The number of U.S. hotel construction projects in the development pipeline at the close of 2021 was about 8 percent lower than one year prior, according to a new report from Lodging Econometrics, but projects in the early stages of development increased. Still, what seems to be pent-up demand by developers for construction has been hindered by inflation and supply chain issues, according to the report.
The total fourth-quarter U.S. hotel construction pipeline stood at 4,814 projects, representing about 582,000 rooms, which were down 10 percent year over year. Projects in the early stages of development though were up 18 percent, representing an 11 percent increase in rooms.
Lodging Econometrics attributed the increase in early-stage interest to eagerness among developers "to accelerate projects long-delayed by the Covid-19 pandemic," particularly given "the recent resurgence of travel demand and the steady increase in hotel booking numbers over recent months." The company projects 2022 business travel and live meeting attendance to increase, further encouraging developers.
But those plans are impeded by what the company called "escalating inflation and supply chain shortages, that are causing higher prices versus pre-pandemic costs for labor and materials." Still, Lodging Econometrics expects "these challenges to abate throughout the year and [to] see construction starts to moderately improve."
Marriott Leads Chains
Marriott International had more U.S. projects under construction than any other hotel company, with 1,345 projects representing about 171,000 rooms in development. Hilton Worldwide had 1,239 projects representing about 141,000 rooms under construction, and IHG Hotels & Resorts had 761 projects with about 77,000 rooms.
Hilton's Home2 Suites led all individual brands with 421 projects in development, totaling about 44,000 rooms, followed by IHG's Holiday Inn Express (288 projects with about 27,600 rooms) and Marriott's Fairfield Inn (247 projects with about 23,300 rooms).
Lodging Econometrics also cited Marriott's TownePlace Suites and Residence Inn, Hilton's Tru and Hampton, and IHG's Avid and Staybridge Suites as brands most represented in the U.S. development pipeline.
Dallas Top City
More projects at the end of 2021 were in the pipeline for Dallas than any other U.S. location, with 152 projects planned totaling about 18,200 rooms. Dallas was followed by Atlanta (133 projects with about 17,600 rooms), New York City (121 projects with about 19,300 rooms), Los Angeles (120 projects with about 19,800 rooms), and Houston (91 projects with about 9,900 rooms).
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