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STR reports U.S. hotel pipeline for September 2008
Duane Vinson, VP of content management for STR, said positive demand spurred a flurry of development activity throughout 2007 and into 2008, but that is beginning to slow.
"With room demand softening in the last half of 2008, we are beginning to see higher-than-historical-average attrition in the Planning and even Final Planning phases," Vinson said. "Which segments of the industry, business or leisure, recover quicker could determine which markets see a rebound in development next year."
At the close of third quarter, the top 26 markets in the U.S., as ranked by the number of guestrooms open, had 243,847 guestrooms in the active pipeline-a 4.9-percent increase from the number in the pipeline at the end of September 2007. Those same markets had 76,435 guestrooms in construction, a 9.1-percent decrease from the number of guestrooms in construction at the end of September 2007.
"With few exceptions, hotel construction in the Top 26 markets is slowing in comparison to last year," Vinson said (see chart below.) "While there are still a considerable number of projects pending, it is difficult to accurately gauge how many of them will ever break ground. A prolonged recession could mean a high number of hotel projects moving into deferral or full abandonment."
The Pipeline Report is co-produced by Torto Wheaton Research, Dodge Construction, and dedicated pipeline team at STR. Available as an annual subscription or a local Market Supply Report, the Pipeline Report is a comprehensive look at new hotel development and existing supply in the U.S. and Canada.
About STR & STR Global
For more than 20 years, Smith Travel Research has been the recognized leader for lodging industry benchmarking and research. Smith Travel Research and STR Global offer monthly, weekly, and daily STAR benchmarking reports to more than 36,000 hotel clients, representing nearly 5 million rooms worldwide. STR is headquartered in Hendersonville, Tenn., and STR Global is based in London. For more information, visit www.smithtravelresearch.com or www.strglobal.com.
* Includes those projects In Construction, Final Planning and Planning phases.
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