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
Data Centers | Apr 14, 2023
JLL's data center outlook: Cloud computing, AI driving exponential growth for data center industry
According to JLL’s new Global Data Center Outlook, the mass adoption of cloud computing and artificial intelligence (AI) is driving exponential growth for the data center industry, with hyperscale and edge computing leading investor demand.
Healthcare Facilities | Apr 13, 2023
Healthcare construction costs for 2023
Data from Gordian breaks down the average cost per square foot for a three-story hospital across 10 U.S. cities.
Higher Education | Apr 13, 2023
Higher education construction costs for 2023
Fresh data from Gordian breaks down the average cost per square foot for a two-story college classroom building across 10 U.S. cities.
Market Data | Apr 13, 2023
Construction input prices down year-over-year for first time since August 2020
Construction input prices increased 0.2% in March, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics Producer Price Index data released today. Nonresidential construction input prices rose 0.4% for the month.
Market Data | Apr 11, 2023
Construction crane count reaches all-time high in Q1 2023
Toronto, Seattle, Los Angeles, and Denver top the list of U.S/Canadian cities with the greatest number of fixed cranes on construction sites, according to Rider Levett Bucknall's RLB Crane Index for North America for Q1 2023.
Contractors | Apr 11, 2023
The average U.S. contractor has 8.7 months worth of construction work in the pipeline, as of March 2023
Associated Builders and Contractors reported that its Construction Backlog Indicator declined to 8.7 months in March, according to an ABC member survey conducted March 20 to April 3. The reading is 0.4 months higher than in March 2022.
Market Data | Apr 6, 2023
JLL’s 2023 Construction Outlook foresees growth tempered by cost increases
The easing of supply chain snags for some product categories, and the dispensing with global COVID measures, have returned the North American construction sector to a sense of normal. However, that return is proving to be complicated, with the construction industry remaining exceptionally busy at a time when labor and materials cost inflation continues to put pricing pressure on projects, leading to caution in anticipation of a possible downturn. That’s the prognosis of JLL’s just-released 2023 U.S. and Canada Construction Outlook.
Market Data | Apr 4, 2023
Nonresidential construction spending up 0.4% in February 2023
National nonresidential construction spending increased 0.4% in February, according to an Associated Builders and Contractors analysis of data published by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $982.2 billion for the month, up 16.8% from the previous year.
Multifamily Housing | Mar 24, 2023
Average size of new apartments dropped sharply in 2022
The average size of new apartments in 2022 dropped sharply in 2022, as tracked by RentCafe. Across the U.S., the average new apartment size was 887 sf, down 30 sf from 2021, which was the largest year-over-year decrease.
Multifamily Housing | Mar 14, 2023
Multifamily housing rent rates remain flat in February 2023
Multifamily housing asking rents remained the same for a second straight month in February 2023, at a national average rate of $1,702, according to the new National Multifamily Report from Yardi Matrix. As the economy continues to adjust in the post-pandemic period, year-over-year growth continued its ongoing decline.
