Hotel Feasibility Study in the Savannah, GA Metro Area

Hotels lead the Savannah record

Lodging ranks first, 1 of 39, among the classes SBA financed in Savannah, and the area itself stands 21 of 807 nationally for hotel and motel lending. At 4.68x, the location quotient puts hotel loans far above their national weight in local activity. SBA approved 70 loans and $204.2 million from FY2017 to FY2026. Its $2.8 million median, 1.30x the national class median, makes for large tickets.

Half of the loans lie between $1.9 million and $3.9 million, a narrow band that shows a borrower what a request here usually looks like. Of the 70 loans, 49 are SBA 7(a) and 21 are SBA 504. Flags cover 72.9% of them, so brand standards, property improvement plans and fees weigh on most projects. Hotels and motels share one class code, which means economy motel and full-service inn product cannot be told apart in these figures.

Lenders and counties

On the 7(a) side GBank leads, with 9 loans and $27.2 million. Under 504, 9 loans worth $21.1 million are held by Florida Business Development Corporation. Both are the holders as SBA reports them, with no verdict on any lender. Chatham County, GA supplies 60 of the loans and Bryan County, GA 10, so the record is overwhelmingly a one-county story and a study should look hard at Chatham's existing room supply.

Loan Analytics does not print a cancellation or charge-off rate for Savannah, under its small-count rule; a missing value there is not a zero. The years that print are FY2017 with 12 loans and $40.1 million, FY2020 with 9 and $22.0 million, FY2021 with 6 and $18.7 million, FY2022 with 14 and $42.7 million, FY2024 with 5 and $16.9 million, FY2025 with 9 and $22.5 million and FY2026 with 7 and $19.3 million. The remaining years are withheld. Savannah membership comes from matching each county name to the 2023 delineation; a loan with an unmatched county stays out.

Testing a Savannah hotel project

The study should weigh the sources of demand against the rooms open in Chatham County, then cost the build or renovation against that $2.8 million median. It has to show occupancy and daily rate carrying debt service coverage, and weigh what a flag adds against what it costs. Appraisal covers the running hotel and the real estate under it. No approval is promised.