By Cameron Sperance
June 12, 2020
It took several months, but coronavirus is finally impacting hotel construction.
The hotel development pipeline had been an anomaly to the economic downward spiral from the pandemic. While hotel occupancy rates and revenue plummeted in March and April, the pace of hotel construction continued to hit record highs in both months. But construction finally showed signs of a slowdown in May, with nearly 3,000 fewer hotel rooms under construction compared to the record level seen in April.
“It’s purely a function of the rooms under construction that completed aren’t being replenished at the same pace of projects going from final planning to construction,” said STR Senior Vice President of Lodging Insights Jan Freitag. “We fully expect the number of rooms under construction to decline for the foreseeable future, the next two years at least.”
There were 217,359 hotel rooms under construction across 1,697 properties in May, according to STR. That is down from the more than 220,207 rooms across 1,711 properties in April, the busiest month for hotel construction on record. But it is also still higher than the 214,704 rooms under construction in March, the previous record holder.