US Hotel Development Tops 5,000 Projects

PORTSMOUTH, NH-The runaway train of US hotel development has yet to be derailed by the commercial real estate credit bump, according to an inventory report by Lodging Econometrics that shows room construction actually ticked up in the third quarter to unprecedented levels. Not only did new project announcements reach a high for any given quarter, with 817 hotels and 102,300 rooms launched in that period, the total count of 5,011 projects and 654,500 rooms are also records, says LE president Patrick Ford.

“Surpassing 5,000 projects in the pipeline is a milestone event,” says Ford, reporting that mark is an “astonishing” 47% above the former high posted in 1999. Room count is up 31% from the peak reached that same year. New announcements in Q3 of 817 projects and 102,300 rooms were 375 projects and 43,160 rooms above that found in the previous quarter. It was also the fifth straight quarter of record development growth.

Touted as the global authority on hotel real estate, LE cites a variety of reasons for the escalation, including a shift several years ago where major operators decided to pass the ownership torch to developers and investors and began concentrating on branding and management services. Marriott has been the most strident in that approach, says Ford, but competitors such as Hilton, InterContinental and Starwood have since followed suit.