The current coronavirus pandemic has hit the hotel industry hard. Business travel has plummeted – many businesses have yet to begin authorizing employee travel because of COVID-19. Also, far fewer Americans have taken vacations over the last six months, opting to stay home instead of taking a Florida getaway. As a result, U.S. hotels already have lost $46 billion in revenue since mid-February.
Many hotels may face bankruptcy over this steep financial loss. Yet, if own a hotel, you may be unsure what you should do. Here are some steps hotel owners can take if they need to consider a business bankruptcy in these uncertain times:
- Contact your lender to negotiate your debt payments or refinance your debt.
- Consult a bankruptcy attorney about whether filing Chapter 11 bankruptcy would be your best move. Through Chapter 11, you can have control over your business and the hotel property throughout the process. You also can get an automatic stay to stop creditors from harassing you.
- Understand what your liquid assets are and what your projected revenue is in the coming months. This financial information can help you as you work to reduce your debt and get back on firmer financial footing.
- Determine the value of your property or franchising agreement. You will need to know how much your property is worth in order to restructure your debt. Also, a franchising agreement can be one of your most lucrative assets if you decide to sell your property to someone else.
Handling a business bankruptcy can be complicated. That’s why working with an attorney can help so you make the best choice for your situation. You want to keep your options open, so when you move forward, you can get the results you need.