STR Reports US Hotel Pipeline for October 2012

According to the October 2012 STR/McGraw Hill Construction Dodge Pipeline Report, the total active U.S. hotel development pipeline comprises 2,590 projects totaling 290,257 rooms.

This represents a 6.6% decrease in the number of rooms in the total active pipeline compared with October 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.

"In construction rooms continue a steady climb and now total roughly 1.5% of the existing room supply base," said Bobby Bowers, senior VP of operations at STR. "Compared with October 2011, rooms currently under construction have jumped 23% and compared with September 2012, room have increased more than 6% sequentially. The Upscale and Upper Midscale Chain Scale segments continue to dominate the In Construction and Final Planning activity, accounting for about two-thirds of the rooms in both development phases. In Construction activity is primarily concentrated in larger Metropolitan Statistical Areas; the New York-Northern New Jersey-Long Island areas are responsible for more than 16% of rooms alone. STR currently forecasts 2013 U.S. room supply at approximately 1%, which is up significantly from the expected 2012 full-year number but about half the long-term supply growth average."

Among the Chain Scale segments, the Luxury segment reported the largest increase in rooms in the total active pipeline, up 53.7% with 8,255 rooms. Two other segments reported increases in rooms in the total active pipeline: the Economy segment (+31.2% with 4,652 rooms) and the Upper Midscale segment (+1.0% with 89,089). The Upper Upscale experienced the largest decrease in rooms in the total active pipeline, falling 40.2% with 14,539 rooms.

Six of the seven Chain Scale segments experienced an increase in rooms in the In Construction phase. The Luxury segment achieved the largest increase in rooms in the In Construction phase, jumping 164.7% with 3,888 rooms.

Three other segments experienced double-digit increases in rooms under construction: the Upscale segment (+37.1% with 22,428 rooms); the Economy segment (+26.1% with 1,190 rooms); and the Upper Midscale segment (+24.9% with 20,652 rooms). The Upper Upscale segment fell 11.6% in rooms under construction to 7,165 rooms, reporting the only decrease for the month.

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