Some of the hotel industry is struggling right now. Whether the source is increased costs or lower revenue due to higher vacancies than expected, you may be thinking about filing for bankruptcy. Before you do this, though, you might do well to consider some alternatives to bankruptcy. Your property could recover without filing if you manage the situation carefully.

Hotel Receivership or Interim Management

One possibility is to seek outside help. A court-appointed receiver or interim manager might be able to make some of the tough choices on costs that someone closer to the hotel's past would have trouble making. When your property is in financial distress, it might be simply a matter of fixing the balance of revenue and expenditure. Someone focused on protecting the value of the hotel, without attachment to the status quo, can often identify ways to make the revenue you create go further.

In addition, a receiver or interim manager might provide some creative ideas to build your revenue. When you have operated successfully for an extended period of time, it can be difficult to operate differently when a more challenging time arises. By bringing in someone to focus on current difficulties, you can avoid some resistance to change.

Work with Your Lenders

In addition, you may find another of your alternatives to bankruptcy is to work with your lenders. You can often restructure some of your debt to make it more manageable in the short term.

Some lenders may resist, so you should be prepared to make a good case for yourself. If you have a long relationship with a lender, they may prefer to work with you over dropping an account; but you should be able to argue not only for the importance of refinancing, but also that you have a good business case for being able to improve your position soon.

Don't Give Up

If you are willing to work, alternatives to bankruptcy can help you move past current financial problems. Whether you bring outside help or work with your lenders, looking at all your options before you file makes sense.