Hotel Feasibility Study in the Salinas, CA Metro Area

Hotels carry more than three times their national weight in Salinas

In the Salinas area hotels and motels rank second among 39 classes (2 of 39); the location quotient reads 3.45x and puts them above three times their national share of local lending. SBA lists 39 loans totaling $98.2 million, the median is $2.6 million, 1.19x the national figure, and the quartile edges are $1.4 million and $3.4 million. Salinas places 46 of 807 across metro and micro areas.

Mix, brands and the code

Of the 39 loans, 28 are 7(a) and 11 are 504, a sizable 504 minority consistent with real estate financing. Franchise share is 33.3%, much lower than in some hotel metros. Hotels and motels share an industry code, so economy lodging and full-service hotels merge in this record. Monterey County, CA carries all 39 loans. That mix means a study must say whether the plan is a branded select-service hotel or an independent property.

Two holders and a front-loaded calendar

Pinnacle Bank (CA) is holder of record on 11 loans worth $30.7 million, and West Coast Community Bank on 7 worth $15.3 million. They are SBA tallies and no verdict on either. FY2017 printed 14 loans and $31.9 million, a third of the entire record in one year, and FY2018 printed 8 and $14.5 million. FY2023 printed 0 loans and $0. FY2019 to FY2022 and FY2024 to FY2026 are withheld.

Blanks

Salinas hotels have no cancellation rate or charge-off rate in this cell, and the blanks are not zeros. Monterey County is in the count because the 2023 list names it.

The Salinas hotel study

Demand here mixes agricultural business travel, wine and coastal tourism, and events, so a study should build occupancy and rate from a competitive set, not from regional averages. Test seasonality, the brand's required improvements, and construction cost. Loans of $2.6 million at the median call for coverage tests with a slow ramp, and the appraiser should separate real estate, furniture and equipment, and the flag. Because most loans came early in the decade, recent market conditions need fresh evidence. Water and labor supply, both pressure points for Monterey County, should be tested in the cost and staffing plan.