As the credit markets remain frozen and hotel revenues continue to plummet, new hotel development has fallen steadily after the pipeline hit a cyclical peak in the second quarter of 2008. Since then, total global construction has declined 10% by projects (9,747 versus 10,781) and 12% by room count (1.6 million versus 1.8 million), according to statistics compiled at the end of 2008 by Lodging Econometrics .

Patrick Ford, president of Portsmouth, NH-based LE, tells GlobeSt.com that a steep falloff in new construction began in September 2008 and has continued into the first quarter of this year. He says the drop is the result of the inability of all large commercial projects to get financed and the concurrent softening of lodging fundamentals.

“People are concerned about not being able to get financed,” Ford says, “and the second concern now is the operating statistics that have surfaced in the lodging industry.”

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