New supply growth for the U.S. hotel market reached 2 percent in 2018, the first time that has happened in eight years, according to Lodging Econometrics. At the same time, many major markets are seeing supply outreach demand.

NEW U.S. HOTEL supply growth reached 2 percent in 2018 for the first time in eight years, according to a new report from Lodging Econometrics. However, LE also predicts supply growth will continue to exceed demand in many markets.

New supply in the country’s top 25 markets grew 2.7 percent while the rest of the country saw a growth of 1.7 percent, according to LE. Demand growth recorded 2.5 percent for the top 25 markets as well as the rest of the country.

LE predicts an increase in the number of markets with supply growth exceeding demand growth and variances to widen, as the economy settles into the “new normal” of slower growth and low inflation. According to the report, 12 of the top 25 markets had supply growth in excess of demand growth in 2018.

STR found similar results regarding supply exceeding demand in its performance analysis of the hotel industry in 2018.

New York tops the list of the markets with the largest hotel construction pipeline in the fourth quarter of 2018 with 171 projects and 29,457 rooms, followed by Dallas and Los Angeles both records all-time highs with 163 projects and 19,476 rooms and 147 projects and 23,404 rooms respectively. Houston stands next with 141 projects and 15,499 rooms followed by Atlanta with 115 projects and 15,522 rooms and Nashville, Tennessee with 114 projects and 15,510 rooms.

Ten markets marked an increase of 15 percent in the number of total pipeline projects compared to their existing census by the end of 2018. Nashville tops this list of markets at 34.4 percent, followed by New York City, Miami, Los Angeles, Dallas, Detroit, Seattle, Denver, Boston and Houston at 17.9 percent. These markets may see the fastest supply growth and the largest supply-demand variances in the following years, according to LE.

The LE forecast expects New York to top the 2019 new hotel openings list with 65 new hotels and 9,478 rooms. Dallas will be in the second position with 31 projects and 3,673 rooms followed by Houston with 30 projects and 3,478 rooms, Nashville with 22 projects and 2,785 rooms, and Los Angeles with 14 projects and 2,124 rooms.