The Refinishing Touch Blog

In the current climate, there is a lot of talk about the impact of the credit crunch upon the lodging industry. Travelers are cutting back, big hotel chains are tightening their belts, and conglomerates are reviewing global spend.

However, there remains very little discussion concerning the impact of economic conditions upon smaller businesses in which individuals are using their own credit to ensure heads remain above water. Many are franchisees who need funds to maintain established standards but who are increasingly finding sources of funding withdrawn as lenders become nervous.

This week, Hotel & Motel Management ran an article that raised precisely this issue. It explored alternate sources of capital as possible solutions, including the U.S. Small Business Administration's 504 Loan Program, part of the SBA's commitment to help businesses with debt financing (loans) and equity financing that offers suitable businesses low interest rates and down payments with fixed rates. The article also examined the viability of approaching private lending services, concluding that franchisees and franchisors should work more closely together, perhaps even to jointly "evaluate temporary solutions."

As a regular reader of Hotel & Motel Management, and a supporter of every business model within our industry, I applaud any incentive capable of bringing franchisors and franchisees together for the good of both the lodging industry and consumers alike. However, I was disappointed that there was no mention of the critical issue of refurbishment alongside the article's discussion topics of loans, temporary fixes, and "selecting general contractors who offer reasonable rates."

The lodging industry is a classic example of a good business experiencing tough times. In such a situation it is always preferable to find an innovative approach to overcoming business hurdles rather than simply cutting back plans or potentially jeopardizing service quality.

Further details of the SBA and its outline for supporting loan applications can be found at: http://www.sba.gov/services/financialassistance/loanapplication/index.html

Discover how Ballantyne Resort, a Starwood Luxury Collection hotel used refurbishment techniques to create a new look and make significant savings, at: http://www.ballantyneresort.com/Accommodations_GuestRooms.cfm