PORTSMOUTH, N.H. — Analysts at Lodging Econometrics (LE) reported this week that the total U.S. hotel construction pipeline expanded 1 percent year-over-year (YOY) at the end of Q1 2020 to 5,731 projects. Nationally, under-construction project counts hit a new all-time high with 1,819 projects totaling 243,100 rooms.
The U.S. markets with the greatest number of projects already in the ground (as opposed to in planning stages) are New York City, Atlanta, Dallas, Los Angeles, and Orlando, which, collectively, account for 16 percent of the total number of projects currently under construction in the United States.
In the first quarter, Dallas had the highest number of new projects announced into the pipeline (13 projects/1,461 rooms), followed by Washington, D.C. (eight projects/1,145 rooms), Phoenix (eight projects/904 rooms), Los Angeles (seven projects/1,103 rooms), and Atlanta (seven projects/774 rooms).
Amid the COVID-19 pandemic, the majority of U.S. hotels are experiencing an extreme decrease in occupancy and some have even closed temporarily. Many companies are using this time to complete updates, plan or start renovations, or reposition their assets. LE recorded renovation and conversion totals of 1,385 active projects/232,288 rooms in the first quarter of 2020. The markets with the largest count of renovation and conversion projects combined are Chicago with 32 projects/5,565 rooms, Washington, D.C. with 26 projects/5,491 rooms, Los Angeles with 26 projects/4,271 rooms, New York City with 21 projects/8,151 rooms, and San Diego with 21 projects/4,456 rooms.
Below are the five U.S. markets with the largest hotel construction pipelines at the end of the first quarter.
Five U.S. Markets with the Largest Hotel Construction Pipelines
Los Angeles had the largest hotel construction pipeline in the country at the end of the first quarter of 2020, with 166 projects totaling 27,752 rooms. The city had the fourth-highest number of hotel projects already in the ground (43 projects/6,851 rooms). Los Angeles also had the fourth-highest number of new projects announced into the pipeline in the first quarter: seven hotels with 1,103 total rooms. The city had among the most renovation and conversion projects, as well—26 projects/4,271 rooms.
Dallas’ hotel construction pipeline followed Los Angeles’ as the largest in the country with 164 projects totaling 19,999 rooms. With 46 projects totaling 5,603 rooms already underway, the city had the third-highest number of hotels in the ground at the end of the first quarter. Dallas also had the highest number of new projects announced into the pipeline in the first quarter—with 13 projects totaling 1,461 rooms.
New York City had the third-largest hotel construction pipeline in the country at the end of the first quarter, with 152 projects totaling 26,111 rooms. The city had the highest number of hotel projects already in the ground (108 projects totaling 18,434 rooms) and was among the markets with the most renovation and conversion projects (21 projects totaling 8,151 rooms) at the end of the first quarter.
Atlanta’s hotel construction pipeline was fourth in the country, with 143 projects totaling 19,423 rooms. The city had the second-highest number of hotel projects already in the ground (48 projects/6,002 rooms). In the first quarter, Atlanta had the fifth-highest number of new projects announced into the pipeline—seven hotels totaling 774 rooms.
With 132 projects totaling 13,316 rooms, the Houston market had among the largest hotel construction pipelines in the country at the end of the first quarter.
NOTE: COVID-19 did not have a full impact on the Q1 2020 U.S. results reported by LE. Only the last 30 days of the quarter were affected. LE’s market intelligence department has and will continue to gather the necessary global intelligence on the supply side of the lodging industry and make that information available to our subscribers. It is still early to predict the full impact of the outbreak on the lodging industry. LE will have more information to report in the coming months.