News Source: lodgingmagazine.com
U.S. Construction Pipeline Dipped Slightly in Q1 2021
News Source/Courtesy: lodgingmagazine.com

According to Lodging Econometrics’ (LE’s) Construction Pipeline Trend Report for the United States, the total U.S. construction pipeline stands at 4,967 projects totaling 622,218 rooms at the end of Q1 2021. While this is a slight dip in the pipeline year-over-year (YOY), it’s not unexpected given the lockdown and travel restrictions over the past year. Further, the pipeline shows no signs of great decline compared to what occurred during the 2008 to 2009 recession. Actually, projects and rooms in the early planning stage are up significantly YOY.

Although hotel development may still be tepid in Q2, continued government support and the extension of programs have aided many businesses to get back on their feet as more and more are working to re-staff and re-open.

To date, nearly half of the eligible U.S. population is at least partially vaccinated, leading to an ease in requirements regarding group gatherings and indoor activities. Clinical trials of vaccines for children (ages 12 to 15) have been highly effective and look very promising for another strong vaccine wave. Additionally, the CDC has announced that, so long as people continue to take COVID-19 precautions, fully vaccinated people are now safe to travel domestically. U.S. travelers are becoming more optimistic about summer travel and are making plans now. As a result, operating performance is expected to soar late this spring, summer, and, fall.

At the end of Q1 2021, projects currently under construction stand at 1,311 projects totaling 179,304 rooms. Projects under construction continue to move towards opening. Through year-end 2020, the United States opened 841 projects accounting for 97,959 rooms. A total of 229 hotels totaling 27,528 rooms opened in the first quarter of 2021. As delayed Q4 2020 opens are coming online, LE is forecasting 691 projects totaling 81,866 rooms to open by the end of 2021, representing a 2.0 percent increase in new hotel supply. For all of 2022, LE is forecasting 963 projects totaling 111,235 rooms to open and a 2.0 percent supply increase.

Projects scheduled to start construction in the next 12 months total 1,866 projects totaling 215,911 rooms. Of the 1,866 projects scheduled to begin in the next 12 months, 26.8 percent of these belong to extended-stay brands, a segment of the industry that developers have become increasingly interested in over the last few years. Projects in the early planning stage stand at 1,790 projects totaling 227,003 rooms, up 10 percent by projects and 14 percent by rooms YOY.

Additionally, there were a total of 1,198 projects totaling 190,475 rooms under renovation or conversion in the United States during the first quarter. This is a small decline after seeing a slight increase at the end of 2020.

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News Source: lodgingmagazine.com

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