At the end of 2018, analysts at Lodging Econometrics (LE) reported that the total U.S. construction pipeline continued to trend upward with 5,530 projects/669,456 rooms, both up a strong 7% year-over-year (YOY). However, pipeline totals continue to trail the all-time high of 5,883 projects/785,547 rooms reached in the second quarter of 2008.
Project counts in the early planning stage continue to rise reaching an all-time high of 1,723 projects/199,326 rooms, up 14% by projects and 12% by rooms YOY. Projects scheduled to start construction in the next 12 months stand at 2,153 projects/255,083 rooms. Projects currently under construction are at 1,654 projects/215,047 rooms, the highest counts since early 2008.
Also noteworthy at year-end, the upscale, upper-midscale, and midscale categories are at record-highs, for both rooms and projects. Luxury room counts and upper-upscale project counts are also at record levels.
In 2018, the U.S. had 947 new hotels/112,050 rooms open, a 2% growth in new supply, bringing the total U.S. census to 56,909 hotels/5,381,090 rooms. The LE forecast for new hotel openings in 2019 anticipates a 2.2% supply growth rate with 1,022 new hotels/116,357 rooms expected to open. The pace for new hotel openings has slowed slightly because of construction delays largely caused by shortages in skilled labor.
Lending at attractive rates is still accessible to developers, but lenders are growing more selective as we move deeper into the existing cycle.
The pipeline has completed its seventh consecutive year of growth. Moving forward the growth rate is expected to slow as the economies of most countries, including the United States, more firmly settle into the “new normal" marked by slow growth and low inflation.
While there are no visible signs of a recession on the horizon, the risks to the economy are not insignificant and include tariff conflicts, swings in the stock market, unforeseen geopolitical problems, any of which could send the economy lower.
Related Stories
Market Data | Aug 12, 2021
Steep rise in producer prices for construction materials and services continues in July.
The producer price index for new nonresidential construction rose 4.4% over the past 12 months.
Market Data | Aug 6, 2021
Construction industry adds 11,000 jobs in July
Nonresidential sector trails overall recovery.
Market Data | Aug 2, 2021
Nonresidential construction spending falls again in June
The fall was driven by a big drop in funding for highway and street construction and other public work.
Market Data | Jul 29, 2021
Outlook for construction spending improves with the upturn in the economy
The strongest design sector performers for the remainder of this year are expected to be health care facilities.
Market Data | Jul 29, 2021
Construction employment lags or matches pre-pandemic level in 101 metro areas despite housing boom
Eighty metro areas had lower construction employment in June 2021 than February 2020.
Market Data | Jul 28, 2021
Marriott has the largest construction pipeline of U.S. franchise companies in Q2‘21
472 new hotels with 59,034 rooms opened across the United States during the first half of 2021.
Market Data | Jul 27, 2021
New York leads the U.S. hotel construction pipeline at the close of Q2‘21
Many hotel owners, developers, and management groups have used the operational downtime, caused by COVID-19’s impact on operating performance, as an opportunity to upgrade and renovate their hotels and/or redefine their hotels with a brand conversion.
Market Data | Jul 26, 2021
U.S. construction pipeline continues along the road to recovery
During the first and second quarters of 2021, the U.S. opened 472 new hotels with 59,034 rooms.
Market Data | Jul 21, 2021
Architecture Billings Index robust growth continues
AIA’s Architecture Billings Index (ABI) score for June remained at an elevated level of 57.1.
Market Data | Jul 20, 2021
Multifamily proposal activity maintains sizzling pace in Q2
Condos hit record high as all multifamily properties benefit from recovery.
