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LE: U.S. hotel pipeline expands in Q1

Construction slowed and some openings have been delayed

THE ONGOING COVID-19 pandemic had a minimal impact on the U.S. hotel construction pipeline in the first quarter of 2020, according to Lodging Econometrics. However, construction did slow and some developers are delaying the opening of their projects.

The total pipeline expanded to 5,731 projects with 706,128 rooms, up to 1 percent by projects and 3 percent by rooms, year-over-year in the first quarter. However, the pipeline has contracted slightly, less than 1 percent by both project and room counts, quarter-over-quarter, down from 5,748 projects with 708,898 rooms.


The U.S. hotel projects currently under construction stand at an all-time high of 1,819 projects with 243,100 rooms.  As many as 144 new hotels with 16,305 rooms were opened in the U.S. from January to March. Though the COVID-19 pandemic has slowed development, LE said, it has not completely stalled it.

There were still 312 new projects with 36,464 rooms announced into the pipeline in the first quarter.

“The U.S. hotel projects scheduled to start construction in the next 12 months total 2,284 projects with 264,286 rooms. Projects in the early planning stage stand at 1,628 projects with 198,742 rooms. Projects in the early planning stage are up 8 percent by projects and 11 percent by rooms, compared to the same period last year,” the report said.

“Developers with projects under construction have generally extended their opening dates by two to four months. For projects scheduled to start construction in the next 12 months, on average, developers have adjusted their construction start and opening dates outwards by four to six months.”

LE predicts a stronger count of openings in the second half of 2020, compared to the first half. Many U.S. hotels have either begun or are in the planning stages of renovating and repositioning their assets while occupancy is low or non-existent, it said. LE recorded 769 active renovation projects with 163,030 rooms and 616 active conversion projects with 69,258 rooms across the U.S.

COVID-19 had impacted only the last 30 days of the first quarter, according to the report.

“It is still early to predict the full impact of the outbreak on the lodging industry. We will have more information to report in the coming months,” LE said.

STR reported previously that the U.S. pipeline hit a record high in March.

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