PORTSMOUTH, N.H. — Lodging Econometrics (LE) is reporting that the total U.S. construction pipeline stands at 4,787 projects/598,111 rooms at the close of 2021’s second quarter, dropping 14 per cent year-over-year (YOY) by projects from Q2 2020’s 5,582 projects/687,801 rooms. The decline is largely a result of delayed projects due to COVID-19.
During the first and second quarters of 2021, the U.S. opened 472 new hotels with 59,034 rooms. LE is expecting an additional 450 projects/51,754 rooms to open by the end of year for a total of 922 projects/110,788 rooms. This new supply represents a two per cent increase, with the same increase forecasted for new supply in 2022 and 2023.
After 16 months of uncertainty related to COVID-19 shutdowns, the first half of 2021 saw a significant increase in hotel bookings and travel-reservation numbers. There were a total of 372 new projects, accounting for 45,084 rooms announced into the pipeline during this time. As demand soared with the arrival of summer, and the U.S. Department of Commerce pledged to invest $750 million in the travel-and-tourism industry, LE saw a 20-per-cent increase in new-project announcements in Q2 2021 compared to the second quarter of 2020 when 169 projects/20,359 rooms were recorded.
Currently, there are 1,165 projects/159,581 rooms under construction. Moreover, 1,843 projects/213,744 rooms are scheduled to start construction in the next 12 months. Projects in the planning stage saw a 25 per cent increase in projects and a 28 per cent increase in rooms YOY, standing at 1,779 projects/224,786 rooms.
As vaccination rates continue to rise and international travel takes off once again, more hotels are re-establishing renovation plans or re-positioning their properties, with 1,152 active renovation projects/238,110 rooms and 1,181 active conversion projects/128,810 rooms throughout the U.S.