Speaking as part of a roundtable of hotel owners at the conference, Dr Schwartz said he, “like many people”, was forced to seek financial capital outside of banks, “despite [his family] not miss a single mortgage payment in 50 years”.

“In the midst of COVID-19, one of my banks said they wanted their money back, and they wanted it right away.”

He said the bank kept raising its fees until it got its money back, forcing Dr. Schwartz to seek expensive mezzanine financing.

The repayment demands, which came when Dr Schwartz was looking to refinance his loans in 2020, forced him to sell one of his popular hotels, the Four Points by Sheraton in Sydney, to reduce his debt.

Dr Schwartz said the lender – understood to be Commonwealth Bank – had triggered a “domino effect” as two other banks that had previously backed his business made similar demands for repayment.

“It really upset me that I couldn’t talk to the CEO of the bank. Only my lawyers could talk to their dear lawyers.

Dr Schwartz, whose family owns hotels like the luxurious Sofitel in Darling Harbour, said The Australian Financial Review that it had since refinanced all of its bank debt with non-bank lenders, including private equity giant Blackstone.

It was not clear why the banks wanted their money back, he said.

“Maybe they thought I was a risk,” he said. “The hospitality industry wasn’t making money at the time because of COVID-19. It was very myopic and stupid decision-making. Maybe the banks thought the pandemic would never end, that the hotels would never reopen again”.

Australia’s big four banks, which have dominated commercial real estate to a greater extent than in other advanced economies, have pulled out of the sector, in part due to higher capital adequacy requirements.

The latest hotel performance figures presented at the conference by Matthew Burke of consultancy STR highlighted that in fact a strong recovery was underway in the sector, led by regional hotels, where daily hotel rates had been ” supercharged” due to a surge in demand.

However, Paul Salter, managing director of hotel fund manager Salter Brothers, and Doma Hotels CEO Jure Domazet sounded cautious, saying inflation, interest rates and construction costs were likely to rise. increase.

Salter said his company is focused on consolidating its existing portfolio, which includes a collection of 11 Travelodge hotels acquired last year for $620 million, and will “cool its jets for a while” on the waterfront. ‘acquisition.

“There is a lot of uncertainty around construction rates and prices,” Mr. Salter said.

“Cap rates will ease, interest rates will rise and discretionary spending will be impacted,” Domazet said.