U.S. Hotel Construction Pipeline Slightly Dips in January

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According to the January 2012 STR/McGraw Hill Construction Dodge Pipeline Report released this week, the total active U.S. hotel development pipeline comprises 2,736 projects totaling 293,143 rooms.

This represents a 1.6-percent decrease in the number of rooms in the total active pipeline compared to January 2011. The total active pipeline data includes projects in the In Construction, Final Planning and Planning stages, but does not include projects in the Pre-Planning stage.

The U.S. hotel industry reported an increase in rooms under construction (+3.4 percent with 52,425 rooms), compared with January 2011.

"The general sentiment coming from the Americas Lodging Investment Summit last month was one of optimism," said Duane Vinson, VP, content management and integrity at STR. "Brand leadership, developers and owners all are poised with plans to once again launch into full development mode once the U.S. economic environment is right. However, with continued economic uncertainty, lending still fairly constricted and virtually no real movement in new project numbers, we can only assume the time is not yet right.

"While the overall number of projects year-over-year barely above even, more hotels are progressing in development, moving from Planning into Final Planning," Vinson said. "Last January, the number of rooms in planning stood at 198,357. That number now stands at 133,205. Final planning rooms have gone from 48,818 to 107,513 in the latest January release."

Among the Chain Scale segments, the Upper Upscale segment reported the largest increase in rooms in the total active pipeline, rising 34.1 percent to 19,786 rooms, followed by the Economy segment (+29.7 percent to 4,507 rooms) and the Upscale segment (+12.6 percent to 74,267 rooms). The Unaffiliated segment reported the most rooms in the total active pipeline with 83,297 rooms.

Three segments ended the month with increases in the number of rooms under construction: the Luxury segment (+45.2 percent with 819 rooms); the Upscale segment (+40.9 percent with 16,594 rooms); and the Upper Upscale segment (+15.5 percent with 7,622 rooms).

U.S. pipeline by Chain Scale segment (number of rooms and percent change January 2012 vs. January 2011):