Home
Hotel News
Upcoming BITAC® Events - Request Event Info
Food & Beverage West 2014 (Sept 7 - Sept 9) 5 Suppliers Spots Left
Purchasing & Design West 2014 (Oct 26 - Oct 28) 3 Suppliers Spots Left
  Are you a member? Log In  or  Sign Up
Showtime
 
Share
Send a summary and link to this article
To Email
Your Name
Your Email
Bot Test
To pass the Bot Test, please type the white text that you see in the gray box. This helps us prevent spammers from abusing the system.
Print Printable Version

New Hotel Construction Pipeline in Global Shift

Lodging Econometrics is showing new hotel development is rapidly changing in nature. Here’s where the current hot spots are and what regions have slowed down construction.

Thursday, April 17, 2014
Glenn Haussman
bookmark this
Bookmark to: Digg Bookmark to: Del.icio.us Bookmark to: Facebook
Bookmark to: Yahoo Bookmark to: Google Bookmark to: Twitter
We are on Twitter

With the U.S. hotel economy continuing to prove its strength, the size of the domestic pipeline is starting to tick upwards. But don’t worry folks, we’re just at the beginning of this phase of the new build construction cycle that should last for several years. So don’t even think of beginning to panic because there needs to be a lot more shovels in the ground before we get anywhere need a full tilt building boom.

However, if you want to make sure you’re yet-to-be-built hotel opens in a robust market you better get to it as the next downturn could happen in 2019. And while that seems far off, five years comes pretty quick.

But what about the rest of the world? To find out what is happening everywhere we tapped into one of our favorite industry people, Bruce Ford, SVP Business Development at Lodging Econometrics, to get a sense of the state of the global hotel industry construction pipeline.

Lodging Econometrics is of course the hotel industry’s real estate authority when it comes to knowing every single hotel project in the world down. Even down to the number of rooms in each property, a feat not easily accomplished. Especially since that number is always a moving target. Good thing they have a staff of about 40 people dedicated solely to tracking this critical information that Ford can turn into industry insight we can all find helpful.

So what is the status of the global hotel industry pipeline?

According to Lodging Econometrics the global pipeline has of 1,342,913 guestrooms in the construction pipeline. That includes 526,777 rooms in the Americas; 234,509 room in the Europe/ Middle East (widely known as EMEA) and 581,627 rooms in Asia Pacific.

Ford says the sun is setting on the unbelievable amount of Asian hotel development seen during the last five years while the Americas is just in the nascent stages of what could be a strong run for new hotel development.

“We are in an ebb and flow situation where the Asia pipeline appears to have peaked. We will likely see a decline in that pipeline, whereas in the Americas we will see it start to grow dramatically in 2014 and 2015 fueled by growth in South and North America,” said Ford. He can make that call because the Asia Pacific pipeline shows 428 of all 581 projects in that region are in the construction phase right now. Remove the ones under construction and it becomes obvious of the downward new hotel construction trend setting in.

The most telling sign, however, according to Ford, is the Americas region pipeline is about to overtake the Asia Pacific region in total new construction rooms in the pipeline sometime this year. It’s a huge reversal that signals the new hotel construction action is returning to this hemisphere.

Back home, the United States is seeing more than 100,000 rooms under construction for the first time since the first quarter of 2009. That was the last big gasp of new construction for hotel projects approved before the malaise of the Great Recession.

So for now China still has the most hotels under construction followed by the United States, Brazil, India, Indonesia, United Arab Emirates, Saudi Arabia, Russia, United Kingdom and Canada.

“There is a splash of projects everywhere with properties distributed everywhere from some in Latin America, Europe, Asia and the United States,” said Ford.`

So how do these rooms being built fit into the global hotel segment scene including independent hotels? Upscale segmented hotels leads the way with 421,000 rooms in the global pipeline with Upper Midscale coming in at 272,000 rooms. Luxury development comes in at 167,000 guestrooms while Upper Upscale is at 269,000 rooms. Casino companies are building 27,000 rooms.

Ford notes most of the Luxury and Upper Upscale new construction is occurring in not yet matured hotel markets and of course select service hotels are the true success story which is rapidly moving past U.S. boarders. “The trend at the select service level is to put them in every major city in the world to leverage success found in the United States and take it to Europe, Asia and the Middle East. And to build them in large formats in city centers,” said Ford.
Credit
Glenn Haussman    Glenn Haussman
Editor in Chief
Hotel Interactive, Inc.

Bio: Glenn Haussman is Hotel Interactive's Editor-In-Chief, where he manages all editorial content for the hotel industry’s leading online information resource. In addition to publishing the daily magazine, he hosts a weekly on demand radio shows and develops educational content for the company’s BITAC and HI Connect Design ...
more
Feedback Messaging & Feedback
We welcome your opinion! Log In to send feedback.
Already a member?
Login
Log In
Not yet registered?
Login
Sign Up
Need More Information?
Information
Benefits
 
  RSS Feed
RSS Feed
Policies
Contact Us
Mobile Version