STR Reports 6.9 Percent Decline in U.S. Hotel Development Pipeline

Adapted by Dave Hogg from a story by Kerry Medina writing for TravelPulse, August 14, 2012:

The total active U.S. hotel development pipeline comprises 2,745 projects totaling 300,954 rooms, according to the July 2012 STR/McGraw Hill Construction Dodge Pipeline Report. This represents a 6.9 percent decrease in the number of rooms in the total active pipeline compared to July 2011. The total active pipeline data includes projects in the In Construction, Final Planning and Planning stages.  It does not include projects in the Pre-Planning stage.

Duane Vinson, vice president of database content at STR, said, “When STR released June year-to-date performance, which showed an increase in occupancy of 3.4 percent and average daily rate gaining momentum at 4.4 percent, it’s easy to understand why hotel companies are eager to open new properties. Not surprisingly, the Upscale (Homewood Suites, Courtyard) and Upper Midscale (Hampton Inn & Suites, Fairfield Inn & Suites, Home2Suites) segments, which have performed remarkably well during the recovery, led all other segments with a 33.3 percent and 12 percent increase in rooms under construction, respectively.”

“While construction is up, we’re seeing very little change now in the total active pipeline, with a 6.9 percent decline compared to July 2011. The only real movement is with the Upscale and Upper Midscale segments, comprising 55 percent of the nearly 300,000 rooms that make up the active pipeline,” Vinson said.

The Midscale (Country Inn & Suites, LaQuinta, Wingate) segment reported the largest decrease in rooms under construction, falling 32.1 percent with only 2,403 rooms.

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