U.S. Hotel Construction Pipeline Ends 2019 on a High Note

U.S. hotel construction pipeline

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.

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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.

 

 


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