Report: Global hotel construction pipelines at record highs
- In its latest bi-annual Global Construction Pipeline Trend Report, Lodging Econometrics said that the number of hotel projects in the works around the world is at an all-time high, up 86% since 2011.
- The hotel research and analysis company reported that there are currently 12,839 projects representing more than 2.1 million rooms in the global pipeline compared to the approximately 6,900 projects with 1.3 million rooms that were in various stages of planning and construction seven years ago. Of the nearly 13,000 hotel projects currently underway, almost 6,000 are under construction, nearly 4,000 are getting ready to start construction and more than 2,900 are in the planning phase. The chains creating a large share of hotel construction opportunity for contractors were Marriott International (2,324 projects/391,058 rooms), Hilton Worldwide (2,202/327,723), InterContinental Hotels Group (1,653/244,038), AccorHotels (809/147,647), Choice Hotels (1,024/84,350), Hyatt (212/45,117) and Best Western (275/29,243). Leading brands were Marriott's Fairfield Inn, Hilton's Hampton Inn, AccorHotels' Ibis brand, InterContinental's Holiday Inn Express and Choice's Comfort brand.
- U.S. hotel projects represented more than 40% of the global pipeline, and, of the top 10 cities for such projects, six were in the U.S. These included New York (169/29,365) — ranked No. 1 in the world — Dallas (156/18,908) and Houston (150/16321).
For U.S. contractors interested in pursuing hotel projects, the three chains with the most growth as of the second quarter of this year were Marriott, Hilton and Intercontinental. These three companies and their brands made up 66% of the nation's hotel pipeline, with Fairfield Inn, Home2Suites (Hilton) and Holiday Inn Express comprising 17%. Either the company itself or an independent owner might select the construction team, depending on whether the property is corporately owned or franchised.
New York, Dallas and Houston are seeing significant opportunity in the hotel construction pipeline, and Lodging Econometrics reported that Nashville, Los Angeles and Atlanta were also experiencing significant hotel construction activity. However, contractors can gain a foothold into this niche in other areas of the country as well.
For example, last month, the Omaha World-Herald, after an analysis of research firm STR's data, found that the percentage of new hotel rooms in Omaha, Nebraska, increased 16% during the last five years compared to the average 7% uptick that the rest of the country experienced. The area is expected to add even more rooms when projects like the $1 billion West Farm mixed-use development, which will have a 300-room hotel, are complete.
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