The capital markets have experienced a signficant shift in the past six months, and financing for hotel projects is both less available and more expensive than it was in the first half of 2022. Driven by successive increases in the federal funds rate, interest rates have risen and are now typically in the 6% to 8% range, depending on the asset and market. At the same time, concerns related to a potential recession and the impact of inflation on operating costs and consumer spending have induced a layer of caution about the near-term outlook for the industry. As a result, loan-to-value ratios have declined and amortization periods shortened, reflecting the market’s perception of elevated risk in the near term. These factors have combined to make current mortgage capital relatively expensive compared to both recent levels and long-term norms.