Hotel Feasibility Study in the Washington-Arlington-Alexandria, DC-VA-MD-WV Metro Area

A 504-heavy hotel market with very large tickets

Hotels in the Washington metro area are a thin slice of lending, with a location quotient of just 0.31x; and the class ranks 13 of 39 locally, with the metro at 26 of 807 for hotel loans. What these loans lack in frequency they make up in size. SBA approved 60 hotel and motel loans worth $198.0 million from FY2017 to FY2026, and the median of $3.9 million is 1.80x the national median for the class.

Programs, franchises and certified development companies

Loans in the middle half run from $2.1 million to $5.0 million. The program mix is unusually even: 36 loans for 7(a) and 24 for 504, a heavy 504 presence. Franchise units are 68.3% of loans. Among 504 lenders, Business Finance Group, Inc. is named for 8 loans worth $28.3 million, 504 Capital Corporation has 6 worth $20.2 million while Rappahannock Economic Development Corporation closes the list with 5 worth $18.7 million. Those lines show where SBA places 504 loans, not any quality ranking. Prince William County, VA has 10 loans; Prince George's County, MD, Fairfax County, VA and Stafford County, VA have 7 each; Frederick County, MD has 5.

Printed years: 5 loans in FY2017 ($16.7 million), 8 in FY2020 ($31.5 million), 9 in FY2021 ($32.8 million), a peak of 14 in FY2025 ($44.2 million) and 8 in FY2026 ($33.9 million). The other years are withheld as too thin. Neither outcome rate, cancellation or charge-off, survives the small-cohort rule. The industry code merges hotels and motels, which blurs the property types, and the area spans four jurisdictions, so a loan counts here through its project county on the 2023 area list. Rates that depend on small cohorts are not available, so no outcome percentage is offered for lenders weighing a new request against the area's history; they will need the study itself to carry that argument.

How to test a hotel project in the capital region

A hotel study here must separate government and association demand from leisure and corporate travel, then test rate and occupancy against the nearby competitive set. Because the 504 share is high, the study should treat the real estate as an investment in its own right, with land or building value, construction cost and a realistic schedule, and then test whether operating income covers debt service in a ramp-up year. The brand's fees and renovation requirements should be explicit. The appraisal will test the same assumptions. History here sets context for ticket size and lenders and promises nothing.