Hotel Feasibility Study in North Dakota

North Dakota hotels: small state, large tickets

North Dakota shows 47 hotel and motel loans from FY2017 to FY2026, with $98.2 million approved. The state ranks 45 of 53 for the class, while within North Dakota hotels hold third place of 39 classes (3 of 39), and the location quotient of 1.32x shows a share above the national one. The median loan of $1.9 million is 0.90x the national figure for hotels, with the middle of the file spanning $1.2 million to $2.8 million. These are real estate loans for whole properties.

Brands, programs and the single code

The franchise share is 63.8%, so the large majority of properties carry a flag, and a lender can expect franchise agreements, property improvement plans and brand standards in nearly every file. By program, 34 loans are SBA 7(a) and 13 are SBA 504. Dakota Business Lending is the lone name that qualifies for the table, with 5 loans and $5.6 million on the 504 side. Hotels and motels sit under one code, so economy motels and upscale properties blur together, and a roadside motel sits beside a full-service hotel in the data.

For North Dakota hotels we hold back two rates, cancellation and charge-off, because the cohorts behind each hold fewer than 30 loans. For a lender, that means North Dakota gives no state-level evidence on how often approved hotel loans fail to close or later default, and national and asset-class figures must stand in. We do not describe either rate as zero.

What a North Dakota study must test

Ward County has 11 loans, Stutsman 8, Burleigh 7, Cass 6 and Stark 4, so activity runs through Minot, Jamestown, Bismarck, Fargo and Dickinson. Demand is the first hard question, because hotel revenue in this state often follows energy activity, agriculture, events and highway traffic. A study should model occupancy and average rate by scenario, not by trend. Cost must include franchise fees and the brand's renovation requirements. Coverage must survive a downturn in oil-related demand. The appraisal must value a going-concern hotel against its real estate. The record has climbed sharply, from 6 loans in FY2024 to 13 loans and $30.0 million in FY2025 and 9 loans and $22.7 million in FY2026, which suggests a lending surge that a study should not assume continues.