PORTSMOUTH, N.H.— Lodging Econometrics (LE) this week reported the top five U.S. markets with the largest total hotel construction pipelines at the close of Q2 2020. Leading for the fourth consecutive quarter is Los Angeles (163 projects/27,415 rooms), followed by Dallas (158 projects/19,314 rooms), New York (151 projects/26,302 rooms), Atlanta (135 projects/18,634 rooms), and Houston (122 projects/12,486 rooms). Despite these top five markets being located in states that have been heavily impacted by COVID-19, combined, they still account for 15 percent of the rooms in the total U.S. pipeline and—with the exception of Houston—have pipelines that remain steady and primarily unchanged quarter-over-quarter.
New York City continues to have the greatest number of projects under construction (106 projects/18,354 rooms). Los Angeles follows (48 projects/8,070 rooms), and then Atlanta (48 projects/6,604 rooms), Dallas (46 projects/5,344 rooms), and Nashville (37 projects/6,597 rooms). These five markets collectively account for nearly 20 percent of the total number of rooms currently under construction in the United States.
According to LE’s research, many hotel owners who have capital on hand are taking this opportunity of decreased demand to upgrade and renovate their properties or redefine their hotels with a brand conversion. In the second quarter of 2020, LE recorded a combined renovation and conversion total of 1,276 active projects with 217,865 rooms for the United States. The markets with the largest combined number of renovations and conversions are Chicago with 28 projects/4,717 rooms, Los Angeles with 26 projects/4,548 rooms, New York City with 22 projects/8,817 rooms, Washington, D.C. with 21 projects/4,850 rooms, and Atlanta with 19 projects/3,273 rooms.
Despite the impact that COVID-19 has had on operating performance, development in the lodging industry continues. In the first half of 2020, Dallas recorded the highest number of new projects announced into its pipeline with 18 projects/2,018 rooms. Washington, D.C. followed with 14 projects/1,978 rooms, then Phoenix with 13 projects/1,397 rooms, Miami with 10 projects/2,472 rooms, and the Florida Panhandle with nine projects/1,178 rooms.
In Q2, Los Angeles had the largest hotel construction pipeline in the country for the fourth consecutive quarter, totaling 163 projects and 27,415 rooms. The city also has the second-highest number of hotels under construction—48 projects totaling 8,070 rooms. Los Angeles had the second-highest number of renovations and conversions in the second quarter—26 projects/4,548 rooms.
Dallas had the second-largest hotel construction pipeline behind Los Angeles in Q2, with 158 projects/19,314 rooms. The city also had the fourth-highest number of hotels currently under construction—46 projects/5,344 rooms. In addition, Dallas had the highest count of new hotel project announcements in the first half of the year, adding 18 projects and 2,018 rooms into its pipeline.
With 151 projects totaling 26,302 rooms, New York City has the third-largest hotel construction pipeline nationwide at the close of the second quarter. New York continues to have the greatest number of projects currently under construction (106 projects/18,354 rooms), and also had the third-highest number of renovations and conversions (22 projects/8,817 rooms) at the end of the second quarter.
Atlanta followed New York’s total hotel construction pipeline with 135 hotel projects totaling 18,634 rooms. The city also had 48 projects/6,604 rooms under construction—the same number of projects as Los Angeles—at the end of Q2 2020. In addition, Atlanta had the fifth-highest number of renovations and conversions (19 projects/3,273 rooms).
Totaling 122 projects and 12,486 rooms, Houston’s hotel construction pipeline was among the largest in the United States at the end of Q2 2020.