Global hotel room construction projects on the rise

A new report has revealed that the number of hotel projects, particularly the number of rooms, either in construction, development or planning, has increased significantly.

STR, a global hotel market data provider, released its June 2017 Pipeline Report, which looks at the number of hotel rooms and projects “under contract”.

Under contract data refers to projects in the construction phase, final planning, and planning stages. The data does not include any reference to projects in the unconfirmed stage.

Starting with Europe, in June 2017, a total of 169,046 rooms in 1,100 hotel projects were listed as under contract which represents a 17.5 percent increase from the same time last year.

Among Chain Scale segments, the Upper Midscale segment accounted for the largest portion of rooms Under Contract (27.5 percent with 46,516 rooms). The Upscale segment represented the largest portion of rooms In Construction (25.3 percent with 19,570 rooms).

Looking at the US, there was a reported 186,945 rooms in 1,440 hotel projects in construction, a 12.4 percent year over year increase.

Looking at construction activity among the Chain Scale segments, Upper Midscale (62,237 rooms in 610 hotels) accounted for the most rooms In Construction followed by Upscale (58,833 rooms in 434 hotels).

“With May as the exception, we have now seen a decrease in room construction totals in three of the last four months,” said Bobby Bowers, STR’s senior VP for operations. “While the month-to-month fluctuations prevent us from definitively calling this a development slowdown, we can certainly point to a significantly lower growth rate year over year in identifying such a trend. Regardless, there will still be plenty of construction and planning activity even with occupancy levels heading toward negative territory.”

Asia/Pacific hotel pipelines show a total of 270,976 rooms in 1,183 hotel projects were in construction. This represents an 8.5 percent year over year increase.

Among Chain Scale segments, the Upscale segment accounted for the largest portion of rooms Under Contract (25.9 percent with 158,312 rooms) and In Construction (25.6 percent with 69,246 rooms). Upper Upscale (25.5 percent with 69,068 rooms) was the only other segment to represent 20.0 percent or more of rooms In Construction.

Central/South America revealed a total of 28,103 rooms in 175 hotel projects were under construction in June, a 2 percent decrease compared to the previous year.

Among Chain Scale segments, the Upper Upscale segment accounted for the largest portion of rooms Under Contract (22.8 percent with 13,418 rooms).

In the Middle East, the report reveals that 160, 120 rooms in 583 hotel projects were under contract, with 56,289 rooms in 310 projects under contract in Africa. This represents a 3.6 percent increase in the Middle East, with a 1 percent increase in Africa.