STR reports U.S. hotel Pipeline for December 2008
“The number of In Construction rooms fell in many of the Top 26 markets as room demand continues to soften and financing for development remains scarce,” said Duane Vinson, vice president of STR. “Given the current situation with the credit market, we expect to see this trend continue.”
Vinson added that if the recession drags into the third quarter of 2009, a high number of deferrals and full abandonment of projects in the total active pipeline is expected.
The individual markets that comprise the Top 26 markets tell a story of extremes in December:
- Houston, Texas, had a 130.3-percent year-over-year increase in the In Construction phase with 4,599 rooms in that stage. It had 14,514 rooms in the total active pipeline—a 101.9-percent jump over the 7,187 rooms in the total active pipeline in December 2007.
- New Orleans, Louisiana, posted a 93.9-percent hike with 3,073 rooms in the total active pipeline (1,585 in December 2007) and a 137.6-percent increase in rooms in the In Construction stage (1,048 in December 2008 vs. 441 in December 2007).
- New York, New York, had the most rooms in the total active pipeline in December with 21,941 (12.7 percent more than the 19,466 in December 2007). The city had 10,252 rooms in the In Construction phase in December 2008—a 16.2-percent jump over the 8,819 rooms in December 2007.
- Las Vegas, Nevada, had 21,447 rooms in the total active pipeline (50.4 percent fewer than the 43,218 in December 2007), including 11,845 in the In Construction stage
- (47.1-percent fewer than the 22,409 rooms in December 2007).
- San Diego, California, experienced a 68.5-percent year-over-year drop in rooms In Construction (936 in December 2008 vs. 2,975 in December 2007).
- Minneapolis-St. Paul, Minnesota’s In Construction number dropped 74.9 percent to 514 rooms (from 2,047 in December 2007).
“The existing supply growth rate for the Top 26 markets continued to climb in December and should peak in early to mid-2009,” Vinson said. “While the Final Planning and Planning phases of the pipeline remain robust, the lack of new construction started in the second half of 2008 will result in slower supply growth rate in late 2009 and 2010.”
The total existing supply for the U.S. hotel industry is 50,815 hotels comprising 4,693,590 rooms.
About STR/TWR/Dodge Construction Pipeline Report: The Pipeline Report is co-produced by Torto Wheaton Research, Dodge Construction, and dedicated pipeline team at STR. Available as an annual subscription or a local Market Supply Report, the Pipeline Report is a comprehensive look at new hotel development and existing supply in the U.S. and Canada.
About STR & STR Global: For more than 20 years, Smith Travel Research has been the recognized leader for lodging industry benchmarking and research. Smith Travel Research and STR Global offer monthly, weekly, and daily STAR benchmarking reports to more than 36,000 hotel clients, representing nearly 5 million rooms worldwide. STR is headquartered in Hendersonville, Tennessee, and STR Global is based in London. For more information, visit or .
Jeff Higley (STR)
VP, Digital Media & Communications
Phone: +1 (615) 824-8664 ext. 3318