THE VAGARIES OF current events in the U.S. took a toll on the nation’s hotel construction pipeline, which was down a little at the end of 2020, according to Lodging Econometrics. A steady increase in supply is expected over the next two years.
By year end there were at 5,216 projects and 650,222 rooms in the pipeline, according to LE’s Construction Pipeline Trend Report, compared to 5,282 projects with 655,026 rooms in the third quarter. As of the end of the fourth quarter there were 1,487 projects with 199,700 rooms under construction.
Of the hotels in the pipeline, 24 percent were extended-stay brands, which have been performing better than other segments during the COVID-19 pandemic.
Also by the end of the year, 833 projects with 97,203 rooms opened in the U.S., increasing the supply to 58,569 hotels and 5,557,119 rooms. Extended-stay brands made up 29 percent of those openings.
“These are year-end 2020 results, and are down only incrementally, as the U.S. grappled with the ongoing coronavirus pandemic, an election, civil unrest, and the large and rapid partisan shift taking place,” LE said in the report. “However, the announcement of various vaccine developments and distribution was undeniably good news for the general public, businesses, hotel development and the lodging industry as a whole, especially going forward. The industry has found optimism in the fact that as the vaccine rolls out travel demand will increase rather quickly, resulting in increased confidence in hotel development activity.”
LE forecasts that another 929 projects and 107,407 rooms will open by the end of 2021, a 1.9 percent increase in new hotel supply. The firm projects 1,031 projects with 116,749 rooms to open in 2022. There are 2,015 projects with 234,703 rooms scheduled to start construction in the next 12 months, down 12 percent by projects and 11 percent by rooms year over year.
“Projects in the early planning stage stand at 1,714 projects and 215,819 rooms, a cyclical high in the number of rooms, and up slightly year-over-year,” LE said. “It is also worth noting that renovations and brand conversions are becoming more prevalent. At the end of the fourth quarter, there were a total 1,308 projects and 210,124 rooms under renovation or conversion in the U.S. The number of projects and rooms has grown consistently over the last three quarters of 2020.”