In the third quarter of 2018, analysts at Lodging Econometrics (LE) report that the top five markets with the largest total hotel construction pipelines are: New York City with 170 projects/29,630 rooms; Dallas with 157 projects/18,954 rooms; Houston with 150 projects/16,473 rooms; Los Angeles with 141 projects/24,129 rooms; and Nashville with 115 projects/15,179 rooms.
Projects already under construction and those scheduled to start construction in the next 12 months, combined, have a total of 3,782 projects/213,798 rooms and are at cyclical highs. Markets with the greatest number of projects already in the ground and those scheduled to start construction in the next 12 months are New York with 145 projects/24,675 rooms, Dallas with 112 projects/13,854 rooms, Houston with 103 projects/11,562 rooms, Los Angeles with 92 projects/14,249 rooms, and Nashville with 88 projects/12,322 rooms.
In the third quarter, Los Angeles has the highest number of new projects announced into the pipeline with 22 projects/6,457 rooms. Detroit follows Los Angeles with 18 projects/1,937 rooms, Dallas with 14 projects/1,529 rooms, New York City with 12 projects/1,857 rooms, and then Atlanta with 12 projects/1,354 rooms.
Reflecting the strong cyclical highs in the pipeline, LE’s forecast for new hotel openings will continue to rise in 2018-2020. In 2018, New York City tops the list with 29 new hotels expected to open/5,351 rooms, Dallas with 29 projects/3,187 rooms, Houston with 27 projects/3,259 rooms, Nashville with 22 projects/3,018 rooms, and Los Angeles with 12 projects/2,152 rooms. In the 2019 forecast, New York continues to lead with the highest number of new hotels expected to open with 59 projects/8,964 rooms followed by Houston with 31 projects/3,098 rooms and Dallas with 30 projects/3,379 rooms. In 2020, Dallas is forecast to take the lead for new hotel openings with 41 projects/4,809 rooms expected to open, followed by New York with 36 projects/5,978 rooms, and Los Angeles with 33 projects/4,292 rooms expected to open.
With the exception of New York City and Houston, the other markets mentioned in the opening show that supply growth has begun to surpass demand. The variances in 2018 year-to-date are small but are certain to widen in the next two years, given the strength of these pipeline in the markets.
All in all, 10 of the top 25 markets show supply growth minimally exceeding demand growth in 2018.
Related Stories
Market Data | Jan 12, 2018
Construction input prices inch down in December, Up YOY despite low inflation
Energy prices have been more volatile lately.
Market Data | Jan 4, 2018
Nonresidential construction spending ticks higher in November, down year-over-year
Despite the month-over-month expansion, nonresidential spending fell 1.3 percent from November 2016.
Contractors | Jan 4, 2018
Construction spending in a ‘mature’ period of incremental growth
Labor shortages are spiking wages. Materials costs are rising, too.
Market Data | Dec 20, 2017
Architecture billings upturn shows broad strength
The American Institute of Architects (AIA) reported the November ABI score was 55.0, up from a score of 51.7 in the previous month.
Market Data | Dec 14, 2017
ABC chief economist predicts stable 2018 construction economy
There are risks to the 2018 outlook as a number of potential cost increases could come into play.
Market Data | Dec 13, 2017
Top world regions and markets in the global hotel construction pipeline
The top world region by project count is North America.
Market Data | Dec 11, 2017
Global hotel construction pipeline is growing
The Total Pipeline stands at 12,427 Projects/2,084,940 Rooms.
Market Data | Dec 11, 2017
Construction backlog surges, sets record in third quarter
CBI is a leading economic indicator that reflects the amount of construction work under contract, but not yet completed.
Market Data | Dec 7, 2017
Buoyed by healthy economy, ABC Index finds contractors upbeat
Despite rising construction labor and materials costs, 55% of contractors expect their profit margins to expand in the first half of 2018.
Market Data | Dec 5, 2017
Top health systems engaged in $21 billion of U.S. construction projects
Largest active projects are by Sutter Health, New York Presbyterian, and Scripps Health.