U.S. hotel construction continued on a downward trajectory in June - Insights
Global News

U.S. hotel construction continued on a downward trajectory in June

U.S. hotel constructionWhile U.S. hotel construction has declined for seven consecutive months, rooms in construction in both New York City and Nashville represent a significant percentage of those markets’ existing supply.

Additionally, planning activity continues to rise nationally, albeit at a slower pace, with markets such as Miami, Nashvilleand Phoenix showing increased interest from developers, according to STR.

U.S. Hotel Pipeline
June 2022 (percentage change in comparison with June 2021):

  • In Construction: 149,198 rooms (-20.1%)
  • Final Planning: 178,809 rooms (-11.3%)
  • Planning: 281,190 rooms (+6.1%)

“The U.S. hotel pipeline continues to decelerate as we enter the second half of the year,” said Carter Wilson, STR’s SVP of consulting. “The continued increases in debt costs combined with the ongoing supply chain disruptions will likely delay projects from breaking ground this year, which will lead to a further decline in rooms in construction. On a national basis, new supply will not be a significant headwind for the foreseeable future.”

New York City leads the major markets in rooms in construction as a percentage of existing supply.

1.    New York (10.8%, 13,568 rooms)
2.    Nashville (7.0%, 3,939 rooms)
3.    Phoenix (6.3%, 4,388 rooms)
4.    Atlanta (5.5%, 5,991 rooms)
5.    Detroit (5.1%, 2,382 rooms)

When looking at the planning phase of the pipeline, Miami shows the highest number of rooms as a percentage of existing supply.

1.    Miami (15.8%, 10,177 rooms)
2.    Nashville (11.2%, 6,295 rooms)
3.    Phoenix (10.1%, 6,990 rooms)
4.    Los Angeles (8.3%, 9,414 rooms)

“The national slowing in the pipeline does not translate to all markets equally,” said Wilson. “Certain markets that have seen sustained demand are still very attractive to developers and the corresponding pipeline numbers prove that point. New York City continues to be at the top of the list with roughly 14,000 rooms in construction, while markets such as Nashville are experiencing a large increase in luxury hotels. And even markets where the recovery is uneven, such as in San Francisco or Chicago, developers are finding submarkets that they hope can support new rooms.”

Tags: , , , , ,
Media

STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an inte…

Related Courses

Related Articles

U.S. hotel results for week ending 16 July
The World Health Network declares Monkeypox a pandemic

You might also like:

 
Join over 60,000 industry leaders.

Receive daily leadership insights and stay ahead of the competition.

Most popular:

Popular this week:

[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]