IT’S OFFICIAL. The decline in new-room construction is a historical trend, reports STR.
The number of hotel rooms under construction in the U.S. has declined or remained flat year over year for three consecutive months. “We feel we can now call that a trend,” said Jan Freitag, STR’s senior vice president of lodging insights.
Overall, STR reported, December data show 179,979 rooms in construction across 1,400 hotels. The number of rooms represented a 3.7 percent decrease compared with the same month in 2016. It is the largest year-over-year room construction decrease in the U.S. since September 2011, when it was down by 7.8 percent.
In November, new construction was flat (up 0.6 percent) and in October was down 0.1 percent, according to STR.
“A construction decline obviously bodes well for the current industry cycle,” Freitag said. “It appears that financing is becoming harder to obtain, and if demand growth holds, occupancy will not deteriorate as quickly or as much as anticipated.”
Of STR’s Top 25 Markets, New York City remained in the lead with 12,074 rooms or 69 hotels under construction.
Dallas, Texas, has 5,768 rooms or 45 hotels under development, and Nashville, Tennessee, has 5,028 rooms or 33 hotels.
Of those three markets, only Nashville showed more construction activity than this time last year, said STR.