US hotels: Renovations and brand conversions are becoming more prevalent
Tuesday, 2nd February 2021
Source : Lodging Econometrics (LE)

According to Lodging Econometrics’ Construction Pipeline Trend Report for the United States, the total US construction pipeline stands at 5,216 projects/650,222 rooms.

These are year-end 2020 results, and are down only incrementally, as the United States grappled with the ongoing coronavirus pandemic, an election, civil unrest, and the large and rapid partisan shift taking place.

However, the announcement of various vaccine developments and distribution was undeniably good news for the general public, businesses, hotel development and the lodging industry as a whole, especially going forward.

The industry has found optimism in the fact that as the vaccine rolls out travel demand will increase rather quickly, resulting in increased confidence in hotel development activity.

At the end of Q4 ‘20, projects currently under construction stand at 1,487 projects/199,700 rooms. Of the 1,487 projects under construction, 24% of these projects in the pipeline belong to extended-stay brands, a segment of the industry that developers have become increasingly interested in over the last few years.

Projects under construction continue to move towards opening. Through year-end 2020, the U.S. opened 833 projects accounting for 97,203 rooms, bringing the U.S. supply of open & operating hotels to 58,569 hotels/5,557,119 rooms. Additionally, of the 833 projects opened in 2020, an impressive 29% of those projects belong to extended-stay brands.

LE is forecasting another 929 projects/107,407 rooms to open by the end of 2021. If all of these projects come to fruition it will represent a 1.9% increase in new hotel supply. For 2022, LE is forecasting 1,031 projects/116,749 rooms to open.

Projects scheduled to start construction in the next 12 months total 2,015 projects/234,703 rooms, down 12% by projects and 11% by rooms YOY. Projects in the early planning stage stand at 1,714 projects/215,819 rooms, a cyclical high in the number of rooms, and up slightly YOY.

It is also worth noting that renovations and brand conversions are becoming more prevalent. At the end of Q4 ‘20, there were a total 1,308 projects/210,124 rooms under renovation or conversion in the U.S. The number of projects and rooms has grown consistently over the last three quarters of 2020.

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