Hotels’ Distress Lays Groundwork For More Bankruptcies in 2023

Hotels across the US are in line for a potential uptick in bankruptcies and out-of-court restructurings in 2023 as distress mounts from rising interest rates, staffing costs, and expectations of a mild recession.

Parts of the hospitality industry may finally be reaching a tipping point—even after managing to stay afloat over the last two years by weathering an unprecedented drop in business caused by the pandemic. Hotel owners and lenders across the country are now increasingly reaching out for help as new economic challenges, including rising interest rates and staffing costs, emerge.

As of December, close to $4.1 billion out ...