Industry statistics show fundamentals for hotels are improving. Smith Travel Research reports lodging demand in the first quarter increased 5.3% compared with the same quarter last year. PKF Hospitality noted RevPAR could grow 1.7% this year and PricewaterhouseCoopers says the sector is starting to recover. It will be a long climb back, though, according to Jeff Myers, a real estate economist with CoStar Group. "Hotel assets suffered some of the most dramatic pricing declines in the CRE world, and as weak fundamentals and day-to-day leases translated into plummeting NOIs, distress levels went sky-high," he says. "CMBS delinquencies for lodging assets are approaching 18%, compared to 6% for office and 13% for apartments."