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
Designers | Oct 19, 2022
Architecture Billings Index moderates but remains healthy
For the twentieth consecutive month architecture firms reported increasing demand for design services in September, according to a new report today from The American Institute of Architects (AIA).
Market Data | Oct 17, 2022
Calling all AEC professionals! BD+C editors need your expertise for our 2023 market forecast survey
The BD+C editorial team needs your help with an important research project. We are conducting research to understand the current state of the U.S. design and construction industry.
Market Data | Oct 14, 2022
ABC’s Construction Backlog Indicator Jumps in September; Contractor Confidence Remains Steady
Associated Builders and Contractors reports today that its Construction Backlog Indicator increased to 9.0 months in September, according to an ABC member survey conducted Sept. 20 to Oct. 5.
Market Data | Oct 12, 2022
ABC: Construction Input Prices Inched Down in September; Up 41% Since February 2020
Construction input prices dipped 0.1% in September compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
Laboratories | Oct 5, 2022
Bigger is better for a maturing life sciences sector
CRB's latest report predicts more diversification and vertical integration in research and production.
Market Data | Aug 25, 2022
‘Disruptions’ will moderate construction spending through next year
JLL’s latest outlook predicts continued pricing volatility due to shortages in materials and labor
Market Data | Aug 2, 2022
Nonresidential construction spending falls 0.5% in June, says ABC
National nonresidential construction spending was down by 0.5% in June, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.
Market Data | Jul 28, 2022
The latest Beck Group report sees earlier project collaboration as one way out of the inflation/supply chain malaise
In the first six months of 2022, quarter-to-quarter inflation for construction materials showed signs of easing, but only slightly.
Hotel Facilities | Jul 28, 2022
As travel returns, U.S. hotel construction pipeline growth follows
According to the recently released United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the total U.S. construction pipeline stands at 5,220 projects/621,268 rooms at the close of 2022’s second quarter, up 9% Year-Over-Year (YOY) by projects and 4% YOY by rooms.
Codes and Standards | Jul 22, 2022
Hurricane-resistant construction may be greatly undervalued
New research led by an MIT graduate student at the school’s Concrete Sustainability Hub suggests that the value of buildings constructed to resist wind damage in hurricanes may be significantly underestimated.
