Wed, 15 June 2016

509,626 Hotel Rooms in 4,151 Projects Under Contract in U.S.

According to STRs May 2016 Pipeline Report, there are 509,626 hotel rooms in 4,151 projects Under Contract in the United States.

The total represents a 19.7% increase in the number of rooms Under Contract compared with May 2015.

The In Construction phase has a total of 164,860 hotel rooms in 1,259 projects. That number of rooms represents a 27.3% increase in year-on-year comparisons. A large percentage of construction activity, 46.8%, is occurring in the Top 26 Markets by existing supply.

Even further than the Top 26 Markets, we are seeing a substantial portion of activity centralized in just a handful of markets, said Bobby Bowers, STRs senior VP for operations. If you look strictly at the five markets at the top of the In Construction list, you have more than 34,000 roomsroughly one-fifth of all U.S. construction activity.

Among those markets, New York, New York, reported the most hotel rooms Under Contract (29,961 rooms) and most rooms In Construction (15,193 rooms).

Seven additional markets each reported more than 10,000 rooms Under Contract for the month: Houston, Texas (17,149 rooms); Dallas, Texas (15,926 rooms); Los Angeles/Long Beach, California (13,733 rooms); Miami/Hialeah, Florida (11,735 rooms); Nashville, Tennessee (11,191 rooms); Washington, D.C.-Maryland-Virginia (10,465 rooms); and Chicago, Illinois (10,363 rooms).

It will be interesting to track how all of this new supply affects the top markets, added Bowers. Two good examples of markets already affected are New York and Houston. Trailing 12-month supply growth (through April) for New York was 4%, while demand grew by 4.2%, yielding occupancy growth of 0.2% In Houston, supply growth over the same period was 3.5%, while demand fell by 2.9%, yielding an occupancy decline of 6.2%.

Seven markets in addition to New York each reported more than 3,000 rooms under construction. Of those, Los Angeles/Long Beach (5,500 rooms) was the only other market to eclipse 5,000 rooms in the In Construction phase.

Two markets each reported fewer than 500 rooms In Construction: St. Louis, Missouri-Illinois (482 rooms), and Norfolk/Virginia Beach, Virginia (456 rooms).

Under Contract data includes projects in the In Construction, Final Planning and Planning stages but does not include projects in the Unconfirmed stage.

See other recent news regarding: STR, Pipeline, ADR, RevPAR

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