Hotel Feasibility Study in the Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Metro Area

New Jersey leads a Pennsylvania-centered area

In the Philadelphia-Camden-Wilmington hotel file, the biggest county is across the river: Burlington County, NJ has 18 loans and Camden County, NJ 13, ahead of Philadelphia County with 11, Bucks County with 10 and Delaware County with 9. Chester County and Montgomery County have 5 each. The 80 loans approved from FY2017 to FY2026 total $214.4 million. The location quotient is only 0.35x, so lodging is a far smaller share of local lending than of lending nationally, though the area is seventeenth of 807 for the class and hotels are twelfth of 39 locally.

The median loan is $2.4 million, 1.13x the national median, with the middle loans between $1.2 million and $4.4 million. Sixty-five loans are SBA 7(a) and 15 are SBA 504, and franchise flags appear on 56.3% of loans.

Who holds hotel loans here

Trenton Business Assistance Corporation is the only 504 holder on SBA's list, with 6 loans worth $14.0 million. On the 7(a) side Hanover Community Bank holds 14 worth $29.5 million, Peapack Private Bank and Trust 9 worth $18.2 million, and Fulton Bank, National Association 7 worth $24.0 million, a book with the largest loans on average. These are holders of record. They do not state what any of them would lend against.

About one hotel approval in eight was cancelled, 13.2% at the least, and the upper bound that adds loans never disbursed is likewise 13.2%. No charge-off rate to date is released for the area, and the loans and dollars of FY2020 and FY2023 are also blank, each on too few loans; blank here does not mean zero. Years that appear run from 11 loans in FY2017, worth $23.9 million, down to 5 in FY2026, worth $13.6 million.

What a Philadelphia-area hotel study should test

The area crosses three states, so taxes, licensing and lodging rules differ by site, and so does the market: center-city business and convention travel, airport and highway-corridor stays, and suburban leisure and corporate trade each need their own evidence. A study should project occupancy and average daily rate from comparable properties, count the competing rooms and those under construction, and show debt service coverage at a stress occupancy. A franchised property carries brand standards and a property improvement plan that belong in the cost. The appraisal must value real estate apart from the going business. Hotels and motels sit together in the classification, so limited-service and full-service properties can't be split. Burlington, Camden and the Pennsylvania counties are counted only for loans whose county the July 2023 list matched.