U.S. Hotel Construction Dips 16% Year-Over-Year in January

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According to the January 2011 STR/McGraw Hill Construction Dodge Pipeline Report released this week, the total active U.S. hotel development pipeline comprises 2,997 projects totaling 317,157 rooms.

This represents a 16.1-percent decrease in the number of rooms in the total active pipeline compared to January 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.

"Development activity has been slowing down as new development dollars have been challenging to obtain. The best illustration of this is the 40-percent reduction of rooms under construction this January compared to January 2010," said Lana Yoshii, VP of content management at STR. "When reviewing this year and prior-year activity, the Luxury and Economy segments were hardest hit, with reductions of 74 percent and 73 percent in rooms under construction, respectively. Looking at January 2011 pipeline activity, not surprisingly, the Upper Midscale (35 percent) and Upscale (24 percent) segments still firmly hold the lead with 60 percent of the share of rooms under construction in the U.S."

Among the Chain Scale segments, the Economy segment experienced the largest decline in rooms in the total active pipeline, falling 59.8 percent to 3,668 rooms, followed by the Luxury segment (-36.0 percent to 4,115 rooms) and the Upper Upscale segment (-22.3 percent with 15,246 rooms).

U.S. pipeline by Chain Scale segment (number of rooms and percent change January 2011 vs. January 2010):

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