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STR Reports U.S. Hotel Pipeline for May 2012

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According to the May 2012 STR/McGraw Hill Construction Dodge Pipeline Report, the total active U.S. hotel development pipeline comprises 2,711 projects totaling 290,392 rooms.

This represents a 6.4% decrease in the number of rooms in the total active pipeline compared to May 2011.

 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.

"While we continue to see an overall draw down in the Active Pipeline, the most significant increase in sheer rooms under construction continues to be in the Upscale and Upper Midscale segments," said Duane Vinson, VP of database content and integrity at STR. "The Upscale segment moved from 12,968 rooms in construction last May to 17,882 this May, a 37.9% jump. The Upper Midscale segment saw a 26.2% increase, going from 15,488 rooms to 19,544."

Among the Chain Scale segments, the Luxury segment experienced the largest increase in rooms in the active pipeline, rising 60.1% with 6,592 rooms. The segment was the only one to report an increase in rooms in the active pipeline. The Unaffiliated segment reported the largest decrease with a 13.6% decrease to 82,713 rooms, followed by the Midscale segment with an 8.0% decrease to 21,984 rooms. The Upper Midscale segment reported the largest number of rooms in the total active pipeline with 86,659 rooms.

The Luxury segment reported the largest increase in rooms in the In Construction phase, up 95.4% to 1,602 rooms, followed by the Upscale segment (+37.9% to 17,882 rooms) and the Upper Midscale segment (+26.2% to 19,544 rooms). The Midscale segment reported the only double-digit decrease in rooms under construction, falling 23.9% to 3,023 rooms.

"The top seven brands with rooms in the active pipeline make up nearly one third of what we see in development," Vinson continued. "All of which have very aggressive growth strategies and reside in the Upscale and Upper Midscale chain scales. A ten-year trend shows these two segments average occupancies of 67.6 and 61.7% respectively, so it's easy to see why developers expect continued healthy demand."

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