Even with some concern about overbuilding, Ford says that the Los Angeles market will continue to see hotel development next year, mostly because there are 42 projects totaling 5,827 rooms that are planned to start construction in the next 12 months, guaranteeing healthy development next year. He also expects development to remain active through 2018. “I expect the Los Angeles pipeline to continue to grow at a disciplined pace,” says Ford. “The market is going to continue to accelerate but at a decelerating pace. There is a pretty strong pipeline in Los Angeles, so you are going to continue to see new construction in 2017 and 2018, and as new projects open up, the backside of the pipeline is going to fill with new announcements.”

LOS ANGELES—Los Angeles has more hotel rooms in the early planning stage of the development pipeline than any other major metro in the US, according to a recent Construction Pipeline Trend Report from Lodging Econometrics. The city has 18,229 rooms under construction, or a total of 108 projects. In early planning alone, the city has 6,382 Rooms/37 Projects, which is higher than any other US market.

“Los Angeles is a large market and a major gateway center with extremely diverse economic demand generators, and when you put all of that together, you are going to see new hotel construction and you are going to see higher rates,” JP Ford, chairman, CEO and founder of Lodging Econometrics, tells GlobeSt.com about the strong hotel development pipeline in Los Angeles. Ford adds that the robust demand and ample capital in the market has also helped to fuel hotel development in Los Angeles.

Much of the hotel development is focused in Downtown Los Angeles, which has many entertainment venues that help to generate demand. For that reason, the Downtown market has the most hotel rooms in the pipeline, followed by L.A. East and then Beverly Hills/Hollywood. “There has been a revitalization of the downtown sector, and the L.A. LIVE complex has been a major hub for the Downtown area and for hotel development,” adds Ford.

The current development pipeline would increase the hotel supply by 18.3% in Los Angeles. While there has been a call for more hotel rooms throughout the city by leaders and elected officials, this sizable increase may concern developers and investors. “It is about the 16^th highest in the country. When the number of projects and the number of rooms go above 16% or 17%, you are going to have concern in any market in the country. This is a market that bears watching if you are an owner, operator or developer, and more specifically, developers and owners need to watch their submarket or tract,” says Ford.

Even with some concern about overbuilding, Ford says that the Los Angeles market will continue to see hotel development next year, mostly because there are 42 projects totaling 5,827 rooms that are planned to start construction in the next 12 months, guaranteeing healthy development next year. He also expects development to remain active through 2018. “I expect the Los Angeles pipeline to continue to grow at a disciplined pace,” says Ford. “The market is going to continue to accelerate but at a decelerating pace. There is a pretty strong pipeline in Los Angeles, so you are going to continue to see new construction in 2017 and 2018, and as new projects open up, the backside of the pipeline is going to fill with new announcements.”