U.S. Pipeline Shrinks 2.5% Since July
-- Hotels, 9/15/2009 8:55:00 AM
The total active U.S. hotel development pipeline includes 4,384 projects with 475,521 rooms, according to the August 2009 STR/TWR/Dodge Construction Pipeline Report. This represents a 2.5% decrease in the number of rooms in the total active pipeline compared to July and a 27.9% decrease compared to August 2008.
The total active pipeline data includes projects in the In Construction, Final Planning and Planning stages, but does not include projects in the Pre-Planning stage.
“The U.S. development pipeline continues the steady slowing we’ve seen since 2007,” commented Duane Vinson, vice president at STR. “All regions of the U.S. are experiencing dramatic decreases in pipeline activity. Slowing supply growth should positively impact industry fundamentals moving into 2010. Hopefully with improved economic growth, demand will firm, resulting in stronger occupancies and better average rate movement across the industry.”
Each U.S. region reported large year-over-year decreases in the number of rooms in the In-Construction phase. The East South Central region experienced the steepest drop at 56.6 percent to 6,466 rooms. The New England region also reported a considerable decrease in rooms in the In-Construction phase, falling 46.5 percent to 2,666 rooms.
The South Atlantic (30,764 rooms in the In-Construction phase) and the West South Central (28,198 rooms) regions account for more than 45 percent of the total U.S. rooms in the In-Construction phase.
All nine of the U.S. geographic regions experienced significant declines in the number of rooms in the total active pipeline in year-over-year comparisons. The East North Central region posted the largest drop, decreasing 36.8 percent to 37,172 rooms. The Mountain region fell from 85,259 rooms in the total active pipeline in August 2008 to 55,106 rooms in August 2009, resulting in a 35.4-percent decrease. Two other regions experienced decreases in rooms in the total active pipeline of more than 30 percent: the East South Central region (-33.8 percent to 30,263 rooms) and South Atlantic region (-31.2 percent to 115,497 rooms). The New England region reported the smallest decrease, falling 16.9 percent to 17,976 rooms.
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