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U.S. Hotel Construction Pipeline Dips 11% in June, Says STR Report

U.S. Hotel Construction Pipeline Dips 11% in June, Says STR Report

Vacation News » Vacation & Leisure Real Estate Edition | By Michael Gerrity | July 14, 2011 9:00 AM ET



According to the June 2011 STR/McGraw Hill Construction Dodge Pipeline Report, the total active U.S. hotel development pipeline comprises 2,967 projects totaling 317,941 rooms.

This represents an 11.4-percent decrease in the number of rooms in the total active pipeline compared to June 2010. 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 number of rooms in the In Construction phase for the New York market stands now at 5,583, a significant decline (-38 percent) from last year's 9,416. However, the market continues to lead all markets with the number of rooms overall in the active pipeline. With more than 20,000 rooms in the In Construction, Final Planning or Planning phases, New York dwarfs in comparison the market coming in second, Las Vegas (9,958 rooms), and comprises 11.7 percent of all construction going on nationally," said Duane Vinson, VP, client services at STR. "Orlando continues its growth period, up 138 percent over last year with 3,053 rooms under construction. And with the 800-room Omni in full hard-hat mode, Nashville moves in at fifth among the top markets with rooms under construction having more than 1,300.

"As we continue with a slow drawn out recovery, at least as far as lending and construction is concerned, we'll continue to see fewer large hotel projects moving into development in the near future," Vinson added. "This certainly doesn't mean the development engine has gone idle of course, as we fully expect to see more activity in the earlier stages of planning with extensive construction activity expected in perhaps late 2012 and early 2013.  One question of course is how much of this renewed activity will take place in the major metro markets and how much moves to smaller markets."

Among the Top 10 Markets by rooms under construction, Nashville, Tennessee, reported the largest increase, rising 1,505 percent with 1,365 rooms under construction (compared to 85 rooms in the In Construction phase in June 2010). Three other markets reported increases in rooms in the In Construction phase of more than 50 percent: Orlando, Florida (+138 percent to 3,053 rooms); San Diego, California (+88 percent with 584 rooms); and Washington, D.C. (+51 percent with 2,308 rooms). New York, New York, reported the largest decrease in rooms in the In Construction phase (-38 percent), though the market currently has the largest number of rooms under construction (5,853 rooms).




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