THE NUMBER OF hotel rooms in the final phase of the U.S. development pipeline rose 5.5 percent in October over the same time last year, according to STR. It’s the lowest hotel construction growth rate the pipeline has seen since February.
There were 1,563 projects with 205, 299 rooms in construction in October, most in upscale and upper midscale segments. Upscale projects reported the construction of 63,423 rooms, while upper midscale and upper upscale reported the construction of 62, 542 rooms and 27, 875 rooms respectively.
“Growth in construction activity had been hovering closer to 10 percent,” said STR’s Senior Vice President of Operations Bobby Bowers. “There also hasn’t been too much of a climb from the last few months, so we’re still roughly 6,000 rooms away from the construction peak of 211,000 in December 2007.”
At 10.9 percent, luxury chains had the highest percentage of projects in construction, Bowers said.
“No other segment is above 7.9 percent in that ratio,” he said.
Six major markets reported more than 5,000 rooms under construction.
New York had the largest amount of rooms in construction, 13, 801, making up 10.9 percent of the total pipeline. It is followed by Las Vegas with 9,259 rooms or 5.6 percent of the pipeline; Orlando with 7,322 rooms making up 5.7 percent; Nashville with 6,770 rooms making up 14.5 percent; Los Angeles/Long Beach with 6,111 rooms or 5.8 percent; and finally Dallas with 5,709 rooms comprising 6.1 percent of the pipeline.
Last week, Lodging Econometrics reported the U.S. hotel construction pipeline nearing an all-time high as it reported an eighth consecutive quarter of growth.