According to the latest "U.S. Hotel Construction Pipeline Trend Report" by Lodging Econometrics, the total U.S. hotel construction pipeline at the end of Q3 2020 stands at 5,282 projects with 655,026 rooms, down 7 percent by projects and 6 percent by rooms year over year.
As expected, the hotel construction pipeline is off more substantially in Q3 2020 when compared to Q2 2020. This is due largely in part to an acceleration of new hotel openings in Q2 2020 as a result of a cyclical high number of projects under construction in Q1 2020 that were delayed and later opened in Q2 2020. Secondly, new project announcements continue to be muted. Projects exiting the pipeline and moving to a cancelled or on hold status in Q3 2020 stood at 191 projects and 21,859 rooms.
Developers continue to closely monitor the impact the coronavirus will have on travel demand, how quickly a widespread vaccine will roll out and the outcome of the U.S. presidential and congressional elections, according to LE. It is expected that as these events and timelines provide more clarity for developers, they will begin to more confidently move forward with their development activity.
Projects currently under construction stand at 1,610 projects with 216,136 rooms, down 7 percent by projects and 8 percent by rooms year over year. Despite the decrease, projects that are currently under construction continue to move forward towards their opening. New hotel openings continue to outpace projects moving to under construction. Projects scheduled to start construction in the next 12 months total 2,113 hotels with 246,528 rooms. Developers with projects scheduled to start construction in the next 12 months continue to adjust their construction start and opening dates, minimize carrying costs, and plan to open in a more robust operating environment.
LE continues to track development timeline changes in its database. Projects in the early planning stage stand at 1,559 hotels with 192,362 rooms, an increase not only year over year but quarter over quarter as well.
Through the third quarter of 2020, the U.S. opened 599 new hotels with 68,712 rooms with another 326 projects (with 35,324 rooms) anticipated to open by the end of 2020, totaling 925 projects with 104,036 rooms. For 2021, LE expects another 960 hotels and 113,247 rooms to open.