Hotel Openings Ramping Up

PORTSMOUTH, NH—New hotel openings in the US will accelerate over the next two years, Lodging Econometrics said Wednesday. It’s the latest in a series of recent reports from the Portsmouth, NH-based consulting firm that illustrate the construction surge in the sector.

A total of 742 new hotels will have opened by the time New Year’s Eve rolls around, according to LE. Based on current pipeline levels, these projects will be joined by 845 more in 2016 and 998 in 2017.

LE says that pipeline stands at 4,055 projects and 503,935 keys in various stages of development, the highest point since the second quarter of 2009. Both projects under construction (1,192, up 12% year-over-year) and projected scheduled to begin in the next 12 months (1,755, up 28% Y-O-Y) are at their highest points since 2009. The pipeline of projects in early planning, at 1,108 hotels, is up 3% Y-O-Y.

The total pipeline is also up by double-digit metrics: 15% by projects and 15% by rooms, maintaining a five-quarter run of Y-O-Y increases of 10% or better.  The US hotel construction pipeline has posted nine straight quarters of Y-O-Y growth, according to LE.

Not surprisingly, the nation’s biggest city and one of the world’s leading tourist destinations is also the busiest US market for hotel construction. New York City has the fullest pipeline with 204 projects, 103 of which are already being built. Next comes Houston with 161 projects in the pipeline; Washington, DC with 85; Los Angeles with 82; and Miami with 76.

LE says that the growth in new hotel openings from ’16 to ‘17 will be led by three major franchise companies, which are forecast to brand 67% of all new openings domestically: Marriott International with 456 hotel openings, Hilton Worldwide with 406, and Intercontinental Hotels Group with 374. The Marriott figures do not reflect its pending merger with Starwood Hotels and Resorts Worldwide, which likely will add to a tally that already includes 22,563 keys branded under various Marriott flags scheduled to open next year and 30,765 in ’17.

Source: GlobeSt.com