The U.S. total active hotel pipeline saw an 8.3% decrease in the number of rooms under development compared to September 2011, according to new data from STR.
The total active U.S. hotel development pipeline comprises 2,598 projects totaling 289,145 guestrooms.
Among the top 10 U.S. markets by guestrooms in the in construction phase, Los Angeles reported the largest increase in rooms under construction, rising 208.2% with 1,005 rooms. Four other markets reported increases in rooms under construction of more than 10%:
- Denver, up 105.8% with 1,245 guestrooms
- Atlanta, up 81.2% with 685 guestrooms
- Chicago, up 67.8% with 1,775 guestrooms
- New York City, up 27.2% with 9,354 guestrooms
Washington, D.C., reported the largest decrease in rooms under construction, falling 87.6% to 2,948 rooms.
“There were roughly 64,000 U.S. guestrooms under construction in September 2012, an increase of 18% from September 2011 but down 3.8% from August 2012,” said Bobby Bowers, senior vice president of operations at STR. “The top 10 U.S. markets accounted for more than one-third of the construction activity. New York City was the runaway leader among the markets, with more than 9,000 guestrooms, approximately 15% of the U.S. total-in the ground. Interest rates are at historic lows, but lending standards are tough, keeping a lid on new supply growth. However, we expect to see new projects drift upward and push supply growth ahead in 2013.”
Canada
Meanwhile Canada’s hotel pipeline showed a 0.3% increase in the number of guestrooms in the total active pipeline compared to September 2011.
Among the chain scale segments, the upper upscale segment reported the largest increase in rooms in the total active pipeline, rising 244% with 867 guestrooms, followed by the economy segment, up 130.2% with 679 guestrooms and the midscale segment, up 62.5% with 564 guestrooms. The luxury segment experienced the largest decrease falling 100% with no rooms in the total active pipeline.
Three segments reported increases in rooms under construction of more than 30%: the economy segment, up 183.1% with 252 guestrooms, the upper midscale segment, up 76.2% with 2,067 guestrooms and the upscale segment, up 33.1% with 2,609 guestrooms.