According to the recently released United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the total U.S. construction pipeline stands at 5,220 projects/621,268 rooms at the close of 2022’s second quarter, up 9% Year-Over-Year (YOY) by projects and 4% YOY by rooms.
At Q2 ‘22, there are 965 projects/130,914 rooms currently under construction, down 17% YOY by projects and 18% YOY by rooms. Projects scheduled to start in the next 12 months, at 2,009 projects/232,163 rooms, are up 9% YOY by projects and 9% YOY by rooms. Projects and rooms in early planning reached a record high in the second quarter, standing at 2,246 projects/258,191 rooms, up 26% YOY by projects and 15% YOY by rooms. Continuing the trend seen over the past several years, the upscale and upper-midscale chain scales continue to lead the pipeline with 68% of projects concentrated in these two chain scales.
Following the substantial decline in travel during recent years, pent up demand and increased consumer sentiment and spending has led to record-high rates of travel and much improved hotel revenue over the last few months. Analysis of the hotel industry at the end of the second quarter suggests the outlook is positive and growth is expected to continue throughout 2022, albeit at a decelerated pace than initially expected. The industry’s ability to adapt to the constantly changing economic environment provides a positive outlook for hotel performance, and its eventual full recovery.
However, market volatility, persistent inflation, rising energy prices, elevated transportation costs, materials shortages, and supply chain backlogs continue to pose a challenge and slow the timeline to full recovery. Some hotels have noted a reduction in certain services and put a limit on the number of available room nights. Furthermore, although leisure travel has had a robust comeback in 2022, business travel is only slowly returning. To counterbalance the occupancy lag and capitalize on the strong leisure recovery, room rates have significantly increased with Average Daily Rates considerably higher than those recorded in 2019.
Even though the U.S. and the hotel industry are facing some economic challenges that can be expected to continue into the near future, corporate and personal balance sheets are reasonably strong, the U.S. banking system is healthy, and the planning of new hotel projects continues. Hotel investors and developers are still eager to move forward on projects and are being more mindful when approaching a deal. There were a total of 428 new projects accounting for 47,034 rooms announced into the pipeline in the second quarter of 2022. This number more than doubled YOY when compared to the second quarter of 2021 when 202 new hotel projects/25,653 rooms were recorded. Also of note, at Q2 2022, there are a total of 1,889 projects/237,420 rooms in the renovation or conversion pipeline in the U.S., with project and room conversions reaching an all-time high and increasing 66% YOY by projects and 35% YOY by rooms.
During the first and second quarters of 2022, the U.S. opened 247 new hotels with 28,116 rooms. LE is forecasting another 428 projects/50,322 rooms to open during 2022 for a total of 675 projects/78,438 rooms by year-end, representing a 1.4% increase in new supply. 733 projects/87,253 rooms are expected to open in 2023, representing a 1.5% increase in new supply. And, announcing for the first time, is LE’s new hotel openings forecast for 2024, for which analysts expect 848 projects/93,581 rooms to open with a 1.6% new supply increase.
Related Stories
| Aug 11, 2010
Manhattan's Gouverneur Healthcare Services tops out renovation, expansion
One year after breaking ground, the Building Team for the renovation and expansion of the Gouverneur Healthcare Services facility on Manhattan's Lower East Side topped out the $180 million project. Designed by New York-based RMJM, the development involves a 316,000-sf renovation and 108,000-sf addition that will house a 295-bed nursing facility and five-story ambulatory care center.
| Aug 11, 2010
Decline expected as healthcare slows, but hospital work will remain steady
The once steady 10% growth rate in healthcare construction spending has slowed, but hasn't entirely stopped. Spending is currently 1.7% higher than the same time last year when construction materials costs were 8% higher. The 2.5% monthly jobsite spending decline since last fall is consistent with the decline in materials costs.
| Aug 11, 2010
Luxury Hotel required faceted design
Goettsch Partners, Chicago, designed a new five-star, 214-room hotel for the King Abdullah Financial District (KAFD) in Riyadh, Saudi Arabia. The design-build project, with Saudi Oger Ltd. as contractor and Rayadah Investment Co. as developer, has a three-story podium supporting a 17-story glass tower with a nine-story opening that allows light to penetrate the mass of the building.
| Aug 11, 2010
Alabama hospital gets a four-story addition
Birmingham, Ala.-based Hoar Construction has completed the North Tower addition at Thomas Hospital in Fairhope, Ala. The four-story, 123,000-sf addition accommodates an ER on the first floor, 32 private patient rooms and nursing support on the second and third floors, and room for 32 planned patient rooms on the top floor.
| Aug 11, 2010
Florida mixed-use complex includes retail, residential
The $325 million Atlantic Plaza II lifestyle center will be built on 8.5 acres in Delray Beach, Fla. Designed by Vander Ploeg & Associates, Boca Raton, the complex will include six buildings ranging from three to five stories and have 182,000 sf of restaurant and retail space. An additional 106,000 sf of Class A office space and a residential component including 197 apartments, townhouses, ...
| Aug 11, 2010
America's Greenest Hospital
Hospitals are energy gluttons. With 24/7/365 operating schedules and stringent requirements for air quality in ORs and other clinical areas, an acute-care hospital will gobble up about twice the energy per square foot of, say, a commercial office building. It is an achievement worth noting, therefore, when a major hospital achieves LEED Platinum status, especially when that hospital attains 14 ...
| Aug 11, 2010
3 Hospitals, 3 Building Teams, 1 Mission: Optimum Sustainability
It's big news in any city when a new billion-dollar hospital is announced. Imagine what it must be like to have not one, not two, but three such blockbusters in the works, each of them tracking LEED-NC Gold certification from the U.S. Green Building Council. That's the case in San Francisco, where three new billion-dollar-plus healthcare facilities are in various stages of design and constructi...
| Aug 11, 2010
Westin Hotel
Mid-twentieth-century projects are in a state of limbo. In many cities, safeguards against quick demolition don't even cover “new” buildings built after 1939, yet many such buildings may be obsolete by current standards. The Farmers and Mechanics Savings Bank, located in downtown Minneapolis, was one such building, a rare example of architecture from a time when American design was ...
| Aug 11, 2010
Platinum Award: Monumentally Hip Hotel Conversion
At one time the tallest building west of the Mississippi, the Foshay Tower has stood proudly on the Minneapolis skyline since 1929. Built by Wilbur Foshay as a tribute to the Washington Monument, the 30-story obelisk served as an office building—and cultural icon—for more than 70 years before the Ryan Companies and co-developer RWB Holdings partnered with Starwood Hotels & Resor...
| Aug 11, 2010
Hilton President Hotel
Once an elegant and fashionably trendy locale, the Presidential Hotel played host to the 1928 Republican National Convention where Herbert Hoover was nominated for President, and acted as a hot spot for Kansas City Jazz in the '30s and '40s. The hotel was eventually abandoned in 1984, at which point it became a haven for vagabonds and pigeons, collecting animal waste and incurring significant s...
