Lodging Econometrics US Lodging Real Estate Trends: Pipeline Breaks Out as Development Accelerates
November 10, 2014 1:14pm
Projects Under Construction, 1,062 Projects/134,292 Rooms, are up a booming 50% by Projects and 46% by Rooms YOY. Projects Scheduled to Start in the Next 12 Months are also strong, up 36% and 34%, at 1,375 Projects/165,085 Rooms.
All Lights Are Green For Hotel Development
Developers are extremely positive with development conditions being near perfect. In 3Q the economy grew at a better than expected annualized rate of 3.5%.
Industry operating statistics are very strong. Importantly, 2014 will be the fifth consecutive year when guestroom demand growth has exceeded supply growth and the fourth year in a row when supply growth has been 1.3% or less. At year-end 2014, occupancy will have reached a 17-year high. Both Average Daily Rate and Revenue Per Available Room will finish at record highs.
Because of the industry’s favorable metrics, lenders are increasingly more attracted to hotel investment making funds easier to access by developers. Interest rates are near record lows and are expected to remain so at least through mid-2015. Selling prices are rising rapidly as Upscale and Upper Midscale branded hotels remain investor favorites.
Favorable economic conditions, record-setting operating metrics, and the positive outlook for the next few years have combined to make it a most opportune time for hotel developers.
Top Markets & Franchise Companies
Guestroom demand in the top 25 markets is explosive as 23 of the top 25 markets are running above the nation’s Average Occupancy Rate of 65.9%. Development too, is thriving in these markets, which account for 40% of all guestrooms in the Pipeline.
New York, with 176 Projects/29,775 Rooms, has the largest Pipeline in the country, and when built-out would result in a hefty 28% increase to
the City’s current supply. Houston, a booming, sprawling city spurred by the oil industry, has 133 Projects/14,982 Rooms. Washington with 87 Projects/14,701 Rooms and Los Angles with 65 Projects/13,365 Rooms follow. Miami, a growing vacation and second-home destination for the Latin American business and tourist class, is next having 63 Projects/12,037 Rooms.
Leading the Pipeline is Marriott International with 667 Projects/82,502 Rooms, Hilton Worldwide 683 Projects/79,966 Rooms, and Intercontinental Hotels Group (IHG) 578 Projects/59,778 Rooms. The Pipeline for these three franchise leaders is up significantly YOY. Among developers who
have already made a branding decision for their project, 55% of them have selected a flag affiliated with one of these three companies.
Key Upscale and Upper Midscale brands are the industry pacesetters in the early years of the development cycle’s expansion phase. For Marriott their leading brands are Courtyard, Residence Inn, Spring Hill Suites, Fairfield Inn and Townplace Suites. For Hilton it is Hilton Garden Inn, Homewood Suites, Home2 Suites and Hampton Inn & Suites. IHG’s leading brands are Holiday Inn Express, Holiday Inn, Indigo, Staybridge Suites and Candlewood Suites. Other Upscale and Upper Midscale lifestyle brands favored by developers include Aloft and Element by Starwood and Hyatt Place.
Tags: lodging econometrics,
Contact: Peter Martin
+1 603.431.8740, ext. 29
The Americas, Asia Pacific and EMEA Are the Top World Regions in the Global Hotel Construction Pipeline
7% Year-Over-Year Growth in the Global Construction Pipeline
Construction Pipeline Growth in China and Its Major Cities Shows Marginal Growth Up 2% Year-Over-Year
Marriott, AccorHotels and IHG Top Asia Pacific Construction Pipeline, Excluding China
Asia Pacific's Top Countries and Cities for Hotel Construction Excluding China
The Asia Pacific Hotel Construction Pipeline Excluding China Continues Double Digit Increases Year-Over-Year
Top Countries & Cities in the Middle East and Africa Hotel Construction Pipelines Are Saudi Arabia, UAE and Qatar
Marriott, Hilton and AccorHotels Lead Construction Pipeline in the Middle East and Africa
The Middle East and Africa Hotel Construction Pipelines Continue to Grow
Germany Leads Europe's Hotel Construction Pipeline; London Ranks as Top City
Europe's Hotel Construction Pipeline Is Healthy and Continues to Rise
Latin America's Hotel Construction Pipeline Is Stalling; Down 8% by Projects YOY
2.5% Growth Rate of New Hotel Openings Expected in 2018 and 2019 in the United States
Extended-Stay Hotels Account for 27% of All Projects Under Construction in the United States
43% of All U.S. Hotel Construction Projects Are Upper Midscale
Total Construction Pipeline in Canada Up 11% by Projects YOY
Marriott Leads U.S. Construction Pipeline With 1,383 Projects Followed by Hilton and IHG
U.S. Markets With the Largest Construction Pipelines & Highest 2018 Growth Rates
The U.S. Construction Pipeline Showed Healthy Growth in the First Quarter
North America Tops Global Construction Pipeline With 6,226 Projects Followed by Asia Pacific and EMEA
Please login or register to post a comment.