LE: 2019 Hotel Development Update

For 2019, “It continues to be a positive outlook in many markets across the world,” says Bruce Ford, Lodging Econometrics’ senior vice president and director of global business development. In fact, the number of scheduled hotel openings is projected to rise, a result of project delays. Market conditions such as climbing material costs, a shortage of labor, and increasing labor costs are the culprits, with developers finding challenges in both equity and debt financing as a direct result, Ford says. “Albeit more challenging, it is still a very good market to build hotels because we have had an increase in demand over the past eight years,” he explains. “The new supply is not likely to disrupt the operating performance balance [in place].”

The U.S. leads the way with more than 650,000 guestrooms in development, followed by China with nearly 570,000 rooms. Dubai is entering the fray in a big way with “more rooms in the new construction pipeline than any whole country in Europe,” Ford points out, in the upscale and upper-midscale segments that continue to lead the industry. Overall, 50,000 more rooms are expected to open in 2019 (446,048) versus 2018 (391,405).