U.S. Lodging Construction Starts to Reach 98,000 in 2005

May 24, 05 | 7:49 am

U.S. room starts in 2005 (the number of hotel rooms beginning construction) will increase by 21.5 percent to approximately 98,000, the largest increase since 1997 and the highest level since 2000 when room starts were 120,000.

The increase is due to impressive RevPAR (revenue per available room) increases which attract developers, investors and lenders, according to PricewaterhouseCoopers.

The largest increase will be in midscale without food and beverage (for example: Hampton Inn) and the highest price segments (for example: Marriott and Courtyard-by-Marriott) according to PricewaterhouseCoopers. The highest price segments, luxury, upper upscale and upscale represent 22.5 percent of current supply, according to Smith Travel Research, but 30.5 percent of what is under construction.

As these rooms are completed, they will add 1.3 percent to the U.S. lodging supply, the largest in three years.

PricewaterhouseCoopers forecasts continuing increases in the number of rooms starting construction in 2006 with growth of 20 percent.

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