The total active U.S. hotel development pipeline
includes 5,706 projects with 612,892 rooms, according to the December
2008 STR/TWR/Dodge Construction Pipeline Report released this week.
This represents a -0.4% decrease in the number
of rooms in the total active pipeline over December 2007. 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.
Of the total active pipeline, 223,159 rooms are
located in the nationís top 26 markets-down 11.3% from a year
earlier. The top 26 markets have 73,985 rooms in the In
Construction stage, a 19.7% decrease from the 92,098 rooms in the
In Construction phase in December 2007.
"The number of In Construction rooms fell in
many of the top 26 markets as room demand continues to soften and
financing for development remains scarce," said Duane Vinson, vice
president of STR. "Given the current situation with the credit
market, we expect to see this trend continue."
Vinson added that if the recession drags into
the third quarter of 2009, a high number of deferrals and full
abandonment of projects in the total active pipeline is expected.
The individual markets that comprise the top 26
markets tell a story of extremes in December:
Houston, Texas, had a 130.3% year-over-year
increase in the In Construction phase with 4,599 rooms in that
stage. It had 14,514 rooms in the total active pipeline, a 101.9%
jump over the 7,187 rooms in the total active pipeline in December
New Orleans, Louisiana, posted a 93.9%
hike with 3,073 rooms in the total active pipeline (1,585 in
December 2007) and a 137.6% increase in rooms in the In
Construction stage (1,048 in December 2008 vs. 441 in December
New York, New York, had the most rooms in
the total active pipeline in December with 21,941 (12.7% more than
the 19,466 in December 2007). The city had 10,252 rooms in the In
Construction phase in December 2008, a 16.2% jump over the 8,819
rooms in December 2007.
Las Vegas, Nevada, had 21,447 rooms in the
total active pipeline (50.4% fewer than the 43,218 in December
2007), including 11,845 in the In Construction stage (47.1% fewer
than the 22,409 rooms in December 2007).
San Diego, California, experienced a 68.5%
year-over-year drop in rooms In Construction (936 in December 2008
vs. 2,975 in December 2007).
Minneapolis-St. Paul, Minnesotaís In
Construction number dropped 74.9% to 514 rooms (from 2,047 in
"The existing supply growth rate for the top 26
markets continued to climb in December and should peak in early to
mid-2009," Vinson said. "While the Final Planning and Planning
phases of the pipeline remain robust, the lack of new construction
started in the second half of 2008 will result in slower supply
growth rate in late 2009 and 2010."
The total existing
supply for the U.S. hotel industry is 50,815 hotels comprising
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