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Housing Needs Boost Hotel Performance

Posted by Lodging Staff on November 09, 2017

Analysis from Cleveland Research Company found that third quarter hotel performance outperformed projections due to increased demand for housing following Hurricanes Harvey and Irma. The economy and midscale hotel segments in particular housed displaced residents and response workers. Read more.

According to the recent United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the franchise companies with the largest construction pipelines are; Marriott with 1,298 projects/166,419 rooms, Hilton with 1,270 projects/144,191 rooms and IHG with 817 projects/83,728 rooms. These three franchise companies comprise 68 percent of all projects in the total pipeline.

The largest brands for each of these companies are; Marriott’s Fairfield Inn with 284 projects/27,411 rooms and Residence Inn with 189 projects/23,605 rooms; Hilton’s Home2 Suites with 348 projects/36,439 rooms and Hampton Inn & Suites with 324 projects/33,627 rooms; and IHG’s Holiday Inn Express with 442 projects/41,053 rooms and Staybridge Suites with 129 projects/13,635 rooms.

The companies with the most new project announcements into the pipeline in the first three quarters are; Hilton with 324 projects/35,637 rooms, Marriott with 248 projects/32,166 rooms and Choice with 196 projects/13,735 rooms. These three companies represent 74 percent of all new projects announced into the pipeline.

Lodging Econometrics has determined that Marriott International, due in part to the acquisition of the Starwood brands, currently has the largest construction pipeline of any franchise company with 1,298 projects/166,419 rooms. Their brands with the strongest total pipeline are: Fairfield Inn with 284 projects/27,411 rooms, Residence Inn with 189 projects/23,605 rooms, and TownePlace Suites with 183 projects/18,590 rooms.

Marriott has the most rooms currently under construction with 516 projects/69,721 rooms, which represents almost 1/3 of all pipeline rooms under construction. Additionally, they have the most rooms scheduled to start construction in the next 12 months with 616 Projects/75,302 rooms. Marriott also has 166 projects/21,396 rooms in early planning,

Marriott is forecasted to opened 257 new hotels with 32,886 rooms in 2017, accounting for 26 percent of all new hotels anticipated to open this year. The Marriott brands with the largest number of new hotels expected to open by year-end are Fairfield Inn with 70 hotels/6,476 rooms and Residence Inn with 37 hotels/4,754 rooms

PORTSMOUTH, NH-Analysts at Lodging Econometrics released the five U.S. markets with the largest hotel construction pipelines by project count.

1. New York
New York has the largest hotel construction pipeline in the U.S. with 181 projects and 30,225 rooms. The city also has the most new hotel openings forecasted for 2017, with 39 hotels and 6,128 rooms. New York is also slated to open the most hotels in 2018 with 48 projects/7,905 rooms and in 2019 with 35 projects/5,046 rooms.

2. Houston
Houston’s hotel construction pipeline stands at 148 projects and 16,398 rooms. The city has the third largest number of projected new hotel openings in 2017 behind New York and Dallas, at 27 hotels and 2,828 rooms.

3. Dallas
Dallas has 143 projects and 17,580 rooms and the second largest number of new hotel openings expected for 2017, at 37 hotels and 4,510 rooms.

4. Nashville
Nashville hit a cyclical peak this quarter with 124 projects and 16,699 rooms.

5. Los Angeles
The City of Angels has the fifth largest U.S. hotel construction pipeline with 112 projects/16,780 rooms.

The markets with the most new project announcements into the pipeline in the last 12 months are: New York with 59 projects/9,563 rooms, Dallas with 54 projects/7,142 rooms, and Orlando with 40 projects/11,394 rooms.

The Department of Labor on Friday morning released employment data for October 2017. The numbers show that the unemployment rate fell to the lowest levels in 17 years and that the job market came back up in October from the September slump caused by Hurricanes Harvey and Irma. Despite the storms’ strong impact on hospitality, the industry saw gains in employment during the month of October, adding 106,000 jobs—more than the 102,000 jobs lost in the previous month. The numbers indicate a continuing positive trend of job growth for the industry and U.S. economy as a whole. Read more about today’s jobs report here.

PORTSMOUTH, NH—According to a recent report by Lodging Econometrics (LE), the U.S. construction pipeline stands at 5,011 projects/608,837 rooms, up 4 percent by projects and rooms year over year (YOY).

Currently, the number of projects and rooms under construction are up 8 percent (1,592 projects) and 7 percent (208,523 rooms) YOY the highest counts recorded this cycle. Projects scheduled to start construction in the next 12 months are at 2,198 projects/251,259 rooms, down 1 percent YOY. Projects in early planning are at 1,221 projects/149,055 rooms. While these projects are up 10 percent YOY, the properties are smaller, resulting in lower room-counts.

The pipeline continues to grow at a moderate, upward pace and has established a new peak for this cycle. The previous cycle peak reached 5,882 projects/785,547 rooms in Q208. Current project counts are 15 percent below that level while rooms are 22.5 percent behind. Any acceleration in the pipeline from its moderate growth rate is likely dependent on the tax plan and other economic measures being discussed in Congress.

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