In the first quarter of this year, more than 140 new hotels opened in the U.S., reported Lodging Econometrics.
In March, the U.S. had 150,000 rooms under construction, said STR. It’s the highest end-of-month total the company has reported.
Jan Freitag, senior vice president of lodging insights at STR, said he expects hotel construction to continue throughout the year. But because of the low customer demand caused by the coronavirus crisis, hotel developers are not in a rush to open and projects will spend more time in construction.
Also impacting the timelines are the availability of building materials due to supply chain disruptions and challenges in finding skilled laborers who want to work during a pandemic.
This episode of Lodging Leaders podcast looks at the current state of hotel construction and explores what the future might hold with regard to new development in the shadow of COVID-19. We interviewed construction company executives and hotel developers to get an idea of the challenges they’re facing in getting a job completed and opened.
Resources and Links
Lodging Econometrics has tracked the hotel industry since 1998. Its global database includes new-hotel pipelines as well as renovations and brand conversions. Hotel franchisers once eager to launch new brands are focused on converting existing hotels because it’s a faster way to recover revenue lost to the COVID-19 pandemic than through new construction. In Episode 346, Lodging Leaders explores the increasing number of conversions in the U.S. hotel industry and what owners and operators need to consider before repositioning an asset.
In the first few months of the COVID-19 pandemic in the U.S., financiers anticipated a swell of distressed hotel businesses. Some raised rescue funds to respond to what they thought was a pending crisis. Though there are financial rescues taking place, the level of such activity is far below what industry advisers and fund managers expected. Commercial real estate investors positioned to act in the early days of the pandemic held off and are now just beginning to unleash their cash hoards totaling billions of dollars. Episode 345 of Lodging Leaders podcast explores the state of capital investment in the hotel industry.