LE: Global hotel-construction pipeline hits record high

Rendering of the Holiday Inn Express in Mount Vernon Triangle
IHG's Holiday Inn Express had 737 projects in its construction pipeline at the end of the second quarter, including one in Washington, D.C.'s, Mount Vernon Triangle neighborhood. Photo credit: Birchington LLC

The total global hotel-construction pipeline ascended to a record high of 14,051 projects and 2,327,923 rooms at the end of Q2, according to Lodging Econometrics’ recently compiled construction pipeline counts for 176 countries. The numbers represent a nine percent year-over-year increase in projects and an eight percent YOY rise in rooms.

Except for Latin America, all regions either continued to set record-high pipeline counts or have already settled into topping-out formations amid concerns of a worldwide economic slowdown. Lodging Econometrics said the fallout after the ongoing trade dispute between the United States and China continued to be a leading factor. It identified low-interest rates and accommodative lending terms as the primary catalysts behind growth. Looking ahead, the group said the global pipeline should continue to grow, “albeit at a much slower pace.”

There also was a record high 6,565 projects—1,192,398 rooms—under construction at the end of Q2, according to Lodging Econometrics. Projects scheduled to start construction in the next 12 months stood at 4,392 projects and 636,080 rooms, an all-time high by both metrics. Projects in the early-planning stage continued to grow, with a 6 percent YOY increase in projects and a 10 percent YOY increase in rooms to 3,094 and 499,445, respectively.

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Lodging Econometrics found the United States led the world in total projects and rooms in its hotel-construction pipeline. At 5,653 projects—230 shy of its all-time high—and 693,207 rooms, the country represented 40 percent of the total worldwide project count. At a new high of 2,991 projects with 592,884 rooms, China came next, accounting for 21 percent of the total global hotel-construction pipeline. Indonesia placed a distant third, representing 378 projects with 63,196 rooms. Germany (320 projects/57,689 rooms) and the United Kingdom (280 projects/40,970 rooms) rounded out the top five.

The top five cities with the largest hotel pipelines by project count were Dubai with 173 projects/50,832 rooms; New York City with 166 projects/28,231 rooms; Dallas with 162 projects/19,972 rooms; Los Angeles with 158 projects/25,428 rooms; and Houston with 146 projects/14,998 rooms.

Marriott International led the franchise companies with 2,534 projects and 420,562 rooms. Hilton came second with 2,334 projects/340,626 rooms, followed by IHG with 1,769 projects/259,057 rooms and Accor with 980 projects/175,002 rooms. The four companies accounted for 54 percent of all hotel projects in the pipeline.

In terms of brands, IHG’s Holiday Inn Express led the way with 737 projects/93,415 rooms; Hampton by Hilton with 689 projects/90,634 rooms; Fairfield Inn by Marriott with 397 projects/43,451 rooms; and Accor's Ibis with 387 projects/54,683 rooms.

A total of 1,374 hotels and 196,237 rooms opened around the world during the first half, according to Lodging Econometrics. The group said a further 1,675 hotels and 236,334 rooms are scheduled to open by year's end. Looking further ahead, it predicted new hotel openings will continue to climb, with 3,168 hotels expected to open in 2020 and 3,171 expected in 2021.

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