The third-quarter 2009 hotel construction pipeline is at a three-year low with 3,890 projects totaling 485,664 rooms, according to a new report from Lodging Econometrics.
The report attributes the drop to the ongoing credit crisis, as banks both big and small continue to cut back on mortgage lending. Declining demand for lodging in many markets also is a key factor. As such, project count declines are accelerating in the upscale, midscale with and without F&B and economy segments. Only 139 projects totaling 15,994 rooms started construction between July and December.
A total of 1,032 new hotels, representing 111,642 guest rooms, opened in the first three quarters of 2009. An additional 355 projects totaling 41,804 rooms are forecasted to open in the fourth quarter. Lodging Econometrics has also decreased its forecast for new hotel openings for 2010 by approximately 10 percent to 988 projects totaling 112,684 rooms. The research firm expects 749 projects representing 75,286 rooms to come online in 2011.
Source: Hospitality Design