KBRA Finds Lodging Delinquencies Vary by Price Class, Chain

(Illustration: Joao Marcelo Martins via Unsplash)

The commercial mortgage-backed securities lodging 30-plus day delinquency rate stood at 6.4% as of March, compared to 6.5% in March 2025 and 5.3% in March 2024, according to Kroll Bond Rating Agency, New York.

“Lodging fundamentals have weakened, with revenue per available room declining and turning negative on a year-over-year basis in 2025,” KBRA said in Late Checkout: Lodging Delinquencies Vary by Price Class and Chain.

But a closer look beyond the headline RevPAR and delinquency figures reveals a growing divergence in performance across hotel price classes. KBRA examined those differences and looked at credit performance across hotel chains, brand parent and geographic markets.

Key takeaways from the report:
KBRA said the Upscale and Upper-Upscale classes have the highest delinquency rates at 11.3% and 10.9%, respectively. While they collectively represent 41.4% of outstanding balance, they account for 72% of total delinquent balance at $1.6 billion and $2.7 billion, respectively.

The Economy and Midscale classes have experienced the largest increase in delinquency rates since March 2024 following three consecutive years of year-over-year RevPAR declines for Economy and two of three for Midscale with the third being flat. “While these classes may continue to face elevated delinquency rates, their impact on overall lodging delinquencies is likely to remain limited, as they account for just 6.3% of all outstanding lodging loans by balance,” the report said.

By chain, Hilton and Courtyard account for over 40% of the total delinquent balance. Hilton (Upper-Upscale) has the highest delinquent balance at $1.8 billion (30.1% delinquency rate), while Courtyard has the highest delinquent balance within the Upscale class at $659.1 million (23.3% delinquency rate). Both significantly exceed the overall lodging delinquency rate of 6.4%.

By brand parent, Hilton Worldwide has the highest delinquent amount at $2.5 billion, and a delinquency rate of 15.7%, more than double the overall lodging delinquency rate. Of the top 20 metropolitan statistical areas, San Francisco had the highest delinquent amount ($1.1 billion) and delinquency rate (50.8%), driven largely by a single large loan exposure, KBRA reported.