The U.S. reported 554,226 rooms in 4,561 projects under contract in October 2016, including 183,371 rooms in 1,403 projects, which is a 32.4% year-over-year increase.
HENDERSONVILLE, Tennessee—STR’s October 2016 Pipeline Report shows 554,226 rooms in 4,561 projects Under Contract in the United States. The total represents a 21.8% increase in the number of rooms Under Contract compared with October 2015.
Under Contract data includes projects in the In Construction, Final Planning and Planning stages but does not include projects in the Unconfirmed stage.
In the In Construction stage, the U.S. reported 183,371 rooms in 1,403 projects, a 32.4% increase in year-over-year comparisons.
Among the Chain Scale segments, Upscale (60,599 rooms in 442 hotels) accounted for the most rooms In Construction followed by Upper Midscale (58,011 rooms in 576 hotels).
“Upscale and Upper Midscale chains account for 65% of all construction activity in the U.S. and 71% of all rooms in the Final Planning phase,” said Bobby Bowers, STR’s senior VP for operations. “Both of those segments maintained demand growth through the first three quarters of the year, and we’re forecasting more demand growth in the coming years. But like the industry as a whole, supply growth is going to outweigh demand. How hoteliers view their pricing power in that environment will be important to monitor.”
Despite representing the lowest number of rooms in the pipeline, the Economy segment reported the largest percentage increases for rooms In Construction (+86.6% to 3,208 rooms) and Under Contract (+93.5% to 10,437 rooms).
“Upper Upscale reported a pretty significant spike (+85.3%) in construction activity as well, especially considering the number of actual rooms in that stage of the pipeline,” Bowers said. “Overall, each of the seven sectors, with the exception of Luxury, posted a double-digit increase in construction for the month. The influx of new supply is continuing across the board.”
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