Lodging Econometrics reports that with 3,645 projects (totaling 460,551 rooms), the 2014 total U.S. lodging construction pipeline stands at its highest level in six years.
After a three-year bottoming formation, the pipeline has now posted five consecutive quarters of double-digit year-over-year (YOY) growth. In both the third and fourth quarters, increases were particularly impressive, exceeding 20%.
Although the breakout might appear robust, pipeline totals are still a long way from the peak of 5,438 projects/718,387 rooms set in 2007.
Projects under construction, the most important predictor of near-term supply growth, has catapulted forward to 1,086 projects/136,442 rooms—the highest level in more than five years. The number of units under construction is up 37% by projects and 34% by rooms (YOY).
Projects scheduled to start construction in the next 12 months have risen strongly, to 1,351 projects/160,061 rooms, up 17% and 13% YOY, respectively.
The growing number of projects in early planning is only just beginning. The cyclical bottom for projects in early planning just occurred in the second quarter of 2014. It bounced back smartly in the second half of the year, adding 221 projects, and ended 2014 at 1,208 projects/164,048 rooms.
Projects in early planning directly influence the number of hotels that will open three to five years outward. Projects that enter the pipeline in early planning are generally larger hotels in downtown or resort locations. Most are upscale select-service projects, while others are upper upscale and luxury full-service hotels that are frequently part of mixed-use developments.
Planning and permitting these larger, more complex projects is typically more protracted and also comes with longer construction periods. These projects generally open near the end of a real estate cycle, often times after the cycle has already peaked and begun to decline.
Project counts in early planning are expected to spurt forward over the next two to three years and make significant additions to new supply towards the end of the decade.
Related Stories
Giants 400 | Sep 5, 2019
Top 85 Hotel Sector Construction Firms for 2019
Suffolk, Yates Companies, AECOM, Swinerton, and Turner top the rankings of the nation's largest hotel sector contractors and construction management firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
Giants 400 | Sep 5, 2019
Top 70 Hotel Sector Engineering Firms for 2019
NV5, EXP, Jensen Hughes, KPFF, and Thornton Tomasetti head the rankings of the nation's largest hotel sector engineering and engineering architecture (EA) firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
Giants 400 | Sep 5, 2019
Top 110 Hotel Sector Architecture Firms for 2019
Gensler, WATG, HKS, HBG Design, and Steelman Partners top the rankings of the nation's largest hotel sector architecture and architecture engineering (AE) firms, as reported in Building Design+Construction's 2019 Giants 300 Report.
AEC Innovators | Aug 27, 2019
7 AEC industry disruptors and their groundbreaking achievements
From building prefab factories in the sky to incubating the next generation of AEC tech startups, our 2019 class of AEC Innovators demonstrates that the industry is poised for a shakeup. Meet BD+C’s 2019 AEC Innovators.
AEC Innovators | Aug 13, 2019
Stacking the deck: Marriott International embraces modular construction
The hotel giant has more than 50 projects in the works that incorporate prefab guestrooms or bathrooms.
Hotel Facilities | Jul 31, 2019
Hotels are taking steps to curtail their energy and water appetites
But owners and operators must be on the same page to achieve meaningful sustainability, says a new ULI report.
Building Tech | Jun 26, 2019
Modular construction can deliver projects 50% faster
Modular construction can deliver projects 20% to 50% faster than traditional methods and drastically reshape how buildings are delivered, according to a new report from McKinsey & Co.
Design Innovation Report | Jun 25, 2019
2019 Design Innovation Report: Super labs, dream cabins, office boardwalks, façades as art
9 projects that push the limits of architectural design, space planning, and material innovation.
Hotel Facilities | May 16, 2019
JFK’s TWA Flight Center has been reimagined as a hotel
MCR and Morse Development spearheaded the project.
Modular Building | May 13, 2019
This Marriott is poised to take over the title as the world’s tallest modular hotel
Danny Forster & Architecture designed the building.
