Hotel Feasibility Study in Mississippi

Mississippi hotel deals close

Cancellation is the measure that sets Mississippi hotels apart, and it is low. Only 1.7% of FY2017 to FY2024 Mississippi hotel approvals were cancelled after approval, as a floor, and even counting loans still undisbursed as cancelled the ceiling is 5.0%; our screen finds that rate apart from both Mississippi's all-class record and the national hotel class by more than its margin. Hotels are also central to Mississippi's SBA lending: hotels rank 2 of 39 within Mississippi, and at 2.35x the location quotient shows it weighs far more in Mississippi than nationally. The state approved 148 hotel loans worth $326.9 million from FY2017 to FY2026, ranking 27 of 53 among states.

Branded properties and local banks

Flags are on 74.3% of the loans, and the middle half of approvals runs from $1.3 million to $3.0 million, around a median of $1.9 million that is 0.90x the national hotel figure. SBA 7(a) carries 136 approvals and SBA 504 just 12. Peoples Bank holds 34 loans worth $71.6 million and GBank 18 worth $50.9 million; Readycap Lending, LLC holds 6 and Customers Bank 5. Three Rivers Local Development Company, Inc. holds 9 of the 504 loans for $30.3 million. Hinds County leads with 21 approvals, Jackson has 15, and DeSoto and Harrison 14 each.

No losses so far

The 77 Mississippi hotels that drew funds over FY2017 to FY2021 show a clean slate so far, a charge-off floor of 0.00% overall and 0.00% across the early-default window of five years, with those loans still running. Annual approvals have been steady, between 12 and 21 a year, with $44.1 million in FY2019 and $38.5 million in FY2026.

Because Mississippi hotel approvals rarely fall through, a study here earns its keep less on the path to closing than on the property's earning power across the term. Demand should start with the hotels a guest would compare, their occupancy and average rate by season, and any new rooms under construction near the site. A brand's renovation requirements or a new-build budget must be priced by a contractor with contingency. The coverage case should stand on a stabilised year after franchise fees and reserves, with a downside for both rate and occupancy. A Mississippi hotel appraisal splits value across real estate, fixtures and the operating business, and the forecast should back each piece.

Mississippi motels and full-service hotels are coded together with limited-service properties, and these figures cannot pull them apart.