Contributing to the shrinkage of the global pipeline is a significant number of projects either being cancelled or postponed. Falling from a cyclical low in the final quarter of 2007, 738 projects with a total of 148,902 rooms had been shut down or delayed at the end of Q4 '08. The US led in that category with 51% of all cancelled rooms, followed by Asia Pacific at 26%.

Construction starts, meanwhile, have trended downward since a high point was reached in Q4 '07 and stood at 536 projects/73,527 rooms when 2008 ended.

Although new-project announcements rose 18% between the third and fourth quarters of last year, NPAs have been on a steady downward tilt since the Q4 2007. According to LE's Q4 '08 report, NPAs hit 993 projects and 138,840 rooms in Q4 2008.

But there are some countries that have strong development pipelines, such as Canada, India and Brazil, Ford says. However, projects in Canada and India, similar to the rest of the world, tend to be smaller (under 200 rooms), branded projects in the select-service segments, where financing is more readily accessible.

Ford does not foresee a turnaround in new lodging development anytime soon. "The pipeline has peaked and we are going to go through a prolonged decline," he says. "From the peak to the trough in the last cycle, it was a four-year period of time. We are going to show that our high came in 2008. The total pipeline will decline through 2011 and 2012 before we have a bottom. That being said, there is going to continue to be activity in the pipeline, but it's going to be focused primarily on mid-market projects."