Abstract
The main purpose of this study is to investigate the influence of hotel brand affiliation on commercial mortgage loan underwriting. Using a sample of 2443 hotel loans securitized into commercial mortgage-backed securities (CMBS) between 2010 and 2018, the results of this study show a significant effect of hotel brand affiliation on credit spreads, loan-to-value (LTV) and debt coverage ratios (DSCR). More importantly, there is a significant interaction effect between hotel brand and lending on credit spreads. The evidence is consistent with the observation that some hotel brands are less risky than other hotel brands, and therefore, receive favorable lending terms from lenders.
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