You can stay at the Four Seasons in San Francisco this weekend at prices starting at $325 a night. That's cheap for San Francisco, to say nothing of a famous five-star hotel at short notice.
In New York City, the weekend's best deal on a five-star Manhattan hotel room starts at $644 a night at the Benjamin, according to the website Orbitz -- believe it or not, that's a steal for luxury in the Big Apple. Further downtown, one USA Today reporter found a room for $125 a night at the Marriot Financial Center on the travel website Priceline - that's half off the 3-and-a-half-star hotel's usual rock bottom rate.
What's going on? The latest downturn has hit hotels especially hard, according to a recent story by the Associated Press. The percentage of occupied rooms has fallen 10 percent in the last year. And nearly one-in-ten hotel properties have fallen behind in their mortgage payments -- 8.7 percent of the hotel loans tracked by data firm Trepp LLC are behind in their payments, compared to just 1.5 percent a year ago.
Lenders don't wait long to seize homes from homeowners who miss payments, even when the value of the home at auction would be much less than the value of the loan. But hotels are a different story, commercial real estate experts say. That's because hotels need specialized owners to maintain the properties, so banks treat them more gently.
As a result, troubled hotels can struggle for a long time, cutting their rates to fill as many rooms as they can. Stronger hotels often have to cut their rates, too, just to stay competitive. That's tough for hotel owners - but great news for travelers.