(ZEROHEDGE) – According to a report from NorthStar, without aid 74% percent of U.S. hotels said they expect to lay off more employees, with a whopping two-thirds of properties warning they won’t be able to last another six months at the current projected revenue and occupancy levels. Needless to say, should two-thirds of the U.S. hotel industry fold, shorting the CMBX S9 BBB- could well be the most profitable (institutionally sized) short in recent history when the Fed has effectively made shorting impossible.
Since then it’s only gotten worse for the hotel sector, which as even the FT now writes has hit New York hotel industry especially hard with four out of five properties underpinning commercial mortgage bonds now on the verge of default.
Normally among most vibrant of global hotel markets, New York has been hammered the coronavirus pandemic has left business travel and tourism deeply depressed ravaging cash flows. The effects have ricocheted into financial markets and hit the nearly $4bn of hotel mortgages in New York that are bundled into commercial mortgage-backed securities particularly hard.
