PORTSMOUTH, N.H. — According to the latest U.S. Hotel Construction Pipeline Trend Report by Lodging Econometrics (LE), the total U.S. hotel construction pipeline at the end of Q3 2020 stood at 5,282 projects/655,026 rooms—down 7 percent by projects and 6 percent by rooms year over year (YOY). As expected, the hotel construction pipeline is off more substantially in Q3 2020 as compared to Q2 2020. This is due largely in part to an acceleration of new hotel openings in Q2 2020 as a result of a cyclical high number of projects under construction in Q1 2020 that were delayed and later opened in Q2 2020. Secondly, new project announcements continue to be muted. The number of projects exiting the pipeline and moving to a canceled or on-hold status in Q3 2020 stood at 191 projects/21,859 rooms.
Developers continue to closely monitor the impact the COVID-19 pandemic will have on travel demand, how quickly a widespread vaccine will roll out, and the outcome of the U.S. presidential and congressional elections. It is expected that as these events and timelines provide more clarity for developers, they will begin to more confidently move forward with their development activity.
Projects currently under construction stood at 1,610 projects/216,136 rooms at the end of Q3 2020—down 7 percent by projects and 8 percent by rooms, YOY. Despite the year-over-year decrease, the number of projects currently under construction continued to move forward towards their respective openings. New hotel openings continued to outpace projects moving to under construction. Projects scheduled to start construction in the next 12 months totaled 2,113 projects/246,528 rooms. Developers with projects scheduled to start construction in the next 12 months continued to adjust their construction start and opening dates, minimize carrying costs, and plan to open in a more robust operating environment. LE continues to track development timeline changes in its database. Projects in the early planning stage stood at 1,559 projects/192,362 rooms at the end of Q3 2020—both a year-over-year and a quarter-over-quarter increase.
Through the third quarter of 2020, 599 new hotels with 68,712 rooms opened in the United States with another 326 projects/35,324 room anticipated to open by the end of 2020, totaling 925 projects/104,036 rooms. For 2021, LE expects another 960 projects/113,247 rooms to open.