More California hotels in trouble in 2009

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The number of California hotels that are in default or in foreclosure continued to increase in 2009 because of slumping travel demand and declining real estate values, according to a new hospitality report.

The report by Atlas Hospitality Group said the number of hotels that were in foreclosure rose 313%, from 15 in 2008 to 62 in 2009. More than half of the foreclosed hotels have filed for bankruptcy. The number of hotels in default on their loans jumped 479%, from 53 in 2008 to 307 in 2009.

The largest hotel to be foreclosed is the 469-room Marriott in downtown Los Angeles. Other troubled properties include the St. Regis Monarch Beach in Dana Point, the Sheraton Universal and the W hotel in San Diego.

Most of the struggling hotels remain open, but real estate experts say it will take a great increase in room rentals or a big influx of financing to keep the properties operating.

The counties of Los Angeles, San Diego, San Bernardino and Riverside had the most foreclosures and defaults, according to the report.

--Hugo Martin