We are often asked about sources and criteria for hotel investment, both on the debt side and the equity side.  Although we are neither investors nor bankers ourselves, we do see and hear plenty about this subject, and most of it expresses the many challenges in the capital markets in general and for hotels in particular.  The “D” word (development) seems to be the most challenging, and access to capital markets for new hotel development seems to have a checklist that includes, as a bare minimum, an impressive hotel location in a performing market, sponsorship with the capacity to invest significant equity capital in the transaction, a well known brand or flag that will deliver professional management and a centralized reservation system, and a hotel general manager and on-location team that can pass muster under the investor’s underwriting.  We have been hearing the phase “Best in Class” for many months, and the concepts behind those words seem unchanged.  Sponsorship seeking capital must be able to clearly demonstrate that the project to be funded has a story that is nothing less than compelling and demonstrates that it is the best opportunity for the investor to not only be repaid the invested capital, but perhaps even earn a return.  For an interesting international twist to this topic, see the recent article in Hotel News Now.com coming out of the recent Boutique Hotel Summit in London.