Business Guidance

Hospitality Lending at Univest

As temperatures start to rise, thoughts turn to spending time at the shore. Maybe you’ve already made hotel reservations and are daydreaming about your favorite restaurant. For us lucky individuals who get to work out of Univest’s Ocean City location, we start to hear from some long lost colleagues about setting up time to “visit” us during the summer (usually on a Friday). Since the Ocean City lending team has spent our entire careers at the New Jersey shore, we have been exposed to an abundance of hospitality lending which encompasses hotels, restaurant and bars.

Currently, the hospitality industry accounts for 75% of the Ocean City team’s loan portfolio. This is significant since this type of lending is considered risky at many financial institutions because of the higher than normal default rates. At Univest, we believe that the risk can be somewhat mitigated thanks to the many years of experience the Ocean City lending team has in the industry and our focus on building relationships and getting to know our customers. This niche area of expertise allows Univest to serve a sometimes underbanked industry.

While the team’s initial area of concentration was hospitality at the New Jersey shore, with Univest’s larger geographic footprint, we have been able to bring this expertise for providing capital to hotels across the entire Univest service area in southeastern Pennsylvania and extending to the Lehigh Valley and Lancaster County.

We categorize hotels into two groups: flagged and non-flagged. A flagged hotel is an operation that is backed by a national franchise such as Marriott, Holiday Inn, Hyatt, etc. These types of hotels pay a franchise fee and are required to update the furniture, fixtures, and amenities on a regularly scheduled basis. In return, they receive the hotel chain’s name recognition, centralized marketing, and reservation systems which all helps increase customer base.

Non-flagged hotels are concentrated mainly at the shore. These hotel operations have the draw of the beach and associated activities, thus, they do not see the need for incurring the franchise fee expense. The expertise of management is even more important with these operations. A recipe for disaster starts with absentee management. Not only does the operation suffer, but a lot of times this situation will lead to deferred maintenance on the property. This is why a vast majority of our New Jersey shore customers are relationships that we have cultivated over decades.

The commercial lending division at Univest is comprised of many individuals with unique areas of expertise, allowing a vast array of potential loan customers to be able to deal with specialists to guide them through their financing journey. If you’re in the hospitality business and have lending needs, reach out to us at 609.399.5500 to get a conversation started.


Univest Bank and Trust Co. is Member FDIC, Equal Opportunity and SBA Preferred Lender.

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