Analysts at Lodging Econometrics (LE) report that at the fourth quarter close of 2021, the total U.S. hotel construction pipeline stands at 4,814 projects/581,953 rooms, down 8% by projects and 10% by rooms year-over-year (YOY). While project totals have dipped slightly YOY, the number of projects in the early planning stage continues to rise. In the final quarter of 2021, projects in the early planning stage experienced an 18% increase by projects and 11% by rooms YOY, for a total of 2,021 projects/239,816 rooms.
Projects scheduled to start construction in the next 12 months stand at 1,821 projects/210,890 rooms at the end of the fourth quarter. Projects under construction finished the year at 972 projects/131,247 rooms. New project announcements are down in the fourth quarter; however, developers are eager to accelerate projects long-delayed by the COVID-19 pandemic. Unfortunately, they face some development roadblocks, including escalating inflation and supply chain shortages, that are causing higher prices versus “pre-pandemic” costs for labor and materials. These factors continue to prolong hotel development timelines. We anticipate these challenges to abate throughout the year and see construction starts to moderately improve.
Nevertheless, the hotel industry has found some assurance in the recent resurgence of travel demand and the steady increase in hotel booking numbers over recent months. Pandemic exhaustion and pent-up demand for “get-aways” have led to a growing number of Americans becoming more open to travel. In addition to leisure travel, the business sector has a strong desire to travel and meet in person. LE analysts are expecting higher attendance at industry conferences and events after Q1‘22. This will help to raise hotel business demand and positively impact the industry as a whole.
Through year-end 2021, the U.S. opened 823 projects accounting for 105,705 rooms, for a growth rate of 1.9%. For 2022, LE is forecasting 783 projects/90,074 rooms to open at a supply growth rate of 1.6%. In 2023, continuing at a supply growth rate of 1.6%, another 820 projects/93,112 rooms are anticipated to open by year-end.
Related Stories
Industry Research | Jan 23, 2024
Leading economists forecast 4% growth in construction spending for nonresidential buildings in 2024
Spending on nonresidential buildings will see a modest 4% increase in 2024, after increasing by more than 20% last year according to The American Institute of Architects’ latest Consensus Construction Forecast. The pace will slow to just over 1% growth in 2025, a marked difference from the strong performance in 2023.
Construction Costs | Jan 22, 2024
Construction material prices continue to normalize despite ongoing challenges
Gordian’s most recent Quarterly Construction Cost Insights Report for Q4 2023 describes an industry still attempting to recover from the impact of COVID. This was complicated by inflation, weather, and geopolitical factors that resulted in widespread pricing adjustments throughout the construction materials industries.
Hotel Facilities | Jan 22, 2024
U.S. hotel construction is booming, with a record-high 5,964 projects in the pipeline
The hotel construction pipeline hit record project counts at Q4, with the addition of 260 projects and 21,287 rooms over last quarter, according to Lodging Econometrics.
Multifamily Housing | Jan 15, 2024
Multifamily rent growth rate unchanged at 0.3%
The National Multifamily Report by Yardi Matrix highlights the highs and lows of the multifamily market in 2023. Despite strong demand, rent growth remained unchanged at 0.3 percent.
Self-Storage Facilities | Jan 5, 2024
The state of self-storage in early 2024
As the housing market cools down, storage facilities suffer from lower occupancy and falling rates, according to the December 2023 Yardi Matrix National Self Storage Report.
Designers | Dec 25, 2023
Redefining the workplace is a central theme in Gensler’s latest Design Report
The firm identifies eight mega trends that mostly stress human connections.
Contractors | Dec 12, 2023
The average U.S. contractor has 8.5 months worth of construction work in the pipeline, as of November 2023
Associated Builders and Contractors reported today that its Construction Backlog Indicator inched up to 8.5 months in November from 8.4 months in October, according to an ABC member survey conducted Nov. 20 to Dec. 4. The reading is down 0.7 months from November 2022.
Market Data | Nov 27, 2023
Number of employees returning to the office varies significantly by city
While the return-to-the-office trend is felt across the country, the percentage of employees moving back to their offices varies significantly according to geography, according to Eptura’s Q3 Workplace Index.
Market Data | Nov 14, 2023
The average U.S. contractor has 8.4 months worth of construction work in the pipeline, as of September 2023
Associated Builders and Contractors reported that its Construction Backlog Indicator declined to 8.4 months in October from 9.0 months in September, according to an ABC member survey conducted from Oct. 19 to Nov. 2. The reading is down 0.4 months from October 2022. Backlog now stands at its lowest level since the first quarter of 2022.
Multifamily Housing | Nov 9, 2023
Multifamily project completions forecast to slow starting 2026
Yardi Matrix has released its Q4 2023 Multifamily Supply Forecast, emphasizing a short-term spike and plateau of new construction.
