Houston hotels are not expected to return to pre-pandemic revenue levels until 2024, according to commercial real estate firm CBRE. Some may not make it that long.

The American Hotel and Lodging Association predicts the industry is facing "massive foreclosures of thousands of hotel properties" across the nation, according to a press release sent out Wednesday.

"With a sharp decline in travel demand, nine times worse than September 11 and with lower room occupancy than during the Great Depression, our small business owners are struggling to survive," Chip Rogers, the association's chief executive, said in the release.

At special risk are hotels that were funded with mortgages that were bundled into securities, known as commercial mortgage-backed securities, or CMBS.

Commercial real estate investors are confronting issues similar to those faced by investors in residential real estate mortgages in the years leading up to the housing bust of more than a decade ago. As with homes, most commercial properties are purchased with mortgages, which are then bundled into securities and sold to investors, whose returns depend on property owners making their monthly payments.

One fifth of securitized hotel mortgages were delinquent in May, data from securities data company Trepp show. But hotels owners who are struggling to make monthly payments are finding much less flexibility if their mortgages have been securitized, according to a survey by the hotel association.

Only 20 percent of hotel owners whose mortgages had been bundled into securities have received any relief on their loans, compared to 91 percent of hotel owners who had borrowed from banks, making it more likely for such mortgages to foreclose, Rogers said. "Without action to shore up commercial debt especially CMBS loans, the hotel industry will experience mass foreclosures and permanent job losses which will snowball into a larger commercial real estate crisis impacting other segments of the economy."

Several Houston hotels with securitized mortgages, including Hilton Houston Post Oak and Crowne Plaza Houston on Katy Freeway, began trying in May to receive payment relief due to the effects of the pandemic. If they do not find a solution, they could be foreclosed on in November.

In a letter to the Department of Treasury and Federal Reserve, a group of U.S. representatives called for relief for CMBS loans.

"We request the Federal Reserve devise a relief plan for these borrowers, who through no fault of their own, have experienced a significant drop in revenue on account of the COVID-19 pandemic and related governmental orders," they wrote, saying that a wave of CMBS loan foreclosures would destroy jobs and cause property values to fall, dealing a blow to state and local tax revenues.

Those calling for the change included six of the 35 U.S. representatives from Texas: Republicans Van Taylor, Lance Gooden, Will Hurd, Michael Burgess and Roger Williams and Democrat Vicente Gonzlez.

Originally published here.