A crisis can arise at any timeday or night, holidays or weekendsespecially in a financially troubled hotel. Often, if the problem is not dealt with immediatelyperhaps the long unpaid laundry vendor decides it will not deliver the weekend’s sheets and towels unless it is paid in cashthe viability of the hotel can come into immediate danger.
Unlike other commercial properties such as an office building, which typically has long-term leases with predictable cash flows and limited services, a hotel has hundreds of nightly “occupancy licenses,” with widely fluctuating cash flows depending on the time of year, weather, strikes, overseas financial crises, a sudden drop in tourism, present competition, and other unpredictable events. And, unlike an office building, a hotel’s revenue, and thus its value, can be instantly and capriciously affected by adverse comments about the hotel in popular social media such as TripAdvisor and Twitter.
