Lodging Econometrics reports that with 3,645 projects (totaling 460,551 rooms), the 2014 total U.S. lodging construction pipeline stands at its highest level in six years.
After a three-year bottoming formation, the pipeline has now posted five consecutive quarters of double-digit year-over-year (YOY) growth. In both the third and fourth quarters, increases were particularly impressive, exceeding 20%.
Although the breakout might appear robust, pipeline totals are still a long way from the peak of 5,438 projects/718,387 rooms set in 2007.
Projects under construction, the most important predictor of near-term supply growth, has catapulted forward to 1,086 projects/136,442 rooms—the highest level in more than five years. The number of units under construction is up 37% by projects and 34% by rooms (YOY).
Projects scheduled to start construction in the next 12 months have risen strongly, to 1,351 projects/160,061 rooms, up 17% and 13% YOY, respectively.
The growing number of projects in early planning is only just beginning. The cyclical bottom for projects in early planning just occurred in the second quarter of 2014. It bounced back smartly in the second half of the year, adding 221 projects, and ended 2014 at 1,208 projects/164,048 rooms.
Projects in early planning directly influence the number of hotels that will open three to five years outward. Projects that enter the pipeline in early planning are generally larger hotels in downtown or resort locations. Most are upscale select-service projects, while others are upper upscale and luxury full-service hotels that are frequently part of mixed-use developments.
Planning and permitting these larger, more complex projects is typically more protracted and also comes with longer construction periods. These projects generally open near the end of a real estate cycle, often times after the cycle has already peaked and begun to decline.
Project counts in early planning are expected to spurt forward over the next two to three years and make significant additions to new supply towards the end of the decade.
Related Stories
High-rise Construction | Jun 29, 2016
Best Tall Buildings around the world favor unusual shapes and hybrid functions
The Council on Tall Buildings and Urban Habitat selects winners in four regions.
Movers+Shapers | Jun 13, 2016
THE DISRUPTORS: The Millennial generation is imposing its will on design
AEC firms, particularly those that design hotels and offices, gain a competitive edge by knowing how to appeal to the largest share of the American workforce.
Hotel Facilities | May 17, 2016
U.S. hotel construction pipeline full, fueled by upscale property segment
The 506,000 rooms under contract in April represent a 14.6% YoY increase.
High-rise Construction | May 17, 2016
Foster + Partners-designed towers approved as part of massive neighborhood redevelopment in San Francisco
One of Oceanwide Center’s buildings will be the city’s second tallest.
Retail Centers | May 10, 2016
5 factors guiding restaurant design
Restaurants are more than just places to eat. They are comprising town centers and playing into the future of brick-and-mortar retail.
Hotel Facilities | Mar 9, 2016
New hotel rooms generate an intergenerational battle
Hotels are going for a new minimalist look to attract younger guests, but some older business travelers don't like the small "desks"—and they don't want to work in the hotel lobby. But it's really all about trimming construction costs.
Hotel Facilities | Jan 19, 2016
8 trends sparking the hospitality sector
Hotels and restaurants are branching out to attract more customers—and hold onto them longer.
| Jan 14, 2016
How to succeed with EIFS: exterior insulation and finish systems
This AIA CES Discovery course discusses the six elements of an EIFS wall assembly; common EIFS failures and how to prevent them; and EIFS and sustainability.
Hotel Facilities | Jan 13, 2016
Hotel construction should remain strong through 2017
More than 100,000 rooms could be delivered this year alone.
Hotel Facilities | Nov 17, 2015
Marriott to acquire Starwood for $12.2 billion
The combination would form the world’s largest hotel company, and bring together two growth-minded businesses.
