US Hotel Construction Remains Strong

Despite the COVID-19 pandemic, construction for U.S. hotels remains strong through the first half of 2020, according to analysts from Lodging Econometrics (LE), a global real estate intelligence firm.

At the end of the second quarter of this year, the total U.S. hotel construction pipeline included 5,582 projects and 687,801 rooms, which dropped just 1 percent year over year.

Currently, there are 1,771 projects/235,467 rooms under construction, which is an increase of 3 percent and 1 percent, respectively, year over year, LE said.

While there have obviously been opening delays, projects continue to move forward “albeit with extended timelines,” LE said. “As was the case at the end of the first quarter, developers with projects scheduled to start construction in the next 12 months continue to monitor current events and make adjustments to their construction start and opening dates.”

During the first half of 2020, 313 new hotels with 36,992 rooms debuted in the U.S. and 81 new projects with 56,823 rooms were announced; 169 new project announcements and 20,359 rooms taking place in the second quarter.

“With franchise development staff largely working from home, non-essential travel halted, and with the on-going pandemic, the ability to get a new development deal signed has slowed,” LE said. “This has resulted in a 53 percent decrease in new project announcements compared to the second quarter of 2019 when 359 projects/44,895 rooms were recorded.”

Meanwhile, the summer is showing an uptick in domestic travel, “As a result, more and more hotels are re-opening, and many others have begun to move-up renovation plans and/or are repositioning their property with a brand conversion,” LE said, adding that in the “first half of 2020, LE recorded 1,465 active renovation projects/314,043 rooms and 1,196 active conversion projects/136,110 rooms throughout the U.S.”

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