LE: U.S. construction pipeline sees 'slight dip' year over year

People work at a construction site
The total U.S. construction pipeline stands at 4,967 hotels with 622,218 rooms at the end of Q1 2021, according to Lodging Econometrics. Photo credit: lamontak590623 / iStock / Getty Images Plus(Photo credit: lamontak590623 / iStock / Getty Images Plus)

According to Lodging Econometrics’ "Construction Pipeline Trend Report" for the United States, the total U.S. construction pipeline stands at 4,967 hotels with 622,218 rooms at the end of Q1 2021.

While this is a slight dip in the pipeline year-over-year, it’s not unexpected given the lockdown and travel restrictions over the past year, according to LE. Further, the pipeline shows no signs of great decline compared to what occurred during the ’08 and ’09 recession. Actually, projects and rooms in the early planning stage are up significant year over year.

Although hotel development may still be tepid in Q1, continued government support and the extension of programs has aided many businesses to get back on their feet as more and more are working to restaff and reopen, according to LE.

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At the end of Q1, projects currently under construction stand at 1,311 hotels with 179,304 rooms. Projects under construction continue to move towards opening. Through year-end 2020, the U.S. opened 841 projects accounting for 97,959 rooms. A total of 229 hotels with 27,528 rooms opened in the first quarter of 2021. As delayed Q4 opens are coming online, LE is forecasting 691 hotels with 81,866 rooms to open by the end of 2021, representing a 2 percent increase in new hotel supply. For all of 2022, LE is forecasting 963 hotels with 111,235 rooms to open and a 2 percent supply increase.
 
Projects scheduled to start construction in the next 12 months total 1,866 hotels with 215,911 rooms. Of the 1,866 projects scheduled to begin in the next 12 months, 26.8 percent of these belong to extended-stay brands, a segment of the industry that developers have become increasingly interested in over the last few years. Projects in the early planning stage stand at 1,790 hotels with 227,003 rooms, up 10 percent by projects and 14 percent by rooms year over year.
 
Additionally, there were a total of 1,198 hotels with 190,475 rooms under renovation or conversion in the U.S. during the first quarter. This is a small decline after seeing a slight increase at the end of 2020.