My city of Fort Myers is enduring a heavy hit from the economic recession, having the number one foreclosure rate in the nation. Hundreds of homes are foreclosing weekly, which has resulted in a crazy number of families forced out of their rental homes because their landlords defaulted. It never occurred to me until this morning what impact the declining real estate market may have on hotels.
USA Today reports that 36% of hotels will face foreclosure danger this year, compared to 21% last year. This difference between this and the residential market is that no one will knock on your hotel room door and deliver you an eviction notice instead of the morning paper. Since banks want operations at defaulting hotels to continue, you most likely won't lose your money, BUT, you most certainly will see a decrease in service and available amenities as they cut staff.
Experts recommend booking at hotels that have been around for a while to protect yourself. My theory, look for hotels that just swipe your credit card, but don't charge you a room night deposit. And for that matter, consider outside insurance for cruise lines and tour vacations. Why? Those home renters are finding themselves not only out of a home, but out of their security deposit too.
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