U.S. Hotel Construction Pipeline Decreases in June

Vacation News » Vacation & Leisure Real Estate Edition | By Michael Gerrity | July 17, 2009 12:19 PM ET

(News Source: Smith Travel Research)

(HENDERSONVILLE, TN) -- The total active U.S. hotel development pipeline includes 4,690 projects with 501,476 rooms, according to the June 2009 STR/TWR/Dodge Construction Pipeline Report released this week. This represents a 4.1-percent decrease in the number of rooms in the total active pipeline compared to May 2009 and a 24.5-percent decrease compared to June 2008. 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 June development pipeline shows us that the number of rooms in the In Construction phase continues to fall in all regions in year-over-year comparisons, with the exception of West South Central, which was up slightly to 3 percent," said Duane Vinson, vice president of content management at STR. "With nearly 56,000 fewer rooms in construction now than a year ago, the front end of the pipeline continues to draw down rapidly."

Among the nine geographic regions in the United States, eight regions experienced double-digit decreases in the amount of rooms in the In Construction phase for the month in year-over-year comparisons. The New England region was down 47.8 percent with 2,665 rooms in the In Construction phase, experiencing the largest decrease among the regions. Three other regions also reported decreases in the amount of rooms in the In Construction phase of more than 40 percent: Mountain region (-47.5 percent to 19,186 rooms); East North Central region (-42.1 percent to 11,013 rooms); and East South Central region (-41.1 percent to 8,279 rooms). The West South Central region was the only region to report an increase for the month, up 3.0 percent to 31,928 rooms in the In Construction phase.

"The Mountain region posts the sharpest decline in the total rooms in the overall active pipeline in year-over-year comparisons, down 37.7 percent, with the West South Central having the softest drop at negative 13.3 percent," Vinson continued. "As we move into the second half of the year, comparisons with 2008 should become less dramatic; however, we will certainly continue to see much of the same with In Construction and Final Planning rooms tapering off."

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