holds 6 loans worth $22.7 million, well over the state median per loan. Ada County has 16 loans, Bannock 14 and Kootenai 10.

A volume that peaked early

The year-by-year record is uneven. FY2017 had 18 loans worth $43.9 million and FY2018 had 15 worth $24.5 million, then FY2019 dropped to 3 loans and $10.1 million. A smaller rebound came in FY2021 with 12 loans and $29.5 million. FY2023 and FY2025 each show only 3 approvals. Lenders should see a market that is lumpy: a few large projects can swing a year.

Cancellations and losses

At least 9.9% of approvals from FY2017 to FY2024 were pulled before funding, and counting unfunded loans as dropped leaves that figure alone. Disbursed hotel loans of the FY2017 to FY2021 vintages number 48, and the written-off share among them is nil to date and nil inside five years. These floors can still rise as the cohort ages.

What the study must test

A hotel study in Idaho has to separate seasonal demand from base demand and name the guest segments it relies on. Average daily rate and occupancy should be built from competing properties in the same segment, not state averages. With a median near $1.8 million, construction or acquisition cost per room must be tested against what the market rate can carry. Debt service coverage needs a low-season stress case, and the appraisal will price the operating hotel as a business, so franchise fees and reserves for property improvement plans belong in the forecast.

One code for every kind of lodging

The industry code lumps every kind of lodging property into one count, so a select-service roadside property and a full-service resort are not distinguishable. A borrower proposing an upscale full-service project should expect its numbers to differ from this blended class.