PORTSMOUTH, N.H. — At the close of 2019, the total U.S. hotel construction pipeline continued to grow with 5,748 projects totaling 708,898 rooms, up 4 percent by projects and 6 percent by rooms year-over-year (YOY), according to analysts at Lodging Econometrics (LE). The pipeline has now completed its eighth consecutive year of growth. These year-end counts are just 135 projects/76,649 rooms shy of the all-time high of 5,883 projects/785,547 rooms reached in the second quarter of 2008.
The number of projects under construction continues to rise, reaching an all-time high of 1,768 projects with 237,362 rooms, up 7 percent by projects and 10 percent by rooms YOY. The number of hotel projects scheduled to start construction in the next 12 months stands at 2,283 projects/265,161 rooms. Those in the early planning stage number 1,697 projects/206,375 rooms.
In 2019, 1,017 new hotels/118,674 rooms opened in the United States, a 2.2 percent growth in new supply, bringing the total U.S. census to 57,903 hotels/5,486,909 rooms. LE forecasts 2.3 percent supply growth for new hotel openings in 2020, with 1,127 new hotels/127,896 rooms expected to open. In 2021, the forecast for new hotel openings rises slightly to 1,162 new hotels/135,228 rooms, a 2.4 percent growth rate.
The U.S. hotel construction pipeline outlook remains optimistic through 2020 and through the early part of the new decade, according to LE analysts, as financial markets are strong, a partial trade agreement between the U.S. and China has been reached, and interest rates could very well go unchanged in 2020. Overall, the economy is in a good place, and the concerns of a possible recession have eased, according to LE analysts. Lenders continue to be cautious, but lending at attractive rates is still accessible to developers and should continue to drive development.