Plans for the building of new hotels across the country are up by around 7% over where things stood exactly a year ago, according to a new report. The actual number of rooms, meanwhile, is up by 6%.
Lodging Econometrics, which is based in Portsmouth, New Hampshire, is reporting that the hotel pipeline as of the end of the second quarter of this year was equal to 5,572 individual projects.
Those projects, notes the report, represent nearly 661,000 rooms.
As of this June, says the report, the “total pipeline is only 5% from its all-time peak in terms of projects.”
The new projects represent a buoyancy in the industry, particular in light of such factors as higher interest rates and inflation. “Developers continue to believe in the strength of the economy long-term as witnessed by the continued growth in the pipeline,” says the Lodging Econometrics narrative.
Largely, both upscale and upper midscale new projects are leading the way, making up 62% of all planned hotel projects across the country and 57% of all new rooms.
At the same time, “announced renovations and brand conversions, combined, reached record high project counts over the last four quarters.” Altogether, such work comprises 1,939 individual projects, representing 253,473 rooms.
The extended stay segment is also playing a role in the pipeline scene, with nearly 2,100 projects in the development stage as of June. Those projects represent 214,557 rooms.
Continues the report: “Extended stay projects account for 32% of projects under construction in the total pipeline, 42% of projects scheduled to start construction in the next 12 months, and 26% of the projects in early planning across the U.S.”
Not incidentally, the extended stay segment is currently growing at anywhere from 2.5 to 3.5 times the forecasted industry growth rates heading into 2025.
The New York Times recently noted that extended stay hotels are additionally “appealing to work crews on road, green energy, and other infrastructure projects.”
Such hotels, the newspaper added, “are less expensive to build and operate than their full-service counterparts.”
By Garry Boulard
