Hotel Construction will likely remain high, according to industry research firm.
While some projects are being put on hold, projects that were in the ground will continue to get built. Here's a press release from the experts at STR:
Press Release. April 20, 2020 STR: U.S. Hotel Construction Hit All-Time High In March
HENDERSONVILLE, Tennessee - The U.S. hotel industry recorded 214,704 rooms under construction in March 2020, the highest end-of-month total ever reported by STR. The industry's previous construction peak occurred in December 2007 with 211,694 hotel rooms in construction. That level was slightly surpassed in February 2020 at 211,859 rooms in the final phase of the development pipeline. "The number of rooms in construction will likely remain high, just as it did during the pre-recession peak," said Jan Freitag, STR's senior VP of lodging insights. "Because of the coronavirus pandemic, the industry is no longer operating in a record-setting demand environment, so there isn't the same rush to open hotels and tap into that business. In addition to a lack of guests awaiting new hotels, there are also limitations around building materials and potential labor limitations from social distancing. With all of that considered, projects are likely to remain under construction for a longer period."
Also during March 2020, nine projects from the final planning stage of the pipeline moved to deferred status, as did 21 projects from the planning phase. Additionally, one project in final planning and seven projects in planning were abandoned.
"It's worth remembering—in 2008, the projects that were in the ground continued to get built, while the projects that were in the planning or final planning stages were most likely shelved. We expect the current pipeline to follow a similar pattern and will continue the monitor the number of projects that are halted in the coming months."
Four major markets reported more than 6,000 rooms under construction between new builds and expansion projects. New York led with 14,051 rooms, which represented 11.0% of the market's existing supply, followed by Las Vegas (9,082 rooms, 5.5% of existing supply).
1. New York: 14,051 rooms (11.0%) 2. Las Vegas: 9,082 rooms (5.5%) 3. Orlando: 8,737 rooms (6.7%) 4. Los Angeles/Long Beach: 6,640 rooms (6.3%) About STR
STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com. Click here to view original press release: https://www.hospitalitynet.org/news/4098223.html?utm_source=HN360&utm_medium=Email&utm_campaign=2020-04-20