U.S. hotel capital markets have produced an array of challenges during the course of the last six months. From the precipitous decline in investor confidence in August 1998 to the moderate recovery in stock prices later in the year, hotel developers, owners and managers continue to face great uncertainty as they consider their capital plans for the coming year. The question facing the U.S. hotel industry is compelling. When will hotel capital markets recover, ending a credit crunch that at year-end extended from Wall Street to Main Street?

A quick look back

Before considering the capital market outlook in 1999, let's consider the tumultuous year we have just been through and the years that preceded it. To summarize the decade thus far, a brief refresher is in order:

Early 1990s