542,419 Hotel Rooms in 4,460 Projects Under Contract in U.S.

STR’s August 2016 Pipeline Report shows that there are 542,419 hotel rooms in 4,460 projects Under Contract in the United States.

The total represents a 23.3% increase in the number of rooms Under Contract compared with August 2015.

In the In Construction stage, the U.S. reported 170,221 rooms in 1,306 projects, a 28.6% increase in year-over-year comparisons.

Among the Chain Scale segments, Upscale (58,548 rooms in 425 hotels) accounted for the most rooms In Construction followed by Upper Midscale (55,095 rooms in 543 hotels).

“Demand has continued to grow in the Upscale and Upper Midscale segments, but supply grew at a slightly quicker pace through the first seven months of the year,” said Bobby Bowers, STR’s senior VP for operations. “That supply growth will continue as more than two-thirds of all U.S. hotel room construction currently falls under the select-service umbrella. How long demand growth holds up will ultimately dictate how long hoteliers can maintain pricing power. With occupancy growth having flattened out, rate has become the sole driver of RevPAR.”

The Upper Upscale segment (+73.2% to 19,978 rooms) reported the largest year-over-year percentage increase in rooms In Construction.

Economy reported the largest percentage increase for rooms Under Contract (+57.0% to 8,846 rooms) despite having the smallest overall number of rooms in the pipeline.

“Even though the Economy Under Contract total was up, construction activity in the segment was down more than 20% compared with last August,” Bowers said. “All of the other segments reported a year-over-year increase in construction.”

Under Contract data includes projects in the In Construction, Final Planning and Planning stages but does not include projects in the Unconfirmed stage.

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