While much of the U.S. travel industry bemoans the potential loss of tourism due to policies enacted by the current administration, hotel developers seem to be incredibly positive about the future.
According to the “U.S. Hotel Pipeline Report for March 2017” released by global benchmarking firm STR, there were some 1,449 hotel projects, (reflecting 190,764 hotel rooms), in construction across the United States during March.
That number reflects a 24.4 percent increase over the same period last year, outpacing construction performance in other regions around the globe.
“Construction was actually down a bit from [February], but we’re still nearing the room construction peak (211,000 rooms) reached in 2007,” said Bobby Bowers, STR’s senior VP of operations. “Almost half (47.6 percent) of hotel room construction activity today is occurring in the major markets.”
The numbers increase even more dramatically when looking at the entirety of hotels in the planning, final planning or construction phases, known collectively as “Under Contract.” In March, the U.S. had some 4,721 hotel projects under contract, reflecting a total of 571,311 rooms. That number has jumped by 14.4 percent over last year.
Hardly surprisingly, New York is the top city for development, with 15,911 rooms in construction. When complete, these new hotel rooms will account for more than 10 percent of the city’s entire room supply.
“Those almost 16,000 rooms account for 8 percent of all U.S. construction activity and just under 14 percent of New York City’s existing supply,” said Bowers.
Another 13,000 rooms in New York are currently in the planning or final planning stages.
Other top markets include Dallas, Texas (18,351 rooms); Houston, Texas (16,774 rooms); and Los Angeles/Long Beach, California (16,510 rooms). Globally, Europe shows the highest rate of growth in hotel construction while Central and South America show a steep decline in construction over last year's numbers.
During March, Europe had 461 projects (73,370 rooms) in construction, a 16.2 percent increase over last year. In total, there are 1,035 hotel projects (162,732 rooms) under contract in Europe, a number that has declined by 0.7 percent from last year.
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Throughout Mexico and the Caribbean, there were 82 hotels (15,086 rooms) in construction during March, a 12.6 percent increase. In total, the region has 212 hotels (38,668 rooms) under contract. Nearly half of the region’s new properties will fall in the upscale and luxury classifications.
And although Asia is looking at a whopping new 1,169 projects (267,986 rooms) in construction, the number reflects a modest 4.1 percent increase over last year. In total, the region has 2,611 projects (583,054 rooms) under contract.
The Middle East has some 258 hotels (79,960 rooms) in construction, a 0.6 percent decrease from last year, with a total of 546 projects (153,298 rooms) under contract. In Africa, 157 hotels (28,768 rooms) are in the construction phase, a 6.1 percent decrease from last year. There are 319 projects under contract (59,200 rooms).
Finally, the financial woes of Latin America’s largest economies are reflected in Central and South America slow-paced hotel outlook. Throughout the region, there are 170 projects (27,421 rooms) in construction, a 14.6 percent decrease from last year. In total, there are 385 projects (60,284 rooms) under contract, a 17.7 percent decrease from last year.