The supply of new hotel rooms is ex

The supply of new hotel rooms is expected to increase slowly during the next several years. Lenders (not necessarily traditional banks and insurance companies, but credit companies and Wall Street securities firms) are beginning to make hotel loans based on very conservative lending criteria. This activity is commencing with the refinancing of existing properties, and the consensus is that hotel lenders will eventually become interested in financing new construction projects in selected markets. This change will occur when occupancies and room rates recover sufficiently to justify new projects that will substantiate the costs of development and construction. Additions to supply are expected to peak in 1998.