Hotel Feasibility Study in West Virginia

Flags on nearly every door

Nearly every West Virginia hotel loan goes to a branded property: franchise affiliation reaches 92.3% of the loans, which makes this cell as much about brand standards as about the state. Hotels and motels hold the number 2 slot of 39 among West Virginia asset types, a 1.63x location quotient shows them weighing far more than in the national mix, and a $2.6 million median loan runs 1.20x the class median nationally. Yet the state is small on volume, 44 of 53 among states, with 52 approvals totaling $143.9 million across FY2017 to FY2026. Cancellation and loss add no separate signal here, so the story is a brand-driven, large-ticket hotel market in a state with few other big small-business borrowers.

Loan size, lenders and counties

Half of the approvals run from $1.6 million to $4.1 million, which is a hotel-sized range rather than a roadside motel range. The 7(a) program supplied 48 of the loans and 504 supplied 4. GBank is the lender to know, with 15 loans totaling $47.4 million, and A second institution holds 11 loans and $28.9 million. Those two lenders account for most of the dollars on the list. Kanawha County holds 10 loans, Cabell, Marion and Wood counties hold 6 each, and Harrison County holds 4. The busiest year was FY2024, with 10 loans and $30.6 million, against a low of 3 loans in FY2019.

West Virginia hotels saw 14.3% cancelled at minimum, with 14.3% as the ceiling too. Charge-offs are not reported for West Virginia, because the funded early cohort is smaller than 30 loans. Large single-asset loans can make one failure decisive, so the absence of a rate carries no comfort, and lenders should look to the class nationally.

One industry code spans hotels and motels, and select-service cannot be told from full-service in it, so a select-service brand near an interstate sits beside a full-service property in a city center. A study has to supply that distinction itself.

What a West Virginia hotel study must test

Start with demand drivers that are specific to the site: energy and industrial travel, university and medical visits, tourism along the highways and rivers, and the seasonal swings in each. The study should show occupancy and daily rate against the comparable set within the market, and name the franchisor's required property improvement plan and fees as a cost. Construction or purchase cost should be tested against a loan near $2.6 million, and the larger deals up toward $4.1 million need support. Debt service coverage should hold on a downside occupancy case, because a 14.3% cancellation floor shows that approved hotel projects do fail to close. Appraisers price a hotel on what it earns, so the study must document trailing revenue per available room.