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.
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Source: Glenn Haussman (2014). New Hotel Construction Pipeline in Global Shift, Hotel Interactive http://www.hotelinteractive.com/article.aspx?articleid=32644 published Apr 17, 2014. Viewed Apr 22, 2014.