At the end of 2018, analysts at Lodging Econometrics (LE) reported that the total U.S. construction pipeline continued to trend upward with 5,530 projects/669,456 rooms, both up a strong 7% year-over-year (YOY). However, pipeline totals continue to trail the all-time high of 5,883 projects/785,547 rooms reached in the second quarter of 2008.
Project counts in the early planning stage continue to rise reaching an all-time high of 1,723 projects/199,326 rooms, up 14% by projects and 12% by rooms YOY. Projects scheduled to start construction in the next 12 months stand at 2,153 projects/255,083 rooms. Projects currently under construction are at 1,654 projects/215,047 rooms, the highest counts since early 2008.
Also noteworthy at year-end, the upscale, upper-midscale, and midscale categories are at record-highs, for both rooms and projects. Luxury room counts and upper-upscale project counts are also at record levels.
In 2018, the U.S. had 947 new hotels/112,050 rooms open, a 2% growth in new supply, bringing the total U.S. census to 56,909 hotels/5,381,090 rooms. The LE forecast for new hotel openings in 2019 anticipates a 2.2% supply growth rate with 1,022 new hotels/116,357 rooms expected to open. The pace for new hotel openings has slowed slightly because of construction delays largely caused by shortages in skilled labor.
Lending at attractive rates is still accessible to developers, but lenders are growing more selective as we move deeper into the existing cycle.
The pipeline has completed its seventh consecutive year of growth. Moving forward the growth rate is expected to slow as the economies of most countries, including the United States, more firmly settle into the “new normal" marked by slow growth and low inflation.
While there are no visible signs of a recession on the horizon, the risks to the economy are not insignificant and include tariff conflicts, swings in the stock market, unforeseen geopolitical problems, any of which could send the economy lower.
Related Stories
Industry Research | Jun 26, 2017
Time to earn an architecture license continues to drop
This trend is driven by candidates completing the experience and examination programs concurrently and more quickly.
Industry Research | Jun 22, 2017
ABC's Construction Backlog Indicator rebounds in 2017
The first quarter showed gains in all categories.
Market Data | Jun 21, 2017
Design billings maintain solid footing, strong momentum reflected in project inquiries/design contracts
Balanced growth results in billings gains in all sectors.
Market Data | Jun 16, 2017
Residential construction was strong, but not enough, in 2016
The Joint Center for Housing Studies’ latest report expects minorities and millennials to account for the lion’s share of household formations through 2035.
Industry Research | Jun 15, 2017
Commercial Construction Index indicates high revenue and employment expectations for 2017
USG Corporation (USG) and U.S. Chamber of Commerce release survey results gauging confidence among industry leaders.
Market Data | Jun 2, 2017
Nonresidential construction spending falls in 13 of 16 segments in April
Nonresidential construction spending fell 1.7% in April 2017, totaling $696.3 billion on a seasonally adjusted, annualized basis, according to analysis of U.S. Census Bureau data released today by Associated Builders and Contractors.
Industry Research | May 25, 2017
Project labor agreement mandates inflate cost of construction 13%
Ohio schools built under government-mandated project labor agreements (PLAs) cost 13.12 percent more than schools that were bid and constructed through fair and open competition.
Market Data | May 24, 2017
Design billings increasing entering height of construction season
All regions report positive business conditions.
Market Data | May 24, 2017
The top franchise companies in the construction pipeline
3 franchise companies comprise 65% of all rooms in the Total Pipeline.
Industry Research | May 24, 2017
These buildings paid the highest property taxes in 2016
Office buildings dominate the list, but a residential community climbed as high as number two on the list.