Hotel Pipeline Reaches Record

The global hotel construction pipeline has never been larger and the U.S. has more properties in the pipeline than any other country, reported Lodging Econometrics, Portsmouth, N.H.

The construction pipeline stands at 12,839 projects totaling 2.1 million rooms worldwide, more than 85 percent higher (by projects) than the 2011 cyclical low, Lodging Econometrics’ Global Construction Pipeline Report said.

The U.S. pipeline has steadily increased since 2011 and currently contains 5,312 properties with 634,501 rooms–41 percent of projects globally. China ranked second with 20 percent of all hotel projects under construction, Lodging Econometrics said. Of the top 10 cities worldwide for hotels under construction, six are in the U.S. and three are in China.

American cities with the largest pipeline counts include New York, which led the world with 169 projects totaling 29,365 rooms, Dallas with 156 projects/18,908 rooms and Houston with 150 projects/16,321 rooms, Lodging Econometrics reported.

The leading companies in the construction pipeline by project count include Marriott International with 2,324 projects, Hilton Worldwide with 2,202 projects, InterContinental Hotels Group with 1,653 projects/244,038 rooms and AccorHotels with 809 projects, the report said.

New hotel openings also continue to reach record levels–reflecting pipeline growth–Lodging Econometrics said, predicting nearly 1,250 U.S. openings in 2020.

The U.S. hotel sector reported negative year-over-year results in its three key performance metrics between September 9 and 15, reported STR, Hendersonville, Tenn. Occupancy fell 3.3 percent to 69.8 percent, the average daily rate slipped 0.3 percent to $131.03 and revenue per available room dropped 3.7 percent to $91.47 compared to a year ago.

“There were a lot of different factors to parse in the week’s results,” STR Senior Vice President of Lodging Insights Jan Freitag said. “Performance levels dropped in several major markets as Hurricane Florence moved up the Atlantic Seaboard. On top of that, an earlier Rosh Hashanah and the comparison with the 2017 post-hurricane demand period in Houston and Florida created significant fluctuations in year-over-year percentage changes.”

Freitag noted Hurricane Florence side effects will continue for several weeks. “Additionally, performance at this time last year in New York City was lifted by the UN General Assembly, which made the comparable particularly difficult to match,” he said.

Among the Top 25 Markets, Miami/Hialeah, Florida, reported the largest RevPAR increase, jumping 8 percent to $80.94 due to a double-digit occupancy increase. New Orleans posted the largest ADR lift, up 9.4 percent to $142.12.