The number of hotel rooms under construction or in planning
is growing at a much slower pace than it was a year ago, according to STR. The
pipeline grew 8.8 percent year over year in August, and the slice that
represents rooms under construction grew 12.9 percent. "Those numbers are
incredibly low compared with the same time last year, and there is potential
for further deceleration in new development as resources are directed to
rebuilding from Hurricane Harvey and Hurricane Irma," said STR VP of
operations Bobby Bowers.
"A slowing in new supply is a positive sign that the industry has reached a balance between supply and demand," said Tripbam CEO Steve Reynolds. This is long overdue, he added, as the scale has been tipped toward the supply side for years. "Corporations need a break." GoldSpring Consulting partner Neil Hammond said growth is still strong, however. "Combined with the additional rooms that will be introduced via the shared
economy, this represents a strong supply pipeline that should temper price
increases," he said. Meanwhile, Reynolds noted that brand consolidation, primarily the Marriott/Starwood merger, should drive average daily rates back up.
U.S. hotel rooms under construction total 192,132. Upper-midscale rooms
represent 63,021 of those, and upscale rooms total 61,258. "The upper-midscale
and upscale segments … are also two chain scale segments that saw occupancy
declines and the lowest rate growth through the first seven months of the year,"
Bowers said. "Demand remains high in the select-service segment, but
significant supply growth will continue to pressure performance levels."
The economy segment represented the largest year-over-year
percentage increase in rooms under construction, at 68.6 percent, though that
totals just 2,498 rooms.
Under Construction
Elsewhere in August
Europe
Rooms: 75,755
Year-Over-Year Increase: 17.5%
Most Rooms Under Construction: U.K.
(16,276), Germany (13,499), Russia (8,350), Turkey (7,172)
Asia/Pacific
Rooms: 284,542
Year-Over-Year Increase: 16.4%
Most Rooms Under Construction: China
(164,538), Indonesia (21,925), India (20,149), Vietnam (11,556), Malaysia
(11,107), Australia (10,486)
Middle East
Rooms: 98,027
Year-Over-Year Increase: 17.2%
Most Rooms Under Construction: Saudi
Arabia (40,020), United Arab Emirates (35,050), Qatar (9,627)
Africa
Rooms: 28,260
Year-Over-Year Change: -5.6%
Most Rooms Under Construction: Angola
(4,451), Egypt (4,169)