According to the Oct. 12 Sunday News, local tax officials and other sources nationally state that the Kronos Hotel and Resorts Company, operator of the local former Holiday Inn, has not been timely paying taxes, bills and workers.
Those familiar with the commercial real estate industry, especially as it applies to hotels, are not likely to be surprised. Fueled in large part with Asian funds, Indian-Americans (not Native-Americans!) have been purchasing hotels at irrationally high prices for several years. In many cases, their ability to raise money from friends and family back home has been greater than their business acumen.
Meanwhile, some hotel chains have been reluctant to withdraw the franchise when hotels fail to meet minimal quality control standards. Franchisers receive a percentage of gross revenue rather than out of hotel earnings. And some chains do not guard their brands' reputation as closely as do others.
Fortunately most hotels are well managed. Nevertheless, even well managed hotels purchased recently at escalated prices will have a hard time making ends meet if the country does slide into a steep recession.