THE U.S. HOTEL pipeline grew 7 percent in terms of projects and 8 percent in terms of rooms during the first quarter of 2019 compared to last year, 4 percent beneath the peak seen in 2008’s second quarter, according to Lodging Econometrics. Once again, three brands made up most of the pipeline, 68 percent: Marriott International, Hilton Worldwide and InterContinental Hotels Group.
There were 5,647 projects with 687,941 rooms in the pipeline during the first quarter, according to LE, 236 projects and 97,606 rooms shy of the 2008 peak. Marriott had the most with 1,499 projects and 196,771 rooms. Hilton had 1,386 projects with 154,349 rooms, with both companies reaching all-time record highs. IHG followed with 980 projects with 99,115 rooms. Those same three companies dominated the pipeline in 2018 as well.
LE expects the 2008 record to be pierced later in the year while the conversions and renovations are already at record levels.
Of the projects in the pipeline, 1,709 projects with 227,924 rooms were under construction. Projects scheduled to start construction in the next 12 months stood at 2,429 projects with 281,395 rooms. Projects in the early planning stage stood at 1,509 projects with 179,622 rooms.
All the upscale, upper-midscale, and midscale chain scales reached record-highs for both projects and rooms. However, 66 percent of projects in the total pipeline is concentrated in upscale and upper midscale.
Hotel operations also had a good quarter but mostly form expense improvements. U.S. demand growth was up 2.4 percent while supply was up 2 percent.
Among the top 25 markets, only 7 showed occupancy increases, quarter-over-quarter and 11 had RevPAR increases.
LE forecasts a 2.2 percent supply growth rate in 2019, with 1,038 new hotels with 118,385 rooms expected. For 2020, LE anticipates 1,174 new hotel openings and 128,598 rooms.
Last year, U.S. ranked first in the global construction pipeline with 5,530 projects with 669,456 rooms.
The top Marriott, Hilton and IHG brands in the pipeline are Tru by Hilton with 313 projects and 30,329 rooms, as well as Hampton by Hilton with 305 projects and 31,468 rooms; Marriott’s Residence Inn with 213 projects and 25,936 rooms and TownePlace Suites with 209 projects and 21,733 rooms; IHG’s Avid Hotel with 172 projects and 15,728 rooms and Staybridge Suites with 164 projects and 17,086 rooms.
Marriott announced 89 new projects with 11,742 rooms and opened 70 new hotels with 9,974 rooms in the first quarter. During the same time, Hilton announced 101 projects with 11,192 rooms and opened 58 hotels with 7,264 rooms. IHG announced 64 projects with 6,848 rooms and opened 36 hotels with 4,359 rooms.
LE forecasts that Marriott will open 278 projects with 34,467 rooms this year. Hilton is expected to open 266 projects with 29,554 rooms and IHG should open 156 projects with 16,284 rooms.