At the close of 2021’s second quarter, analysts at Lodging Econometrics (LE) report that the total U.S. construction pipeline stands at 4,787 projects with 598,111 rooms, down 14% year over year by projects from Q2 2020’s 5,582 projects with 687,801 rooms. This decline in pipeline totals YOY is largely a result of projects that were delayed in the under construction phase of the pipeline as a result of COVID-19, now having exited the pipeline and opened.
During the first and second quarters of 2021, the U.S. opened 472 new hotels with 59,034 rooms. LE is forecasting another 450 projects with 51,754 rooms to open during 2021 for a total of 922 projects with 110,788 rooms by year-end. This will represent a 2% increase in new supply for 2021. Expected to open in 2022 are 1,008 projects with 113,871 rooms, representing a 2% increase in new supply for 2022. And, announcing for the first time this quarter is LE’s forecast for 2023. LE is expecting 997 projects with 115,271 rooms to open. This is a 2% increase in new supply.
There were a total of 372 new projects accounting for 45,084 rooms announced into the pipeline in the first half of 2021. Of those totals, 202 new project announcements with 25,653 rooms occurred in the second quarter. The arrival of summer, a rebounding demand for domestic business and leisure travel, combined with the recent pledge from the U.S. Department of Commerce to invest $750 million in the travel and tourism industries, has investors and developers feeling increasingly optimistic. This confidence has resulted in a 20% increase in new project announcements in Q2 2021 when compared to the second quarter of 2020 when 169 projects with 20,359 rooms were recorded.
Projects currently under construction stand at 1,165 projects with 159,581 rooms. Projects scheduled to start construction in the next 12 months total 1,843 projects with 213,744 rooms.
Photo: Free-Photos from Pixabay