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Steep Decline in US Hotel Openings Seen

Construction of new lodging units is expected to drop precipitously between now and 2011.

By Maria Wood | Updated on August 13, 2009

PORTSMOUTH, NH—Development of new hotels in the US remains on a downward spiral, a reflection of the inhospitable lending climate for hospitality properties. A recent forecast from Lodging Econometrics predicts 759 hotels and 74,493 rooms will open in 2011.

Contrast that with the locally based firm’s revised projections for new openings in 2009 and 2010. This year, 1,425 hotels/156,653 rooms will debut, a reduction of 5,036 rooms, or a 3% decrease, from LE’s previous estimates. Next year, 1,073 projects and 124,439 keys will be delivered, which represents a decline of 21,277 rooms, a 15% drop.

J.P. Ford, senior vice president at Lodging Econometrics, says the steep reduction in the pipeline comes as no surprise in light of the slumping economy and the lack of an immediate impact from the government’s efforts to spur lending. “It was inevitable that the forecast for 2011 would be down, and down pretty significantly,” he says.

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