U.S. Construction Pipeline Continues on a Modest Growth Trajectory
November 8, 2018 1:05pm
November 8, 2018 – PORTSMOUTH, NH – Analysts at Lodging Econometrics (LE) report that in the third quarter of 2018 the total U.S. construction pipeline stands at 5,376 projects/650,576 rooms, up 7% from 2017’s 5,011 projects/608,837 rooms. The total pipeline has been growing modestly over the past two years and is expected to continue its ascent at least into the first quarter of 2019. However, pipeline totals are still distant from the all-time high of 5,883 projects/785,547 rooms reached in the second quarter of 2008 and are not expected to reach those records again this cycle.
Projects in the early planning stage with 1,594 projects/ 84,031 rooms are up significantly, 31% by projects and 23% by rooms year-over-year (YOY). Big jumps are typical for the back-end of a hotel real estate cycle when developers rush to move projects from the drawing board to the pipeline before further interest rate hikes, the rising cost of building materials and the continued struggle to secure skilled labor take effect.
Projects scheduled to start construction in the next 12 months, with 2,144 projects/253,102 rooms, are near even YOY. Projects currently under construction are at 1,638 projects/213,443 rooms, while the highest count for this cycle, they are up only modestly YOY.
The announced renovation and conversion pipeline has expanded significantly with the total pipeline at 1,767 projects/273,443 rooms, it is the largest count that LE has ever recorded. These numbers show a remarkable 30% increase by projects and 27% increase by rooms, YOY. The surge in announced renovation and conversion counts can also be seen quarter-over-quarter with a 25% increase in both projects and rooms since the second quarter of 2018.
Tags: lodging econometrics,
u.s. construction pipeline,
Lodging Econometrics is the leading provider of global hotel intelligence. Combining unparalleled industry experience, a real-time pulse on market trends and extensive knowledge of key decision-makers, LE delivers actionable business development programs for hotel franchise companies looking to accelerate their brand growth, hotel ownership and management companies seeking to expand their real estate portfolios, and lodging industry vendors wanting to increase their sales. LE’s programs turn a client’s business goals into opportunities that advances their competitive advantage.
Contact: Colleen Brennan
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