|STR's August 2017 Pipeline Report shows 590,080 rooms in 4,911 hotel projects Under Contract in the United States. The total represents an 8.8% increase in the number of rooms Under Contract compared with August 2016.
Under Contract data includes projects in the In Construction, Final Planning and Planning stages, but does not include projects in the Unconfirmed stage.
In the In Construction stage, the U.S. reported 192,132 rooms in 1,463 projects. Based on the number of rooms, that is a 12.9% increase in year-over-year comparisons.
In Construction and Final Planning activity was up a bit from the previous month, but we did see a drop in the Planning phase, said Bobby Bowers, STRs senior VP of operations. Year over year, however, were under 13% growth for rooms in construction and now under 10% growth for the total pipeline. Those numbers are incredibly low compared with the same time last year, and there is potential for further deceleration in new development as resources are directed to rebuilding from Hurricane Harvey and Hurricane Irma.
Looking at construction activity among the Chain Scale segments, Upper Midscale (63,021 rooms in 619 hotels) accounted for the most rooms In Construction followed by Upscale (61,258 rooms in 448 hotels).
The Upper Midscale and Upscale segments remain the most popular across the three phases of Under Contract, Bowers said. Those are also two chain scale segments that saw occupancy declines and the lowest rate growth through the first seven months of the year. Demand remains high in the select-service segment, but significant supply growth will continue to pressure performance levels.
Despite representing the lowest number of rooms in the pipeline, the Economy segment reported the largest year-over-year percentage increase for rooms In Construction (+68.6% to 2,498 rooms).