Overbuilding, of course, is the death knell for every mature cycle and asset class, so that decrease is not necessarily bad news.

And the activity that is underway in the area is hardly an outlier. In general, hotel development activity is strong right now across the US, STR figures show. There are about 509,626 rooms under contract in the US, a 19.7% year over year increase, and 164,860 rooms actually under construction.

Whether this pipeline is too much, not enough, or just right comes down to -- no surprise here -- the fundamentals in the specific market. Bobby Bowers, STR's senior VP for operations, gives two examples of how that can work in the report. In New York, the trailing 12-month supply growth through April was 4%, while demand grew by 4.2%, he said. That yields occupancy growth of 0.2% In Houston, by contrast, supply growth over the same period was 3.5%, while demand fell by 2.9%, yielding an occupancy decline of 6.2%.

So what about Washington DC? Will our hotel pipeline play out like New York's has, or Houston's? I won't drag this out -- the answer is New York, and for two very straightforward reasons.

Build It and They Will Come

One is the notion that the development of convention center hotels begat, well, more convention center business. (And conversely, as Boston has realized, the lack of such convention or “headquarter” hotels limits convention business). Washington DC unveiled the long-awaited Marriott Marquis convention center hotel in 2014, a marvel of a $520 million, 1.1-million square foot hotel that features 83 meeting rooms, four restaurants and employs about 500 people.

Perhaps not so coincidentally, in 2014, there were more than 20 million visitors to Washington DC, setting a new record for the city, according to the Washington DC Economic Partnership.

“As our convention market matures we will be doing more business,” Tom Baker, corporate managing director at Savills Studley told GlobeSt.com. “That is a major reason I am not concerned about the new supply entering the Washington DC area's hotel market.”

The other reason the DC market has not overbuilt its hotel pipeline is because most are opening in new markets such as the Waterfront with a specific guest type in mind, Baker continued. They are purpose-built in other words with their own demand generators.

Some of the projects in the Washington DC area's pipeline include:

The Hive Hotel, under construction at 2224 F St., NW, near George Washington University. The 83-key hotel being developed by Abdo Development is being billed as Washington's first pod style hotel.

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The Line DC is a 227-key hotel under construction at 1780 Columbia Rd., NW that also includes the restoration and preservation of the 110-year old historic First Church of Christ. Sydell Group is overseeing the project, which is perhaps better known as the Adams Morgan Historic Hotel project.

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Baywood Hotels is building two hotels totaling 230 rooms at 501 New York Avenue, NE. They are the extended stay Homewood Suites and the hotel Hampton Inn hotels. The site used to be home to a 78-room Quality Inn hotel.

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There is a 170-room Residence Inn hotel that is under construction at 1st & N Streets, SE. It is part of the 450,000-square foot Capitol Riverfront District project being developed by Grosvenor Americas. Delivery is expected around Q1 of 2017.

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A 195-key Hilton Homewood Suites is under construction at 50 M Street, SE, by C/G Investments and Englewood LLC. It will be delivering later this year.

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The Wharf's Phase 1 includes three hotels that are under development: a 278-room The Wharf Intercontinental (built by Carr Hospitality and InterContinental Hotels Group), a 175-room Canopy by Hilton, and a 238-room extended-stay Hyatt House. That is a total of 683 keys.

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Trump International Hotels' The Old Post Office is delivering 270 luxury rooms into the market later this year. The hotel is located at 1100 Pennsylvania Ave., NW. It will be competing with the renovated Watergate Hotel, another luxury hotel that has opened, or re-opened, its doors.

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