Strategic and Structural Changes in Hotel Mortgages: A Multiple Regression Analysis

摘要

This article demonstrates that corporate "A" bond rates and hotel mortgage interest rates are highly correlated. Specifically, bond rates in one calendar quarter are a reasonably accurate predictor of interest rates in the following quarter. The most effective analysis involves a multiple regression equation that accounts for recent strategic changes in participants in the hotel mortgage market and thus a structural shift in the market. The equation also accounts for federal tax policy as well as bond rates in estimating interest rates in the subsequent quarter. This model overcomes the concerns of timeliness for existing hotel mortgage rate estimates that are based on surveys of relatively few mortgagees.