Government must change immigration policy to protect tourism workers

Cumbria Chamber of Commerce is asking the Government to change its proposed new immigration system to protect the county’s tourism and food businesses.

It says that some firms could be forced out of business if ministers push ahead with plans for a points-based immigration system with salary floor after Brexit.

Migrant workers would be able to come to the UK only if they had the offer of a job paying at least £30,000 a year.

Chamber chief executive Rob Johnston said: “Our research shows that Cumbria’s hospitality and food-processing sectors rely heavily on migrant workers from the EU.

“We found hotels in the Lake District where migrants make up more than half the workforce.

“The overwhelming majority of these jobs have salaries below the £30,000 threshold.

“If the supply of migrant workers were to be turned off, there would be dire consequences. We’ve spoken to businesses that have told us they might have to stop trading.

“Recruiting local people to replace migrant workers isn’t a realistic option in many parts of Cumbria.

“South Lakeland and Eden have the lowest unemployment rate in the UK, 1.8 per cent, and Carlisle isn’t far behind.

“Given too that our working-age population is shrinking, it’s vital that employers retain access to migrant workers.”

The Migration Advisory Committee, which advises the Government on immigration policy, is consulting on the proposed post-Brexit system.

Cumbria Chamber plans to submit a detailed response before the deadline on November 5.

Mr Johnston said: “We don’t like the concept of a £30,000 salary floor but, if it is implemented, there should be exemptions for food processing and hospitality businesses.

“That’s an argument we’ll be making forcibly.

“Food processing and hospitality are big earners for the Cumbrian economy and it would be foolhardy to undermine them by restricting the supply of labour.”

Source: https://www.nwemail.co.uk/news/17982959.government-must-change-immigration-policy-protect-tourism-workers—cumbria-chamber-commerce/

How Can The Hospitality Industry Ride The Wave Of The Experience Economy?

A recent study by McKinsey and Company showed that global spending on experiences like concerts, amusement parks, eating out, and traveling has grown more than 1.5 times faster than spending on personal consumption, and about four times faster than spending on goods. This emergence of the experience economy is a trend that hotels and other hospitality businesses should leverage for higher revenue and improved brand loyalty by providing exceptional experiences. 

In the last year, India had about 10.56 million foreign tourists, and reported about 1.68 billion domestic travelers in 2017. The largest growing segment of these travelers are millennials, and that is because of a few different reasons. In comparison to previous generations, millennials tend to have a much larger overall awareness of the world and a much higher disposable income as well. More so, millennials are much more likely to spend on experiences over basic services.

Guests are constantly seeking great experiences with every hospitality brand they interact with on their travels.. Participants in the hospitality industry that fail to design and provide engaging guest experiences won’t be able to measure up to modern guests’ expectations.

In order to design and create such experiences, hotels and other hospitality participants will have to embrace and implement new and innovative technology platforms that will allow them to manage and create end-to-end experiences for guests. More so, these experiences will need to be comprehensive and tailored to the specific travel intent of each guest.

Even with the disruption of OTAs, hotels are still a space where guests still expect the hotel to act as the service provider and personalize their journey and experience. Hotels should take advantage of the ability to establish direct relationships with guests in a market where in addition to OTAs, Google and Amazon are becoming increasingly interested.

Hotels need to constantly improve and reinvent their core offerings and identify possible reasons if and why their guest experiences are not matching up to expectations. In order to stand out in the experience economy, hospitality businesses need to ensure the highest possible levels of guest satisfaction and embrace technology for personalization and constant analysis of guest reviews and feedback.

Some experiences can only be had in certain destinations. A traveler can only experience Oktoberfest in Germany, or can only take a picture in front of the Eiffel Tower in France. Hospitality businesses need to explore ways to ensure that guests have the serendipity of discovering these new experiences, all while keeping them engaged on their platform without them having to search for those experiences elsewhere. Hotels need to help their guests with area advice, available excursions and events in the area by partnering with non-competing travel operators to be the single source of guest experiences and add ancillary revenue while beefing up the guest experience.

Travelers have now started creating their own travel experience instead of being passive consumers. Consequently, hospitality businesses need to provide guests with platforms that serve hyper-personalized options for guests to create their experience from. These platforms will allow for delight in the guest journey, and will ultimately build brand loyalty and add revenue to hotels.

From tailored guest-centric experience packages, access to mobile concierges or in-room smart technology, hotels need to create experiences for guests that supercede mere service, or a product like a comfortable room.

Guests are constantly searching for new places and platforms that will allow them to have memorable and unique experiences they can share with friends and family. Not paying attention to rising trends in this new experience economy could prove to be the downfall of many hospitality businesses, unless new technology and innovative guest experiences become a core part of guest management.

Source: https://www.traveltrendstoday.in/news/hotel-and-resorts/item/7608-how-can-the-hospitality-industry-ride-the-wave-of-the-experience-economy

3 reasons why the U.S. economy may have already peaked for the year

The U.S. economy grew at a solid 3.1 percent annual rate in the January-March quarter — a pace that will likely prove to be the high-water mark for the year before growth weakens in the coming months.

That’s the assessment widely shared by economists in light of the rising threats facing the U.S. economy, from a raging trade war to more cautious spending by consumers and businesses to a global slowdown. Their collective forecast is that last year’s 2.9 percent growth — the fastest year of expansion since 2015 — will be followed by a more tepid 2.3 percent gain this year.

That pace would roughly match the average annual growth since the current expansion began in 2009. In two months, it will become the longest post-recession recovery on record. But it has also been the slowest since World War II.

The Trump administration, defying the assessments of mainstream economists, insists that its program of tax cuts, regulatory reform and tougher enforcement of trade deals will produce dramatically higher annual growth above 3 percent for the next six years.

Here are three key reasons why economists think growth has peaked for the year:

A pendulum swings back

Half the 3.1 percent growth rate in the January-March quarter that the government reported Thursday was due to two temporary factors: A surge in business efforts to restock shelves. And a big narrowing in the trade deficit.

In the calculations that produce the nation’s gross domestic product, a widening trade deficit subtracts from growth. By contrast, a narrowing trade deficit, like the one last quarter, raises growth. Yet economists predict that the pendulum will swing back to a wider trade gap in the current April-June quarter. That’s because neither a sharp drop in imports nor a big surge in exports in the first quarter is expected to persist.

For that reason, analysts foresee second-quarter growth slowing to around a 1.5 percent annul rate — just about half the first-quarter figure.

Fading stimulus

President Donald Trump’s signature domestic achievement was the passage of a $1.5 trillion tax cut in December 2017. Billions in additional spending for domestic and military programs that Congress approved in early 2018 also delivered a stimulative lift to the economy.

The tax cuts allowed companies, which received a major portion of the bounty, to spend more on plants and equipment. Business investment grew sharply as a result. So did stock buybacks, which helped boost the stock market.

And for households, tax cuts began showing up in paychecks early last year in the form of lower withholding amounts, leaving consumers with more money to spend. Consumer spending, which accounts for about two-thirds of economic activity, averaged a sizzling 3.3 percent annual rate over the final three quarters of 2018.

But the initial surge from the tax cuts and the increased government spending are waning now. That’s a major reason why economists think growth this year will slow to a modest 2.3 percent annual pace, in line with the pattern of the past decade.

An ominous trade war

A return to a 2.3 percent growth rate, while slower than last year, would still likely leave the economy with enough steam to keep unemployment, already near a 50-year low, at a healthy level. What concerns economists is that some further shock might significantly slow growth.

Analysts are warily monitoring an array of risks, from disruptions resulting from a British exit from the European Union to weakening manufacturing and retail industries to jitters over congressional investigations into Trump’s presidency.

But the gravest perceived threat may be the escalating trade war between the United States and China, the world’s two largest economies. Stock markets have been falling since talks broke off this month and the Trump administration announced that it was boosting tariffs on $250 billion in Chinese goods. Beijing vowed to retaliate against U.S. products as it has done with previous Trump tariffs.

For economists, the concern is that the disruptions in trade could become severe enough to trigger a recession in an already weakening economy.

“If the trade war escalates, that could cause unemployment to start to rise and that could cause consumers to cut back on their spending, which would then prompt businesses to cut back,” said Mark Zandi, chief economist at Moody’s. “Then the recession risks become very high.”

Yet Zandi said he thought that risk could fade if the United States and China can at least declare a truce in their trade war, which would keep punitive tariffs from widening further.

Economists are watching for such an outcome, with Trump and President Xi Jinping set to meet on the sidelines of a Group of 20 major nations’ summit next month in Japan.

Source:
https://www.pbs.org/newshour/economy/3-reasons-why-the-u-s-economy-may-have-already-peaked-for-the-year

Trade and the economy have become the new roller coaster for markets

Trade headlines could be a big factor for markets in the week ahead, but investors will also be attuned to fresh inflation data and moves in the bond market, which is flashing new worries about the economy.

Stocks were on a roller-coaster ride in the past week, as markets reacted to worsening trade tensions and concerns that negotiations could be prolonged, causing pain for the global economy. But the bond market’s move was perhaps even more dramatic, as yields fell to levels last seen in 2017, and the futures market began to price in three Federal Reserve interest rate cuts by the end of next year.

“There’s not a lot of economic data next week, so events hang over us,” said Marc Chandler, chief global strategist at Bannockburn Global Forex. “It’s more about the evolution of old issues than new issues, like trade and Brexit.”

Brexit will continue to be a focus in global markets. U.K. Prime Minister Theresa May stepped aside Friday after failing to get agreement on a plan for the U.K. to leave the European Union. Chandler said investors will be watching the jockeying among candidates hoping to succeed May, with hard-line Brexit proponent Boris Johnson expected to seek the job, among others.

As for trade, Chandler said it’s possible that President Donald Trump’s comments that Huawei could be part of a trade deal may be the start of a new approach by the administration to tone down its rhetoric. The telecom giant has been blacklisted by the U.S. and is expected to be denied access to U.S. components for its equipment.

“In some ways, it’s a headline problem. We think of it more as event risk,” said Nadine Terman, CEO and CIO at Solstein Capital. “China thinks in dynasties, and U.S. investors seem to think in durations of days and months, so I think we are misunderstanding the duration of their negotiating strategy.”

She said the issues between the two countries go way beyond trade and extend to China’s military aspirations in the South China Sea and its global campaign of influence through the Belt and Road initiative, Chinese President Xi Jinping’s signature program.

“It’s now become more nationalistic, emotional, to say: ‘We’re going against the U.S., and we’ve got to be in it for the long haul.’ I don’t think you have the same emotion here in the U.S. You don’t have the same nationalistic pride to say ‘we have to fight China at all cost,’” she said.

In the past week, Wall Street increasingly began to expect the Trump administration to turn up the pressure on China with another wave of 25% tariffs on the $300 billion or so in goods remaining that have no tariffs. Those tariffs would directly hit American consumer goods and are expected to take a bigger bite out of the economy.

Fears of a trade war hurting global growth and concerns that the U.S. is already beginning to weaken were evident in the bond market. Treasury yields, which move opposite to price, reflected lowered growth expectations. The 10-year hit a low of 2.29% on Thursday and was at 2.32% Friday.

J.P. Morgan economists Friday downgraded their view of the economy, slicing second-quarter growth to just 1% from an earlier forecast of 2.25% and first-quarter growth of 3.2%. The economists blamed weak U.S. manufacturing data. They said risks were signs of weakness in the global economy and indications that the trade war was hurting business sentiment.

“The concerns the markets have right now are that we’re moving towards a worst case scenario, and that could persist for quite some time,” said Mark Cabana, head of U.S. short rate strategy at Bank of America Merrill Lynch. “If that’s the case, then the market is believing economic data, and the Fed will likely need to respond to that by trying to offset and prevent a recession.”

The most important data point in the coming week will be Friday’s personal consumption expenditures, which includes the PCE deflator inflation data that the Fed monitors. It was at 1.6% year-over-year last month and is expected to be the same for April, well below the Fed’s target of 2% inflation.Core PCE inflation 10-year chart.

Inflation has become a key focus on Wall Street, particularly after Fed Chairman Jerome Powell said low inflation appears to be transitory and not enough of a concern to make the Fed cut interest rates. Powell and other Fed officials have stressed the Fed is pausing in its rate-hiking cycle, is monitoring the economy and does not yet know which way it will move next.

Solstein Capital’s Terman said she is watching the PCE inflation report to see if it confirms her view that inflation and the economy will be weaker this summer.

She also expects the markets to be choppy, and by late summer, around its annual Jackson Hole symposium, the Fed could indicate it could cut interest rates.

“People are going to start getting even more concerned this summer about the U.S.,” Terman said.

Terman said she has been positioned for lower inflation and slower GDP growth with key holdings in utilities, REITs, Treasurys and gold.

“What would do well this summer? Staples, utilities, health care, REITs. You want fixed income. You want to be underweight tech, energy, financials and industrials,” she said.

Home prices data is expected Tuesday and advanced economic indicators Thursday. Earnings reports include Costco, Ulta Beauty and Dollar General.

Markets will also be watching the outcome of European parliamentary elections, and if there is a strong showing by populists, there could be a negative impact on the euro and risk assets.

Source: https://www.cnbc.com/2019/05/24/trade-and-the-economy-have-become-the-new-roller-coaster-for-markets.html

Membrane Technology for Food and Beverage Processing industry update – Company profiles, market forecast, market size 2019-2025

The report provides insightful details – how clients enhance their basic leadership capacity within the worldwide Membrane Technology for Food and Beverage Processing Market business. Utilizing figures and flowcharts are brief in this report, the specialists represented to the analyzed information in a superior acceptable manner. This report identifies that rapidly changing market trends and competitive landscape with growth significant CAGR during Forecast. Along, with latest marketing factors those are essential to monitor market performance and crucial decisions for progress and profitability.

According to this study, the next Y-o-Y (year over year) Membrane Technology for Food and Beverage Processing market will register a XX% CAGR in terms of revenue, the Astonishing Growth market size will reach US$ XX million by 2024, from US$ XX million in 2019. In particular, this report presents the global market share (sales and revenue) of key companies in the Market New Research Study.A

The prominent players covered in this report:

• Aquamarijn Micro Filtration BV
• fluXXion BV
• Polymem
• Siemens
• 3M Membranes
• Donaldson Co. Inc.
• Dow Liquid Separations/Filmtec Corp.
• GE Water Treatment & Process Technologies
• Graver Technologies
• Koch Membranes Systems Inc.
• Meissner
• Filtration Products Inc.
• Pore technology Inc.
• Xylem
• Hyflux Ltd.
• Asahi Kasei Corp.
• Mitsubishi Rayon
• Toray industries Inc.

Market Segment by Type, covers:

• Reverse Osmosis (RO)
• Nanofiltration (NF)
• Ultrafiltration (UF)
• Microfiltration (MF)

Market Segment by Applications can be divided into:

• Food Industry
• Beverage Industry

Regional Analysis: The report analysis developed regions along with developing regions:

North America (United States, Canada, and Mexico)

Europe (Germany, France, UK, Russia, and Italy)

Asia-Pacific (China, Japan, Korea, India, and Southeast Asia)

South America (Brazil, Argentina, Colombia etc.)

Middle East and Africa (Saudi Arabia, UAE, Egypt, Nigeria, and South Africa)

Membrane Technology for Food and Beverage Processing Market Research Report provides in-depth information and professional study for the period 2019-2024. Membrane Technology for Food and Beverage Processing market report shares details of upstream raw materials, downstream demand, and production value with some important factor that can lead to market growth. Also, the Report is segmented into Manufactures, Types, Applications, and Regions.

Market Segments:

The global Membrane Technology for Food and Beverage Processing market is segmented on the basis of the type of product, application, and region. The analysts authoring the report provide a meticulous evaluation of all of the segments included in the report. The segments are studied keeping in view their market share, revenue, market growth rate, and other vital factors. The segmentation study equips interested parties to identify high-growth portions of the global Membrane Technology for Food and Beverage Processing market and understand how the leading segments can grow during the forecast period.

Primary Objectives of Global Membrane Technology for Food and Beverage Processing market Report:

• To analyze target consumers and their preferences.
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• To mitigate risks and hurdles to drive informed business decisions.

Key questions answered in this report:

• What will be the Membrane Technology for Food and Beverage ProcessingMarket size in 2024 and what will be the growth rate?
• What are the key factors driving the Global Market?
• Who are the key vendors in this Membrane Technology for Food and Beverage Processing market?
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To conclude, the Membrane Technology for Food and Beverage Processing market report mentions the key geographies, market landscapes alongside the production and consumption analysis, supply and demand analysis, market growth rate, along with future forecast etc. This report also provides SWOT and PEST analysis, investment feasibility and return analysis

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Source: https://udyog.news/membrane-technology-for-food-and-beverage-processing-market-research-report/8874/

Would banning tips improve hospitality work?

Some American hospitality companies are experimenting with banning tipping and raising staff wages instead.

Minimum wages are supposed to ensure that everybody who works earns enough to live. For as long as they’ve been around, people have disagreed over how high the minimum wage should be (and even whether there should be one).

But you’d probably struggle to find anyone who thinks someone in the USA could live on £1.65 an hour, which is the US government’s minimum wage for some workers. For comparison, the UK’s hourly minimum wage for over-25-year-olds is £8.21.

The reason this minimum wage is so low is that the government expects the workers being paid it – usually hospitality staff – to also receive tips from their customers. Indeed, they expect customers to tip enough to put the employee’s average hourly wage up to at least £5.63. (If they don’t, the employer has to cover the difference.) That’s why when you go out to eat and drink in the States you’re heavily encouraged to tip, and tip well.

Paying people in this way, however, throws up a host of problems. Wages can vary wildly each month, and the unpredictability makes it hard for workers to budget. Staff feel like they have no choice but to appease badly behaved and abusive customers, and customers feel guilted into tipping even if the service they received was poor.

Perhaps most worryingly, the tipping system creates big wage inequalities. Implicit or explicit prejudice means customer-facing staff often receive different amounts of tips than their colleagues of different races, genders, nationalities or sexualities. And workers who don’t deal with customers get zero tips directly, and subsequently often end up making much less money.

Because of these problems, some businesses are trying out banning tips. Instead, they uniformly up all staff wages and pay for the raise by increasing the prices they charge customers. But this system causes problems of its own. Restaurants who tried it said their diner numbers went down, as people were put off by the higher food prices. And wait staff who had previously got the most tips hated the change – and often quit – because while many of their back-of-house colleagues were getting paid more, their own salary decreased.

Source:https://www.ecnmy.org/engage/banning-tips-improve-hospitality-work/

Brexit kills a small town’s tiny tourism business

Not much happens in Gadheim, a Bavarian hamlet of 89 souls. A handful of part-time farmers cultivate wheat, barley and rapeseed. A hotel trains apprentices in gardening and carpentry. Birds tweet, cars whoosh by. The landscape undulates, mildly.

But Britain’s impending departure from the European Union has disturbed the rustic peace. Whenever the club’s composition changes, the French National Institute of Geographic and Forest Information (ign) calculates its new geographical centre. Over the years eastward enlargements have tugged the point from France to Belgium and then southern Germany; since 2013, when Croatia joined, it has sat in Westerngrund, a town in north-west Bavaria. But in April 2017 the ign judged that Brexit would shift the eu’s centre 70km farther east, to Gadheim.

Source: https://www.economist.com/europe/2019/04/27/brexit-kills-a-small-towns-tiny-tourism-business

How Brexit threatens Falklands’ economy — and Spanish fishermen

A no-deal Brexit would deal a severe blow to the economy of Britain’s Falkland Islands which is heavily dependent on squid exports — and to Galicia in Spain where almost all of the molluscs are sent.

Fully 94 percent of the catch, mostly squid, exported from the contested South Atlantic archipelago known to Argentina as the Malvinas and occupied by Britain since 1833, is sent to the port of Vigo in northwestern Spain, some 13,000 kilometres (8,000 miles) away.

There the squid are processed or shipped directly to other European nations. About a third of the squid eaten in continental Europe comes from the Falklands, according to the archipelago’s government.

Fishing accounts for 40 percent of the economic output of the island group which was at the heart of two-month war between Britain and Argentina in 1982. And Galician trawlers staffed mainly with Spaniards dominate the sector.

This trade is profitable because no customs tariffs are slapped on the squid since both Britain and Spain belong to the European Union — but that would end if Britain leaves the bloc without any agreements in place about what their relationship would be in the future.

In that case World Trade Organization (WTO) custom tariff which range from six to 18 percent depending on the nature of the product would apply, according to Richard Hyslop, senior policy advisor to the Falkland Islands government.

“It’s critical that we retain our tariff-free access (with the EU),” Teslyn Barkman, who is in charge of managing natural resources and Brexit related issues with the archipelago’s government, told AFP by telephone, adding it was a “life or death” issue for the Falkland’s economy.

– Rush shipments –

Fearing a no-deal Brexit before an initial March 29 deadline for Britain to leave the EU, fishing firms rushed three ships with 21,000 tonnes of squid to Vigo to try to avoid paying hefty customs duties.

Galician trawlers also worry a no-deal Brexit would mean they lose access to Britain’s fishing waters.

But British Prime Minister Theresa May last week asked fellow EU leaders to postpone Brexit for a second time, from April 12 to October 31, giving London a chance to negotiate an exit deal — and the three trawlers loaded with squid more time to reach Galicia.

The first trawler to arrive began unloading its cargo in Vigo this weekend.

“We create jobs, wealth” but “there is total uncertainty, we don’t know what will happen to the Spanish fleet” if there is a no-deal Brexit,” said Javier Touza, the president of fishing vessel owners’ cooperative Arvi at the port of Vigo.

“What we ask is that we can continue to fish. We have the biggest ships in the Galician fleet over there,” he added.

– ‘Frustrating’ –

Forty-three trawlers which belong to Arvi currently operate in the waters of the Falklands Islands.

Twenty-four fly the Spanish flag while the rest use the flag of the Falklands even though “the majority of their crew is Spanish and 100 percent of their cargo ends up in the port of Vigo,” said Touza.

The regional government of Galicia estimates around 1,700 crew members of fishing trawlers could be affected if Britain crashes out of the EU without a divorce deal.

This figure combines crew deployed on ships in the waters of the Falklands as well as those on the 66 trawlers that operate in British waters in Europe.

Against this backdrop of uncertainty, fishermen who work in the waters of the Falklands are on track for another record haul of squid this year, after catching 78,913 tonnes in 2018.

The archipelago, which is also heavily dependent on sheep farming, is home to just 3,000 people — which is why it relies on Spanish fishing crews.

“Europe wants to buy, eat and enjoy our world quality premium calamari. It’s frustrating to be in that position but it makes sense to keep that relationship,” said Barkman.

Source: https://www.france24.com/en/20190418-how-brexit-threatens-falklands-economy-spanish-fishermen

How Innovation in Hospitality Financing Is Shaking up Commercial Real Estate

For a number of reasons, hospitality services have been very profitable lately. Wisely, the industry is using these times to invest in new technologies that improve processes and experiences. Some of these changes are obvious, personalization for valued guests and smart-room technologies with lobby integrations for example. However, it’s the less talked about advancements never seen by consumers that are making some of the most significant impacts on the growth and success of hotel real estate.

This is particularly true with hotel lending. Technology has streamlined the borrower application and underwriting process, a workflow that has remained largely unchanged up to this point. The new approach has been reimagined from a fresh perspective (rather than updating dated and broken workflows), and the implications of this change have the potential to radically impact the bigger world of commercial real estate.

The traditional loan application process has been by-and-large frustrating, time-consuming and oftentimes complicated. In most cases, borrowers have been required to submit sensitive and pertinent documentation either in-person or via email attachments. After submitting, the lender must double check to ensure the documents were received. And even if the documents have been received by the financial institution and are deemed complete and accurate, it isn’t always clear if every department within the same organization (such as business development and underwriting) have access to the same data and documents. As a result, many applications remain in a state of limbo for an unnecessary period of time and borrowers do not have any type of view into the status of their request. Naturally, tensions can run high.

The good news is that digital lending platforms seem to finally be making inroads. While online loan applications aren’t necessarily new, extending the automation of tasks through to underwriting and other areas of the lender’s back office are improving the speed and quality of loan decisions. Why does that matter? More borrowers are gaining quicker access to the capital they need to fund new projects with confidence.

Streamlining applications

Every lender’s policies are different, but there are ubiquitous commonalities to the borrower loan application process. So, it makes sense that a universal loan application exists to detail the criteria needed from prospective borrowers. When forms are standardized and presented in a digital, dynamic format, whereby questions are based on the borrower’s previous responses to things like loan type and purpose, lenders receive loan requests that are more complete and easier to decision.

Another emerging concept in hotel and real estate financing is leveraging a single, digital portal to streamline checklist activity such as uploading or accessing documentation and monitoring the status of an application. This is especially important when there is a borrower consortium for a loan, quite common in the hotel industry. Each person in the group can upload respective personal financial statements that are confidential and only accessible by the lender. Borrowers gain the efficiency to easily manage how this data gets contributed to the lender. And in turn, lenders can better manage their own custom due diligence checklists of what’s needed from the borrower, helping eliminate frustration and preserving the borrower-lender relationship.

With more lenders and borrowers uniting on mutually beneficial marketplaces, the manner in which loans are applied for and processed is changing for the better. It’s far less tedious and time-consuming; a loan decision that normally took 60 to 90 days can now be executed in well under 30 days.  

Simplifying negotiations

While many banks and some credit unions offer hospitality financing, it is a niche field and there are lending hurdles, especially for new builds or construction projects. For this reason, frustrated borrowers often look to private lenders. One such Dallas-based direct private lender closed nearly $400 million in hospitality loans in 2018. And while there is a host of reputable private lending firms for borrowers to consider, the interest rates on offered loans are usually higher than a traditional lending institution. This leaves borrowers in a pickle.

According to the American Bankers Association 2018 “The State of Digital Lending” report, banks are seeking to compete with non-bank lending firms by expanding digital lending channels. While the report noted that many traditional banks offer “some form of digital capabilities around lending,” such as loan status, loan payments and basic account information, “the majority of banks’ lending processes, including online applications, onboarding, processing, underwriting and funding, have yet to be overhauled through technology.”

Now, streamlined lending marketplaces offer borrowers the opportunity to negotiate the best loan terms from even the traditional lenders–all with one application. Recall the aforementioned digital loan portal. This represents a huge step forward in lending, especially given that in the past the borrower would fill out a loan application for every single lender, inputting the same data in the same required fields several times over. This can deter an otherwise well-qualified borrower who grows weary of the process to truly seek out the most competitive rate, agreeing possibly to an offer that’s merely the “best” within a limited scope. Or, the borrower gets careless with duplicative data entry and provides incorrect information or misses required fields altogether.

Alternatively, online lending platforms enable borrowers to simplify data entry by requesting it just once and submitting a standard application to multiple lenders with one click. Information is repurposed across requests and can be updated over time as needed for future loan requests. In a marketplace format, applicants can indicate what type of lenders they are seeking and which loan programs they are open to. The lenders, in turn, can target the type of borrower they would consider engaging and avoid needing to manually filter through hundreds of applications.

Lenders and borrowers share the same frustrations with the loan application process. Whereas a borrower may be overwhelmed by the process, a lending officer may also grow tired of triple-checking, for example, that all forms are completed and signed. These back-and-forth exchanges ultimately take a toll on the borrower-lender relationship. But by engaging a digital loan platform, the platform essentially becomes the application manager alerting both the lender and the borrower about the status of the loan application, what forms are required and when, or when the lender has made a loan decision.

Closing the deal

Digital lending platforms are an industry game changer for delivering that loan approval too. Deals can happen more quickly because all documentation related to the project is housed in one secure location. Critical loan data is current and always at the ready. As a result, informed decisions are made in real time about a project, be it an acquisition, new construction or refinancing.

Whether a borrower is experienced or inexperienced in hospitality, technology is leveling the playing field. And while industry experts have historically advised borrowers to allow at least three months for the loan discovery and selection process, tech tools, in many cases, have reduced the application process time by two thirds or more.

Hospitality is considered one of the more complicated and riskier commercial real estate loans. The evolution toward a more modern way of lending will translate to address the common challenges found across all commercial real estate. Technology has provided a way to streamline the borrower application and underwriting process, and its use is only going to grow.

Source:https://www.propmodo.com/how-innovation-in-hospitality-financing-is-shaking-up-commercial-real-estate/