Hotel Development Pipeline Contracts Through Q2

PORTSMOUTH, NH-The total development pipeline fell 5.2% during the second three months of the year as the continued slowdown in guestroom demand has developers reluctant to advance projects up the pipeline or to make any new project announcements, according to Portsmouth, NH-based Lodging Econometrics latest guidance memo to its Wall Street and corporate clients.

Most were delaying in hopes of later opening into a confirmed recovery, according to the memo, which found that the pipeline had contracted by 91 projects or 13,984 hotel rooms as compared to the first quarter. At 1,868 projects comprising 254,317 rooms, the total pipeline is at an all time cyclical low–53% below its record high during the third quarter of 1998, according to the memo.

New project announcements during the second quarter fell to 203 projects totaling 22,263 rooms, the lowest number for this cycle. Exiting the pipeline as new openings were 173 projects comprising 17,381 rooms, also a record low. Another 121 projects totaling 18,866 rooms were either postponed or cancelled, according to the memo.