U.S. Hotel Construction Boom Hit a Record High in March Despite Coronavirus
Hotel builders shouldn’t get too optimistic by a record-setting month. It can take as long as a year for economic downturns to reflect in the construction industry.
If you're seeking indicators of how coronavirus is impacting the U.S. economy, you won't find it with hotel construction activity — yet.
If you're seeking indicators of how coronavirus is impacting the U.S. economy, you won't find it with hotel construction activity — yet.
There were 214,704 hotel rooms under construction in the U.S. at the end of March, according to STR. It is the highest end-of-month construction total ever recorded by the hotel data firm. The previous record high was one month earlier in February, when STR reported 211,859 rooms under construction. But the pace of construction often lags disturbances in the economy, and the hotel pipeline will almost certainly cool off, especially with projects still in the planning phase.
"The number of rooms in construction will likely remain high, just as it did during the pre-recession peak," STR Senior Vice President of Lodging Insights Jan Freitag said. "Because of the coronavirus pandemic, the industry is no longer operating in a record-setting demand environment, so there isn't the same rush to open hotels and tap into that business."