Abstract
This study investigates the magnitude of the distress sale and foreclosure sale discount in financially distressed hotels by determining the influence of financial distress conditions on hotel transaction prices. Using a hedonic pricing model and a sample of 6,340 distressed and non-distressed transaction prices from 2008 to 2016, the study’s results show a significantly negative effect of financial distress on the pricing of distressed hotels. In particular, the estimated discount is 33% for an auction/trustee sale, 30% for a short sale, 42% for a foreclosure sale, and 44% for a real estate owned (REO) sale, all relative to non-distressed normal market sales.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
