Why do I like financing hotels? They are INTERESTING.
An underwriter asked a bunch of questions about a refinance loan I originated. One of those questions was about a spike in the cost of "SUPPLIES", a line item on the taxes, It wasn't THAT big of a deal but, the underwriter asked for it so we address it.
The spike in supplies came from the franchisor's vendor change for soap/shampoo/and personal items, the stuff you and I take for granted when we stay at a hotel. The vendor change amounted to an extra $.48 per day, per room rented.
If you have a 150-key hotel, with 75% occupancy, that adds up to $54/day or $19,710 annually. Is it a BIG deal? No but it was a big enough deal that the franchisees complained and had it switched back for 2025. I am sure the underwriter asked because he wanted to see if the operator had a handle on his finances.
My clients are successful owner-operators so $1,500/month isn't going to break the bank but, think about this; Florida State University costs about $18-19K annually for tuition and lodging for an undergraduate, in-state student. That choice of vendors could (conceivably) take away a kid's chance to get a college degree.
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