In commercial real estate, few property types have vexed bankers more than hotels. Weak sponsorship, lax underwriting, and intermittent slowdowns in corporate and leisure travel have in recent years forced foreign and domestic banks to swallow unthinkable losses.
One "fantasy" hotel in Hawaii, for example, fetched 5 cents on the dollar, despite costing more than $400 million to build. Last summer, New York's Four Seasons Hotel traded at a 50% discount. Banks were liable in both cases.