US tops global hotel construction pipeline

Dive Brief:

The global hotel construction pipeline, led by the U.S., is at a record high, according to Lodging Econometrics, with 14,051 projects (2.3 million rooms) under construction, getting ready to start construction in the next year or in the early planning stages. This represents 9% more hotel projects and 8% more hotel rooms in the pipeline since the same time last year.
Internationally, 6,565 projects are under construction; 4,392 are scheduled to start in the next 12 months; and 3,094 are in the planning phase. The U.S. makes up 40% of the global pipeline, with 5,656 projects in the works. China has 21% of the share with 2,991 projects, followed by Indonesia (378 projects), Germany (320) and the United Kingdom (280).
In the 176 countries Lodging Econometrics examined, all regions with the exception of Latin America were either adding to their pipelines or had topped out amid record activity as the hotel industry deals with fears of a coming economic slowdown, sparked by concerns about the U.S. trade war with China. However, low interest rates and borrower-friendly loan terms should continue to drive future growth, the report said, even though it will likely be at a slower rate.

Dive Insight:

The U.S. cities of New York City (166 projects), Dallas (162 projects), Los Angeles (158 projects) and Houston (146 projects) grabbed the largest share of the hotel project pipeline.

Globally, four hotel companies made up more than half of construction activity — Marriott International, Hilton Worldwide, InterContinental Hotels Group (IHG) and AccorHotels. IHG's Holiday Inn Express, Hampton by Hilton, Marriott's Fairfield Inn and AccorHotels' Ibis Brands were the leading hotel brands in the pipeline.

This summer, Lodging Econometrics also issued reports on the U.S. pipeline specifically, and the top three hotel companies mirrored the latest list of global franchise leaders — Marriott, Hilton and IHG, although Home2Suites by Hilton led the most active brands in this country. The top 10 U.S. markets for hotel construction activity were New York City; Dallas; Los Angeles; Houston; Atlanta; Nashville, Tennessee; Austin, Texas; Orlando, Florida; Detroit; and Charlotte, North Carolina.

In the U.S., at least, modular construction has helped owners keep pace with demand, oftentimes beating traditional turnaround times and getting the doors open, so the hotel can start generating revenue as soon as possible. Currently, Marriott is building what the company claims will be the tallest modular hotel in the world. The $65 million, 360-foot tall AC Hotel New York, with its 168 modular hotel rooms, is scheduled for final on-site assembly late this year and will open in late 2020.