Austin Hotel Buyer Walks Away From $2 Million Deposit , Because No One Wants To Own A Hotel Now

The $100 million sale of the Renaissance Austin hotel< failed to close with the buyer forfeiting $2 million in earnest money.

The deal was announced in February and hotels are worth a lot less today than they were two months ago – enough so that it made sense to walk away from a $2 million deposit. Whether the unnamed buyer no longer wanted to do the deal (reasonable) or was unable to get financing (also a challenge now) is unclear.

The group which owns the property, Xenia Hotels & Resorts, said that the Renaissance was “a legacy asset” that had been pulling lower revenue per room and earning less than their other hotel properties, and that it needs a lot of investment to bring up to par.

Now, however, it looks like they’re stuck with it – although don’t expect capital investment any time soon.

The hotel industry has been looking for a federal bailout, with their main lobby shop also seeking to allow hotels to obtain paycheck protection loans without having to spend the money on payroll. Their priority is mortgage payments, and they argue that defaults will become a financial crisis (so they want taxpayers to pay their mortgages). While there will undoubtedly be losses there’s little discussion of how those losses would turn into a halting of the financial system, the argument that justified government bailouts during the 2008 financial crisis.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Maybe the buyer who aborted the deal at an expense of $2 million will come back in to try to buy it for many millions less than the original contract price.

  2. Wow, nice local find, Gary !!! Having spent around 30 years with 3M Corporation in Austin, I can tell you that when this hotel as built in 1985 it was THE place for all of the Execs to stay. We also had a number of Division and Group Level Parties and Events there, the property is positively gorgeous. It’s unfortunate that The Arboretum area never really went very far as an entertainment district, in terms of North Austin it’s The Domain that’s the place to be. Thanks for the memories !

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