At the end of the first quarter of 2020, analysts at Lodging Econometrics (LE) report that the total U.S. construction pipeline continued to expand year-over-year (YOY) to 5,731 projects/706,128 rooms, up 1% by projects and 3% by rooms. However, quarter-over-quarter, the pipeline has contracted slightly less than 1% by both project and room counts, down from 5,748 projects/708,898 rooms at the close of 2019.
Projects currently under construction stand at an all-time high of 1,819 projects/243,100 rooms. Projects scheduled to start construction in the next 12 months total 2,284 projects/264,286 rooms, while projects in the early planning stage stand at 1,628 projects/198,742 rooms. Projects in the early planning stage are up 8% by projects and 11% by rooms, YOY. Developers with projects under construction have generally extended their opening dates by two to four months. For projects scheduled to start construction in the next 12 months, on average, developers have adjusted their construction start and opening dates outwards by four to six months. Additionally, brands have been empathetic with developers by relaxing timelines as everyone adjusts to the COVID-19 interruptions. As a result, LE anticipates a stronger count of openings in the second half of 2020, compared to the first half.
In the first quarter of 2020, the U.S. opened 144 new hotels with 16,305 rooms. While the COVID-19 pandemic has slowed development, it has not completely stalled it. There were still 312 new projects with 36,464 rooms announced into the pipeline in the first quarter.
Many open or temporarily closed hotels have already begun or are in the planning stages of renovating and repositioning their assets while occupancy is low or non-existent. At the close of the first quarter, LE recorded 769 active renovation projects/163,030 rooms and 616 active conversion projects/69,258 rooms throughout the United States.
To date, the largest fiscal relief and stimulus efforts include the unprecedented $2 trillion CARES Act, the Paycheck Protection Program (PPP), and the Paycheck Protection Program Liquidity Facility (PPPLF), with a third phase of relief having been signed by the president last week. This third phase includes nearly $500 billion to further support the small-business loan program, as well as provide additional critical funding needed for hospitals and comprehensive testing. A phase four “CARES Act 2” package is already being discussed.
In order to support the economy and build liquidity, the Federal Reserve cut interest rates to almost zero; reduced bank reserve requirements to zero; rapidly purchased hundreds of billions of dollars in treasury bonds and mortgage-backed securities; bought corporate and municipal debt; and extended emergency credit to non-banks. The Federal Reserve has signaled that it will provide more support to the economy if warranted.
Although there are discussions about opening parts of the country that are beginning to stabilize; it will be measured with phased openings designed to effectively balance a highly desired economic ramp up while following prudent health and safety precautions.
*COVID-19 (coronavirus) did not have a full impact on first quarter 2020 U.S. results reported by LE. Only the last 30 days of the quarter were affected. LE’s market intelligence department has and will continue to gather the necessary global intelligence on the supply side of the lodging industry and make that information available to our subscribers. It is still early to predict the full impact of the outbreak on the lodging industry. We will have more information to report in the coming months.
Related Stories
Contractors | Feb 14, 2023
The average U.S. contractor has nine months worth of construction work in the pipeline
Associated Builders and Contractors reports today that its Construction Backlog Indicator declined 0.2 months to 9.0 in January, according to an ABC member survey conducted Jan. 20 to Feb. 3. The reading is 1.0 month higher than in January 2022.
Office Buildings | Feb 9, 2023
Post-Covid Manhattan office market rebound gaining momentum
Office workers in Manhattan continue to return to their workplaces in sufficient numbers for many of their employers to maintain or expand their footprint in the city, according to a survey of more than 140 major Manhattan office employers conducted in January by The Partnership for New York City.
Giants 400 | Feb 9, 2023
New Giants 400 download: Get the complete at-a-glance 2022 Giants 400 rankings in Excel
See how your architecture, engineering, or construction firm stacks up against the nation's AEC Giants. For more than 45 years, the editors of Building Design+Construction have surveyed the largest AEC firms in the U.S./Canada to create the annual Giants 400 report. This year, a record 519 firms participated in the Giants 400 report. The final report includes 137 rankings across 25 building sectors and specialty categories.
Multifamily Housing | Feb 7, 2023
Multifamily housing rents flat in January, developers remain optimistic
Multifamily rents were flat in January 2023 as a strong jobs report indicated that fears of a significant economic recession may be overblown. U.S. asking rents averaged $1,701, unchanged from the prior month, according to the latest Yardi Matrix National Multifamily Report.
Market Data | Feb 6, 2023
Nonresidential construction spending dips 0.5% in December 2022
National nonresidential construction spending decreased by 0.5% in December, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $943.5 billion for the month.
Architects | Jan 23, 2023
PSMJ report: The fed’s wrecking ball is hitting the private construction sector
Inflation may be starting to show some signs of cooling, but the Fed isn’t backing down anytime soon and the impact is becoming more noticeable in the architecture, engineering, and construction (A/E/C) space. The overall A/E/C outlook continues a downward trend and this is driven largely by the freefall happening in key private-sector markets.
Hotel Facilities | Jan 23, 2023
U.S. hotel construction pipeline up 14% to close out 2022
At the end of 2022’s fourth quarter, the U.S. construction pipeline was up 14% by projects and 12% by rooms year-over-year, according to Lodging Econometrics.
Products and Materials | Jan 18, 2023
Is inflation easing? Construction input prices drop 2.7% in December 2022
Softwood lumber and steel mill products saw the biggest decline among building construction materials, according to the latest U.S. Bureau of Labor Statistics’ Producer Price Index.
Market Data | Jan 10, 2023
Construction backlogs at highest level since Q2 2019, says ABC
Associated Builders and Contractors reports today that its Construction Backlog Indicator remained unchanged at 9.2 months in December 2022, according to an ABC member survey conducted Dec. 20, 2022, to Jan. 5, 2023. The reading is one month higher than in December 2021.
Market Data | Jan 6, 2023
Nonresidential construction spending rises in November 2022
Spending on nonresidential construction work in the U.S. was up 0.9% in November versus the previous month, and 11.8% versus the previous year, according to the U.S. Census Bureau.
