PORTSMOUTH, N.H.—Lodging Econometrics reports that the Q1 2017 United States construction pipeline currently stands at 5,032 projects/602,034 rooms, up 13 percent by projects year-over-year (YOY). There are 1,511 projects/197,450 rooms under construction, up by 155 projects YOY or 11 percent. Projects scheduled to start in the next 12 months, at 2,414 projects/272,487 rooms, were up 367 projects, 18 percent. Projects in early planning at 1,107 projects/132,097 rooms were up by 39 projects or 4 percent.
This is the 21st consecutive quarter of growth, but the pipeline is still a distant 851 projects/183,513 rooms away from the Q2 2008 peak of 5,883 projects/785,547 rooms. This moderate pipeline growth can be attributed to the tightening of loan availability, the recent rise of interest rates with the expectation of more increases on the horizon, and a slowing economy near full employment.
While luxury hotels may have once been reserved for the wealthiest guests, an increasing number of customers with large disposable incomes are looking to stay at these high-end properties. Guests now have greater access and information to book luxury travel without paying premiums, and an “affordable luxury” segment is emerging as a result. By 2030, households with more than $300,000 in disposable income are projected to increase from 1.5 percent to 3.1 percent of the population—outnumbering high-net-worth individuals and presenting more opportunities for hotels to tap into a growing market. To read more, click here.
For the last seven years, California has seen growth in its tourism industry. In 2016, traveler spending was more than $126 billion, which grew 3.2 percent from the previous year, according to a report by the state’s tourism marketing agency—Visit California. Read more about the industry’s growth here.
Today’s hotel companies are increasingly expanding their brand portfolios to reach travelers and meet their varying needs. While a large portfolio of offerings and strategies like dual-branded properties provide travelers with greater options, the influx of brands may be complicating the hotel landscape. One of the challenges companies face is differentiating their brands—from both the competition and within their own portfolio. Another is the cost of each brand’s advertising, market research, and digital media efforts. To learn more about how hotels in the industry are addressing these challenges, click here.
Hotels no longer use WiFi solely for guest entertainment purposes as more internet-dependent amenities are being implemented throughout the hospitality industry. Gadgets like remote key access and robotic housekeeping services increasingly rely on a strong WiFi connection to function properly. Read more.
Hotel transaction activity in the U.S. is predicted to stay stagnant in 2017. JLL’s Q4 2016 U.S. Lodging Investment Outlook expected $29 billion in U.S. transaction activity, a repeat of the market’s 2016 performance. The gap between supply and demand is narrowing, creating more risk for investors. Read more here.