The hotel sector is booming. But for how long?
Last April, the Real Deal, which tracks real estate news and trends, reported that new hotel construction in New York, which peaked in 2014, “is finally crashing” because so many new properties were coming online and developers were shying away from planning new projects.
In the first three months of this year, hoteliers had submitted permit applications for only six new hospitality properties, a total of 512 units, citywide. The Real Deal estimates that barely 10,000 new hotel rooms would be added to New York’s inventory this year, compared to more than 9,000 in 2014.
On Tuesday, Lodging Econometrics, the Portsmouth, N.H.-based market research firm, reported that New York City has the country’s largest hotel construction pipeline by project count: 196 projects and 32,121. New York has had the largest project count since the fourth quarter of 2011.
New York is followed by Houston (170 projects, 20,083 rooms), which has been the second-largest hotel market for the past 10 quarters, according to Lodging Econometrics. The rest of the top five hotel construction metros are Dallas (128 projects/15,662 rooms), Nashville (109/13,789), and Los Angeles (104/17,912).
A day before Lodging Econometrics released this data, STR, a global data benchmarking and analytics firm, released its July 2016 Pipeline Report, which showed 171,276 rooms in 1,305 projects under construction, a 32.6% increase over the same month a year ago.
STR estimates that New York, with an existing supply of 112,468 rooms, had 15,770 rooms under construction, 11.9% more than in July 2015. Three other markets—L.A./Long Beach, Dallas, and Houston—had more than 5,000 rooms under construction.
Conversely, Bobby Bowers, STR’s Senior Vice President of Operations, notes that the San Francisco/San Mateo, Calif., market may be reaching a saturation point, with room construction among the five-lowest in the country.
New York City continues to lead the nation in new hotel construction and rooms under contract. The nation's 26 largest cities are, for the most part, seeing strong growth in their hospitality sectors, even as some developers worry that too much inventory may be coming online. Chart: STR
Related Stories
Giants 400 | Dec 3, 2020
2020 Hotel Sector Giants: Top architecture, engineering, and construction firms in the U.S. hospitality sector
Gensler, Jacobs, and Suffolk Construction top BD+C's rankings of the nation's largest hotel sector architecture, engineering, and construction firms, as reported in the 2020 Giants 400 Report.
AEC Tech | Nov 12, 2020
The Weekly show: Nvidia's Omniverse, AI for construction scheduling, COVID-19 signage
BD+C editors speak with experts from ALICE Technologies, Build Group, Hastings Architecture, Nvidia, and Woods Bagot on the November 12 episode of "The Weekly." The episode is available for viewing on demand.
Hotel Facilities | Nov 3, 2020
Hotel made from CLT opens at Fort Jackson, S.C.
This project used over 4,100 pieces of cross-laminated timber. It's the fourth CLT hotel in the Army's housing portfolio.
Hotel Facilities | Oct 27, 2020
Hotel construction pipeline dips 7% in Q3 2020
Hospitality developers continue to closely monitor the impact the coronavirus will have on travel demand, according to Lodging Econometrics.
Smart Buildings | Oct 26, 2020
World’s first smart building assessment and rating program released
The SPIRE Smart Building Program will help building owners and operators make better investment decisions, improve tenant satisfaction, and increase asset value.
Hotel Facilities | Sep 22, 2020
‘Lifestyle’ is adding new color to the select-service hotel sector
A new WATG Strategy white paper examines the design characteristics of the blending.
Giants 400 | Aug 28, 2020
2020 Giants 400 Report: Ranking the nation's largest architecture, engineering, and construction firms
The 2020 Giants 400 Report features more than 130 rankings across 25 building sectors and specialty categories.
Coronavirus | Aug 25, 2020
Video: 5 building sectors to watch amid COVID-19
RCLCO's Brad Hunter reveals the winners and non-winners of the U.S. real estate market during the coronavirus pandemic.
Hotel Facilities | Aug 14, 2020
5 strategies for creating safer, healthier hotel experiences
As hotels begin to reopen, the focus on health and safety takes priority while working to preserve the guest experience.
Hotel Facilities | Aug 5, 2020
Renovations could be hospitality’s stopgap for next few years
Modular and prefab construction are already more prominent.
