Pittsburgh’s pipeline steers upper-midscale, upscale

Getty Images/Sean Pavone

According to the most recent data from Lodging Econometrics, 10 hotels with 1,177 rooms opened in Pittsburgh over the first three quarters of 2016, and another four were slated to open during the fourth quarter, bringing the total for the year to 14 hotels with 1,501 rooms.

J.P. Ford, SVP and director of business development for Lodging Econometrics, said that most of the new development in Pittsburgh ranges from midscale to upscale. “There is no pipeline at the luxury chain scale,” he said. A full 45 of the hotels in the city’s pipeline are in the upper-midscale and upscale segments, he said.

“Over the last few years, most hotel development has been in the upscale and upper-midscale chain scales,” Ford said. “In many ways, Pittsburgh is mirroring that in terms of its development. They’re easy hotels to run. They don’t have any [food-and-beverage] components, or if they do, they’re minimal.”

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What's Next

LE’s total pipeline for hotels in Pittsburgh has 57 hotels and 6,000 rooms in development, with 33 slated to start construction within the next 12 months.

LE expects 14 hotels (with 1,543 rooms) to open in Pittsburgh in 2017, and another 16 (with 1,583 rooms) to open in 2018. This is keeping pace with recent years: In 2015, Pittsburgh got 14 new hotels with 1,576 rooms.

Thanks to the recent challenges with the gas market, it’s likely that not all hotels in Pittsburgh’s pipeline will open on schedule, or at all. Hotels scheduled to start construction in the next year may be put on hold because of a lack of financing. “It’s more difficult to get a construction loan in Pittsburgh than it has been,” Ford said. “Some developments have gone on hold or were canceled, and there are likely to be others. The demand in Pittsburgh has been soft this year, so it may take a while for that to come back. You had a 6.2-percent growth rate by rooms in the Pittsburgh market in 2015, but when demand doesn’t keep pace with supply, you get imbalance. Pittsburgh’s experiencing that a little bit.”

RELATED: Pittsburgh is one of seven cities part of Questex Hospitality Group's Hotel ROI Series, regional one-day events focused on how to leverage an asset for maximum returns. For more information and dates, visit www.hotelroi.com.

Pipeline Snapshot

Drury Plaza Hotel Pittsburgh Downtown (207 rooms; scheduled to open February 2017)

TownePlace Suites Cranberry Pittsburgh North (96 rooms; scheduled to open January 2017)

Home2 Suites Pittsburgh Area Beaver Valley (107 rooms; scheduled to open December 2017)

Fundamentals

REVPAR: $71.93

ADR: $ $119.34

OCCUPANCY: 60.3 percent

Source: STR, as of November 2016

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