U.S. Hotel Construction Pipeline Under Contract for June 2017 Up 11.6 Percent over 2016
The U.S. reported 186,945 rooms in 1,440 hotel projects in construction in June, which is a 12.4% year-over-year increase.
STR’s June 2017 Pipeline Report shows 583,028 rooms in 4,836 hotel projects Under Contract in the United States. The total represents an 11.6% increase in the number of rooms Under Contract compared with June 2016.
Under Contract data includes projects in the In Construction, Final Planning and Planning stages, but does not include projects in the Unconfirmed stage.
In the In Construction stage, the U.S. reported 186,945 rooms in 1,440 projects. Based on the number of rooms, that is a 12.4% increase in year-over-year comparisons but a 2.5% decrease from the previous month.
“With May as the exception, we have now seen a decrease in room construction totals in three of the last four months,” said Bobby Bowers, STR’s senior VP for operations. “While the month-to-month fluctuations prevent us from definitively calling this a development slowdown, we can certainly point to a significantly lower growth rate year over year in identifying such a trend. Regardless, there will still be plenty of construction and planning activity even with occupancy levels heading toward negative territory.”
Looking at construction activity among the Chain Scale segments, Upper Midscale (62,237 rooms in 610 hotels) accounted for the most rooms In Construction followed by Upscale (58,833 rooms in 434 hotels).
“Those two limited-service segments account for 65% of all U.S. construction activity, and that is not going to change anytime soon with 67% of the Final Planning stage also represented by Upscale and Upper Midscale projects,” Bowers said. “At the same time, Midscale looks to be gaining steam, ranking third in rooms being constructed and in that Final Planning phase.”
Despite representing the lowest number of rooms in the pipeline, the Economy segment reported the largest year-over-year percentage increase for rooms In Construction (+128.0% to 2,440 rooms) and Under Contract (+160.1% to 11,157 rooms).
|U.S. pipeline by Chain Scale segment (number of rooms % change, June 2017 vs. June 2016):
Source: STR / report as of June 2017, activity reported through May 2016
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