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STR: US hotel pipeline for March 2016

April 15, 2016 Hotel Trends No Comments Email Email

STR’s March 2016 Pipeline Report shows 499,492 rooms in 4,071 projects Under Contract in the United States. The total represents a 15.2% increase in the number of rooms Under Contract compared with March 2015. 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 153,345 rooms in 1,201 projects. That number of rooms represents a 21.5% increase in year-over-year comparisons. A large portion of the construction activity, roughly 47%, is occurring in the Top 26 Markets by existing supply.

“Regardless of short-term supply and demand swings, the top markets are big demand generators, and most brands want a strong, fresh presence in those markets,” said Bobby Bowers, STR’s senior VP for operations.

Among those Top 26 Markets, New York, New York, reported the most rooms Under Contract (31,394 rooms) and most rooms In Construction (15,145 rooms).

“Obviously there are many factors contributing to the rate-growth challenges in New York, and significant supply growth—with more on the way—is one of them,” Bowers noted.  “That said, demand growth continues to outpace supply growth, and occupancies remain high.”

Seven additional markets each reported more than 10,000 rooms Under Contract for the month: Houston, Texas (17,895 rooms); Dallas, Texas (15,480 rooms); Miami/Hialeah, Florida (13,225 rooms); Los Angeles/Long Beach, California (12,452 rooms); Washington, D.C.-Maryland-Virginia (10,450 rooms); Nashville, Tennessee (10,259 rooms); and Orlando, Florida (10,243 rooms).

Seven markets in addition to New York each reported more than 3,000 rooms under construction, but Houston (5,296 rooms) was the only other market to eclipse 5,000 rooms in the In Construction phase.

“It appears oil prices have stabilized and seem to be trending upward, but the movement north will likely take time for Houston,” Bowers said. “That challenge is compounded by the significant supply growth the market has experienced and the more than 5,000 rooms currently under construction.  Good times will definitely return in Houston, but 2016 will be a challenging year.”

Three markets each reported fewer than 500 rooms In Construction: Oahu Island, Hawaii (482 rooms); St. Louis, Missouri-Illinois (482 rooms); and Norfolk/Virginia Beach, Virginia (300 rooms).

Top 10 U.S. Markets (In Construction phase)

Market Existing Supply In Construction
March 2016
In Construction
March 2015
In Construction
YOY % change
New York, NY 110,879 15,145 13,081 +15.8%
Houston, TX 81,173 5,296 6,173 -14.2%
Los Angeles/Long Beach, CA 97,588 4,931 2,820 +74.9%
Dallas, TX 80,412 4,428 2,243 +97.4%
Miami/Hialeah, FL 52,565 4,297 4,026 +6.7%
Las Vegas, NV 167,642 3,905 104 +3654.8%
Chicago, IL 111,438 3,186 3,572 -10.8%
Washington, DC-MD-VA 108,450 3,146 3,435 -8.4%
Denver, CO 43,975 2,876 1,719 +67.3%
Seattle, WA 42,847 2,647 2,427 +9.1%

Source: STR / data current as of 31 March 2016

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