STR’s February 2017 Pipeline Report shows 578,508 rooms in 4,775 hotel projects Under Contract in the United States. The total represents a 16.3% increase in the number of rooms Under Contract compared with February 2016.
Under Contract data includes projects in the In Construction, Final Planning and Planning stages, but does not include projects in the Unconfirmed stage.
In the In Construction stage, the U.S. reported 194,455 rooms in 1,481 projects. Based on the number of rooms, that is a 29.3% increase in year-over-year comparisons.
“Hotel development activity continues to ramp up, and we’re now just 8% below the all-time construction peak reached in 2007,” said Bobby Bowers, STR’s senior VP for operations. “As expected, all of the new supply entering the market is affecting occupancy levels and hotelier pricing power.”
Among the Chain Scale segments, Upper Midscale (63,274 rooms in 618 hotels) accounted for the most rooms In Construction followed by Upscale (62,083 rooms in 463 hotels).
“Construction in the limited-service segment hasn’t cooled off, with more than 125,000 rooms being built between Upper Midscale and Upscale,” Bowers said. “Not only does that figure represent roughly two-thirds of all U.S. hotel construction, it also is a 24% increase from last February.”
Despite representing the lowest number of rooms in the pipeline, the Economy segment reported the largest percentage increase for rooms Under Contract (+122.9% to 11,013 rooms).
The Upper Upscale segment reported the largest percentage increase for rooms In Construction (+91.3% to 27,457 rooms).
U.S. pipeline by Chain Scale segment (number of rooms % change, February 2017 versus February 2016):
|Chain Scale||Existing Supply||% Change||In Construction||% Change||Under Contract||% Change|
Source: STR / report as of February 2017, activity reported through January 2016